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C O P Y
VM

PLADI
London
Dated August 27, 1959
Rec!d

3:05 p.m.

Secretary of State
Washington.
1279,

August 27, 8 p.m.

FOR IMMEDIATE DELIVERY TO THE ACTING SECRETARY OF THE TREASURY
FROM BUTTERWORTH.
"British Treasury has decided, in view of movement of
events, to require British residents to declare certain foreign
securities and not to dispose of such holdings without permission.

British Treasury states there is no present (repeat

present) intention to actually acquire them from holders or
to dispose of them.

Because of the importance of this step to

us I am cabling both the regulation made under the Emergency
Defence Act and the related Treasury order.

These will be in

effect when the city opens tomorrow morning; they are being
postdated to August 25. His Majesty, in pursuance of section
one of the emergency powers (Defence) Act, 1959, and of all
other powers enabling him in that behalf, is pleased, by and
with the advice of his Privy Council, to order, and it is hereby
ordered, that the following regulations shall have effect:
1« - (l) The Treasury may by order direct (A) that,




subject

VM -2- 1279, August 27, 8 p.m., from London.
subject to any exemptions for which provision may be made
by the order, no person shall, except with permission
granted by or on behalf of the Treasury, sell, transfer or
do anything which involves the creation of a charge on
securities of any such class as may be specified in the
order, being a class of securities which, in the opinion
of the Treasury, are likely to be marketable outside the
United Kingdom, and I repeat United Kingdom, and
(B) That the owner of any securities of the said class
shall, in such manner and within such period as may be
specified in the order, make a return to the Bank of England
giving such particulars with respect to those securities as
may be so specified.
For the purposes of this paragraph a person who mortgages or pledges a security shall be deemed thereby to
create a charge on the security.
(2) At any time while an order made under the preceding paragraph with respect to securities of any class is
in force, the Treasury, if they are of the opinion that it
is expedient so to do for the purpose of strengthening the
financial position of the United Kingdom, may, by an order
made generally with respect to any specified securities of
that class, or by directions given with respect to any securities of that class of which any particular person is the




owner

VM

-3-

1279, August 27, 8 p.m., from London,

owner, transfer to themselves the securities to which the
order or directions relates or relate, at a price specified
in the order or directions being a price which, in the opinion
of the Treasury, is not less than the market value of the
securities on the date of the making of the order or the giving
of the directions.
(3) Where any order is made, or any directions are given,
under the last preceding paragraph with respect to any securities.
(A) Those securities shall forthwith vest in the Treasury
free from any mortgage, pledge or charge, and the Treasury may
deal with the securities as they think fit;
(B) The owner of any of those securitiss, and any
person who is responsible for keeping any register or book
in which any of those securities is registered or inscribed
or who is otherwise concerned with the registration or inscription of any of those securities, shall do all such
things as are necessary or as the Treasury or the bank of
England on their behalf may direct to be done for the purpose
of securing that the security and any document of title relating thereto will be delivered to the Treasury or to such
person as the Treasury may direct and, in the case of any
registered or inscribed security, that the security will be
registered or inscribed in the name of the Treasury or such




person

VM

-4-

1S79, August 27, 8 p.m., from London.

person as the Treasury may direct•
(4) The duty to deliver any security under the last
preceding paragraph shall include a duty to do all such
things as are necessary to secure that any dividends or
interest on that security becoming payable on or after
the date of the making of the order or the giving of the
directions will be paid to the Treasury; and where, in the
case of any security payable to bearer which is delivered in
pursuance of the said paragraph, any coupons representing
any such dividends or interest are not delivered with the
security, such reduction in the price payable therefor shall
be made as the Treasury think fit:
Provided that, where the price specified in the order
or directions in relation to any securities is ex any dividend or ex any interest, this paragraph shall not apply to
that dividend or interest or to any coupon representing it»
(5) A certificate signed by any person authorized in
that behalf by the Treasury that any specified securities
are securities
/transferred to the Treasury under this regulation shall be
treated by all persons responsible for keeping any registers
or books in which the securities are registered or inscribed,
or who are otherwise concerned with the registration or inscription of those securities, as conclusive evidence that
the securities have been so transferred.




(6) ?his

VM

-5- 1279, August 27, 8 p.m., from London,
(6) This regulation shall not apply to any security

if

the Treasury are satisfied that at all times since the beginning
of the twenty-sixth day of August, Nineteen hundred and thirtynine, all the persons interested in the security, other than
persons interested therein merely as trustees or merely by
virtue

of any mortgage, pledge or charge created before the

said day, but including any persons beneficially interested therein under a trust, were not resident in the United Kingdom,
2 O - (l) Stamp duty shall not be chargeable on any security
by reason only of the assignment, transfer or negotiation thereof
to the Treasury, and shall not be chargeable-,
(A)

On any instrument whereby any security is assigned

or transferred to the Treasury (whether on sale or otherwise),
or
(B)

on any cjatract note for, or relating to, any sale

of securities to the Treasury,
(2)

This regulation applies only in relation to assign-

ments, transfers, negotiations or sales of securities effected
during the continuance in force of this regulation, whether in
compliance with these regulations or otherwise.
(3)

In this regulation the expression "Contract Note"

has the meaning assigned to that expression by subsection




(3) of

VM -6- 1279, August 27, 8 p.m., from London.
(3) or section seventy-seven of the Finance (19O9-IO) Act,
1910.
3. The provisions of Part V of the defence regulations,
19391 shall apply ror the purpose of the enforcement of
these

regulations, and otherwise in relation thereto, as if

any reference in the said Part V to those regulations included a reference to these regulations.
U» In these regulations, unless the context otherwise
requires, the following expressions have the meaning hereby
respectively assigned to them, that is to say:"Owner," in relation to any security, includes any
person who has power to sell or transfer a security, or who
has the custody thereof, or who receives, whether on his
own behalf or on behalf of any other person, dividends or
interest thereon, or who has any other interest therein;
and
"Security" induces shares, stock, bonds, debentures,
debenture stock and treasury bills, but does not include a
Dill of exchange or promissory note.
S

These regulations may be cited as the Defence

(i'inance) Regulations, 1939• Butterworth.

DJDM



KENNEDY

W

PLAIN
LONDON
Dated
Rec'd

August 27, 1939
4:10 PM

Secretary of State
Washington
1279, August 27, 8 p.m.

(SECTION TMO).

Treasury Order.
Whereas it is provided by paragraph (l) of regulation Q.
of the Defence (Finance) Regulations 1939 that the Treasury
may by order give directions prohibiting, except with
permission, dealings with securities which in the opinion of
the Treasury are likely to be marketable outside the United
Kingdom and requiring owners of such securities to make a
return to the Bank of England, and whereas the Treasury are
of opinion that securities of the classes to which this
order applies are likely to be marketable outside the United
Kingdom.
Now, therefore, the Lords Commissioners of His Majesty's
Treasury in pursuance of the said paragraph hereby make the
following order1. No person being an owner of securities of any of the
classes to which this order applies shall on or after the
date of this order, unless permission has previously been




granted

VM - 2 - 1S79, August 27, 8 p.m. (SECTION TWO), from London.

granted by or on behalf of the Treasury, sell transfer or do
anything which involves the creation of a charge on any
securities of the said classes.
2. The owners of any securities of the said classes
shall before the expiration of one month from the date of
this order make a return to the Bank of England (on a form
which may be obtained from any branch of a bank or any
stockbroker in the United Kingdom) giving the following particulars with respect to those securities, that is to say,
(A) The full name and address of the owner by whom or
on whose behalf the return is made.
(B) A description of the security in full.
(C) The nominal amount of the security.
(D) The place where the security is deposited.
(E) The full name and address of the person for whose
account the security is held (if other than the owner making the return)•
5. The classes of securities to which this order applies are the following, that is to say,
Securities in respect of which the principal, interest
of dividends are payable in the currency of any of the
following countries:-




Argentina
Belgium
Canada

" M - 3V

1S79, August 27, 8 p.m. (SECTION TWO), from London.

Canada
France
Holland and the Dutch East Indies
Norway
Sweden
Switzerland
Unitsd States of America
Or in respect of which the holder has an option to
require the payment of principal, interest or dividends
in the currency of any of those countries.
4. This order may be cited as the securities (Restrictions and Returns) Order 1939. Butterworth.

KENNEDY

DSB




London
Dated August 27, 1939
Rec'd 4:20 p.m.

Secretary of State
Washington.
1279, August 27, 8 p.m., (SECTION THREE).
The following paragraphs from the press handout are of interest:
"Permission will, however, be granted until further
notice for the transfer of securities of these classes to
persons resident in the United Kingdom, provided that an
application has, prior to the transfer, been made to and
approved by the Bank of England. Such applications must
be made to the Bank of England by a bank or stockbroker.
Securities affected by the order will not be good delivery
on the stock exchange unless accompanied by a form bearing
the Bank of England's certificate that the name of the new
owner of the securities has been registered.
If it is desired to transfer securities affected by the
order to a person not resident in' the United Kingdom, special
application must be made to the Bank of England by a bank or
stockbroker.
Definition of owner
Special attention is drawn to the fact that the Defence




(Finance)

WL 2- 1279, August 27, 3 p.m., (SECTION THREE)

(Finance) Regulations 1939 define the term "Owner" in
relation to any security to include any person who has
power to sell or transfer the security, or who has the
custody thereof, or who receives, whether on his own behalf or on behalf of any other person, dividends or interest thereon, or who has any other interest therein.
Non-resident owners.
The order referred to above does not apply to any
security if the Treasury are satisfied that at all times
since the beginning of the 26th day of August, 1939, all
the persons interested in the security, other than persons
interested therein merely as trustees or merely by virtue
of any mortgage, pledge or charge created before the said
day, but including any persons beneficially interested
therein under a trust, were not resident in the United
Kingdom.

Accordingly, no action has to be taken by such

non-resident owners."




(Butterworth)

KENNEDY