[Shepherd's Question]

 

See accompanying letter

 

Question

To ask Mr. Chancellor of the Exchequer whether His Majesty's Government will convey to the Directors of the Bank of England the suggestion that the volume of Treasury Bills now in the possession of the Bank should be reduced by selling a proportion to the market which is experiencing a scarcity of such short-dated securities and that the Bank should replace such bills as it sold by the purchase of long-dated securities, thus correcting the present deficiency of bills and reducing the volume of long-term securities in the market, a proceeding which would strengthen the capacity of the Joint Stock Banks to expand credit, reduce the cost of the service of the national debt and produce more favourable conditions for the issue of a further defence loan when that becomes necessary.

  1. 1. The Advisory Committee of the Parliamentary Monetary Committee. The chairman was Charles Morgan Webb, who at the time was in the United States (see letter 909 , [jump to page] ). Craven-Ellis was the economic adviser. On Harrod's collaboration with the Parliamentary Monetary Committee see note 1 to essay 20 .

    2. Craven-Ellis kept Harrod posted on the development of the debate. On 17 March he informed him of the decisions of the Advisory Committee of the Parliamentary Monetary Committee regarding the questions to amend or submit as drafted (the numbering of the questions as listed in Craven-Ellis's letters indicates that more questions were meanwhile suggested by Harrod or Shepherd). On 24 March he communicated that Harrod's questions 4 and 5 (as numbered here) were returned from the Table saying that they were already answered elsewhere. On 30 March he acknowledged receipt of a new supplemental Question and expressed his satisfaction that Midland Bank supported the Parliamentary Monetary Committee's point of view ("The Change in Monetary Policy. Can Deflation be Justified?", Midland Bank Monthly Revue, April-May 1939, pp. 1-4). On 31 March he sent the Hansard reporting on three other questions put by himself on 30 March (Official Reports, Fifth Series. Parliamentary Debates. Commons, vol. 345, pp. 2219-20; see also vol. 347, pp. 1636-37 and 2075), and communicated that another question was to be replied on 6 April (Official Reports, Fifth Series. Parliamentary Debates. Commons, vol. 346, p. 2978). On 5 and 11 April, Craven-Ellis reported of Simon's misunderstanding of one of the questions (Simon to Craven-Ellis, in HP VI-132-161/9). On 26 April Harrod was sent by Craven-Ellis's private secretary a copy of another Question put on the day before on how the government intended to secure the co-operation of the banking system for stimulating employment (see Official Reports, Fifth Series. Parliamentary Debates. Commons, vol. 346, p. 961). On 25 August, Craven-Ellis asked Harrod's views on a draft of a letter to the chancellor of the exchequer (enclosed) on the increase of the bank rate from 2% to 4%. On 1 September he thanked for Harrod's comments and communicated that he changed his mind and decided to formulate a new Question on the matter instead of sending the letter (the Question, however, is not reported in the Hansard. This correspondence is in HP VI-132-161/3-12 and HP VI-132-161/23-24, Harrod's replies were not found).

    3. The same suggestion was advanced in a letter to the Chancellor of the Exchequer following the publication of Harrod's article in The Times ("Meeting a Trade Recession", Harrod 1938:11 , here reproduced as press item 22 ): see letter 804 to Simon, [jump to page] .

    1. a. TLS, one page, in HP VI-132-161/2. Harrod's Questions (CcTD, six pages on six leaves) and Shepherd's Question (CcTD, one page), are in folder HP VI-132-161/1.


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