HC Deb 24 November 1914 vol 68 cc1042-55

(1) The Board of Trade shall appoint a person to act as Custodian of enemy property (hereinafter referred to as "the Custodian") for England and Wales, for Scotland, and for Ireland respectively for the purpose of receiving, holding, preserving, and dealing with such property as may be paid to or vested in him in pursuance of this Act, and if any question arises as to which Custodian any money is to be paid under this Act, the question shall be determined by the Board of Trade.

(2) The Public Trustee shall be appointed to be the Custodian for England and Wales, and shall, in relation to all property held by him in his capacity of Custodian, have the like status and his accounts shall be subject to the like audit as if the same were held by him in his capacity of Public Trustee, and the Public Trustee Act, 1906, shall apply accordingly.

(3) The Custodian for Scotland and Ireland respectively shall have such powers and duties with respect to the property aforesaid as may be prescribed by regulations made by the Board of Trade with the approval of the Treasury.

(4) The Custodian may place on deposit with any bank approved by the Treasury any moneys paid to him under this Act, or received by him from property vested in him under this Act, and any interest received on account of such deposits shall be paid by the Custodian to the Treasury except so far as the Treasury may authorise the Custodian to retain any such interest for the purpose of meeting any charges on account of the remuneration of the Custodian and expenses incurred by him under this Act:

Provided that the Custodian for any part of the United Kingdom shall, if so directed by the Treasury, transfer any money held by him under this Act to the Custodian of another part thereof.

Mr. NIELD

I beg to move, in Subsection (1), after the word "of" ["for the purpose of receiving, holding, preserving, and dealing with such property"], to insert the word "collecting."

I regard this as being a substantial point in the consideration of this important measure. The Attorney-General said on Friday last, in making a speech upon the Second Reading of the Bill, that he did not desire to extend the provisions of the Act to every kind of payment that might be made to an enemy. He pointed out that that would be making the non-payment of a debt a criminal offence. I would point to what he has done under Clause 2, where penalties are prescribed for those who do not pay money which is owing within a definite time. The object of my Amendment is to give a Custodian power where he knows money is due to get it in, not necessarily by enforcing it, although the penalty which Clause 2 imposes upon the person who owes money and does not pay it within a definite time, will, of course, operate to assist him in getting it. As the Bill is drawn, Section 1 is very much like the Trustee Act, which enables the person embarrassed by the possession of money which he has to pay to somebody to pay it into Court and so to get a quittance. It seems to me that the Custodian ought to be allowed to have the real power of taking the initiative, at any rate in the case of certain creditors from whom he has a right to receive the money, so that the money that is due should be paid.

I do not think we ought to be unduly tender in regard to the enemy in the construction of this Bill. It may surprise the House to know that in Germany they have powers in relation to matters of this sort which are a very great hardship. I have here in my hand the translation of a letter from one of the many branches of a large English house in Germany, the branch which at this particular place pays no less than £1,000 a year rent under a lease which has yet ten years to run. One of the measures which was promptly taken by the patriotic landlord was to apply for a distress, and to distrain for ten years' rent in advance. That, apparently, is a perfectly legal claim to be made. The firm was distrained upon for no less than £10,000, and have had to provide the money. Under those circumstances it is not unreasonable for us to ask this House that this Bill shall be constructed that, so far as possible, it will enable the money due to a German or Austrian firm to be got, and to be held in safety for those who may ultimately be entitled to it. I do not profess to know how this Act will ultimately work out, and whether or not the funds held will be treated as a gigantic settlement against debts which may be due from them to us. However that may be, it seems to me that we ought to give the Custodian something more than the mere passive right to receive money.

Sir J. SIMON

I hope the hon. Member will not press his proposal. This Bill may, in the course of its passage through Committee, require to be altered here and there. I do not prejudge that; but we have to deal with the subject as it arises Clause by Clause, and doubtless we shall be able to see what is the proper way to describe what the Custodian shall do. I would ask the hon. Gentleman not, at any rate, at the very outset, to prejudge the matter in the sense in which he suggests. The general idea of the Bill was that the public trustee would be the Custodian in England, and be rather a recipient and guardian. If he were to collect the money it would mean, or might mean, that he would have to bring actions to enforce claims, and I am sure the hon. Gentleman will see at once that that opens up a very grave objection. As things stand, a person in this country cannot be made by a German creditor to find the money while the War is going on. I cannot help thinking it would be rather a strong thing to say, "Oh, that is all very fine, but we are going to put the public trustee, or whoever the Custodian may be, in the position that he can make a man pay here and now." I am sure that the hon. Gentleman will see at once that the Bill has been drawn very carefully, and that it would probably be better to treat the public trustee rather as a person who receives and keeps moneys and gives receipts for them than somebody who actively insists upon the money being paid to him. I think it really would be better to get the Bill as it is at the present time, and consider any suggestions in the line suggested by the hon. Gentleman on Report.

Mr. NIELD

I am quite ready to adopt the suggestion of the Attorney-General, but I would only observe that there are some people whom it would be better to relieve of the money than allow them to keep it in hand until a later time when they might dissipate it. And also, that it is hardly fair on that section of persons which is required to pay under Clause 2. For some there is a penalty to pay, while others are allowed to retain money in their hands. It is not suggested that there is anything against the Custodian receiving and holding the money instead of leaving it in the hands of those who own it. They would be in a worse position for taking advantage of the money in their hand. However, I adopt the suggestion that if it is found he ought to have such powers he should have them.

Amendment, by leave, withdrawn.

Mr. NIELD

I have another Amendment oil the Paper enabling the money to be invested in War stock or other Government securities. When I put that Amendment down, the Amendment by the Attorney-General to enable the money to be invested in securities was not upon the Paper, and I am perfectly willing to allow the Amendment which he has on the Paper to take the place of mine. I do not see why, however, we should drop the alternative in the Bill of placing the money on deposit. However, we can discuss that upon the Attorney-General's Amendment.

Sir J. SIMON

I beg to move, in Subsection (4), to leave out the words "place on deposit with any bank," and to insert instead thereof the words "invest in any securities."

Sir W. ESSEX

I do not know why the Government propose to withdraw from itself the right to place this money on deposit in any bank. I conceive that if they limit themselves in dealing with this money to investment in securities there might be a fall in those securities—an injury might be done to the market value of the stock at the end of the War. I do not think it will do any harm to retain power of placing this money in creditable banks on deposit. I should like to hear from the Government why they propose to withdraw the words "place on deposit in any bank."

The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. J. M. Robertson)

It is a matter of Treasury policy that moneys invested in securities approved by the Treasury would be in the most secure position. The hon. Member suggests that securities might depreciate, but it is considered that securities approved by the Treasury will be the best for the investment of the money.

Mr. RUTHERFORD

As the Clause stood the Custodian could do nothing but put the money into a bank. Now the Government come down with an Amendment that he is not to put any money into the bank, but that he is to invest in securities. Surely the power to do either of these things would be the better course to adopt, and therefore I suggest the necessity of leaving in the words "placed on deposit with any bank" and adding "or invest them in any security." Surely a moment's consideration of that suggestion would be sufficient to satsfy the Government that they ought to take power to do either the one or the other.

Mr. RAWLINSON

Is it the intention of the Treasury to interfere as to what this money should be invested in?

Mr. ROBERTSON

I said securities approved by the Treasury.

Mr. RAWLINSON

Are the Treasury to interfere?

Sir J. SIMON

If the hon. and learned Gentleman will look at the Bill he will see where the Treasury comes in.

Mr. RAWLINSON

We have not got to that, at all events, yet. What I want to know is, Does this mean the money is only to be invested in such investments as the Treasury approve? What is the reason for not taking power to place the money on deposit in banks as well as to invest in securities? What possible objection could there be to giving this discretion? This is really emergency legislation of the Government, for they first put into the Bill the words "place on deposit with any bank," and then they say that is a wholly indefensible position. I think that requires more explanation.

Mr. HENRY TERRELL

Under this Bill you may be dealing with a large number of small sums. A man may owe £3 or £4 to an enemy. He has got, under this Bill, to pay that to the Custodian. How is the Custodian to invest sums of £2, £3 or £4 in securities? It is absurd! Why not place it on deposit in a bank. The Treasury might limit the banks in which those deposits are to be made. But surely, if you are to invest small sums from time to time, the best thing is to deposit them in banks. That is the course the Courts always take in regard to small sums. The Courts always order small sums to be placed on deposit.

Sir J. SIMON

I quite follow what the hon. and learned Gentleman suggests. I venture to suggest it is not a case whether the Government are trying to take some advantage of the hon. and learned Member beside him, and suddenly make some monstrous change in the Bill. The suggestion that we have suddenly and unexpectedly introduced the Treasury, will not I think be borne out if the hon. and learned Gentleman studies the Bill. I hope that in the Committee stage we will not get into the habit of regarding each other as double-dyed scoundrels. [HON. MEMBERS "Single-dyed."] We are only trying to do the right thing, and I am anxious to accept any suggestion that commends itself on reflection as an improvement in the Bill. There is force in what has been said, and I should propose to move my Amendment in this way—I am not quite clear how, as a matter of order, it ought to be done. As my Amendment stood it was to leave out the words "placed on deposit with any bank," and to insert the words "invest in any security."

I think I shall be following the spirit of the suggestions made if I suggest that in place of leaving out the words "placed on deposit in any bank" we should insert after them the words "or invest in any security." Then, both the choice of the bank and the securities will be approved by the Treasury. Of course, the Committee will bear this in mind, that the Public Trustee as a responsible official ought to be answerable to somebody, and further, that he ought to be responsible to somebody responsible to this House. If we do not arrange for some Government Department and somebody who can be had up at this box to answer for what is done, we should be doing what is neither constitutional nor right. The Trustee has always been regarded as a functionary of very great importance, for whom the Treasury answers in this House. It was done not with any desire to perpetrate in the form of emergency legislation some particularly monstrous proposal. We wanted someone here responsible for this money and susceptible to criticism. The Sub-section would then read: The Custodian may place on deposit with any bank or invest in any securities approved by the Treasury any moneys paid to him under this Act. Then I am going to suggest that we should insert the words, and any interest received on account of such deposits or investments shall be dealt with in such manner as the Treasury may direct. Then we should have a Custodian who really collects and preserves these sums in the general interest, and we should at the same time keep control over this money until the end of the War, and until we see how corresponding moneys are being dealt with in Germany. This proposal would give an opportunity, by means of questions in this House, of discussing and deciding as to what is the proper way to deal with these moneys. I do not know whether that will meet the views of hon. Members opposite or not.

Amendment, by leave, withdrawn.

Amendments made: In Sub-section (4), after the word "bank" ["deposit with any bank"] insert the words "or invest in any securities."

In Sub-section (4), after the word "interest" ["any interest received on account"] insert the words "or dividends."

9.0 P.M.

Sir J. SIMON

I beg to move, in Sub-section (4), to leave out the words "shall be paid by the Custodian to the Treasury, except so far as the Treasury may authorise the Custodian to retain any such interest for the purpose of meeting any charges on account of the remuneration, of the Custodian and expenses incurred by him under this Act"; and insert instead thereof "or investments shall be dealt with in such manner as the Treasury may direct."

Mr. CAVE

It has been represented to me that some of those described in the Bill as enemies are British subjects resident in the enemy country. They may have nothing but these dividends to live upon, and therefore if this is done they will have no means. I take it that it will be within the power of the Treasury to remit some part of the income to persons placed in that position.

Sir J. SIMON

I think that is so.

Question put, and agreed to.

Mr. NIELD

I beg to move, in Subsection (4), at the end of the first paragraph to add the words, And except so far as the same may be required to be applied in payment of any interest under an order of Court made in pursuance of Section five.

Sir J. SIMON

I think the Clause is quite wide enough without those words.

Mr. NIELD

Will you consider this point between now and the Report stage?

Sir J. SIMON

Yes.

Amendment, by leave, withdrawn.

Mr. RUTHERFORD

I beg to move, in Sub-section (4), to add at the end of the first paragraph the words:— The Custodian when receiving any property or moneys under the provisions of this Act shall have the power to arrange and settle the claims of any British subject or other persons not being alien enemies, and to agree the amounts and pay and discharge the same before making such bank deposit or payment to the Treasury as aforesaid. It has been pointed out to me by more than one very important body of traders, one of which is the British Engineering Society, representing capital to the extent of £100,000,000, and very largely trading generally, that the Custodian should settle any claims there are of any British subjects before parting with any of the moneys which he received under this Act or before they are invested or got out of his control into the hands of the Treasury. I apprehend that there cannot be any objection on account of the War to a British subject's claim being settled. We are trying in this Bill to prevent the payment to people in Germany or Austria of moneys which might help those countries to prolong the War against us, and the one object surely of appointing a Custodian to take charge of moneys or property belonging to German subjects in this country ought to be, first of all, to settle the claims of British subjects upon those moneys or property. The Employers' Association, which is a very large body in Manchester, and the British Engineering Society, which represents a very large body of traders and manufacturers in this country who have a large section of business with Germany, both pointed out to me that it is very desirable, before these moneys go out of the control of the Custodian and into investments, or into the hands of the Treasury, that any claims of British subjects upon them should be adjusted in a businesslike manner and simply the balance invested or handed over to the Treasury. It is with that object entirely that I move this Amendment.

Of course, a great deal as to the merits and the effect of this Amendment depends upon what we are going to do with Clause 2. If Clause 2 is going to remain as at present printed and all that the Custodian is going to receive are interest, dividends, and share of profits, then I confess there is very little in the suggestion involved in the present Amendment, but there is a general concession of opinion in the country, as evidenced by hundreds of communications—which I am sure the right hon. Gentleman must have received, because, having taken some part in the Debate last week, and I suppose made myself a target for correspondence of this description, I have received a vast quantity—that this Custodian ought to be at liberty to take possession of and charge of all kinds of property belonging to an enemy, as well as simply dividends, interest, or share of profits. Of course, if the scope of the Bill is enlarged, as the vast body of opinion in the country expects that it will be, and thinks it ought to be, then it is clear that the Custodian should have power to properly settle all outstanding accounts before definitely dealing with the balance.

Sir CLIFFORD CORY

I rise to support this Amendment, because, like the hon. Member, I have had any number of representations made to me by traders, who seem to be rather under the impression that this Bill is framed more in the interests of alien enemies who have businesses in this country than in the interests of this country itself. They find in Germany that a supervisor has been put in charge of every British business, and that his main business seems to be to collect the debts due to those businesses in order to pay German creditors. They therefore feel it is rather hard, when they have debts owed to them by Germans having businesses in this country, which they can fully prove and to meet which there are effects, that there should not be some means of getting those debts paid. I trust the Attorney-General will see his way to accept the Amendment, which would give great relief and satisfaction to traders in this country.

Mr. WATT

I also desire to support the Amendment, and perhaps if I gave a concrete instance it might make the case clear. A friend of mine has something like £29,000 owing to him by the firm of Krupp's, who have assets in this country to the extent of £225,000. The Custodian should have power to seize that quarter of a million and to pay off the creditors of Krupp's in this country. The idea which I think has prompted this Bill as it now stands is that the Custodian should have power to gather the dividends accruing from that quarter of a million and to pay them to the creditors of that firm in this country, but that would not be sufficient to pay the creditors of Krupp. It does not fellow that the friend of whom I spoke and to whom £29,000 is owing is the only creditor of Krupp's in this country, and if he and the other creditors of the firm are to rely for the payment of their debts on the interests and dividends accumulating from the capital Krupp's possess in this country, then they will have to wait a very long time. If, on the other hand, the Custodian were permitted to lay hands on the whole of the assets, the capital as well as the dividends, and to pay out, after realisation, the sums that are in his hands to the various creditors, the mercantile community of the country would consider this measure of some use, whereas as it at present stands it would be comparatively futile in paying off the creditors of German firms.

Sir J. SIMON

The speech of my hon. Friend who last addressed the Committee would appear to me to be a general criticism of the Bill—a general impression of the Bill rather than a speech directed to this particular Amendment. But the hon. Member who moved it (Mr. Rutherford), and the hon. Gentleman who supported it (Sir C. Cory), did address themselves particularly to this point. It surprises me it should be thought that this is an Amendment which we ought to put into this Bill. I do not differ in the least from those who have expressed the opinion that our object here should be, first, to prevent the enemy country from getting, directly or indirectly, financial assistance while the War is going on; and, secondly, to see that, as far as may be, we keep a hand on enemy assets in this country, in order that they may be administered fairly and properly and in the way they should be. But what is it that hon. Gentlemen are really asking us to do?

The Public Trustee, according to this Amendment, is to have the power to settle the claims of anybody other than an alien enemy, as against persons to whom this money might have been paid were it not handed over to the Custodian. The Public Trustee is to do that. He, of course, is not a judge. He has to administer the fund, but he has no judicial machinery for testing the claims. He will never hear the case of the other side. He will never know whether there is a set-off or a counter-claim; but the first person who comes along and tells him he has a claim against the enemy asset is to have the money. Now, surely the proper thing is to have a claim adjusted in a business-like manner. I know lawyers are often told that they do not know much about business, but I decline to admit that a business-like manner of adjusting anybody's claim is to admit it without being proved or tested, and without having any machinery for investigating it, or to admit it without any regard to other claims which have not been heard of, but which may be twenty times as great. Suppose the Custodian came into possession of a sum of £100. Is he to hand it over to the first plausible person who states he has a claim against the money? For all he knows there may be ten people who have equally good claims, far exceeding in amount the £100. Yet, according to this Amendment, the first gentleman who walks into the Public Trustee's Office with his claim is to get the money. It seems to me that this Amendment should, without the slightest hesitation, be rejected.

Mr. RUTHERFORD

I think the Attorney-General has entirely misapprehended the effect of the Amendment. Nobody has ever suggested that, without a particle of common sense—without a particle of business capacity, the Custodian should hand money over to the first plausible gentleman who presents himself. I am sure that that is not in the Amendment. I do not suggest that this Custodian should be such a consummate ass as to adopt any such course of action as the Attorney-General has suggested. The effect of the Amendment is this. The suggestion is that the Public Prosecutor should be appointed in England. He is a business man. He is practically acquainted with business affairs, and, in his capacity of Public Trustee, he has paid over to me many thousands of pounds. But he has not paid it over because I was a plausible person who had no right to any portion of the money. He has paid it over because he was satisfied I was the right person to receive it. The whole spirit of this Amendment is that the Public Trustee, or the corresponding official in Scotland or Ireland, should, in a business-like manner, settle proper claims against an alien enemy's estate of which he has been placed in possession. Of course, if the Attorney-General has made up his mind that he will decline to strengthen this Bill—

Sir J. SIMON

I have not done that at all.

Mr. RUTHERFORD

If we are to have any reasoned Amendment of this kind simply made a mockery of, if it is to be suggested that it means a whole pile of things it does not mean, if in fact we are going to be left with the Bill of the Government, I can tell the right hon. and learned Gentleman that there is not a single section of the trading community that will be satisfied.

Sir F. LOW

The hon. Member should have regard to Sub-section (2), Section 5.

Mr. RUTHERFORD

I have read that Sub-section, but we are not upon that at the present time, and when we do come to it we shall find that it only applies to matters dealt with by order of the Court. I am not dealing with getting anything into Court. I know the hon. and learned Gentleman likes to get everything into Court.

Sir F. LOW

And so does the hon. Member for the West Derby Division of Liverpool.

Mr. RUTHERFORD

I dare say I have a predilection for sending most things into a place where they can be dealt with in a reasonable manner. But that is not the point. What I am afraid I can see at the very beginning is that the Bill is not going to be made satisfactory at all. If every Amendment we put forward is going to be refused, and if we are to be told that the Custodian is only to take charge of dividends and interests, and of no other money, then I say the Bill will be of no real practical use.

The DEPUTY-CHAIRMAN

The hon. Member had better confine his remarks to the Amendment.

Mr. RUTHERFORD

May I ask leave to withdraw the Amendment. I feel it is of no use continuing the discussion upon it.

Sir C. CORY

In regard to the suggestion that any British creditor would be able to put in a claim without any proof whatever under this Amendment, may I point out that I have handed in another Amendment dealing with this very point, and providing that British creditors should verify their claims by statutory declarations and that the Custodian should not deal with them until they have been adjudicated by the High Court. I must say I think some such Amendment as this is highly desirable.

Mr. RUTHERFORD

But they will not accept it.

Mr. H. TERRELL

It seems to me that the criticisms which have been made against this Amendment are quite justified. May I ask my hon. Friend to consider this point: Suppose the Custodian receives the sum of £100. What is to be his next step? Is he to advertise for creditors, or is he to pay over the money to the first man who happens to hear that he has received the cash in respect of debts due to a particular German? Or are you going to have a process such as is well known in bankruptcy and in winding-up proceedings? What, as a matter of fact, when the Custodian receives this sum of money, is he to do? He must either invest it or, under this Amendment, he must consider the claims of British creditors. But how is he to get at the claims of British creditors? How is he to find out what claims there are? He cannot do it unless you introduce machinery such as you have in bankruptcy—the advertisement, the notice to send in statutory declaration in support of the claim, the date fixed for adjudication, and the right of appeal. You would have to introduce the whole of that machinery for determining what the particular claims are and then you would have the process of appeal from the decision of the Custodian. You would also require an arrangement for the apportionment of the money in cases where the claims were greater than the amount in the Custodian's hands. I say the whole thing is a practical impossibility as a matter of business. On the other hand, the procedure provided by Sub-section (2) of Section 5 is practical. There you have a procedure for the purpose of enabling a man who has a claim to go to the Court to adjudicate upon it. You have in the Court the machinery you require, and you would have no need to set up totally new machinery for the purpose of dealing with these matters. It seems to me that to introduce these words would introduce a practical impossibility into the working of this Bill, and I hope the Committee will not adopt the Amendment.

Mr. MORTON

We are all anxious to help the Government and give them every power for which they ask in dealing with this very troublesome and difficult matter. I trust that the Attorney-General will consider whether there is not some way of meeting this case whereby, while we prevent enemies from getting our money to buy gunpowder with which to blow us up, the just claims of British citizens can be met. The Attorney-General knows very well we are not going to divide on any Amendment, because we are anxious to help him, but I hope he will consider before the Report stage whether there is not some way of meeting this case.

Sir J. HARMOOD-BANNER

As a business man, I am rather disappointed with what the Attorney-General has said, not because I do not agree with him as to the difficulty of the form of carrying it out, but because I had hoped this Bill would be a means of paying the enemy's creditors out of the enemy's funds. I do not see how the Bill as it now stands is going to do that. An hon. Member opposite raised the question of Krupp's. There are a few legal Gentlemen here who will know how that question was adjudged, and how, by absence of notice, it was impossible to get a decision in the absence of Krupp's, so that the person to whom money was owing was unable to get it. I do not know whether the Attorney-General can tell us whether book debts are to be paid to the Custodian. [HON. MEMBERS: "Everything comes in!"] Of course, if it all comes in, then it forms a fund in the hands of the Public Trustee.

The DEPUTY-CHAIRMAN

Other Clauses of the Bill deal with the point the hon. Member is now raising—Clauses 4 and 5. I would suggest to the Committee that the matter should not be pressed any further now, and that we are rather wasting time.

Mr. RUTHERFORD

As the Government will not accept the Amendment, I ask leave to withdraw it.

Amendment, by leave, withdrawn.

Question, "That the Clause, as amended, stand part of the Bill," put, and agreed to.