§ Mr. MACQUISTENasked the Home Secretary whether, during the War, the only disability attached to the issue of new shares was that they could not be dealt in on the Stock Exchange unless their issue was made with the consent of the Treasury; and that since the Armistice Regulations have been issued under the Defence of the Realm Act prohibiting not only the issue and the sale and transfer of all new shares except with Treasury licence, but also making the prohibition of purchase, sale, or transfer retrospective, so as to effect stocks or shares issued within the last four years with no other disability than the refusal of the Stock Exchange to deal in them; and whether he will take steps to have this Regulation rescinded, if not wholly at least in so far as the same has retrospective effect?
§ Mr. BALDWINIt has frequently been publicly announced since the outbreak of war that it was regarded as essential in the national interests that new issues of capital should only be made after the assent of the Treasury had been obtained, and not only have dealings in stocks and shares issued without the consent of the Treasury been prohibited by the Emergency Regulations of the Stock Exchange, but all persons dealing in stocks and shares outside the Stock Exchange had been publicly requested to observe the same restrictions.
The effect of the new Regulation is to make such dealings illegal except under licence from the Treasury, and I do not think that this can be regarded as a serious hardship to the promoters of or subscribers to such issues, regard being had to the repeated warnings which had been given that the issues made without Treasury assent have been throughout regarded by the Government as being contrary to the national interest.
I may, however, observe that the Regulation is not an absolute prohibition of dealings in unauthorised issues, but only a prohibition subject to licence, and that the Committee acting for the Treasury 1944 will be quite prepared to give favourable consideration to applications for licences in all cases in which hardship to an innocent holder is likely to be created if permission to sell is withheld.
The Treasury will also be prepared to give covering approval for issues already made in all cases in which the issue was originally made without the Committee acting for the Treasury assent owing to the requirement not having been understood, and where such assent could properly have been given if it had been applied for at the time the issue was made.
§ Sir E. CARSONMay I ask my hon. Friend whether he is aware that this new Order is creating almost a panic in reference to many business transactions; is it not the fact that the only prohibition existing under the Defence of the Realm Regulations was that if these share transactions took place there could be no Stock Exchange quotation, and that there was no absolute prohibition, and is not the effect of the present Order by retrospective action to upset gigantic financial arrangements which have been entered into?
§ Mr. MACQUISTENHas not a great deal of debenture stock been issued under Section 123 of the Companies Act, and are not many of these shares and stocks practically unsaleable; is there not, in fact, about 200 millions of capital affected?
Sir H. DALZIELIs the hon. Gentleman aware that in Lancashire many cotton mills are carried on by means of loans, and that under this Order a renewal of the loans is prohibited. Is he also aware there is almost certain to be a financial panic? May I further ask is it not the case that the Treasury have accepted money for the registration of these companies to the extent of hundreds weekly. I will ask the Leader of the House, as this is so important, whether he will promise us an early day to discuss this?
§ Mr. BONAR LAW (Leader of the House)I will try and arrange an early opportunity to discuss this matter. My belief is that the scope of the Order is misunderstood. My impression is that it takes the form of the Defence of the Realm Regulation but enlarges its scope, and that certainly was the intention of my right hon. Friend.
Sir H. DALZIELWill my right hon. Friend, in order that we may get the matter made clear, consent to move the Adjournment of the House a little earlier to-night?
§ Mr. BONAR LAWI should very much prefer to hold the matter over till next week, when my right hon. Friend the Chancellor of the Exchequer will be present.
Sir H. DALZIELIs my right hon. Friend aware that at the moment the banks are unable to advance loans on shares or for renewals, and that this will mean certain financial disaster to thousands of people this week?
§ Mr. BONAR LAWI really believe that there is a mistake about this. The arrangement was made by my right hon. Friend in consultation with people in the City and with the banks. I will at once see my right hon. Friend and consult him on the matter.
§ Sir E. CARSONDoes not my right hon. Friend see that if his statement is accurate that this has been exaggerated, the sooner we have the Government explanation the sooner will the panic be allayed?
§ Mr. BONAR LAWI realise that. It is, however, really desirable that if possible the Chancellor should himself be here. I shall see him this afternoon, however, and will consult him on the matter.
Sir H. DALZIELWill my right hon. Friend make a statement to-night after consultation with the Chancellor of the Exchequer?
§ Sir M. DOCKRELLMay I ask the right hon. Gentleman if it is with the view of preventing Ireland participating in those transactions that the private wire between the Dublin Stock Exchange and London has been withdrawn?
§ Sir E. CARSONMay I ask my right hon. Friend whether, having regard to the seriousness of this matter, he will suspend the Treasury Order or Minute until we have the full explanation and the matter has been discussed in this House?
§ Mr. BONAR LAWIt is quite obvious that the Government must be as anxious as any private individual not to have the evils which have been described. I will at once consult the Chancellor of the Exchequer, and some time to-night I will give a definite answer to the question.