§ 1. Mr. A. M. SAMUELasked the Under-Secretary of State for Foreign Affairs whether he is aware that the Brazilian Government is about to invite the British public to lend it a large sum of money; that the Brazilian Government has, since 1914, defaulted in its obligations to British subjects by suspending till 1927 its contracts with regard to sinking funds on most of the previous Brazilian loans; and whether he has requested the British firms acting for the Brazilian Government to inform that Government that the British Government regards with disfavour maltreatment of British capital entrusted to foreign Governments on the faith of pledges given by such Governments when they seek financial assistance from British subjects?
§ 8. Sir ROBERT THOMASasked the Under-Secretary of State for Foreign Affairs whether he is taking any steps to protect British subjects against possible loss by drawing attention to the fact that, contrary to the terms of contract contained in the invitation by Brazil to British subjects to subscribe to the Brazilian Four per Cent. (1911) Loan, the Brazilian Government has since 1914 dishonoured its obligation to repay by means of a sinking fund; and whether, in view of the impending issue in England of a fresh Brazil Government Loan, he has informed the Brazilian Government that the British Government takes note of the injury to British subjects caused by breaches of faith by foreign Governments in commercial transactions?
§ The UNDER-SECRETARY of STATE for INDIA (Earl Winterton, for Mr. Cecil Harmsworth)In consequence of the indisposition of my hon. Friend, I have been asked to answer these questions.
I understand that negotiations for such a loan have been proceeding, but have no official information on the subject. It has not been the practice of His Majesty's Government to interfere with the 1315 flotation of loans by recognised and responsible Governments, and I think that the public interest is best served by allowing these questions to be dealt with, as hitherto, on business lines.
§ Mr. SAMUELDoes not the Noble Lord think that the public interest would be better served if the Government now said that they will not allow this loan to be entered into here until the Brazilian Government has made good its contracts with British investors, in regard to which it has defaulted?
§ Earl WINTERTONI have already said that I think the public interest will be best served by allowing these questions to be dealt with, as hitherto, on business lines.
§ Sir R. THOMASDoes not the Noble Lord think it advisable to warn the British public against these things?
§ Earl WINTERTONI should have notice of that question, as I am answering for another Department, but perhaps I may say that I do not think it is the duty of the Foreign Office to warn the public.
§ Sir R. THOMASThat is question No. 8, and I ask whether the Noble Lord will do that?
§ Earl WINTERTONNo, certainly not.
§ Mr. SAMUELIs it not the duty of the Foreign Office to protect British subjects from being, I will not say swindled, but misled by the prospectus of a foreign Government? Is it not the duty of the Foreign Office to protect British investors against the loss of their money?
§ Mr. N. MACLEANIs it not really the duty of the Government to suggest, to those British capitalists who have money to invest, that, before investing abroad, they should invest in industries at home?
§ Earl WINTERTONThat does not arise out of the questions on the Paper. Any member of the investing public can judge for himself in a case of this sort whether the security put forward is good or bad.
§ Sir R. THOMAS rose——
§ Mr. SPEAKERWe are now debating the matter.