§ 11. Sir NICHOLAS GRATTAN-DOYLEasked the Secretary of State for Foreign Affairs whether his attention has been called to the action of the Brazilian Government in relation to releasing exchange funds to repay Bank of San Paulo (Brazil) loans at a discount of 60 per cent. notwithstanding the unilateral moratorium arrangement with British creditors of Brazil; and will he request His Majesty's Ambassador at Rio de Janeiro to obtain particulars and make a report on the matter?
§ Sir J. SIMONI have seen a report indicating that the Brazilian Government have given permission for the exchange 1548 derived from the sale of certain foreign bonds in the possession of the Bank of the State of Sao Paulo to be utilised for the purpose of purchasing on the open market bonds issued by the bank, which are to be cancelled following upon their purchase. This scheme has, I understand, no connection with the arrangements for the consolidation of Brazilian foreign loans which were announced on 5th February last. I have requested His Majesty's Ambassador at Rio de Janeiro to furnish me with particulars, and I will communicate these to my hon. Friend on receipt.
§ Sir N. GRATTAN-DOYLEIf this action of the Brazilian Government be correctly stated, is it not equivalent to downright dishonesty?
§ Sir J. SIMONI cannot answer a question in those terms. The purchase of the bonds is at most an offer. No bondholder is obliged to part with his bonds.