COLONIAL STOCK BILL. (Hansard, 23 July 1934)

THE UNDER-SECRETABY OF STATE FOR FOREIGN AFFAIRS (EARL HOPE):

My Lords, this is a short Bill of two clauses which I think I can explain to your Lordships very briefly. The Colonial Stock Act, 1900, laid down three conditions which every Dominion or Colonial Government must observe if it desires its loans to be given trustee status in the London market. The third of these conditions reads as follows: The Colonial Government shall place on record a formal expression of their opinion that any Colonial legislation which appears to the Imperial Government to alter any of the provisions affecting the stock to the injury of the stockholder, or to involve a departure from the original contract in regard to the stock, would properly be disallowed. In 1929 the Conference on the operation of Dominion legislation, while recommending that disallowance in general was no longer operative, made one exception, that where any stock was outstanding 875 which was of trustee status the right of disallowance must remain and could properly be exercised. Both the United Kingdom Government of the day and the Dominion Governments at the Imperial Conference in 1930 approved of this recommendation. Thus the rights and safeguards of the stockholder remain exactly as they always had been in every Dominion where the right of disallowance has not been abolished altogether. If, however, a Dominion should propose to change its Constitution in this respect a new situation would arise.

This situation has in fact arisen in South Africa, where last autumn the Dominion Government of South Africa gave notice that they were going to bring to an end a clause in their Constitution which gave the power of disallowance of Dominion legislation. But they desire to maintain the trustee status of their stocks which of course enables them to raise money in the London market at a much lower price than they would otherwise pay, and so they gave a very definite undertaking and have followed that by legislation to confirm the undertaking which they gave. The wording of Clause 1 (1) (a) of the Bill now before your Lordships was agreed to between this Government and the Government of the Dominion of South Africa, and it is in fact at the request of the South African Government that this Bill is now before your Lordships. The other Dominions were asked whether they, too, wished to join in a similar Bill, but the Dominions of Canada, Australia and New Zealand all preferred to remain under the old conditions. Therefore they do not come into the Bill. None the less, the Government have thought it wise to draw the Bill on general lines so that, should a Dominion hereafter wish to accede to the Bill, it will be possible for them to do so. I think there is nothing further that I need say to your Lordships on this Bill and I beg to move it be now read a second time.