TRADING WITH THE ENEMY (EXTENSION OF POWERS) BILL. (Hansard, 22 December 1915)

THE LORD PRESIDENT OF THE COUNCIL (THE MARQUESS OF CREWE)

My Lords, this Bill of no little importance although it does not cover a very wide field. In ordinary circumstances we should naturally have given the House full time to consider it in the usual way, but for a reason which I will explain in a moment I shall be glad if the House will agree to take it through all its stages this afternoon.

The purpose of this measure is to restrict the possibility of trading with enemy firms in neutral countries, and the necessity for it is based on the fact that by our English law, which in this respect differs from the law of many foreign countries, the presumption of nationality depends not upon birth or origin but upon domicile. That is to say, a firm, German in essence, for example, domiciled and trading in South America would by our law not be in the strict sense a German firm, but a firm belonging to the South American country in which it was trading. It is evident that anything like indiscriminate trading with either firms or persons of that kind ought not to be permitted. Quite apart from any natural desire to prevent persons or corporations of that kind from profiting through any acts of ours in the course of the war, there is the definite fact that the money which such persons or firms are able to earn can be used and is used for the actual support of the enemy country in carrying on the war, and this is a thing which ought not to be allowed to happen. It was not thought that a 783 mere alteration of the term "enemy," abolishing the qualification of domicile and substituting something else for it, would meet the purpose, because in cases of the kind under discussion if such a step only were taken it would be easy for the persons concerned to evade our legislation by working through neutral firms in those countries or here.

There is another fact which is also important to remember. We do not wish to restrict the operations of our own traders beyond what is absolutely necessary to achieve our purpose. Far from desiring to limit in any way our export trade, as a general consideration we desire to encourage it by every possible means. It is altogether impossible simply by legislation to cut off the possibility of trading with those countries, and therefore the course which it has been thought most useful to adopt is to prepare and to issue a Proclamation concerning a Black List of traders who, as the Bill says, "by reason of their enemy nationality or enemy association" fall within the ambit of those with whom, in our opinion, no trading ought to take place. The fact as to what firms ought to be included in such lists can, of course, only be ascertained by inquiry with informed persons on the spot and those who are cognizant of the course of particular trades. Therefore a Black List of firms with whom it is not proper to trade in neutral countries will from time to time be issued which will always be open to revision and addition by the issue of an amended Proclamation; and it is thought that this is a better way of proceeding than by an attempt to name in general terms the type of traders with whom transactions ought not to be carried on.

One or two points were raised in another place with reference to this legislation. Questions were asked as to what would happen in the case of contracts entered into before the issue of the Proclamation between traders in this country and traders who might be placed on the Black List. Such contracts might have been entered into in all innocence by traders here, and it is obvious that cases of hardship might arise if those contracts were automatically broken. I do not think that it is possible to deal with those cases except individually and on their particular merits, and therefore we have not attempted in the Bill itself to touch that particular difficulty.

784 Then your Lordships will note that certain provisions of the existing Trading with the Enemy Acts are applied to these persons, subject to such exceptions and adaptations as may be prescribed by Order in Council—that is to say, by His Majesty in Council. On the other hand the additions to the Black List can at any time be made, and made offhand, by what is called an Order of Council not an Order in Council, which can be made by myself as President of the Council at any time without notice on the recommendation of a Secretary of State, and that, of course, facilitates the speedy operation of the measure.

The only other point to which I need allude is one which will be of particular interest to the noble and learned Earl on the Front Bench opposite (Lord Halsbury)—namely, that this Bill explicitly does not attempt to deal with the question in which, as we know, the noble and learned Earl is specially interested, that of the extension of the prohibition of trading with enemies who in one form or another as directors of companies or otherwise are in this country. This Bill applies exclusively to what goes on or may go on in neutral countries, and does not attempt to touch the other side of the question.

I said that I would inform the House why I was going to ask your Lordships to take the Bill through all its stages now. A question has been raised, as to the phrase which is to be found in the first two lines of Clause 1— His Majesty may by Proclamation prohibit all persons or bodies of persons resident, carrying on business," and so on, whether that as a matter of legal construction could properly apply to limited companies. Of course if the words are construed as not applying to companies, a very large part of the value of the Bill would disappear. It is suggested, therefore, that in order to make absolutely plain what is intended and to prevent the possibility of the Bill breaking down in this respect we should go into Committee, and that I should ask your Lordships to agree, after the words "persons or bodies of persons," to insert the words "incorporated or unincorporated." That, I am informed, would prevent the possibility of any mishap of the kind I have indicated. Those words would have to be inserted in four places in the Bill, and I hope that 785 your Lordship will agree to go into Committee and allow those words to be inserted. The Bill can then go down, and the change can be accepted, as I have no doubt it will be, in another place. Were I to postpone the next stage of the Bill to to-morrow, that could scarcely be done; so I hope your Lon I ships will find no difficulty in agreeing.