National Security (Capital Issues) Regulations (Amendment)

Legislation au C1945L00026 Regulations Not in force Legislative Instrument

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STATUTORY RULES.

1945. No. 26.

 

REGULATIONS UNDER THE NATIONAL SECURITY ACT 1939-1943.*

I, THE GOVERNOR-GENERAL in and over the Commonwealth of Australia, acting with the advice of the Federal Executive Council, hereby make the following Regulations under the National Security Act 1939-1943.

Dated this sixth day of March, 1945.

HENRY

Governor-General.

 

By His Royal Highness’s Command,

J. B. CHIFLEY

for and on behalf of the Minister of State for Defence.

 

Amendments of the National Security (Capital Issues) Regulations.†

Repeal.

1. Regulation 3 of the National Security (Capital Issues) Regulations is amended by inserting in sub-regulation (2.), after the word “shall” (first occurring), the words subject to these Regulations,”.

Parts.

2. Regulation 4 of the National Security (Capital Issues) Regulations is amended by omitting the words “Part IVa.—Provisions relating to the Sale of Land.”.

3. After regulation 7 of the National Security (Capital Issues) Regulations the following regulation is inserted:—

Syndicates, &c.

“7A. Except with the consent of the Treasurer, a person (other than a body corporate) or persons carrying on, or proposing to carry on, either alone or together with other persons, any business shall not accept or offer to accept from any person any money in consideration of any person’s becoming entitled to an interest in the business where the persons from whom money has already been accepted, together with any persons from whom money is accepted at the same time, upon similar consideration, exceed nineteen in number.”.

Applications for consent of Treasurer

4. Regulation 8 of the National Security (Capital Issues) Regulations is amended by omitting the words “either of the last two preceding regulations” and inserting in their stead the words “this Part”.

 

* Notified in the Commonwealth Gazette on 7th March. 1945.

† Statutory Rules 1940, No. 218, as amended by Statutory Rules 1940, Nos. 242 and 291; 1941, Nos. 150 and 304; and 1942, Nos. 23, 126, 196, 366 and 424.

269.—Price 3d.


Loans totalling less than £500 in any period of twelve months not affected.

5. Regulation 15 of the National Security (Capital Issues) Regulations is amended by omitting paragraph (c) of sub-regulation (2.) and inserting in its stead the following paragraph:—

“(c) any extension or renewal of a mortgage or charge, where the rate of interest payable under the mortgage or charge as extended or renewed does not exceed the rate specified in paragraph (a), (b) or (c) of sub-regulation (1.) of regulation 18 of these Regulations, whichever is applicable; or”.

Extensions and renewals.

6. Regulation 18 of the National Security (Capital Issues) Regulations is amended by omitting from paragraph (a) of sub-regulation (1.) the words “Five pounds” and inserting in their stead the words “Four pounds fifteen shillings”.

Limitation of Interest on deposits with bodies other than banks, building societies, declared pastoral companies and partnerships.

7. Regulation 20 of the National Security (Capital Issues) Regulations is amended—

(a) by omitting from paragraph (b) the word “or”; and

(b) by omitting paragraph (c) and inserting in its stead the following paragraphs:—

“(c) on any deposit made after the twelfth day of March, 1942, but not after the twelfth day of March, 1945, with that body by a person other than a bank—at a rate higher than One pound five shillings per centum per annum; or

“(d) on any deposit made after the twelfth day of March, 1945, with that body by a person other than a bank—at a rate higher than Ten shillings per centum per annum.”.

Limitation of interest on deposits with building societies made on or after 29th March, 1940.

8. Regulation 22 of the National Security (Capital Issues) Regulations is amended by omitting paragraph (a) and inserting in its stead the following paragraphs:—

“(a) in the case of a deposit made not later than the twelfth day of March, 1945, and repayable at call or at a shorter date than three months—at a rate which exceeds One pound ten shillings per centum per annum;

“(aa) in the case of a deposit made after the twelfth day of March, 1945, and repayable at call or at a shorter date than three months—at a rate which exceeds Ten shillings per centum per annum; and ”.

Limitation of interest on deposits with declared pastoral companies made on or after 29th March, 1940.

9. Regulation 23 of the National Security (Capital Issues) Regulations is amended by omitting paragraph (a) and inserting in its stead the following paragraphs:—

“(a) in the case of a deposit made not later than the twelfth day of March, 1945, and repayable at call or at a shorter date than three months—at a rate which exceeds One pound ten shillings per centum per annum;

“(aa) in the case of a deposit made after the twelfth day of March, 1945, and repayable at call or at a shorter date than three months—at a rate which exceeds Ten shillings per centum per annum; and”.


Limitation of interest on deposits made with declared pastoral companies.

10. Regulation 24aa of the National Security (Capital Issues) Regulations is amended by omitting all the words after the word “ interest “ and inserting in their stead the following words:—

“, on any deposit repayable at call made (whether before or after the twentieth day of April, 1942) with that company by a person other than a bank—

(a) in respect of any period commencing on or after the twentieth day of April, 1942, and ending not later than the twelfth day of March, 1945—at a rate exceeding One pound per centum per annum; or

(b) in respect of any period commencing after the twelfth day of March, 1945—at a rate exceeding Ten shillings per centum per annum.”.

Interest on certain deposits not affected.

11. Regulation 25 of the National Security (Capital Issues) Regulations is amended by omitting paragraph (b) and inserting in its stead the following paragraph:—

“(b) the rate of interest payable on the deposit does not exceed—

(i) in the case of a deposit made before the thirteenth day of March, 1942—Five pounds ten shillings per centum per annum; or

(ii) in any other case—Five pounds five shillings, per centum per annum.”.

Interest on certain renewed deposits.

12. Regulation 26 of the National Security (Capital Issues) Regulations is amended by omitting paragraph (d) and inserting in its stead the following paragraph:—

“(d) the rate of interest payable in respect of the renewed deposit does not exceed—

(i) the rate payable when the deposit was made or, in the case of a deposit which has been previously renewed, the rate payable when the deposit was last renewed; or

(ii) the rate of Ten shillings per centum per annum or, in the case of a deposit with a building society or a declared pastoral company, the maximum rate which would be applicable to that deposit under regulation 22 or 23 of these Regulations, as the case may be,

whichever is the higher.”.

Interpretation.

13. Regulation 28 of the National Security (Capital Issues) Regulations is amended—

(a) by omitting from paragraph (a) the word “and”; and

(b) by inserting after paragraph (a) the following paragraph:—

“(ab) where the whole or any portion of the amount of a dividend which becomes payable after the commencement of this paragraph by a company to any person has not been paid after the expiration of three months from the date on which the dividend became payable, the amount unpaid shall be deemed to be a deposit received by the company from that person on the first day after the expiration of those three months; and”.


Provisions relating to the sale of land.

14. Part IVa. of the National Security (Capital Issues) Regulations is repealed.

Interest rate not to be increased in certain cases.

15. Regulation 29 of the National Security (Capital Issues) Regulations is amended by omitting paragraph (b) of sub-regulation (2.) and inserting in its stead the following paragraph:—

“(b) charge interest on any loan (not being an unsecured loan)—

(i) made after that date but not later than the twelfth day of March, 1942—at a rate exceeding Five pounds ten shillings per centum per annum; or

(ii) made after the twelfth day of March, 1942—at a rate exceeding Five pounds five shillings per centum per annum.”.

Consent of Treasurer.

16. Regulation 31 of the National Security (Capital Issues) Regulations is amended by inserting after sub-regulation (2.) the following sub-regulation:—

“(2a.) Where the consent of the Treasurer has been granted under any provision of the previous Regulations or has been or is granted under any provision of these Regulations, the consent shall cease to be in force on the date of commencement of this sub-regulation or at the expiration of the period of twelve months after the date on which the consent was granted, whichever is the later, but nothing in this sub-regulation shall affect the period during which any such consent has effect by virtue of the terms thereof.”.

 

By Authority: L. F. Johnston, Commonwealth Government Printer, Canberra.

Overview

The Statutory Rules 1945 No. 26, titled Regulations under the National Security Act 1939-1943, was enacted in 1945 to provide amendments to existing regulations pertaining to capital issues during the national security period. This legislative instrument was made by the Governor-General in Council, reflecting the authority of the Australian Parliament to enact such regulations. The primary policy objective of these regulations was to manage financial activities in a manner that would not undermine national security, particularly in the context of wartime economic controls and constraints. These regulations address gaps in the existing legislative framework by providing more stringent controls on capital issues, syndicate activities, interest rates on deposits, and extensions or renewals of mortgages or charges, thereby ensuring that financial practices did not inadvertently support activities contrary to national interests. The amendments also include provisions for obtaining consent from the Treasurer for certain financial activities, and establish time limits for such consents to remain in effect. The overarching goal was to maintain economic stability and prevent financial exploitation during a period of national emergency.

Scope and Application

The Statutory Rules 1945, No. 26, made under the National Security Act 1939-1943, provide amendments to the National Security (Capital Issues) Regulations, impacting various financial transactions and entities. These regulations primarily apply to the Commonwealth of Australia and cover transactions involving capital issues, syndicates, and deposits, with a particular focus on limiting interest rates on loans and deposits to ensure economic stability during wartime. The regulations target individuals and entities carrying on or proposing to carry on any business and set limits on syndicate size and interest rates on deposits with certain financial institutions, including banks, building societies, and declared pastoral companies. Notably, the regulations exclude loans totalling less than £500 in any twelve-month period and certain types of deposits. The scope of these regulations is further extended through subordinate instruments, which may modify or elaborate on the provisions to adapt to changing economic conditions.

Key Provisions

The regulations primarily address amendments to the National Security (Capital Issues) Regulations, focusing on the cap on interest rates for certain types of deposits and loans, and the conditions under which these financial transactions can be made. Regulation 3 of these Regulations is amended to subject any capital issues to the provisions of these Regulations (section 1). It also removes the section on the sale of land from Regulation 4 (section 2), and introduces a new Regulation 7A that restricts the number of people who can collectively accept money in consideration for a business interest to nineteen, unless the Treasurer consents (section 3). Applications for such consent are governed under Regulation 8 (section 4). Loans of less than £500 in a twelve-month period are exempt from these regulations (section 5). The regulations impose obligations on financial institutions and individuals regarding the interest rates they can charge or pay. For instance, Regulation 15 requires that any extension or renewal of a mortgage or charge must not exceed certain specified interest rates (section 5). The interest rates for deposits with various financial entities are also capped. For example, Regulation 18 limits the interest on deposits with entities other than banks, building societies, declared pastoral companies, and partnerships to One pound five shillings per centum per annum for deposits made between March 1942 and March 1945, and Ten shillings per centum per annum for deposits made after March 1945 (section 7). Similar caps apply to deposits with building societies and declared pastoral companies (sections 8 and 9). Breaches of these regulations can result in criminal and civil penalties. Regulation 29 stipulates that charging interest rates above the prescribed limits on loans and deposits can lead to legal consequences (section 15). The consent granted by the Treasurer under these Regulations can lapse either on the commencement date of these regulations or after twelve months from the date of consent, whichever is later (section 16). These regulations are intended to ensure that interest rates do not exceed certain thresholds, thereby maintaining financial stability and preventing exploitation during the wartime context.

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