HC Deb 17 May 1934 vol 289 cc1944-5

asked the Secretary of State for Foreign Affairs if he will make inquiries from the Brazilian Government as to the prospect of facilities being granted for payment to British bondholders of interest on the City of Santos (Brazil) Seven per Cent. Consolidated Loan of 1927?


My hon. Friend will be aware that the recently issued scheme for the consolidation of the Federal, State and Municipal debts of Brazil placed the loan referred to by him in the 7th Grade. Under the scheme payment on 7th Grade loans is to be made during the first year of 17½ per cent. of the face value of the coupons due in connection with interest, a percentage which will increase to 20 per cent. and 22½ per cent. in the second and third years respectively, and to 32½ per cent. in the last of the four years covered by the scheme.


Is my right hon. Friend aware that the City of Santos has been in default since 1931, and, in view of the fact that there are a great number of British investors who are con- cerned with this unsatisfactory position, will he take all possible steps to relieve the situation?


The scheme to which I have referred is a scheme which was designed by the Brazilian Government to divide equitably the exchange available over loans of different kinds, and, when the scheme as a whole is examined, I think it will be found that bondholders will, in the first year covered by the scheme, actually receive considerably more than they have received in the past, and still more in successive years; and, in view of the undoubtedly serious exchange transfer difficulties, I do not at this stage consider that the interests of British bondholders as a whole would be served by addressing representations to the Brazilian Government.