HC Deb 25 November 1914 vol 68 cc1165-85

(1) Any sum which, had a state of war not existed, would have been payable and paid to or for the benefit of an enemy by way of dividends, interest, or share of profits, shall be paid by the person, firm, or company by whom it would have been payable to the Custodian to hold subject to the provisions of this Act and any Order in Council made thereunder, and the payment shall be accompanied by such particulars as the Board of Trade may prescribe, or as the Custodian, if so authorised by the Board of Trade, may require.

Any payment required to be made under this Sub-section to the Custodian shall be made—

  1. (a) Within fourteen days after the passing of this Act, if the sum, had a state of war not existed, would have been paid before the passing of this Act; and
  2. (b) in any other case within fourteen days after it would have been paid.

(2) Where before the passing of this Act any such sum has been paid into any account with a bank, or has been paid to any other person in trust for an enemy, the person, firm, or company by whom the payment was made shall, within fourteen days after the passing of this Act, by notice in writing, require the bank or person to pay the sum over to the Custodian to hold as aforesaid, and shall furnish the Custodian with such particulars as aforesaid. The bank or other person shall within one week after the receipt of the notice comply with the requirements and shall be exempt from all liability for having done so.

(3) If any person fails to make or require the making of any payment or to furnish the prescribed particulars within the time required by this Section, he shall, on conviction under the Summary Jurisdiction Acts, be liable to a fine not exceeding one hundred pounds or to imprisonment, with or without hard labour, for a term not exceeding six months, or to both such fine and imprisonment, and in addition to a further fine not exceeding fifty pounds for every day during which the default continues, and every director, manager, secretary or officer of a company, or any other person who is knowingly a party to the default shall, on the like conviction, be liable to the like penalty.

(4) If in the case of any person firm or company whose books and documents are liable to inspection under Sub-section (2) of Section two of the Trading with the Enemy Act, 1914 (hereinafter referred to as the principal Act), any question arises as to the amount which would have been so pay able and paid as aforesaid the question shall be determined by the person who may have been or who may be appointed to inspect the books and documents of the person firm or company, or, on appeal, by the Board of Trade, and if in the course of determining the question it appears to the inspector or the Board of Trade that the person firm or company has not distributed as dividends interest or profits the whole of the amount properly available for that purpose, the inspector or Board may require the whole of such amount to be so distributed, and in the case of a company, if such dividends have not been declared, the inspector or the Board may himself or themselves declare the appropriate dividends, and every such declaration shall be as effective as a declaration to the like effect duly made in accordance with the constitution of the company:

Provided that where a controller has been appointed under Section three of the principal Act this Sub-section shall apply as if for references to the inspector there were substituted references to the controller.

(5) For the purposes of this Act the expression "dividends interest or share of profits" means any dividends bonus or interest in respect of any shares stock debentures debenture stock or other obligations of any company, any interest in respect of any loan to a firm or person carrying on business for the purposes of that business, and any profits or share of profits of such a business, and where a per son is carrying on any business on behalf of an enemy any sum which had a state of war not existed would have been transmissible by a person to the enemy by way of profits from that business shall be deemed to be a sum which would have been payable and paid to that enemy.

Amendment proposed [24th November]: In Sub-section (1), after the word "enemy" ["for the benefit of the enemy"], to insert the words "or a limited company registered in Great Britain or Ireland where shares are held as to upwards of seventy-five per cent. by enemies."—[Mr. Joynson-Hicks.]

Question again proposed, "That those words be there inserted."

Mr. JOYNSON-HICKS

I do not want to repeat the arguments which we had last night, but I wish to make a suggestion to see if we cannot come to some agreement as to the Amendment on which many Members on both sides of the House feel very strongly. The discussion yesterday did not follow party lines. Some Members on this side of the House abused me, and some on the other side abused the Government, which is perhaps the best way of getting legislation. The object of this Amendment is simply to deal with the question of these limited liability companies who are, in fact, alien enemies. I entirely repudiate the suggestion that we desire to confiscate the shares in any English company which are held by alien enemies. Any such statement is a travesty of anything said either by the hon. Member for Mansfield or by myself. The point simply is this: If an alien enemy in Berlin, Mr. Schmidt, carries on business here and a large amount of money is owed to him by customers, he cannot at the present moment sue in any English Courts to get his money. In order to get hold of this money and make things easier for trading here, Mr. Schmidt has converted himself into a limited liability company under our law. In the case which I gave yesterday the whole of the shares were held by Mr. Schmidt. There was not an Englishman among the shareholders.

In many of these companies the whole of the shares, except perhaps a few held by solicitors' assistants, and in one case every single share, was held by Mr. Schmidt. He cannot come to our Courts himself but the company can, and does at the present moment, come to our Courts and sue English citizens for money which is due nominally to the company, but in its essence is due to Mr. Schmidt. That is a fraud on our company law, and I want the Government to take some steps under the provisions of the Bill to prevent that fraud being carried out successfully. The Attorney-General made a speech last night which, in some respects, was convincing, and in other respects was unconvincing in regard to this matter. He admitted that the law is not satisfactory at the present time. He admitted that the Trading with the Enemy Act which was passed in September is not a satisfactory Act so far as relates to this particular point. The right hon. Gentleman the President of the Board of Trade told us that he would make a statement before the House rose with regard to this matter. Perhaps I may refer to the speech of the Attorney-General in reply to myself on this matter, on September 9th, when I raised the point. The Attorney-General then told us that they had been looking into it very closely, and his right hon. Friend hoped to introduce before the present sittings terminated proposals dealing with this matter. Then he went on to say—I am concluding the quotation which I made last night— I want to make it quite plain, however, that the Bill which I am asking to introduce does not profess to deal with the case of a company registered under our law, which is found in substance to be a company with a hostile directorate and shareholders, save to this extent."—[OFFICIAL REPORT, 9th September. 1914, cols. 590 and 591.] that it gives power to inspect and so on. It does not deal with the whole point which I am raising here. I want to come to terms with the Government. On Clause 11 I have an Amendment which will not give me all I want, but it will go a great way towards allaying public feeling in regard to the enemy company. Under the parent Act there is power in certain circumstances to appoint a controller, and the President of the Board of Trade told us last night that they had appointed, I think he said, 240.

The PRESIDENT of the BOARD of TRADE (Mr. Runciman)

No; 228 companies have been inspected.

Mr. JOYNSON-HICKS

But only in regard to nineteen of these companies have controllers been appointed, and in the case of one of the most important companies of all—Siemens—they have only appointed an inspector, though nearly all the shares are held in Germany, and though they have vast contracts with the Government, they have not yet appointed a controller of the company, and I think that they ought to have done so. The proposal which I make to the Government is this, that they should agree to the Amendment which I have got on Clause 11, which is for additional powers. They may wherever they think necessary, appoint a controller. I suggest that they should add the words, "in any case of one of these companies where the shares of more than 50 per cent. of them are held by alien enemies." That does not meet all my views, but I do think that it goes a very long way towards doing so. The right hon. Gentleman in his speech last night indicated that he is prepared to use his powers a great deal more stringently and drastically than he has used them up to the present. He has only appointed a controller in the case of nineteen companies, knowing perfectly well that in Germany they are appointing supervisors and controllers in regard to all English companies trading in that country. I venture to suggest that these companies which I have brought before the House so often are a fraud upon our company law. I do not mind whether the measure is 50, 60 or 70 per cent., because in all these companies which I have in my mind they are from 90 to 95 per cent. If you will accept that Amendment I should be glad to withdraw the present one, and the difficulties that have arisen with regard to this Bill would be removed, and I hope that it would go through quickly and satisfactorily.

Sir A. MARKHAM

May I point out to the right hon. Gentleman that he made a speech in the Debate last night which was founded on the fact that here was a company established in England, which is a German company, whose taxes were being paid and whose business was being carried on by British capital which was being employed? He used that as an illustration to show that the House ought to allow that company to continue to trade. But the hon. Member for Ealing (Mr. Nield) pointed out that you are going to put the trading company in this country in a much better position than the private individual. You lock him up and prevent him from paying rent, prevent him paying rates and taxes, or doing any business by the direct action of His Majesty's Government. But this does not happen provided that the individual has turned himself into a limited company. That is what actually happens. I know several cases from my own knowledge where Germans carrying on business in this country have been interned in different camps. Their business has come to an end; all the people they employed have been dismissed; therefore, as the hon. Member for Ealing pointed out, a limited company is in a different position from a private firm. The whole power of this country to-day is being used for the purposes of destroying German trade, or any trade carried on in Germany, by cutting off supplies from the coast of Germany, and yet you are giving every facility to allow foreigners to carry on trade here and to have their business preserved as going concerns after the War is over.

Mr. RUNCIMAN

I do not propose to cover the ground which has been traversed by my hon. Friend who has just sat down. The speech which was made from the opposite side of the House simply shows what I thought had been made clear last night, that, although you can go ahead with great rapidity with the appointment of inspectors under the parent Act which was passed some weeks ago, it is a slow business to get a controller. I do not go in detail into the process, but it practically amounts to this, that before a controller can be appointed you have to satisfy the Court as to two or three things. Affidavits have to be made, solicitors have to come on the scene and draw up statements, and the whole procedure is longer than is necessary for such executive act, and one of the objects of this very Bill is to make the proceedings so short that there need not be these delays. It is true that we have covered a very great deal of ground with these inspectors.

I am not sure whether the hon. Gentleman has very clearly in mind the difference between an inspector and a controller. The inspector knows what is going on in the business personally. He can see the correspondence, the books, and the banking account. It is true that he has not full power, but he is able to scrutinise the business of the firm, and, as many chartered accountants could tell you, the work done by the inspectors enables them to see every detail of what is going on within the four walls of these companies. However, that is not sufficient, and it is because it is not sufficient that we want to get this Bill. I therefore hope that the House will not delay the passage of this Bill. I would suggest to the Committee that we could get over the small difficulties that have been described here by a statement of actually what is proposed by the Executive if this Bill passes into law—that is with the Amendment put down on the Paper by my right hon. and learned Friend the Attorney-General—providing for supervisors. It is the intention of the Board of Trade to appoint supervisors in the case of every company which is referred to in the Amendment of the hon. Gentleman. That surely goes as far as the hon. Gentleman wants, and I think that it would very much shorten our proceedings if he would accept that assurance and leave us free at the earliest possible moment to proceed with the appointment of these supervisors. If we do that, I have no doubt that it will meet the view of those for whom he speaks. I hope that we can now proceed with the Bill as quickly as may be.

Mr. JOYNSON-HICKS

Perhaps the right hon. Gentleman could tell us what exactly is the difference between "inspector," "supervisor," and "controller"?

Mr. RUNCIMAN

If the hon Member reads very carefully the Bill and the parent Act he will see that an inspector is appointed to look into the whole proceedings of the firm. A supervisor is what may be called a continuing inspector who may go in at any time, without any notice, every day if he wishes, and see what is going on. A controller is for all practical purposes acting as the managing director of a concern. The latter are difficult to obtain, and in some cases quite unnecessary. But the continuance of the inspection will give us all the information which we want, and the powers taken will enable us to check the passage of any money abroad exactly in the way the hon. Gentleman desires.

Sir WALTER ESSEX

Last night we were told by a Member of one of the Divisions of Liverpool that he spoke in this matter as representing some particular body of engineers. He will forgive me if I do not remember the name. I should not have intervened in this discussion but for the fact that I have been requested to do so on behalf of persons who are very deeply concerned, as deeply concerned as human beings can be, in one firm whose name has transpired here to-day. There has been what I think a great many Englishmen feel to be a discreditable aspect in this wild, ravaging attack upon the stranger within our midst. I know that there has been a very great deal of underhand work on the part of enemies of this country from the two countries with which we are at war, and no man will pass more bitter condemnation on any of these underhand practices than I. But because a man has been born in Germany and bears a German name, are we to take no account whatever of a long career honour- ably passed by him in this country? Let me take the firm whose name this afternoon has been again and again bandied about by innuendo, but against whom no charge has ever been brought in this House or out of it. The men who have alluded to the firm, again and again, dare not in this House or cut of it say anything derogatory of it, or in the least degree charge it with not having performed its part with due regard to our commercial law, which is the admiration of the whole world. Why this attack on great commercial and industrial institutions, unless it be motived by some selfish interest lurking in the background, and used by Members of this House—[HON. MEMBERS: "Order! order!"]

The CHAIRMAN

I do not think the hon. Member has the right to make an innuendo of that kind against the good faith of his fellow Members.

Sir W. ESSEX

I certainly would not desire to do anything of that kind, and I was myself led to speak rather warmly against the innuendoes made against the firm to which I refer, but I beg to apologise if I have transgressed in anything I have said, so let that pass and sleep. I spoke under strong feeling in this matter. One hon. Member came here and said he had been requested to make his protest against the proposal of the Government, and he did that with good nature and with due respect for order. He said he came on behalf of a body of employers. In my pocket I hold a petition from twelve trade unions in regard to the particular firm to which I refer. What do they say? They express the hope that I will endeavour to resist these attacks which are made. The firm whose interests I am now defending has had an honourable career in England for sixty years. It was the first firm that came into this country with practically a new scientific development along lines which established a model for employers to manufacture according to scientific methods. The firm has always paid good wages; it is a model employer; it is paying its men at the front, and it is giving a preference to married men in affording employment. It has issued a notice that all its employés of foreign birth who have not taken out naturalisation papers must do so; and let me point out, in regard to this attack, that I have letters from two of the men employed. One writes that he has worked for the firm for forty years, and that they have always treated him well. He came into this country at a time when he thought there was no need to bring with him the police methods of his own land. He admits that he may have acted foolishly, and he now wishes he had taken up his naturalisation papers; but he asks whether a man could not call himself naturalised in this country who is between sixty and seventy years of age, and has three of his sons in the Army. Two died with the Colours. One is now ill and just returned from the front, and a fourth seeks to enter the Artillery. He concludes his letter by asking if he is not justified in considering himself naturalised, especially when all his neighbours regard him as a good citizen and neighbour. Another man wrote me last week, stating that he has given two sons to the Army—one of them having been sent back because he was not physically fit; the other was now wearing the King's uniform.

In regard to the firm which has been attacked in this cowardly way, a good many years ago its chief was honoured by the Queen. The present chief had laboured long to bring the advantage of his knowledge to English industries, and for the growth of our manufacture; he has received degrees and honours from all the learned societies interested in various crafts and industries; and he brought into the country gigantic industries. He is a man who has helped us to compete with the whole world, and make gigantic contracts for railways, docks, warehouses, factories, harbours, and so on. This man who for sixty years has lived in this country, but has not taken up his naturalisation papers, is attacked and charged as a foreigner. No English company has ever done more to keep up the credit of English manufactures than his firm, a very large proportion of whose workmen are English. A few of them are strangers within your gate, let them be treated fairly. For when this War is over many will be proud to have them as friends. [An HON. MEMBER: "No!"] Then the hon. Gentleman will have one less in his personal companionships of a creditable character. When this War is over, I hope it will be found that we have done nothing in these days to lower the high order of English commercial life. We have maintained a courageous attitude in the face of all the peoples of the earth, and may that continue, but I do not want to rob people in this country, whether by law or by any other methods. Fight them if you will, but do not, under the cover of commercial law, start filching the goods of these people because they were born abroad, and for no better reason.

Mr. H. TERRELL

I do not know to what firm the hon. Member refers, but I strongly suspect that it is one in his own constituency.

Sir W. ESSEX

I stated that I represented the workmen in my Constituency.

Mr. H. TERRELL

I have not the slightest doubt I was right in my suggestion. Before the hon. Member spoke I was very much inclined to vote against the Amendment, but the hon. Member's speech has convinced me that if we can have a Member of this House making a speech of that kind here, such an Amendment is necessary. The hon. Member seems to laud our enemies to the sky, and says that they are honourable men beyond question. But it is the feeling of trust we have in these honourable men that has led us into this War. We have trusted them and treated them as honourable men, but now we find their system of dishonour throughout the world; their spying of the worst kind has become their national system. What about the Germans in this country who have not taken out naturalisation papers? Many of them are here for the purpose of serving their country, and if they are not here for that purpose, they are either betraying their country, or betraying us. The speech which the hon. Member has made will be repeated, with possibly a great deal of exaggeration and additions, in every paper in Germany, just to show the Germans that even in the House there are men who can belaud them as honourable men throughout the world. We know what they are. We have trusted them, and if we had not trusted them, as we are now asked to trust them, things would be different to-day. To me the speech of the hon. Member is evidence that this Amendment is necessary, and if it goes to a Division I shall vote for it.

The ATTORNEY-GENERAL (Sir J. Simon)

I cannot help thinking that it would be rather a pity if this discussion, which we are conducting in a businesslike way, and in regard to which we are co-operating for the same end, should by any accident or misfortune become diverted to other channels. With what we are aiming at it appears to me that both my hon. and learned Friend opposite and my hon. Friend behind me both sympathise. I would venture to urge in this matter that, on the one hand, we must make it our business, by this Bill, to see that whatever be the forms and methods of our law, the substance of our law is such as will prevent financial aid being given to the enemy we are fighting. I am sure the hon. Member behind me just as warmly supports that as any other Member of the House.

Sir W. ESSEX

Hear, hear.

Sir J. SIMON

It may be said with equal truth and with equal force—and I am sure all agree—that in pursuing that object we must also have regard to the purpose we have in view, and do it in such a way that we do not inflict unnecessary injustice and un-English treatment on people who are entitled to be treated fairly, like everybody else. That object is one in which we are all interested, and the hon. and learned Gentleman opposite has spoken for one part of it, and the hon. Member on this side has spoken for the other. I must say that I sympathise with the fervour and intensity and determination to do all that is necessary to stop trading with the enemy. I must say, also, that the hon. and learned Member referred to no particular firm.

Mr. H. TERRELL

I do not know what firm it is.

5.0 p.m.

Sir J. SIMON

I know that the hon. and learned Gentleman began by telling us that he did not know what firm was referred to. Are we to proceed on the assumption that because a man is a German he is a spy? What we are trying by this Bill to secure is that no financial assistance shall be given to Germany which we can stop, and show to every country in the world that under our commercial law we deal fairly with people of all nationalities. After all, I do not see why this occasion should be taken for such a debate. The hon. Member who moved this Amendment indicated quite fairly that he thought any difficulty would be in some degree met, or, if not met, ameliorated, if he were satisfied that the Board of Trade were really going to use their powers more rapidly than they have done hitherto. My right hon. Friend the President of the Board of Trade has given him his answer. He pointed out that the Department, with the best will in the world, was not able before to do everything that all of us would have liked, because this emergency legislation, passed necessarily in rather a hurry, we have found from experience, does not give wide enough powers. However, if we get the new-Clauses inserted in this Bill, as I hope we will in the course of the next few-hours, there is one which is designed to enable the Board of Trade to use its very necessary and I think quite essential powers of control, in suitable cases, without having to go through the elaborate process which the original Bill prescribed. It is not merely that the inspector should be entitled to act, but that there should be established some form of continuous supervision, and the Clause will provide that the inspector is to have such powers as the Board of Trade, in special circumstances, think right. In one case it may be less, and in another case it may be more. I really think that it meets the point, especially since, as the President of the Board of Trade told the hon. Gentleman, action is going to be taken at once in every case in this country which comes within the hon. Gentleman's suggestion. I do appeal to the Committee, because all of us desire to do a business matter in a businesslike way, to let us get this Amendment out of the way and get on with the next.

Mr. JOYNSON-HICKS

After what has taken place, I need hardly say that I think the best course is to accept the offer made by the President of the Board of Trade and by the Attorney-General. It does not quite meet all my views, but it is distinctly better, and I appreciate the spirit in which the Government has met me. I therefore ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. WATSON RUTHERFORD

I beg to move, in Sub-section (1), to leave out the words "by way of dividends, interest, or share of profits."

May I be allowed to say that I was the Member that did say in connection with one Amendment last night that I was requested to bring that Amendment forward by the British Engineering Association which consists of a number of firms with a capital of one hundred millions of money in this country. The suggestion that we heard just now from the hon. Member opposite that in bringing forward any of these Amendments we were doing so in any manner that was not bonâ fide I would repudiate. With regard to this Amendment I am anxious, as one who has taken some part in connection with this Bill, to shorten the discussion upon this and upon subsequent Amendments as much as possible. Therefore, when I move this Amendment if the Attorney-General is still disinclined to accept any modification in this direction of strengthening and improving the Bill in the manner indicated in this Amendment I shall accept the position and let the Government take the responsibility. As far as I am concerned we have done our best. We are bound to accept the decision and I, at all events, under those circumstances shall not move any of the other Amendments I have put down to either Clauses 3, 4, or 5. I think that is a fair statement. What I mean is this: that in making these suggestions we are not going to a Division. The responsibility really for this Bill rests with the Government. We are simply doing what we conceive to be our duty in bringing forward these Amendments with a view to making the measure a reasonable and, in our view, a proper measure. By Clause 1 we have constituted a Custodian. This Amendment goes to the very root of the question as to what the Custodian is to take possession of. The Clause says dividends, interest, or share of profits, and Sub-section (5) gives a definition as to what dividends, interest, or share of profits is to include. The definition does not extend the items in any respect. They are cut down to dividends of shares, bonuses, interest on loans and share of profits of any business that is being carried on.

The object of my Amendment is in order to give the Custodian the right to immediately take possession of any sums of money that would be payable to an alien enemy. I desire to ask the right hon. Gentleman why the Clause should be limited and why the sums of money which the Custodian is empowered to take possession of should be restricted? There are obviously plenty of other kinds of sums of money which are payable to an alien enemy in addition to those which are mentioned. For instance, there are the proceeds of goods which have been sold on account of an alien enemy. I have in my own knowledge a number of cases where the proceeds of goods that were consigned by enemies before the War, and which have been sold on account of those enemies since the War, are now payable to those enemies and in those two or three cases they total over a million of money. That being so, I ask why should not the Custodian receive the proceeds in those cases? What is the good of leaving him to collect interest and dividends and not let him take possession of those enormous sums of money? I make no doubt whatever that there are hundreds of thousands of pounds to-day owing by British subjects to alien enemies, and in a large number of those cases the British subjects would like to pay the money to some person really entitled to receive it. It is a curious position to have to explain in Committee of this House that people are really anxious to try and pay money, but I know of cases where people really are anxious to be relieved of sums of money which do not belong to them, and which they are precluded by law from paying to the alien enemy. Why, in the name of all that is reasonable, should not the Custodian be able to take receipt of all those debts and discharge the account?

We have mention also of charges, fees, royalties on patents, and all kinds of sums of money which are, or may become, due, but why should all these different kinds of money be distinctly excluded from the purview of the Bill, and why should not the Custodian be able to receive them? If dividends on shares and interest on debentures are to be handed over, why not the shares and the debentures and also in the case of a loan? If the profits of a business are to go to the Custodian, why should not the capital also pass to him, if he likes to take possession of it? It is because where these sums belong to an alien enemy he cannot to-day come and get them. I am making the suggestion. I am not suggesting that they should be confiscated, but unless you pass them over to the Custodian they will not be taken care of properly as they ought to be, or dealt with in an equitable manner. The Clause is restricted at present to dividends and interest on shares and profits, and as regards all other real and personal property we have Clauses 3, 4, and 5. Those Clauses give power to ascertain particulars and to apply to the High Court. I am going to be told that those Clauses are quite sufficient to deal with all the rest of the real and personal property and that the power to go to the High Court is quite sufficient. We have had a speech this afternoon from the President of the Board of Trade, who told us that he had only been able to get controllers appointed in nine cases because you have to have affidavits, or something to go upon, for the Court, and somebody has to begin to incur expense and to take all the responsibility in initiating litigation, and you have got all this paraphernalia, and therefore we have only got controllers appointed in nine cases instead of 9,000—that is, the 8,991 cases have not had controllers yet appointed.

I ask, if the President of the Board of Trade tells us that it is difficult and expensive to get controllers appointed, why should not these sums I have mentioned, stocks and shares and securities, automatically under Act of Parliament pass into the possession of the Custodian? I move this Amendment. We shall have done our best. We have only put our own views forward. I beg to assure, anybody who has got the slightest feeling of sympathy with the hon. Gentleman who spoke just now that I am not actuated by any ill-will against any firm. I never mentioned any firm's name in this Committee. I do not think it a right thing to do, and I consider it is very dangerous to refer to any firm or person. In bringing forward this Amendment I beg to assure the Committee that I am simply actuated by the desire to see a workable, strengthened and complete Act of Parliament. I am anxious to save expense, bother, litigation and law costs. I am anxious to see this official whom we have just appointed empowered to take possession of, to take care of, and to preserve all the property and effects of an alien enemy that he can lay his hands upon. If the Attorney-General considers that his way of doing this as provided in subsequent Clauses is superior to mine, if he is content to take responsibility on behalf of the Government, I will accept his answer and endeavour to shorten the proceedings by not moving any of the Amendments that I have on the Paper to Clauses 3, 4 and 5.

Sir J. SIMON

The hon. Gentleman has told us, and I am sure we have all accepted his statement, that his object is to make this Bill as workmanlike and businesslike for the purpose of preventing trading with the enemy, as is possible. That is my object too, and I hope I have enough fair-mindedness to be prepared to consider quite frankly a suggestion made in that spirit by the hon. Gentleman. I am equally certain that the hon. Gentleman is prepared to listen to my explanation, which I think will convince him, because he is a fair-minded man, that his proposal, instead of improving the Bill, would inflict very great injury on British subjects. If I do not convince him of that, I shall certainly think there is something wrong with my argument. However that may be, we shall each be certain that we are trying to make the Bill as good as it can be made. Let me point out what the Amendment would do. It would say that if there is any British subject in this country who at the outbreak of war owed any sum of money to a German enemy, even although that British subject may find it very difficult to find the money, because, war having broken out, his business has dropped, and even although he cannot be compelled by the German enemy to pay that money till the War comes to an end, none the less he shall go to prison for six months if he does not produce the money and pay it to the Custodian. That is the businesslike effect of the businesslike Amendment. The hon. Gentleman proposes to make Clause 2 read in such a way that any sum of money due from a British person to an alien enemy will have to be paid within fourteen days, and any sum of money which becomes due hereafter will have to be paid within fourteen days of the date upon which it falls due. Subsection (3) provides that if any person fails to comply with that provision he shall be liable to a fine not exceeding £100, or to imprisonment with or without hard labour for a term not exceeding six months. Obviously, that is not what the hon. Member intended. But it is equally obvious that that is the result. On reference to the Order Paper, I see that this Amendment stands in the names of the hon. and learned Member for Kingston (Mr. Cave) and of the hon. Member for Brentford (Mr. Joynson-Hicks), as well as in that of the hon. Member who has moved it. It has been on the Paper for two days. There was some debate on this subject last night, and it will be seen, by reference to the OFFICIAL REPORT, that the hon. and learned Member for Kingston, who was the first to put down this Amendment, said that, after reflection as to its effect, he did not intend to move it. His words were:— Although I had intended to move an Amendment to extend this Clause to all debts—in fact I have an Amendment on the Paper which would have that result—I do not to-day propose to move it, because I do not want to make a condition under which it would be criminal for a man not to pay his debts. He may not be able to pay his debts. It would be very unreasonable that such a penalty should fall upon those who are simply prevented from paying money which they owe, and which may, no doubt, be recovered by civil process."—[OFFICIAL REPORT, Tuesday, 24th November, 1914, col. 1060.]

Mr. RUTHERFORD

I agree.

Sir J. SIMON

If ever there was a case where you should not make it a criminal offence, because a man who owed a sum of money did not produce the money and hand it over, it is this case. Who is the man who, under the hon. Member's proposal, is to be penalised if he does not pay? A British subject. Who is the man who has the claim against him? An alien enemy. The hon. Gentleman is actually proposing that, although the alien enemy cannot compel the British merchant to pay before the War comes to an end, none the less, the Act of Parliament shall make the British merchant find the money within fourteen days. Anybody who has done me the honour of following my argument will see that, whatever be the proper Amendment to this Clause, the Amendment now proposed would make the provision very hard on the British subject. I hope that that very large and responsible body of commercial opinion outside, which is very easily led to suppose that a Government—and especially lawyers in a Government—do not understand business, will realise that the proposal they are putting forward is one to make every British subject who, at the outbreak of war, owed money to an alien enemy in Germany, find that money within fourteen days or go to prison. The proper place to provide that other assets of alien enemies should be brought into the hands of the Custodian is not in this Clause, which is a penal and compulsory provision, but in Clause 4, which I hope we shall shortly reach. The hon. Gentleman has dealt with the matter fairly and generously, because he has said that he will take in good part the view which I might feel it my duty to express to the Commitee. I trust the hon. Gentleman will not imagine that I am encouraging further debate when I express the hope that, because this particular suggestion is shown to have the consequences to which I have referred, he will not deprive us of the advantage of his views if there be other points about which he feels strongly. My own feeling about the present Amendment is that its effect is so plain that the hon. Member will probably be the first to say that he does not desire to produce that effect. Therefore, I would ask him to withdraw the Amendment.

Mr. RUTHERFORD

Of course, as I have said, that if the Attorney-General did not see his way to accept the Amendment I should withdraw it; I feel bound to do so. I would, however, point out that it was no part of my suggestion that a man who could not pay should go to prison. That is absurd. All I meant by my Amendment was that the Custodian should be able to give a receipt for everything that was owing to an alien enemy. All the rest of the Clause about who is to go to prison and under what circumstances, we should, of course, have to consider. If a British subject owed £20 to an alien enemy and flatly declined to pay it—although he was able to do so—I think he ought to go to prison if he did not hand it over to the Custodian.

Sir J. SIMON

Even though he cannot collect his debts owing to the War?

Mr. RUTHERFORD

I do not suggest that a Clause of this kind should be used for oppressive purposes against British subjects. However, the Attorney-General is going, in a different way, which is not as effective as I think it might be, to bring about this very result.

The DEPUTY-CHAIRMAN (Mr. Maclean)

Does the hon. Member withdraw his Amendment?

Mr. RUTHERFORD

I was about to say that I therefore ask leave to withdraw.

The DEPUTY-CHAIRMAN

We cannot have a speech on the question of withdrawal.

Sir CLIFFORD CORY (indistinctly heard)

I think there is something to be said for allowing the Custodian to collect dividends that may arise from capital here. Although it may not be desirable that he should collect debts owing by British people to German creditors, at the same time there are many assets which might be put into the hands of the Custodian and fairly used to meet the claims of British creditors.

Question, "That the words proposed to be left out stand part of the Clause," put, and agreed to.

Mr. H. TERRELL

I wish to move an Amendment which is not on the Paper, namely, to insert words so that the Clause shall read "profits or annuities." I have had a case to-day where a firm have to pay an annuity to an alien enemy, and they do not know what to do with it. It is an annuity out of profits, but I do not think it is covered by the definition of profits in the Bill. There is also another kind of case which is not infrequent—

Sir J. SIMON

Might I interrupt the hon. and learned Member? I have not had the advantage of seeing this Amendment, and if the hon. Member could give me an opportunity of knowing what cases he has in mind, I should be glad to co-operate. At present I could not do more than say that I do not think it would be safe to insert the Amendment without consideration. There will be a Report stage, and I should be glad if in the meantime the hon. Member would give me an opportunity to consider the matter.

Mr. H. TERRELL

I will not move the Amendment now; I will introduce it on the Report stage. I beg to move, in Subsection (1), at the end of paragraph (b), to insert the words, Provided that, in case any such person, firm, or company as aforesaid shall claim to be entitled to any set-off against any money so payable or to maintain any counterclaim, whether for a liquidated sum or for damages against the enemy to whom or for whose benefit any sum would have been payable from any such person, firm, or company had a state of war not existed, such person, firm, or company may by originating summons apply to a judge of the High Court to determine whether any and, if so, what part of any sum so payable shall be paid to the Custodian, and such person, firm, or company shall be liable under this Act to pay such sum only as the judge shall so determine. The Amendment I have put down may in a measure be met by what was said by the Attorney-General yesterday with regard to the words "payable and paying." What I want to provide by this Amendment is that if, for instance, any man owed a sum of money by way of interest, and he also had a counterclaim or claim by way of set-off, or claim by way of damage against the enemy, that he should not become compelled to pay without at the same time being allowed the set-off or counterclaim against what the enemy owes him. The Attorney-General may say that the Section would not apply to that case. Under which circumstances a man who owed interest would not have paid it; therefore it would not come within this Section. I want to provide for the case of the kind that constantly arises, of a man owed interest, or a company owing shareholder's dividends, so that the man or company may have a counterclaim. In these cases it would be very hard to say to the man, "You have got to pay up, you must pay your interest over to the Custodian; and wait until the end of the War, when you can sue the alien and, if you can, recover your counterclaim from him." What I propose by the Amendment is that a man should be able to claim, by way of set-off or counterclaim, against the alien creditor; that he should, by a summons, apply to the judge, and then the judge would say how much he ought to pay, if anything. The judge would determine whether there was a primâ facie case of counterclaim, and whether the man ought to pay a part or the whole of the amount. The procedure I propose would relieve a man of the manifest injustice of paying the whole of what might be due without entitling him to setoff any of what may be due to him.

Sir J. SIMON

The object of this Amendment, which the hon. and learned Gentleman has so clearly explained, is, in my judgment, perfectly to the point. The principle which he is endeavouring to enforce is one which everybody must accept. But I have a great deal of doubt whether it is really necessary to insert it. There are two reasons why I think not. First of all, the hon. and learned Gentleman will bear in mind that this Clause, in view of our decision upon the last Amendment, is limited to payment by way of dividends or share of profits. Nearly all the cases therefore that may arise are already provided for in circumstances very familiar to the hon. and learned Gentleman. Take a company—he knows better than I do—but I think I am correct in saying that the articles of a company almost invariably provide that the company has a paramount lien over the dividends, and only hands over what is payable to the shareholders after the company are satisfied it has no claim against the shareholders.

Take the other principal case, that of the share of profits. Circumstances may differ, but certainly in substance it is true to say that all you pay out to a partner is what he gets after claims against him are satisfied. I do not say it is true in every case. I rather doubt whether it is. I can imagine an ingenious person finding some exceptions. Most cases are certainly of that sort. The second ground is that, for reasons which were given to the Committee, we determined to keep in the test that the money should be such as would have been paid—not merely payable, but paid—and it does not appear to me doubtful that that test would quite positively provide, by much simpler methods than what appears here, to do what the hon. Member desires. If he could see his way to withdraw his proposal now I would say, not in a formal way but with the intention of looking at the matter afresh, as best I may in the interval—and if I may see him and others interested before we come to Report to-morrow—we may see whether or not the matter cannot be left as it is. Obviously the less we introduce into this Bill applications to Court and everything suggesting to the trading community that this Bill involves a great deal of litigation, the better. I would hope therefore that the hon. and learned Gentleman would be able to withdraw his Amendment.

Mr. H. TERRELL

I agree to the suggestion of the right hon. and learned Gentleman, and ask him to withdraw my Amendment.

Amendment, by leave, withdrawn.

Sir J. HARMOOD-BANNER

I beg to move, in Sub-section (4), after the word "themselves" ["the Board may themselves declare the appropriate dividends"], to insert the words "ascertained such profits and." I will ask the Attorney-General to accept this Amendment as a means of ascertaining what profits are actually available.

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

We accept that Amendment.

Question, "That those words be there inserted," put, and agreed to.

Sir J. HARMOOD-BANNER had an Amendment in Sub-section (5), after the word "which" ["which, had a state of war not existed"], to insert the words "after the payment of the debts of such business in the United Kingdom."

The DEPUTY-CHAIRMAN

This Amendment appears to me, if it comes in at all, to come under Clause 5, which deals with how in some respects the Custodian is to deal with property. It does not seem to me to be relevant to this Clause.

Sir J. HARMOOD-BANNER

I do not desire to press it in view of the discussion that has just taken place with regard to counterclaims.

Amendment, by leave, withdrawn.

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