The Exchange Account Last week it was announced that the
Exchange Equalisation Account, the " exchange control," would be increased by £200,000,000 to £575,000,000 ; and on Monday Sir John Simon, in the debate on the money resolution which gives effect to this decision, dispelled some of the secrecy which surrounds the operations of the Fund. On March 3oth this country's total holdings of gold amounted to L703,000,000, of which the Bank held £517,000,000 and the Account £186,000,000 : the total today is probably nearer L800,000,000. Sir John rightly emphasised the essential part of the Account in the monetary structure of today ; our gold resources are certainly not too large in view of this country's position as the centre of the sterling bloc, and of the necessity of con- trolling, through the Account, the exchanges, the large move- ments of capital which followed the end of the gold standard, and, especially lately, gold prices. But it is all to the good that, since the Account has assumed such magnitude and importance, it should be under public control ; and all to the better that in future the Treasury will issue a half-yearly statement of the position of the Account and that it will be open to regular examination by the Public Accounts Committee, with power to examine Treasury officials. The increase in the Account is wholly justified, and indeed inevit- able, at the present moment. Almost the whole of its pre- vious resources, allowing for losses on sales of gold to the Bank, is held in gold ; if the Account is to fulfil its function an increase in its sterling resources is unavoidable.
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