HC Deb 21 March 1932 vol 263 cc682-5
23. Lieut.-Colonel SANDEMAN ALLEN

asked the Secretary of State for Foreign Affairs if he is aware that owing to the default of Chile a number of British investors have lost their savings; and will he inquire of the Chilean Government what proposals they can make to honour their obligation?


I would refer my hon. and gallant Friend to the replies which were given to my hon. Friend the Member for Colchester (Mr. Lewis) on the 17th of February, and to my hon. and gallant Friend the Member for North Portsmouth (Sir B. Falle) on the 16th and 23rd of November last. I am fully aware of the hardship to British investors, but I do not consider that any useful purpose would be served by addressing representations to the Chilean Government on this matter at the present time.


asked the Secretary of State for Foreign Affairs if he will ascertain from the Brazilian authorities the date upon which the State of Rio de Janeiro will honour its obligations to British subjects who lent it their savings; and, if any negotiations are proceeding, will he request the British commercial secretary in Brazil to represent the unorganised British holders of the securities of the State of Rio de Janeiro, irrespective of any scheme being negotiated on behalf of bondholders by those loan houses who sold the bonds to British investors, in order that British investors may receive the protection of His Majesty's Government and that their interests may be separately represented and distinguished from the interests of those loan houses who also act for the Brazilian borrowing authority?


I understand that negotiations on this matter are in progress. As regards the second part of the question, the Council of Foreign Bondholders represent bondholders generally, and it has never been the practice, and in my view it would be undesirable, for negotiations between foreign Governments and their creditors on the London market to be conducted by His Majesty's Government. As regards the position of individual investors, it is, of course, customary to obtain the assent of individual bondholders to any arrangements proposed.

27. Sir C. CAYZER

asked the Secretary of State for Foreign Affairs whether, in view of the British small investors who have entrusted their savings to the Chilean Government not being represented in any negotiations with the Chilean Government except by those financial firms who were responsible for issuing the Chilean loans in Britain, he will arrange for His Majesty's commercial secretary in Chile to represent the small British investor and on his behalf watch any agreement, irrespective of the intervention of the issuing firms?


I would refer my hon. Friend to the second part of my answer to his immediately preceding question, which applies equally in this instance.

28. Lord SCONE

asked the Secretary of State for Foreign Affairs if he will obtain from the Brazilian Government a declaration that its undertaking to deposit currency to cover its third default provides that the currency, pending distribution, shall not be used for any purpose other than that specified in the agreement of 14th March; or, failing such a declaration, will he, on behalf of British investors who do not accept the issuing houses as their representatives, nominate an official of the British Government to act as co-trustee, so that the currency deposited cannot be used without the co-trustee's sanction?


As regards the second part of the question, I would refer my Noble Friend to the answer I have just given to my hon. Friend, the Member for the City of Chester (Sir C. Cayzer). I would also draw the attention of my Noble Friend to the express undertaking given by the Brazilian Government in paragraphs 15 and 16 of the General Bond implementing the agreement published on the 14th of March.


Does the right hon. Gentleman not think that there is a very real danger that these funds may be put to some purpose for which they were certainly not intended?


If my Noble Friend will examine paragraphs 15 and 16 of the General Band, as I did this morning, he will see that they contain a very substantial assurance on that point.

30. Mr. McEWEN

asked the Secretary of State for Foreign Affairs whether he is aware that the municipality of Buenos Aires persist in their refusal to sanction the request of the Anglo-Argentine Tramways Company, Limited, for an increase of fares; and whether he will now consider the advisability of again addressing official representations to the Argentine Government on behalf of the large number of British investors in this company?


I regret to state that no progress appears to have been made in this matter since the answer given to my Noble Friend, the Member for Perth (Lord Scone), on the 8th February. It is understood that proposals for forming a traffic combine are under consideration, but His Majesty's Government, while sympathising with any desire on the part of the municipality of Buenos Aires to solve the traffic problem by the coordination of the interests concerned, would view with great concern any consequent postponement of the immediate relief which is indispensable if the company is to continue its present efficient service under the terms of its concession. These terms, as was stated in the previous reply to which I have referred, have become quite inapplicable to present-day conditions, as was admitted when, in April, 1920, the necessary increase in fares was actually granted and continued until April, 1923. The company had increased their wages bill by £350,000 in return for this concession, and have maintained this ever since despite the with- drawal of the concession. His Majesty's Government will continue to take every opportunity of bringing the seriousness of the case to the notice of the Argentine Government.

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