WAR LOAN (TRUSTEES) BILL. (Hansard, 2 July 1915)

§ Loup HYLTON

My Lords, this is a Bill to enable trustees of Two-and-a-half per cent. Consols, or of Government Annuities, or of the old War Loan, to borrow money to enable them to take advantage of one of the options mentioned in the prospectus of the New War Loan. It has come to the knowledge of His Majesty's Government that there are a great number of trustees in the country holding an appreciable amount of these old Government Stocks who are anxious, for the sake of the trust estate, to take advantage of this option, but it is obviously impossible, without some legislation such as is promoted in this Bill, for trustees who have no ready money in hand to provide the funds to take up that amount of the new War Stock which it would he necessary for them to do in order to avail themselves of the option of converting their old holdings.

The power of borrowing that is given to trustees under the Bill is, of course, to some 242 extent a rather unusual power, but the Government consider that the circumstances of the time are unusual, and that it will be to the advantage of the State to enable larger liquid funds to flow into the New War Loan, and it will also be to the advantage of the trust estates. The power which it is proposed to give to trustees under the Bill is a purely optional power. If trustees think it not for the benefit of the trust estate that they should convert the old Stocks, into the new War Stock there is no obligation upon them to do so. But if they decide that it will be for the benefit of the estate to convert, the Bill enables them to borrow on the security both of the old Stock and of the new amount which they will necessarily be obliged to apply for in the New Loan.

Under Clause 2 of the Bill it is proposed that— Any sum paid into any Court or otherwise under the control of any Court., may, without prejudice to any other mode of investment, be invested in securities created under the War Loan Act, 1915; and any sums paid into Court or otherwise under the control of the Court before the passing of this Act may, in pursuance of any order of the Court, or in accordance with Rules of Court, be realised and reinvested in those securities. That clause was, I understand, placed in the Bill in consequence of there being large sums of money held in or antler the control of the Court. The only other clause to which I think I need call your Lordships' attention is Clause 3, under which a trustee is indemnified from any loss that may be sustained from borrowing under the Act or from any subscription to or investment in the New War Stock.