§ Sir J. Leechasked the Prime Minister whether, now that some arrangement has been made about the dishonoured Brazilian obligations to British subjects, he will again protest to the Brazilian authorities against the continued ill-treatment of British savings lent to Brazil to provide and equip the Leopoldina Railway and the Leopoldina Terminal Company, now operated for the benefit of Brazilian subjects?
§ Mr. ButlerThe difficulties experienced in the past by the Leopoldina Railway Company have been substantially relieved owing to the good will of the Brazilian Government in issuing a decree law on 3rd August last granting a loan of 30,000 contos of reis to the company for re-equipment purposes. This decree has been duly implemented and the moneys deposited. I understand that satisfactory negotiations are in progress between the Brazilian Government and the Leopoldina Terminal Company.
§ Mr. Critchleyasked the Financial Secretary to the Treasury, how often, between 1918 and 1939, Brazil has, after borrowing here £249,000,000, dishonoured her obligations, pleading inability to pay; and whether he will set up an exchange clearing to replace the almost valueless composition accepted temporarily by British investors in March last, although Brazil's external trade balances are adequate to meet her obligations to British investors?
§ Captain CrookshankThere was no default on the service of Brazilian Federal loans up to February, 1931, although defaults had take place between 1918 and 1930 on the external loans of Brazilian Slates and municipalities. The arrangements made in regard to Brazilian loans since the financial crisis of 1931 are fully586W set out in the annual reports of the Council of Foreign Bondholders. I would add that the figure of £249,000,000 referred to in the Question appears to represent the total amount of Federal, State and municipal loans in all currencies outstanding on 31st December, 1938, and is substantially in excess of the amount owned by British holders. In reply to the second part of the Question, the recent settlement was recommended by the Council of Foreign Bondholders, and I think that an examination of the relevant figures shows that the action suggested in the Question would not achieve the object which my hon. Friend has in mind. In this as in other cases it is the policy of His Majesty's Government to give the fullest support to the claims of British bondholders, and to take such action as represents in their considered opinion that which is most calculated to protect the interests of this country.