DOMINION STOCKS

New Zealand Herald, Volume LXXI, Issue 21845, 6 July 1934, Page 11

DOMINION STOCKS

SOUTH AFRICAN BILL TRUSTEE STATUS QUESTION HOLDERS' RIGHTS PROTECTED 5y Telegraph—Press Association—(Copyright (Received July 5, 6.5 p.m.) British "Wireless RUGBY, July 4 An important statement was made in the House of Commons to-day by the Chancellor of the Exchequer, Mr. Neville Chamberlain, on the subject of the Colonial Stock Act, 1900, Declaration Bill recently passed by the Parliament of South Africa. .This, he said, was the result of an agreement between the British and South African

Governments. Last autumn the Union Government announced that it proposed to repeal the section of the South Africa Act, 1909, which provides for the exercise of the power of disallowance in respect of Union legislation. That action was in. accordance with the constitutional de« velopments of the last few years, but one of the conditions prescribed by the Treasury under the Colonial Stock Act, 1900 —with which every Dominion or Colonial Government must comply in order to obtain trustee status in the United Kingdom for their securitiesis that the right of disallowance shall be expressly recognised by the borrow-, ing Government in respect of any legislation which appears to the British Government to alter any of the provisions affecting stock to the injury of stockholders, or to involve a departure from the original contract in regard to the stock. Alternative Form oi Safeguard The Union Government, therefore, realising that when the power of disallowance ceased these conditions in the absence of an express'stipulation, would become nugatory, and desiring to maintain to the fullest possible degree the rights of the holders of its stocks, approached the British Government with a view to devising an alternative form, of safeguard. As the result of discussion it was agreed that the Union Government should enter into an undertaking with the British Government, now confirmed by the Act referred to, and that the new undertaking, which should be accepted by the Treasury subject to the approval of Parliament, as an alternative to the existing stipulation, should be as follows: — Union's New Undertaking " The Union Government has undertaken that legislation which appeara to the British Government to alter any of the provisions affecting stock to the injury of stockholders, or to involve a departure from the original contract in regard to stock, shall not; be submitted for the Royal assent except after agreement with the British Government. Also that if attention is drawn to any such legislation as aforesaid after the passing of it by the Union Parliament the Government of South Africa will take the necessary steps to ensure such an amendment as may be requested by the British Government." Mr. Chamberlain said a bill was to, be presented in the House of Commons authorising the Treasury to accept the undertaking in the agreed form from any Dominion Government which prefers to adopt this as an alternative to the existing condition. Any Dominion Government may continue the existing practice. Mr. Chamberlain said he was entirely satisfied that the existing rights of stockholders would be safeguarded equally under either condition.