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Thursday, 22 October 1931


Mr CROUCH (Corangamite) . - Nobody can fail to respect the personnel of the National Debt Commission. As the Treasurer pointed out, the commission as a trustee for the nation has a fiduciary responsibility, and must act in accordance with the law. It is in duty bound to buy at market rates. If a private trustee were to pay £95 for bonds that he could have purchased for £88 he would be held to have committed a breach of trust.


Mr Theodore - And that would be the case with the commission.


Mr CROUCH - That is so ; therefore, it is necessary to give a mandate to the commission to buy bonds at. face value. The bill gives to the commission power to buy at a price in excess of the market rate, but not above par. Bonds can be bought in the market to-day for £S7; they may rise to £90. The obligation of the commission as trustee will be to consider how far this bill limits its obligations. The cases of hardship will absorb very much more than the £2,000,000, which the commission will make available this year. If bonds are quoted in the market at £90, many people will be ready to sell their bonds for £91, and the commission will be compelled by its trust to buy at that price. The commission is a corporation and has to act legally. It cannot be influenced by sentiment. A corporation has been described as having neither a body to be saved nor a soul to be dammed. If I were the trustee of an estate, and my duty required me to buy bonds the cestui que trust could sue me personally, if I paid £100 for a bond which I could have bought for £91.


Mr Paterson - This clause gives the necessary authority.


Mr CROUCH - The duty of a trustee is to do the best possible for the estate he is administering. If the market price for Commonwealth bonds is £90, the National Debt Commissioners, to avoid a possible charge of dereliction of trust, will be obliged to buy at £91, which, in the words of the bill, will be " in excess of the market price


Mr Gabb - For whom are they the trustees?


Mr CROUCH - They are trustees for the nation. I regret that the AttorneyGeneral is not present, because I should like to have his confirmation of my interpretation of the legal position. If the commission paid £100 for bonds at a time when the excess market price was £91, then, as trustees for the nation, they would be guilty of a breach of trust. I realize that it is useless for me to move an amendment, but I appeal to the Treasurer's sense of right in this matter, and suggest that he submit it to the law advisers of the Crown, and, if necessary, have the point reconsidered in another place. No distressed bondholder should receive less than par.







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