§ Sir J. Leech
asked the Financial Secretary to the Treasury whether he is aware that the scheme of repudiation of debt service by the Chilean Government compels British holders of Chilean loans themselves to repay, for the benefit of Chile, part of the Chilean debt; and will he, in order to ascertain the advantage accrued, on balance, to British investors, from lending to Chile between 1885 to 1929, and, as a guide to those now considering our future foreign lending policy in general, institute an inquiry by the Government actuaries to estimate how much of the total interest and sinking funds on all Chilean public loans floated in London betwen 1885 and 1929 has been provided by fresh Chilean loans raised here and now in default?
§ Captain Wallace
The terms of the arrangements made by Chile with regard to her foreign debt are explained in a communiqué published by the Council of Foreign Bondholders on the 7th June, 1935, and are reproduced on pages 27–32 of the Council's Annual Report for that year.
The latest Decree regulating the Chilean Debt Law is published in the Council of Foreign Bondholders' Report for 1938. Although the terms were and are open to objection in many respects—which was the reason for which the Council did not feel that they could recommend the offer to holders—I do not think the law can fairly be described as a scheme of repudiation.
I do not think that the inquiry suggested in the second part of the question would serve any useful purpose.