asked the Chancellor of the Exchequer whether the 1931 agreement between the Bank of England and the Treasury is still in operation, seeing that when the Government left the Gold Standard the Bank's gold was allowed to remain at its old valuation and not to be written up to its market value until there was some agreement on the international exchanges, and that when that agreement was made the price of gold was 85s. per fine ounce, whereas the present selling price of gold is 142s. per fine ounce; whether, in consequence of the difference in values, the Bank of England will be required to hand over to the Treasury the sum of £160,000,000, being gold profits as a result of the tripartite agreement between France, the United States of America, and this country; for what purpose these profits are to be used; and on what date the Bank of England will make payment?
The hon. Member's question appears to be based on two misapprehensions. The first is that the tripartite agreement involves a revaluation of the pound in terms of gold. The agreement has no such effect. In the second place, while the Bank of England manages the Issue Department it has no financial interest in that department any profits of which are paid to the Treasury under Section 6 of the Currency and Bank Notes Act, 1928. As the hon. Member will see from a reference to Part IV of the Finance Act, 1932, which is still in force, no question of profit on the gold in the Issue Department arises until revaluation. This is due to be made immediately before the Exchange Equalisation Account is wound up, and the difference between the market value and the fixed value of the gold is then to be transferred to that account and thereafter applied to redemption of debt.