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Debts Clearing Offices And Import Restrictions Act, 1934

Volume 319: debated on Tuesday 2 February 1937

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10.59 p.m.

I beg to move,

"That the Clearing Office (Rumania) Amendment Order, 1936, dated the seventeenth day of December, nineteen hundred and thirty-six, made by the Treasury under the Debts Clearing Offices and Import Restrictions Act, 1934, a copy of which was presented to this House on the nineteenth day of January, nineteen hundred and thirty-seven, be approved."
With the permission of the House I will introduce this Order and the next Order on the Paper, leaving the House free of course to take a decision on each of them separately. It can be done in a very few words. The first Order is the Clearing Office (Rumania) Order. An agreement was negotiated with the Rumanian Government on 5th December last, providing that the deduction or refund of non-sterling charges may be allowed from debts payable to the Clearing Office. Under the heading of charges incurred otherwise than in sterling fall such charges as those commonly incurred in Poland and Germany with respect to the carriage of Rumanian goods to this country by the land route. It was found that trade was being interfered with owing to the inability to allow for charges incurred otherwise than in sterling. Hence the new agreement was negotiated, and this Order gives effect to it.

If I might turn to the second Order, it relates to Spain. The Anglo-Spanish clearing was working successfully up to the outbreak of the civil war, and the arrears were surely and slowly being liquidated, but the civil war gravely interfered with the work of the clearing. The Madrid Government declared a moratorium on all payments in Spain, the Spanish exchange office in effect ceased to operate for a time, and difficulties of communication between London and that office were very great. Moreover, the Spanish exchange office in Madrid was entirely cut off from that part of the Spanish territory controlled by the rebel authorities. Events moved on, and as time went on it became clear that to maintain the obligation on the United Kingdom debtor to make his payments to the London clearing office was bound to interfere with trade. On the other hand, to suspend this obligation would be unwelcome to creditors in the United Kingdom who had outstanding debts in Spain, and the opportunity was taken of consulting with representatives of the interests concerned. The view expressed was that in all the circumstances it was desirable to suspend the clearing in the interests of current trade, always provided that an understanding was arrived at with the Spanish authorities that liquidation of outstanding debts would be resumed at the earliest possible moment.

It was decided in December last that on the whole the only practicable solution of the many difficulties was to suspend the clearing procedure altogether for the time being, and on 17th December my hon. Friend the Parliamentary Secretary to the Board of Trade announced that the Government had decided that the clearing procedure should be suspended and that, under a Treasury Order which was being issued on that day, debts due in respect of Spanish goods imported into the United Kingdom after 18th December are not payable to the Anglo-Spanish Clearing Office. That is the Treasury Order for which approval is now being sought. On the question of liquidating outstanding debts, Article 2 of the Order directs the Clearing Office to place in a reserve account sterling already collected and due to be collected in respect of Spanish goods imported into the United Kingdom before 19th December, 1936. The sterling is to remain in the reserve account until such time as a further Treasury Order is issued regarding its distribution. The Government fully recognise that a further Treasury Order as regards distribution of this sterling should be made as soon as possible, and this is a matter on which discussions with the Spanish Government are actively proceeding. It is not now possible to say more, but the question is being actively pursued, and a further statement will be made as soon as possible.

Question put, and agreed to.


"That the Clearing Office (Rumania) Amendment Order, 1936, dated the seventeenth day of December, nineteen hundred and thirty-six, made by the Treasury under the Debts Clearing Offices and Import Restrictions Act, 1934, a copy of which was presented to this House on the nineteenth day of January, nineteen hundred and thirty-seven, be approved."

Motion made, and Question proposed,

"That the Clearing Office (Spain) Amendment No. 2 Order, 1936, dated the seventeenth day of December, nineteen hundred and thirty-six, made by the Treasury under the Debts Clearing Offices and Import Restrictions Act, 1934, a copy of which was presented to this House on the eighteenth day of December, nineteen hundred and thirty-six, be approved."—[Lieut.-Colonel Colville.]

11.5 p.m.

I desire to draw attention to a matter affecting a constituent of mine who is in a very unfortunate position, to say no more. A certain Mr. William Dick was carrying on business in Greenock as an agent, among others, for a Newfoundland firm which had dealings with interests in Spain. By the end of June last there was owing to this Newfoundland firm a sum of over £11,000. On 9th July there was received in Greenock a cheque from the Anglo-Spanish Clearing House amounting to £5,042 19s. 9d. made payable to the firm with which Mr. Dick was carrying on business. Unfortunately he died just prior to the cheque being received. It was returned to the Clearing Office at London, with a request that a new cheque should be issued in favour of Mr. Dick's executrix, and there accompanied the request a guarantee that the confirmation of the executrix would be applied for as soon as possible, that being the corresponding proceeding to the taking of probate in England. The cheque was accepted in London, but in my submission must be taken to be accepted subject to the condition under which it was sent, that a new cheque made payable to the executrix would be sent in return. No such cheque was sent and the sum has remained in London and has not been sent to Greenock. That is a serious matter, not so much for Greenock as for Newfoundland, because it would immediately be transmitted there. Judging from remarks made in the House in the last few days business interests in Newfoundland are in urgent need of money. This is a serious injustice. A new article is to be substituted for Article 8 of the principal Order and it begins in these terms:

"Any sums standing to the credit of the Clearing Office by virtue of the principal Order at the coming into force of this Order shall be transferred to a reserve fund."
That sum, whatever it is, includes this sum of £5,042 19s. 9d., which ought not to be standing to that credit at all. As soon as the original cheque was sent to Greenock there was clearly an intention that it should be honoured and, accordingly, there was, notionally at any rate, a segregation of that sum from the fund standing to the credit of the Clearing House in London. That sum should have been kept apart. If it was not kept apart but remained apparently to the credit of the Clearing Office, then, it was subject to a trust and could not and ought not to be held to be covered by the terms of this Order at all. These being the facts, the sum of £5,042 19s. 9d. has been improperly detained in London. That is a serious matter even from the mere point of view of interest, because at five per cent. for seven months, the interest on that sum is already £147. But it is a much more serious matter to the Newfoundland business people who are in urgent need of money and who will reckon money at a higher rate than five per cent. Accordingly, I suggest to the right hon. and gallant Gentleman that he should give an undertaking that this sum should be segregated from the sums standing to the credit of the Clearing Office and be transmitted to Newfoundland, and then the Order be approved. Failing such an undertaking from the right hon. and gallant Gentleman, I suggest to the House generally that, in view of this very grave injustice, it should not approve of the Order, but should divide against the Minister on this very clear injustice.

11.13 p.m.

The hon. and learned Member for Greenock (Mr. R. Gibson) suggests the rather severe method of dealing with the situation, of refusing to approve of the Order because of this particular case. The Order relates to a very wide range of trades, and there is a very general demand among traders generally that the Order should be passed in order to enable trade to flow with Spain at the present time. The point he raised is a difficult technical point—a legal point really—and the advice which the Clearing Office received was, that they could not, in fact, make the payment until a satisfactory discharge could be secured. Without going into long details at this time of the night, that discharge could not be secured until the confirmation was granted by the Scottish Court, and this was sealed on 11th August. By that period payment had been suspended on account of the outbreak of the civil war, a circumstance which nobody could have foreseen, and payment had been totally suspended, which was a most unfortunate situation among those who expected to receive money. The Clearing Office could be sued if it distributed money wrongly, and it could not have acted other than it did.

It is a legal matter, and one which those interested, if they desired, could test in the courts, but I suggest that any such action would be drastic. What I indicated in my speech in moving the Order was that, as soon as possible, it is intended to recommence payment, when it can be agreed with the Spanish Government—and negotiations are actively proceeding just now—out of that sterling account. The parties for whom the hon. and learned Member speaks will, of course, then receive their payment. I am advised—and I have no reason at all to doubt the advice—that the Clearing Office could not properly have paid this out without receiving a sufficient discharge, which was not forthcoming until after the date when payments had been suspended owing to the outbreak of civil war.

Division No. 65.]


[11.16 p.m.

Acland-Troyte, Lt.-Col. G. J.Furness, S. N.Neven-Spence, Major B. H. H.
Adams, S. V. T. (Leeds, W.)Fyfe, D. P. M.Owen, Major G.
Agnew, Lieut.-Comdr. P. G.Gilmour, Lt.-Col. Rt. Hon. Sir J.Palmer, G. E. H.
Allen, Lt.-Col. J. Sandeman (B'kn hd)Gluckstein, L. H.Penny, Sir G.
Anstruther-Gray, W. J.Graham, Captain A. C. (Wirral)Petherick, M.
Aske, Sir R. W.Griffith, F. Kingsley (M'ddl'sbro, W.)Ponsonby, Col. C. E.
Baldwin-Webb, Col. J.Grimston, R. V.Radford, E. A.
Balfour, G. (Hampstead)Guest, Maj. Hon. O. (C'mb'rw'll, N.W.)Raikes, H. V. A. M.
Barolay-Harvey, Sir C. M.Guy, J. C. M.Ramsay, Captain A. H. M.
Beaumont, Hon. R. E. B. (Portsm'h)Hanbury, Sir C.Ramsbotham, H.
Blindell, Sir J.Hannah, I. C.Ramsden, Sir E.
Bowyer, Capt. Sir G. E. W.Harbord, A.Rathbone, J. R. (Bodmin)
Brown, Col. D. C. (Hexham)Harris, Sir P. A.Reed, A. C. (Exeter)
Browne, A. C. (Belfast, W.)Heilgers, Captain F. F. A.Reid, W. Allan (Derby)
Bull, B. B.Hills, Major Rt. Hon. J. W. (Ripon)Remer, J. R.
Burgin, Dr. E. L.Holmes, J. S.Rickards, G. W. (Skipton)
Butler, R. A.Hope, Captain Hon. A. O. J.Ropner, Colonel L.
Cartland, J. R. H.Hudson, Capt. A. U. M. (Hack., N.)Ross Taylor, W. (Woodbridge)
Carver, Major W. H.Hudson, R. S. (Southport)Rowlands, G.
Cary, R. A.Hunter, T.Ruggles-Brise, Colonel Sir E. A.
Castlereagh, ViscountJones, H. Haydn (Merioneth)Salt, E. W.
Chapman, A. (Rutherglen)Jones, L. (Swansea W.)Scott, Lord William
Clarke, Lt.-Col. R. S. (E. Grinstead)Kerr, Colonel C. I. (Montrose)Selley, H. R.
Colville, Lt.-Col. Rt. Hon. D. J.Lamb, Sir J. Q.Shaw, Major P. S. (Wavertree)
Cooke, J. D. (Hammersmith, S.)Law, R. K. (Hull, S.W.)Shaw, Captain W. T. (Forfar)
Cooper, Rt. Hn. T. M. (E'nburgh, W.)Leckie, J. A.Shepperson, Sir E. W.
Courthope, Col. Sir G. L.Leech, Dr. J. W.Smith, Sir R. W. (Aberdeen)
Craven-Ellis, W.Leighton, Major B. E. P.Southby, Commander A. R. J.
Gritchley, A.Llewellin, Lieut.-Col. J. J.Spears, Brigadier-General E. L.
Crooke, J. S.Loftus, P. C.Spens, W. P.
Cross, R. H.Lovat-Fraser, J. A.Storey, S,
Crowder, J. F. E.MacAndrew, Colonel Sir C. G.Stourton, Major Hon. J. J.
Davies, Major Sir G. F. (Yeovil)M'Connell, Sir J.Strauss, H. G. (Norwich)
Doland, G. F.McEwen, Capt. J. H. F.Strickland, Captain W. F.
Duckworth, W. R. (Moss Side)McKie, J. H.
Dugdale, Major T. L.Macnamara, Capt. J. R. J.Taylor, C. S. (Eastbourne)
Duncan, J. A. L.Magnay, T.Turton, R. H.
Edmondson, Major Sir J.Makins, Brig.-Gen. E.Walker-Smith, Sir J.
Ellis, Sir G.Mander, G. le M.Warrender, Sir V.
Elliston, Capt. G. S.Manningham-Buller, Sir M.Wells, S. R.
Emmott, C. E. G. C.Margesson, Capt. Rt. Hon. H. D. R.Willoughby de Eresby, Lord
Emrys-Evans, P. V.Mayhew, Lt.-Col. J.Womersley, Sir W. J.
Erskine-Hill, A. G.Mellor, Sir J. S. P. (Tamworth)Wragg, H.
Evans, Capt. A. (Cardiff, S.)Mills, Major J. D. (New Forest)Wright, Squadron-Leader J. A. C.
Everard, W. L.Moreing, A. C.Young, A. S. L. (Particle)
Fildes, Sir H.Morris-Jones, Sir Henry
Findlay, Sir E.Morrison, G. A. (Scottish Univ's.)TELLERS FOR THE AYES.—
Fleming, E. L.Morrison, Rt. Hon. W. S. (Cirencester)Lient.-Colonel Sir A. Lambert
Foot, D. M.Muirhead, Lt.-Col. A. J.Ward and Mr. James Stuart.
Fremantle, Sir F. E.Nail, Sir J.

It must have been paid then. That cheque was sent back subject to a condition which should have been honourably observed, otherwise the cheque should have been returned. If the cheque had been sent back those concerned in Greenock would have had their own means and remedy to get payment as soon as confirmation was got. If they had retained the cheque in their own hands that could have been done as a simple matter of Scottish law. That being the situation in Scotland, it should not be altered by the fact that when the cheque was sent to the Clearing Office in London it was improperly retained there. The Clearing Office should not benefit by what they have done.

Question put.

The House divided: Ayes, 144; Noes, 69.


Adamson, w. M.Jones, A. C. (Shipley)Pritt, D. N.
Alexander, Rt. Hon. A. V. (H'Isbr.)Jones, Morgan (Caerphilly)Richards, R. (Wrexham)
Anderson, F. (Whitchaven)Kelly, W. T.Ridley, G.
Barnes, A. J.Kennedy, Rt. Hon. T.Ritson, J.
Barr, J.Lathan, G.Robinson, W. A. (St. Helens)
Benson, G.Leonard, W.Rowsen, G.
Bevan, A.Leslie, J. R.Sexton. T. M.
Broad, F. A.Logan, D. G.Silverman, S. S.
Burke, W. A.Lunn, W.Simpson, F. B.
Cape, T.Macdonald, G. (Ince)Smith, Ben (Rotherhithe)
Chater, D.McGhee, H. G.Smith, E. (Stoke)
Ede, J. C.MacLaren, A.Stewart, W. J. (H'ght'n-Ie-Sp'ng)
Edwards, Sir C. (Bedwellty)Maclean, N.Taylor, R. J. (Morpeth)
Fletcher, Lt.-Comdr. R. T. HMacMillan, M. (Western Isles)Tinker, J. J.
Gardner, B. W.Mainwaring, W. H.Watson, W. McL.
Gibbins, J.Marshall, F.Whiteley, W.
Gibson, R. (Greenock)Messer, F.Williams, E. J. (Ogmore)
Greenwood, Rt. Hon. A.Milner, Major J.Wilson, C. H. (Attercliffe)
Grenfell, D. R.Morrison, R. C. (Tottenham, N.)Windsor, W. (Hull, C.)
Henderson, J. (Ardwick)Muff, G.Woods, G. S. (Finsbury)
Henderson, T. (Tradeston)Oliver, G. H.Young, Sir R. (Newton)
Hicks, E. G.Pethiek-Lawrence, F. W.
Hills, A. (Pontefract)Potts, J.TELLERS FOR THE NOES.—
Jagger, J.Price, M. P.Mr. John and Mr. Mathers.

East India Loans Bill

Read a Second time.

Bill committed to a Committee of the Whole House, for Thursday.—[ Captain Margesson.]