STATUTES
| Date | 01 January 1947 |
| Published date | 01 January 1947 |
| DOI | http://doi.org/10.1111/j.1468-2230.1947.tb00037.x |
STATUTES
BORROWING
(CONTROL
AND GUARANTEES) ACT,
1946
Tars
is
a
short Act containing two important contributions to
the assumption of economic control by the State.
In
the
first
place,
it
makes permanent the need for Treasury
consent to borrowing and raising of capital introduced
as
a
war-time measure by the Defence (Finance) Regulations. By
section
1
the Treasury is empowered to make orders for
regulating, subject to such exemptions
as
may be specified,
four types of transactions which embrace any issue in Great
Britain
or
by
a
company incorporated in Great Britain
of
shares
or
other securities, the circulation in Great Britain of
any offer of foreign securities, and the borrowing
in
Great
Britain by any person of sums aggregating more than
€10,000
in any twelve months. The ambit of the section
is
wide, and
provision is made to catch unit trusts. Provisions for enforce-
ment and penalties are contained in the Schedule, but
it
should
be noted that transactions which contravene the section are not
avoided (sub-section
(8)).
The penalties are severe, and the
methods of enforcement stringent, conferring on the Treasury
wide powers of securing production of documents and informa-
tion.
It
is, however, expressly provided that
a
counsel
or
solicitor shall not be required to disclose any privileged
communication.
It
would be improper in this review to discuss the case
for
State control of private enterprise
as
a
permanent measure.
Nor
is
it
possible to discuss the way in which the Act
is
likely to
work in practice, since
it
is another example of
'
streamlined
'
legislation and everything will depend on the orders made
under
it.
At the time of writing, no such orders have been
made, and the present position
still
depends on the Defence
(Finance) Regulations and the Capital Issues Exemptions
Orders, under which the consent of the Capital Issues Com-
mittee has to be obtained to issues, etc., aggregating more
than
E50,000
in any twelve months. There appears to be
no
immediate intention of introducing any fundamental changes
in the present practice,' although the Act enables the Govern-
ment either to tighten
or
loosen the control as they wish
from
time to time. The existing position
is
certainly not popular
1
See
the Draft Order
in
the
Explanatory
Memorandum (Cmd.
67!26/46)
52
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