Fiduciary Note Issue

Oral Answers to Questions — National Finance – in the House of Commons on 8th September 1942.

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Photo of Mr William Craven-Ellis Mr William Craven-Ellis , Southampton

asked the Chancellor of the Exchequer what financial operation had to be undertaken on 28th July before increasing the fiduciary note issue by £50,000,000; what is the present annual charge of servicing the securities which back the total note issue, and to whom is this paid?

Photo of Sir Kingsley Wood Sir Kingsley Wood , Woolwich West

When the fiduciary issue was increased by £50,000,000 on 28th July last, securities of the value of £50,000,000 were acquired by the Issue Department of the Bank of England from the Banking Department in exchange for a corresponding amount of notes. The gross income from the securities held against the note issue is received in the first instance by the Issue Department of the Bank, and the net profit, after deduction of the expenses of the note issue, is paid over to the Treasury. The amount of such net profit to the Treasury for the year ended 31st August, 1942, was £8,228,259 10s. 3d.