| Activity | In 1923, following a suggestion by Governor Montagu Norman, HM Treasury (HMT) agreed that a private holding company, to be called Securities Trust Limited, be formed to hold and dispose of, as and when appropriate, miscellaneous securities held by HM Government. These securities had been acquired when companies to whom "cold storage" advances had been made, by the Bank on behalf of the Treasury, during the 1914-18 War and for purposes of reconstruction thereafter found themselves unable to repay those advances. The securities held were a mixed bag, some with actual value and others without, and the Treasury found it difficult, with criticism and questions in Parliament about their management of realisation, to maintain a consistent policy; the idea, therefore, of forming a company to carry out the orderly liquidation of the companies concerned, and to which would pass the various questions and difficulties attaching to the holdings, greatly appealed to the Treasury. The company was registered in January 1924, when it was proposed that £950 of the share capital of £1,000 should be subscribed by the Treasury and the balance by the Bank. Subsequently, in order to avoid payment out of public funds which, because it would have required legislation, would have disclosed the Treasury's interest in the Company, the whole of the share capital was purchased by the Bank and handed over to the Treasury, the shares being registered in the names of nominees of the Treasury (in practice, the Bank's nominees).
The Securities Trust paid the Treasury £2 million for the securities that were initially taken over and also for any other securities subsequently transferred. To raise this sum the company received an advance from the Bank which was to be repaid out of monies received from sales and by way of interest, etc. This advance, together with a further advance of £1 million was repaid by the end of 1927. In October 1927, a first dividend and capital bonus were paid by Securities Trust and were handed over to the Treasury by the shareholders: and other payments were made from time to time subsequently and similarly disposed of.
In 1961, when the only remaining security was that of A.Ruffer and Sons Ltd, the Trust, with the prior agreement of the Treasury went into voluntary liquidation and the Ruffer security was transferred to the Banking Department, proceeds from its eventual liquidation being paid over to the Treasury. The Securities Trust Ltd ceased to exist on 6 March 1962. |