HC Deb 19 June 1933 vol 279 cc473-5
31. Major HILLS

asked the Chancellor of the Exchequer whether the Treasury embargo against the purchase in London of foreign-owned securities extends only to certain classes of such securities and only to large blocks of such securities, or whether it extends to all foreign-owned securities of whatever kind or amount?


The terms of my right hon. Friend's request, published on the 17th May, related to the purchase of large blocks of foreign-owned securities of all kinds—whether of British concerns or otherwise—with a view to sale in this country. He did not attempt to define precisely what was meant by a large block of securities, and he requested that, in any cases of doubt, inquiries should be made of the Treasury. Since then he has had occasion to address to the Chairman of the Stock Exchange a letter intended to clear up certain misunderstandings, and I am causing a copy of that letter, which has already appeared in the Press, to be circulated in the OFFICIAL REPORT.


Does the letter to which the hon. Gentleman referred apply the embargo to purchasers of all amounts, or only to large blocks of securities?


I would prefer to refer my right hon. and gallant Friend to the terms of the letter itself.


I have seen the letter already.


Would it not be advantageous to strengthen the embargo, in order to protect the British public against losses such as they have recently suffered because of the default on contractual obligations by foreign borrowers?

Following is the letter:

Treasury Chambers,

12th June, 1933.

Dear Mr. Chairman,

From the nature of the enquiries which have been addressed to the Treasury in the last fortnight it appears that the purpose underlying the request which I made it) the Press on the 17th May respecting the purchase of foreign owned securities is imperfectly understood by the Stock Exchange.

The large inflow into London during this year of short term money from abroad may have obscured, but it certainly has not removed, the intrinsic weaknesses of our position, and this country is not in my judgment at present in a position to invest large sums at long term in foreign countries.

Though from many points of view it would have been advantageous to do so, I have not thought it possible to make any public request discouraging ordinary private investment abroad by individuals. I kept the notice of the 17th May within the ambit of my previous request by limiting it to the question of the purchase of large blocks of foreign owned securities (whether of British concerns or otherwise) with a view to resale here.

Since this notice was issued I find instances in which brokers or others in this country have been asked by foreign owners to find a market in this country for large blocks of securities by distributing them among a considerable number of buyers without actually making an intermediate purchase. This, of course, equally conflicts with the general object which I have in view, and there may be other technical means for carrying through transactions of a similarly injurious kind. I trust that the members of the Stock Exchange will assist me by discouraging any such transactions by every means in their power.

I shall be obliged if you will convey the sense of this letter to your members, on whose good will I am confident that I may rely. Perhaps you would at the same time explain to them that a similar request is being addressed on my behalf to the principal bankers and other firms outside the Stock Exchange who are accustomed to handle business in foreign securities.


Sir Archibald Campbell,


Stock Exchange Committee.

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