U.K. MONETARY INQUIRY

Press, Volume XCV, Issue 28252, 13 April 1957, Page 4

U.K. MONETARY INQUIRY

Proposal Canvassed For Several Years

(Special Correspondent N.ZP.A.) LONDON, April 11. The decision announced by Mr Peter Thorneycroft in his Budget speech to set up a committee to inquire into the working of the monetary and credit system in Britain gives effect to a proposal which has been strongly canvassed in both Government and Opposition circles for several years.

It was urged on Mr Macmillan when he was. Chancellor by an all-party Parliamentary and industrial committee which claimed that existing financial machinery was no longer an effective instrument for carrying out Britain’s national economic policy. The last inquiry of this sort was made in 1931. The “Manchester Guardian” says the decision to hold the inquiry will satisfy a growing body of opinion. “Many people feel it is high time the money mechanism was examined again. Bank rate, active participation by the Government in the stock exchange and all the paraphenalia of the credit squeeze were part of an old machine which the Tory Government gradually put back into operation from IFSI onwards.

“It is surprising it worked as well as it did because it had not been used since 1932. The present inquiry will make it possible to bring it up to date and to relate it to the very different problems which Britain faces now, compared with those of the depression years.”

Advance “by Fits and Starts” “The Times” says no field of the economy needs more constructive thought than that of credit and investment policy. “Britain cannot advance by fits and starts as she tended to do in recent years—crudely stimulating investment when it seems to be going forward too slowly, and then as crudely damping it down when the Government feared it was getting out of hand. “Moreover, a new factor is being introduced. The Government is becoming more and more involved as one of the largest industrial investors.

“Plans already announced for atomic energy development, together with those of other nationalised boards, are of such a size that they cannot fail to affect the whole economy.”

The “Financial Times” says the new committee will try to get the best possible system of money and credit while observing to the full the international obligations of exchange rates *and other matters.