§ 1. Sir PARK GOFFasked the Secretary of State for Foreign Affairs whether he is aware that those responsible for the flotation in London of various loans to Brazilian public authorities now in default have, after three years, failed in their attempt to protect the interests of British investors in those defaulted loans; and will he, therefore, now request His Majesty's Minister in Brazil to endeavour to obtain redress, as the Government can represent the varied British interests more comprehensively than the finance houses?
§ The LORD PRIVY SEAL (Mr. Eden)My hon. Friend will have observed that on the 6th February full details were published in London of the decree issued by the Brazilian Government on the previous day fixing new conditions for the service during the next four years of all the Brazilian Federal, State and municipal foreign loans. In the circumstances my right hon. Friend does not at present consider it would be advisable to adopt the action proposed.
§ Sir P. GOFFIn view of the many British investors who have been treated in this way, will the Government maintain the embargo on foreign loans?
§ Mr. KIRKWOODWhy is there this differential treatment as between Brazil and Russia?
§ 2. Mr. BURNETTasked the Secretary of State for Foreign Affairs whether he is aware that Hungary, Yugoslavia, and Rumania have not yet completed payments due to British holders of Hungarian securities under the protocol of Innsbruck and the Prague and Paris arrangements; and whether he will make representations to have the matter put right?
§ Mr. EDENThe answer to the first part of the question is in the affirmative. In reply to the second part, my right hon. Friend does not consider that it would serve any useful purpose for His Majesty's Government to make special representations on this matter at present.
§ 40. Sir ALAN McLEAN (for Sir NICHOLAS GRATTAN-DOYLE)asked the Chancellor of the Exchequer whether he is aware that Brazil has defaulted three times within 30 years, and has this week imposed a further scheme of default involving losses on £250,000,000 of British savings; and will he now, before considering requests for lifting the embargo upon the issue of foreign loans, cause an analysis to he made as to the extent to which Britain has benefited by lending to foreign borrowers in order to obtain export trade at the expense of British savings?
§ The FINANCIAL SECRETARY to the TREASURY (Mr. Hore-Belisha)I am fully aware of the losses caused to British investors in Brazil and elsewhere by the transfer difficulties which have resulted from the drop in the wholesale prices of primary commodities and the falling off in international trade. These and all other relevant considerations are being kept in mind in connection with the question of the embargo on the issue of foreign loans.
§ Sir A. McLEANMay I ask my hon. Friend whether the Brazilian default plan involves the abandonment, in certain cases, of that special security of the investors which consists of a sinking fund invested in the names of independent trustees?
§ Mr. HORE-BELISHAI should not like to interpret the scheme within the scope of an answer to a question, but, if I can be of any assistance to my hon. Friend in elucidating any point, I shall only be too happy to do so.