BIGGEST BANKING ACCOUNT.

Taranaki Daily News, Volume LII, Issue 109, 5 June 1909, Page 3

BIGGEST BANKING ACCOUNT.

"Tile Chancellor of the Exchequer in amiuiit with the Bank of England,'' sik<!i is the simple reading of the largest banking account in the world; this is the nation's account through which its whole revenue ami expenditure is passed. It takes a special staff of five clerks to attend to the mere clerical work involved in keeping this gigantic account; .but there are also three officials who are experts in finance to attend to the special tmd intricate business arising from .tile handling of tliis gigantic wanking account. It is, of eourse, not to lie supposed that the nation's revenue and expenditure is all dealt with in one amount; but the account with which this article deals is the "chief distributing Treasury account." as it is officially termed, into which the nation's revenue is paid in enormous bulk sums, and then paid out to Itlie credit of various Government de.partmen'ts, the heads of which are responsible for the distribution of the money.

The huge sums of money arising from die various Sources of imperial revenue,

such as the income tax, excise, and profits from the Post Office, are paid in from time io time in very large sums to the credit of the Chancellor of file Exchequer's account, the Treasury being always advised of the amount by the flank of England and thy the official who pays it in. it is very rarely that any sum under a million is paid into the national account; more usually it amounts to three or four .millions. The money remain*' to the credit of the Chancellor of the Exchequer for a very .sliort time, for there are constant calls 'being made oil hi.m for money by the great spending departments. The Admiralty, the War Office, the Payinaster-deneral (who pays all the expenses in connection with tile lioyal Households and also all t'lic salaries of civil servants), 'cannot get along 'without ready money, a fact of which they are icoii'tinually Molding reminders to the Treasury. Once a month, and .Sometimes oftener. huge rhcqiies are drawn on the nation's account and paid to the credit of the various departmental accounts. These cheques are .signed sometimes by the Chancellor of 'tile Exchequer. or in .his absence, by two Junior Lords of the Treasure.

It often happews, however, when the Chancellor of the Exchequer wants to draw cheques, perhaps, for four or five millions', he is informed that there is no money to his credit.

The revenue comes in from time to time in big sums; but a great part of the nation's expenditure, such as salaries to <-ivil servants, interest on Consols, and the maintenance of the Army and Navy, has to be met at regular interval*. The Chancellor of the Exchequer cannot aak. for example, a clerk in a Government ollice to wiiiit a couple of months for liU salary, or i\ holder of Consols for his dividend. Such items must lie paid the day they are due. and the only way the Chancellor of the Exchequer can meet the nation's liabilities is To borrow the money, .so he issues what are called Treasury bills.

A Treasury bill is .the -best security in the world. It is an ordin-nry promissory note signed hy the Chancellor of the Exchequer on 'hehalf of "His Hritannic Majesty's Government," who promise to repay the lender the amount of money he has advanced on a certain date.

Treasury bills art? generally issued in separate -.inns of £IO,OOO, und. a> a rule, about .three millions are raised in this way for three or four months'. The lender receives usually about 2*/* per cent, oi-the money he advances. The lenders, who are always financiers or bankers in a big way of business, pay in fhe money, which they advance on 'lhe bills lo the eredit of tbe national account, and the Chancellor of the Ex-, chequer is then in a position to meet 1 'his liabilities. If the Chancellor of the Exeheqiier /ailed lo borrow the money 'he required, the interest on Console could not be paid, and the nation would jibe bankrupt, but there are always huni dreds of people ready lo lend liiim far more money than he requires. Five big ledgers nre annually used in 'keeping tin- national account, which, by the way, at one time cowld be inspected by any taxpayer on payment of a guinea. But Ibis rule has been abolished.