HC Deb 20 June 1932 vol 267 cc755-6

asked the Secretary of State for Foreign Affairs whether he will inquire of the Brazilian Government the specific reasons for the continued delay in bringing to an agreed settlement the default of the State of Rio de Janeiro in its obligations to British investors who have relied upon the good faith of that State?


My right hon. Friend understands that the delay in settling this default is due first to the falling off in internal revenues, and second to the great difficulty experienced in securing the sterling exchange required to meet the interest and sinking fund charges on the external loans issued in London. As was stated in reply to my hon. Friend the Member for Pudsey and Otley (Mr. Gibson), on 25th April last, the State of Rio de Janeiro made towards the end of April a deposit of 3,000 contos of milreis, in its own name, with the British Bank of South America, as a currency deposit pending the completion of an arrangement regarding these loans, and my right hon. Friend is informed that since that date further sums have been deposited for the same purpose. While the Federal Government of Brazil have shown themselves helpful in these negotiations, they do not accept responsibility for the debts of the various States, and my right hon. Friend does not consider that an inquiry of the nature proposed would serve any useful purpose.