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Bank Notes (Increased Circulation)

Volume 487: debated on Tuesday 24 April 1951

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58.

asked the Chancellor of the Exchequer if he is aware that the amount of bank notes in circulation in 1928 was 137,000,000, in 1938 it had increased to 504,000,000 and in 1950 was 1,357,000,000; and if he will make an inquiry into the reasons for these in creases with a view to effecting a stricter control over the circulation of bank notes.

Yes, Sir, but I do not think any inquiry is called for. The increase in the note circulation almost certainly reflects changes in the economic situation and, in particular, the rise in money incomes.

Does not my right hon. Friend agree that one of the main reasons for this enormous increase in the bank note circulation is the fact that certain traders have adopted the pernicious practice of making payments in cash instead of by cheque, and that the black marketeers trade in this way with the object of defrauding the Inland Revenue? Will he consider, if he agrees, the advisability of calling in the present bank notes in circulation in exchange for notes of another issue?

I am naturally concerned to prevent any form of tax evasion, but I doubt whether this particular form—this alleged form—really requires such a big step as calling in the whole of the note circulation.