Finance—Public and Private (Continued from page 608.)
THE EXCHANGE PROBLEM.
I shall hope next week to examine the Budget more in detail, but at the moment I will deal only with two further points. To the City and, indeed, to all who follow with understanding the significance of the movements in the sterling exchange, no part of the Chancellor's speech was more important than that in which he announced the setting up of an Exchange Equalization Account. I would like, if it is possible in a sentence or two, to explain the plan and its purpose.
As a starting point, let me recall the fact that for some years we have had, by reason of our War debt to America, to obtain each year the equivalent in dollars of about 183,000,000. That has meant that the Exchequer has had, whatever the state of the American exchange, to buy dollars to meet our debt service. The Treasury has taken the precaution always to have a large amount in hand both in dollars in New York and in sterling in London so that in April of last year the position was that there was a special reserve amounting to the equivalent of £37,750,000. Lord Snowden a year ago balanced his Budget by hypothecating £23,000,000 from that Fund into the Revenue Account. The amount actually taken, however, during the year was only £12,750,000, thus leaving the Fund standing at £25,000,000.
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