Bank of England Annual Report 1947
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BANK OF ENGLAND REPO RT FOR THE YEA R EN DED 28TH FEBRUARY 1947 lS$IIed by Order of the COllrt of Directors, 10th April, 1947 COURT OF DIRECTORS FOR 'fR E YEAR ENDED 28TH F H1HW A R V, 1947. THE RT. HON. L ORD CATTO, C.B,E. , GOVER NO R. CAMERON FROMANTEEL COBBOLD, ESQ., DEPUTY GOVERNOR. TUE RT. H ON. LORD AUtF.DALE, D.S.O., M. C. D ..o\LLAS GER .. \LD MERCER BER NA RD, E S Q. RALPH ELLI S BROOK, ESQ., O.B. E. L.WRENCE JOHN CADDURY, ESQ, BASIL GAGE CATTERNS, ESQ. SIR PATRleK ASHLEY COOPER. GEORGE GIBSON, ESQ., C.H. S I R ALBERT C HARLES GLADSTONE, B T. SIR CHARLES ]OCELYN H A?>lB R O , K .D.E., M .C. JOHN COLDBROOK H ANBURy -WILLIAMS, E SQ . EOW!.RD H OLLAN D-MARTIN, ESQ . SIR OTTO ERNST N I E hl EYER, G.B.E., K.C. B. T HE R T. HON. LORD P I ERCY, C.B.E. BASIL S .... NDERSON, ESQ. HARRY ARTH UR S I EPl l ANN , ESQ. *ARTHUR GEORGE W ANSBROUGH , E SQ. ·Appointed 1St June, 1946, 10 fill the vacancy created by the death f) f TilE RT. Hos. LOJm KEYN£S , C.B., on 21S t April, 1946. BANK OF ENGLAND. Report for the year ended 28th February, 1947. The Bank of England Act. 1946 (9 & 10. Geo. 6. Ch. 27) came into force on 1 St March, 1946. By Section r of this Act, Bank of England Stock was transferred to a nominee of H.M. Treasury in exchange for Government Stock . Section 2 provided for the appointment of the Court of Directors by Hi ~ Majesty and reduced its membership to Governor , Deputy Governor and 16 (previOusly 24) Directors. The Act also contained consequential and supplemental provisions as to the constitution of the Bank and the qualification and terms of service of members of the Court of Directors. In pursuance of Section 3 a new Royal Charter was granted to the Bank on 1st Ma rch , 1946, by which such part of the Charter of 27th July, 1694, as no longer applied and the Supplemental Charter of 19th August, 1896, were revoked. The following Report summarises the operations of the Bank of England during the year ended 28th February, 1947, together with certain related developments in finance, both internal and external. Banking Department. The assets and liabilities of the Banking Department at the beginning and end of the year were as follows :- £ thousands. B ANKING DEPARTMENT. 28TH FEBRUARY. 1946. 1947. CbllDge. Capital 14,553 140553 Rest ... 3.900 3,901 + 1 Public Deposits 14,724 7,051 7.673 Bankers' Deposits 241,730 298,322 + 56,592 Other Accounts 54.523 96.334 + 41,811 Total Deposits 310,977 401,707 +90,730 329,430 420, 161 +90,731 Government Securities 214,560 306,931 +92,371 Discounts & Advances 9.373 12,281 + 2,goS Securities 26.354 26.840 + .,86 Other Securities 35,727 39,121 + 3.394 Notes 78,178 73,228 4,950 Coin ... 965 881 !4 32~M30 420,161 +90,731 Total Deposits rose by £91 million, Bankers' Deposits nSlng by over £56 million and Public Deposits falling by over £7 million while Other Accounts ( I ) £ millions. FLOATING DEnT OUT STANDI NG. 4th Mar. 26th Feb. 24th Feb. 2nd !h.r. 1st liar. 1939. 1944. 1945. 1946. 1947. Treasury Bills 856 3,117 3,739 4,206 4,7.04 1 v..' ays & Means Advances : by Public Departments 40 340 543 446 530 by Bank of England 6 32 '5 Treasury Deposit Receipts 1,376 1,801 1,566 1. 473 90 2 4,865 6,083 6,218 6,759 - ~ - ~ The weekly allotment of Treasury Bills by tender rose from £ I 30 million at the beginning of the year to £ 170 million at the end. For half the year allotments were on the basis of £ I So million a week. £ milliolls. VVEEKLV ALLOTMENT OF TREA SURY BILLS. 1 week ended 9th March, 1946 130 .. 16th March 140 " 5 weeks .. 20th April '50 I week " 27th April ' 40 3 weeks " 18th May 150 I week " 25th May 140 18 weeks .. 28th Septem ber 15° I week 5th October 160 3 weeks " 26th October 0 " 17 6 7th Dec ember 160 " 6 " 0 " " 18th January, 1947 '7 I week 25th January 165 " 2 weeks 8th February 160 " 1st March 170 3 " " The average rate of discount at which the Bills were allotted remained stable at aroWld 105. %, the highest and lowest rates being 105. z.83d. % at the tender on 30th August, 1946, and 9S. II.z5d ..% on 6th December, 1946. The rate of interest on Treasury Deposit Receipts remained unchanged at i%. Public Debt (other than Floating Debt). I t is a statutory duty of the Bank of England to manage all British Government stocks and bonds outstanding, except those on the registers of the Bank of Ireland (Belfast and Dublin), the Post Office Savings Department and the Trustee Savings ( 4 ) Banks. They also act as registrars of loans guaranteed by H. M. Treasury, and of the 5.tocks of certain Dominion and Colonial Governments, United Kingdom Local Authoritiec; and Public Boards. The nominal total of stocks and bonds managed (i.e .• excluding amounts on the above registers) showed a net increase during the year of £119 million, a rise of £187 million in British Government securities being partly offset by a fall of £68 million in other securities. The following table gives some detail of changes in recent years in the different groups of stocks managed by the Bank. Tax Reserve Certificates and interest-free loans are not included in the figures. DEBT MANAGED BY THE BANK. £ 1II.illi011J. END OF FEBRUARY. 1939. 1944. 1945. 1946. 1947. British Government: Stock 5, 107 10,507 11,133 12,367 12.567 Bearer Bonds 1,002 168 163 158 145 Total 6,109 10,675 1l ,zg6 12.s:~5 12 ,7 12 Other Securities : Treasury Guaranteed 140 2>0 209 207 15 1 * Dominion & Colonial ... 454 156 15° 126 122 Local Authorities 197 188 188 173 166 Public Boards, etc. 202 203 202 202 201 Miscellaneous 19 16 16 16 10 Total 1,012 773 765 724 656 Grand Total 7. 121 11.448 12,06r 13,249 13.368 "Including Government of IndiOl . The principal operations during the year in stocks managed by the Bank are set out below. The figures given (to the nearest £ million) refer to the total of stock outstanding, which is slightly larger than the total managed by the Bank, by the amounts standing on the Bank of Ireland and other Registers. Repayments for cash included:- 2;% Conversion, 1944-49 1st April, 1946 £31 million 2!% National War Bonds, 1945-4i 1St July. 1946 160 2.10' no National War Bonds. 1946 -~4B 15th August, 1946 ... 159 " 2!% National Defence Bonds 15th September, 1946 60 " 3% Local LOilns 5th January. 1947 ... 12 5 " ( 5 ) Issues for cash or by exchange or conversion included :- 3 °~ Treasury Stock, 1966 or after : 1st March, 1946. Exchange for Bank of England Stock ... £58 mill ion Ii % Exchequer Bonds, 1950: 1st April. 1946. Conversio n of 2!% Conversion, 1944-49 ... 176 z!% N.W. Bonds, 1945-47 284 " " 60 4 " 2!% Savings Bonds, 1964-67 : 17th MaY- 9th July, 1946. For cash at par ... 418 15th August, 1946. Conve rsion of 2~% N.W. Bonds, 1946-48 334 752 2! % Treasury Stock, 1975 or after : 28th October, 1946 - 1tth January, 1947 . For cash at par ... 177 5th January, 1947. Reinvestment of 3% Local Loans 305 482 2~% T reasury Stock, 1986--20 16 : 1st j anuary, 1947. Exchange fo r £69 milli on 3% Coal Commi ssion Guaranteed Stock, IgSo-2016 ... '" ... ... ... 8 7 " 2!% Guaranteed Airways Stock, 1971 -76 : 1St j une, 1946. For cash at 99 ... si 2l% Guaranteed Airways Stock, 1977-82: 10 24th j anuary, 1947. For cash at 101! ... " The last three of these issues were made to the Commissioners for the Reduction of the National Debt. From the administrative point of view , the most noteworthy operation was the redemption of J% Local Loans, a stock nearly sixty years old of which £413 million (out of a total of slightly less than £430 million) was beld on the Bank of England Register in some 97,000 accounts. The an nouncement on 16th October of its forthcoming redemption was followed by great activity in the stock, more than 25,000 transfers being received between that date and the closing of the register on 13th December. Between February, 1939, and February, 1947, the nominal total of British Government stocks and bonds managed by the Bank increased by 108%, but the number of accounts rose during the same period from 2,170,000 to 2,477,000, or by only 14 %. The strikin g fa ll in the total of bearer bonds outstanding which took place between F ebruary, 1939 (£1 ,002 million) and February, 1944 (£ I 68 million) illustrates the success of the campaign to exchange bearer securities into registered securities. The small ness of the subsequent movement, fr om £168 million to £145 million, may be explained by a considerable proportion of the bonds still outstanding being held abroad. During the year there was a marked increase in the number of transfers to be registered, which at 640,000 showed a rise of 34% on the previous year's total of 476,000. The figure includes transfers for nominal consideration and also covers transfers of non· Government stocks.