BRITISH NOTE ISSUES.

New Zealand Herald, Volume LXV, Issue 19947, 16 May 1928, Page 11

BRITISH NOTE ISSUES.

BILL FOR AMALGAMATION. PAPER MONEY CURRENCY. CONTROL BY BANK OF ENGLAND.

British Wireless. RUGBY, May 14. In the House of Commons to-day the Financial Secretary to the Treasury, Mr. A. M. Samuel, moved the second reading of the Currency and Bank Notes Bill. He said the bill proposed to give effect to the long foreshadowed amalgamation of the Treasury currency notes with Bank of England notes.

The bill placed the responsibility for the note issue where the actual responsibility lay and must continue to lie, that was with the Bank of England, because the Bank of England controlled credit.

No one who had studied the economic development of Britain in the 20th century could have failed to see the position which the Bank of England had established in the finances of the nation. The country was proud of this bank and it was with full confidence that the Government had decided by this bill to trust the management of its paper currency to the bank. It was empowered to issue notes of the value of £1 and 10s and to make these legal tender for all payments. It was provided that the whole of the profits of issue, both on the new £1 and 10s notes, as well as on the £5 notes issued by the Bank of England, should go to the State. AMENDMENT BY LABOUR FURTHER INQUIRY REJECTED. BILL READ SECOND TIME. Australian Press Association—United Service (Received May 15, 5.5 p.m.) LONDON. May 14.

In the course of the debate in the House of Commons on the Currency Bill Mr. Philip Snowden, the former Labour Chancellor of the Exchequer, moved as an amendment that the House withhold its assent to the bill in the absence of any policy putting into operation the resolutions passed by the Geneva International Conference in 1922, and until an investigation has been made into the constitution, powers and policy of the Bank of England, in the light of modern developments in finance and industry. Mr. Snowden said tho Labour Party in no way wanted to make this a party question, or to censure the Bank of England. But the time had come to review the archaic constitution of the Bark of England. This should be a public corporation, composed of the best men in finance and industry, with representatives of the co-operative and Labour movements. The bill restricted the total of currency too rigidly. Mr. Hilton Young, Conservative member foe Norwich, and a former editor of the Financial News, supported the demand for an inquiry, although riot as a preliminary to the passage of the bill. Mr. E. C. Grenfell, Conservative member for the City of London, and a director of the Bank of England, said that in view of the tone of the amendment he hoped the bill would pass with general agreement. There was no reason to hold up the bill for another inquiry. Mr. F. W. Pethick Lawrence, Labour member for Leicester West, said the bill was a disastrous return to out-of-date conditions, which were at variance with the best international views on currency.

The Secretary of State for War, Sir Laming Worthington-Evans, said the Geneva resolutions were valuable and had pointed out the way to the restitution of sound financial and economic conditions. Most of them had been carried out in Britain. There was no necessity for a further inquiry into the control of the Bank of England.

Mr. Snowden's amendment was defeated by 229 votes to 101, and the bill was read a second time.