§ Motion made, and Question proposed, "That the Clause stand part of the Bill."
§ Mr. SMITHERSI desire to ask the Chancellor of the Exchequer one or two questions on this Clause. I do not suppose there are half a dozen Members in the Committee who understand what it means. It affects a large amount of turnover in the City and I want to know what is really intended. The Clause refers to the National Debt Act of 1870, Part VII, which deals with unclaimed dividends and stocks which remain at the Bank of England and upon which no dividends have been paid for 10 years. The stock is then considered to have lapsed and becomes the property of the State. It is handed over by the Bank of England to the National Debt Commissioners. Am I right in that respect?
§ Mr. P. SNOWDENindicated assent.
§ Mr. SMITHERSThis Clause refers to stocks, stock to bearer and coupon stock. I can understand the case where dividends may not have been claimed on stock which may be lying in the Bank of England, that after 10 years it becomes the property of the State, but since the War there has been an enormous creation of bearer bonds. An enormous amount of the 1914 War Loan at 3½ per cent., and of all War loans since has been issued in bearer bonds. Sub-section (2) of this Clause says:
For the purposes of this Section a bond shall be deemed to have been issued if it 1302 has been made out and paid for, notwithstanding that it has not been taken up by the person entitled thereto.Suppose that a man has paid for a bond and he does not take it away. How can the situation arise that bonds can be kept at the Bank of England and after 10 years become the property of the State? The Chancellor of the Exchequer would not have put this Clause in the Bill unless someone had whispered in his ear that there is a certain amount of stock lying at the Bank which might possibly, and legally, come to the Treasury. How much of unclaimed bearer bonds does the right hon. Gentleman expect to receive if this Clause is passed?
§ Mr. P. SNOWDENThe hon. Member has asked several questions, but an answer to one or two will cover the lot. He asked whether I knew how many bearer bonds there were for which the coupons had not been paid during the last 10 years. I do not know. But the hon. Member is partly answered by a remark which was made just before that observation. Since the War there has been an enormous increase in the issue of bearer bonds. The Act of 1870 does not cover bearer bonds, and the reason for this Clause is that bearer bonds shall be put in the same position as inscribed bonds; that is to say that if they have not been claimed for 10 years they can be lodged with the National Debt Commissioners. But, of course, the right of the owner to bearer bonds never lapses, if afterwards he can make out a claim. The hon. Member asked me how it could happen that bonds could have been paid for and never taken away from the Bank. I do not know how it happens, but I know that it does happen, and that there are cases where bonds have been paid for and are still in the custody of the Bank. I think that those answers meet the difficulty of the hon. Member.
§ Mr. SMITHERSArising out of that reply, take the case of Five per cent. War Loan as an example. If the Bank of England finds that the coupons from say 1,000 bonds have not been cashed for 10 years, has the Treasury the right to take those coupons? Am I right in assuming that if at any later date the owner of the bonds finds them, say, at the bottom of a box, hidden under other papers, he can claim not only the capital of the bonds, but also the coupons?
§ Mr. SNOWDENI would not like to give a definite reply at the moment, but I can say that what covers inscribed bonds covers bearer bonds also. I am just informed that the answer to the question is in the affirmative, and that the owner would be able to claim both the coupons and the bonds.