CLAUSE 9.—(Conditions as to the Incorporation of New Companies.) (Hansard, 25 November 1914)

§ Mr. POLLOCK
I beg to move, in Sub-section (2), to leave out the words "during the continuance of the present War."
I move this in the interest of safeguarding our position at the close of the War. Hon. Members will see that this Clause is directed to preventing companies being formed for the purpose of taking over what may be called enemy businesses, and therefore enabling enemies to trade by means of a company formed in order to conceal their real purpose. So one of two things is required before a company can start business—either a statutory declaration by a solicitor or a licence by the Board of Trade. Assuming that all was in good order, and that the solicitor has been able to declare that there is no intention or purpose of taking over any business 1221 which is liable to inspection under Sub-section (2) of the principal Act—which provides for inspection by the Board of Trade of firms or companies in which one-third or more of the capital or directorate is held by or consist of Germans—this Clause is directed to the prevention of a company being formed to take over a business which is really subject to inspection by the Board of Trade, because it is substantially held by Germans. If a company is formed, and if a statutory declaration has been made by a solicitor that it is all right or a licence has been given by the Board of Trade, and it enters upon a new period of existence, it may be that it will then take over such an undertaking as is described in Sub-section (2) of the principal Act, and you have got in some way to put a stop to that. So this provision is inserted, that where that declaration has been made or where that company has started during the continuance of the present War the company shall not acquire any business which is substantially held by Germans.
In the interests of commercial people generally and of British trade, it would be wise to leave out the words "during the continuance of the present War" in order that, when the War is over, the Board of Trade or some other authority may decide whether or not they will allow free trading to Germans in just the same way as it existed before the War broke out. That is the only purpose of my Amendment. I do not wish to stop them altogether, but when peace is declared it will be very important to consider how far we should restore the position of German traders in this country. And at the time of peace it may very well be wise on our part to have something to begin with. Therefore I do not want to decide now that we should automatically put them back in the position which they were before the War. If they behave well to us in Germany, if they treat our merchants properly, if they have respect for the property of others, at the conclusion of the War we on our side will do the same. But I think that to have the possibility that at the conclusion of the War a company may take over the business of a company liable to inspection under Sub-section (2) of the principal Act, is unwise at the present moment. It may involve a little later on some action, or possibly a new Bill by the Board of Trade. I do not wish to decide anything about 1222 that now, but what I do object to is leaving an automatic provision in favour of Germans without the Board of Trade having the opportunity or the right to decide whether this free transfer of business shall take place. Therefore I want to leave out those words "during the continuance of the present War" until we see what circumstances arise. If we are properly treated by Germany, of course the old relations might be established, and it might be unnecessary to put any sort of embargo on the transfer.

Mr. ROBERTSON
I hope that the hon. and learned Member will not press this Amendment. I do not think that the hon. and learned Member suggests any way in which, at the close of the War, this provision would be at all likely to do anything that would be injurious to this country or would be helpful to the other country in any way in which we do not want to be helpful to the other country. I might suggest to him that if there should at the conclusion of the War emerge any considerations which would seem to make it advisable to prevent future action of this sort, it would be quite a simple matter then to make fresh legislation providing for it; whereas, if you make this provision absolute, you would find yourself at the close of the War faced by a condition of things in which you would have suddenly to legislate to make transactions which are ordinarily quite possible legal. That does not seem necessary. The hon. Member has not suggested how it could be desirable to prevent the taking over of such a concern. At the close of the War, if there were unforeseen circumstances we should then be perfectly free to deal with them, and I think it far more convenient that we should leave it on that footing. We make the prohibition apply only to the period of the War, leaving ourselves free to apply an extended provision at the close of the War. I think that a perfectly reasonable and prudent course.

Mr. RUTHERFORD
I have been entirely unable to discover the slightest utility in this Clause. Throughout I have been in favour of improving the Bill, but as to this Clause I cannot see any advantage in it. Why not make as many British 1223 companies as possible to carry on any business which otherwise the Germans would be carrying on? I should have thought that was the most desirable thing possible to do. As a matter of practice, not as a matter of law on which I am less in a position to speak, but as a matter of practice, with which I am better acquainted, even if the Clause is intended to stop something that it is desirable to stop, it is perfectly useless; because anybody that wants to register a company can buy the registration. I can sell the right hon. Gentleman half a dozen registrations, which were effected two or three years ago, and which he can have for a very few pounds over the amount of the stamps. How you are to stop a company from being registered to carry on business I do not know. For these reasons I do not see the slightest use in the Clause. I have an Amendment on the Paper to leave it out, but if the Attorney-General really thinks that there is some utility in it, then I am quite prepared to accept it and not press the Amendment.

§ Sir J. SIMON
I have for a good many hours in this Committee been hearing what a shocking thing it is that there should be companies registered under the British law, the registration being merely a disguise for German undertakings. I accepted that criticism, and I rather thought that we were to do what we could to prevent that, though we cannot do everything. But this is a case where a British company is going to carry on a business the Germans had carried on before; it is going to acquire the undertaking, and the Clause has this value, that it prevents a German undertaking, in time of war, from disguising itself as a British company.

§ Mr. HUME-WILLIAMS
Suppose a German firm has hitherto carried on business in this country, and an English company desires to buy its business, if the German firm is prepared to sell, an undertaking might be formed to take over the plant and stock, and the purchase money could go to the Custodian instead of going to the Germans.

§ Sir J. SIMON
Clause 9 provides that there is to be a licence from the Board of Trade authorising the acquisition by the company of such an undertaking, that is, if the Board of Trade acquiesces in it.