TRADING WITH THE ENEMY BILL.

HC Deb 10 September 1914 vol 66 cc691-724

Motion made, and Question proposed, "That the Bill be now read a second time."

Sir JOHN HARMOOD-BANNER

I would like to ask the Attorney-General whether he will consider Clause 3; which gives power to the Board of Trade to apply for a receiver in certain cases. I wish to urge upon the right hon. and learned Gentleman the propriety of the Board of Trade consulting with those for whose business a receiver is to be appointed as to the character of the appointment to be made. No doubt, in some cases, these businesses will be bonâ-fide businesses carried on for the benefit of our country, and it is important that the appointment of a receiver should be so carried out by the Board of Trade as to result in securing somebody who is approved by the company, and who has some knowledge of its business and how to carry it on, paying due regard to good administration and the interests of all concerned. I would like to know whether it is possible to put in words which would ensure that object being achieved.

Sir J. D. REES

I desire to ask a question, the answer to which may render it unnecessary for mc to move a new Clause. The question is, why there is no definition in the Bill of "alien enemy," and why it excludes an alien enemy resident and exclusively trading in this country? There are before the country two definitions of "alien enemy," and it seems to me, under present circumstances, that it is somewhat inconvenient. By Sub-section (2) of Clause I the matter is to be dealt with by Proclamation, but the draft of the Proclamation did not accompany the Votes this morning. I understand the document is to be found in the daily papers, but a Member of Parliament is not bound to read the daily papers or take one in, and he should know from official sources what are the intentions and powers of the Bill. I understand that trading with an alien enemy is to be trading in this country if such alien enemy has received a licence. If I am right in that, would it not be desirable to have a definition of the words "alien enemy" in the Bill?

The ATTORNEY-GENERAL (Sir J. Simon)

The hon. Member for the Everton Division called attention to Clause 3 of the Bill, and pointed out that, in regard to the powers to be exercised by the Board of Trade under that Clause, cases may arise where it is desirable that the receiver to be appointed should be a person thoroughly conversant with the business in respect to which he is appointed, and a proper person to discharge the duties of receiver. Under a proper Clause I think that would be so. Obviously, we must take security that the person appointed is a person who will be able to discharge his duties properly under the Clause. I certainly will make it my business to communicate this view to the Board of Trade, in order that all proper steps may be taken to see that the person appointed is not necessarily, or always, one of a comparatively small list of persons whom the Board of Trade are accustomed to appoint, but will include a wider circle of equally responsible and equally experienced persons, who may command the confidence of the particular business which is sought to be administered. I think that would be a fair way to deal with that. The hon. Member for Nottingham (Sir J. D. Rees) did not do justice to the efforts which have been made to meet the convenience of Members of the House. If his memory serves him, he will recollect that I pointed out that there was one Proclamation in actual existence at the present time, and that the second one, at the time I was speaking, was being issued, but that it would not be possible to circulate it with the papers. However, I stated that the document would be found first thing this morning at the Vote Office, and I took steps to get some 500 copies sent there for the convenience of hon. Members. In the second place, the hon. Gentleman spoke as though this Bill used the expression "alien enemy." The Bill contains no such expression, on the contrary, it avoids it; we have been careful to avoid using it, and have confined it to the use of the word "enemy." We cannot define it further for this reason. I am sure that those who have considered the matter will agree that if we are going to maintain the common law it is better not, at the same time, to try to define it, and I have not the slightest doubt that the common law will be found to apply to trading with the enemy, and I do not see any other way of doing it. I quite sympathise with the hon. Gentleman's desire to get the matter made definite and clear, but I do not think it can be done by introducing a comment or glossary on the common law of this country.

Sir J. D. REES

Is it not a quite unusual thing to have nothing whatsoever in the Bill of what may appear in the Proclamation?

Sir J. SIMON

That is also a matter which was gone into yesterday. I do not think it very unusual. I think it was generally agreed by the House that a matter of this sort, involving consequences so important to the application of the machinery of our trade, is best dealt with by reserving a power of adjustment which may be varied from time to time. Of course, no prosecution can take place under this Bill unless the Attorney-General approves, and I hope it will be taken from me that there would be no proceeding on a mere technicality under a Proclamation which may not be clearly known to the public. In view of the difficulties I hope the hon. Gentleman will consider this the best course to be taken.

Mr. J. M. HENDERSON

This Bill has only just been printed, and a very important Bill it is, and as far as it goes I think it may be considered all right; but it leaves out one of the very most important things which is exercising the minds of the people in this country at the present time. It leaves out of consideration altogether the case of the limited company which if trading as a private firm would be absolutely alien and a company with which no one in this country could deal, but by registering themselves as a company they continue to carry on business. If we are to carry on war against any nation ruthlessly because that nation is carrying on war against us, then we ought to attack their trade in every form we can. I think that must be common sense, for the sooner you destroy their trade the sooner you destroy their army. One is as important as the other, and one leads a great deal further very often than the other The Bill deals with firms or companies which immediately before or any time since the commencement of the present War were subjects of or carrying on business in a State for the time being at war with His Majesty. And it deals also with the case of a company more than one-third of whose issued capital immediately before or at any time since the commencement of the War was held by persons or subjects of any State for the time being at war with His Majesty, but there is no dealing at all with limited companies where the preponderating shares are held by that alien company. There is no provision for the case of a limited company where the whole of the shares, except perhaps the necessary signatures, are held by that company.

Sir F. FLANNERY

"Held by a foreign company."

Mr. POLLOCK

A slight verbal alteration is all you want.

Mr. HENDERSON

This Bill makes no provision for what I want to see done.

Sir J. SIMON

Perhaps the hon. Member would be kind enough to indicate what it is he wants done, and then I shall understand.

Mr. HENDERSON

I think this Bill ought to provide for the stopping of fresh business, the same as was done in the case of the Dresdner Bank, and the Deutsche Bank. I will take an example. The Allgemeine Electricitas-Gesellschaft, the biggest electrical company in the whole world, has the principal contract for the electrification of the Brighton Railway. About the time of the War that company registered a company in England with 30,000 shares, of which they held 29,993, and they registered this company for the express purpose of keeping their business alive here. I protest. Here is an alien company, and an alien firm, and I say if the Dresdner and Deutsche Banks are to be stopped doing business, though, of course, a receiver is put in, it must be right in the case of this other company. [An HON. MEMBER: "No, no!"] Why not? Here is a limited company of foreigners, though technically it is not so, since they have covered themselves by this process to enable themselves to do that which as a private firm they could not have done. Therefore, I say I shall put down an Amendment, and I hope there will be a full House to support it, that the same measure may be meted out to this company, the overwhelming bulk of whose shares are held in Germany, as has been meted out to the Dresdner and Deutsche Banks. The whole business of this company, or a large portion of it, is honeycombed with this thing. This company have protected themselves by registering, while the bulk of the shares are held in Düsseldorf, Berlin, and other places in Germany. If it is right that the German banks should be stopped from trade, then it is equally right that this company, which is absolutely and undoubtedly simply a German company which has covered itself by registration under the Limited Liabilities Act, should also be stopped.

I shall put down an Amendment to see if that cannot be done, although I dare say it may be a little difficult to do, but it was done in the case of the two banks. It may be said that no profits can go now. It is not necessary for the profits to go. The Attorney-General said yesterday or the day before that if profit was accruing it was equally the same thing. I will tell the House what Germans are doing with regard to that. I saw to-day a letter from a German firm saying, "You owe us £26. We know we cannot collect the money, but be kind enough to sign this document that the amount is owed by you." That is enough, as it is as good as any cheque, and they take it to the bank and get credit for it. They are very, very artful. Another part of this Bill refers to trading with a foreigner directly. I will tell you what they have done. At the present moment this country has never declared copper to be contraband of war, and yet copper is as much contraband of war as lyddite or any explosive. You cannot make a shell without a copper ring, not one. The annual consumption of copper in Holland is 600 tons per year. There are 1,600 tons of copper going in through Holland at this moment—and where are they going? Transhipped on to barges on the Rhine and sent to Düsseldorf, and on to Krupps, where they cannot make a single shell without copper. We ought to be able to stop that. If you stop the making of ammunition you help just as much as by defeating a battalion or an Army Corps. This Bill ought not to go through to-day. I shall not oppose the Second Reading, but I shall put down an Amendment which will deal with firms which are practically and ostensibly, and without any concealment, German firms carrying on business in this country under the aegis of our Limited Liabilities Act just as much as if they were private firms.

Mr. DUKE

One cannot fail to appreciate the impulses which have moved the appeal of the hon. Member, but I hope His Majesty's Government is not going to be moved by those impulses into doing something which if the hon. Member's proposals were carried out would be a tremendous blow at industry and employment in this country. I will give the House one or two instances. The hon. Member has referred to one instance, but there are many others. One of the companies engaged in the electrical industry in this country employs more than 1,000, or, I think, more than 2,000 workmen, or, at all events, an enormous body of British workmen. It is carrying on its industry in this country for the purposes of this country. It is an existing organisation, and I think it may be truly said, if you confiscate the property, the alien interest in the property, and destroy the trade as it exists now, the sole result would be to dislocate, for the time, at any rate, a critical time, the industry of the company in which the sole concern of this country is that it should be carried on here, that it should be prosperous here, and that it should provide employment here.

I will give the House and the hon. Member, without the name, another case which is within my own knowledge, and which offends grossly against the principles the hon. Member proposes to lay down. I have in my mind the case of a company carrying on a manufacturing business in England which was organised originally by Englishmen, and in which the business was acquired by German capital, and in which all that exists at the present time of a British character is the incorporation. The incorporation is a mere shell for an organisation in which German capital down to the time of the War, and German management, and German control were all in all. The hon. Member's proposal, as I understand it, would be to make that an illegal undertaking and to destroy it, and, I suppose, to confiscate it. I am not sure whether the hon. Member proposes that we in this country should confiscate that industry, and that it should become public property, or whether he proposed that it should be summarily stopped.

Mr. HENDERSON

I want to propose that it be stopped the same as the Dresdner Bank. You did not confiscate the property in that case, you only stopped the business.

Mr. DUKE

It may be said that during the War it would be stopped, but you cannot in an ordinary business stop the business for the period of a war, for that is an end of it. The immediate result of a stoppage, and the only result during the War would be to put in this particular case 1,400 skilled workmen living here in London out of their employment.

Mr. HENDERSON

It would give employment elsewhere.

Mr. DUKE

Is the hon. Member ready to offer these skilled workmen that employment, although he does not know their whereabouts or the industry in which they are engaged. I am not sure that his speech was not actuated by as great readiness to undertake untold liabilities. To undertake an operation of that kind I am quite sure would be contrary to the public interest, and would not be consonant with the objects which the hon. Member or any of us have in view. What is the position with regard to these concerns. Proclamations have been issued prohibiting, as the common law does, all kinds of communication between those who conduct this business in this country, and those beyond the seas who, down to the time of the War, were the proper controllers of that business. The business is as isolated from them as though they were put out of existence. The common law lays it down, and the Proclamation makes it plain to every person concerned that to communicate any matters of business to those who were the controllers of that concern beyond the seas, or to communicate any money or any goods to them would be a criminal offence, and nothing of the kind will be done. What is the state of things? While the War goes on, this business will be carried on as an English concern. If this Bill becomes law, His Majesty's Government may step in promptly and may ascertain all the transactions of that concern, and by means of an English receiver exercise control over it to see that if the Englishmen who were and are legitimately in charge, were neglectful of their duty as citizens of this country, then the State should see that no harm was done by the carrying on of that which is a necessary business. That is the state of things during the War. The business is carried on as though it were an English business. The common law, reinforced by this Statute, will prevent any proceeds of that business going out of this country. I sincerely trust that His Majesty's Government will have the courage to go a little further in the same direction.

It has occurred to me, and probably to many others, that in the present state of public affairs His Majesty's Government might well set at rest many questions by providing by Statute or otherwise an administrator of all these alien interests, by seeing that those alien interests are for the time being under the control of the Grown, which is entitled to control them, which has, as I believe, and I think lawyers generally believe, a latent power to appropriate to public uses in this country everything concerned in these industries belonging to alien enemies, Nobody desires to go to that desperate and extreme length, at any rate at this time, but His Majesty's Government might take a course of that kind consistently with this Bill. This is an emergency Bill. It is directed to assist, not alien enemies, but business men in this country, those who advise and control manufactures and industries, and to make the road clear for the carrying on of British industry. I view the Bill with great satisfaction. I believe it has been prepared with extreme care. No man can say after one or two readings of a document of this kind that there is no point requiring further consideration; but the care of the law advisers of the Crown and the draftsman is conspicuously present in the Bill. It is a measure which I believe when hon. Members consider it will be seen to be directed not to protecting, sheltering, and nourishing any enemy, whether at home or abroad, but to the necessary uses of commerce and industry in this country, and the necessary guidance of business men. I hope, if I may respectfully say so, that His Majesty's Government will be encouraged in the passing of legislation of this kind.

Sir FREDERICK LOW

I entirely agree with the hon. and learned Member for Exeter (Mr. Duke) that it is of great importance with regard to industries carried on in this country, that no feeling of patriotism or feeling that it is necessary to suppress every kind of foreign interest, should imperil the employment of people working here. There are, to the knowledge of every person with any experience of business, a great number of undertakings in this country which are being carried on under foreign control, and to a large extent with foreign capital, but which still give a vast amount of employment here. The Bill as prepared, I think, fully covers these cases, and I am glad that it is not of the confiscatory nature that some speakers would seem to desire For my part, I entirely welcome the Bill. One or two points may require further consideration, but, as a whole, I think the Bill most admirably provides for those matters which, in the present position of affairs, have to be provided for in relation to the question with which we are dealing.

Mr. PETO

This is a matter in regard to which I particularly desire to ask the Attorney-General some questions. First let me thank him for having had copies of the Proclamation placed in the Vote Office. I only wish that the Bill were as plain and as easy to understand as the Proclamation is. It would be very much easier for the trading community. I know that this question concerning companies in which there is a preponderating enemy shareholding is exercising a great many legal minds. I am quite sure that the public at large are most anxious to do nothing that would entail the wages fund of those companies being stopped, diverted, or interfered with. But there is naturally a great deal of anxiety lest, when orders are placed with a company in which 90 per cent. of the shareholding is in the City of Berlin, it should be possible, sooner or later, in meal or in malt, by deferred payment after the War, if not during the War, for these wealthy shareholders in Berlin to get the profits of the industry which accrue during the War. I have read Clause 2 with a good deal of attention, and I find the case dealt with under Sub-section 2 (b)—

"In the case of a company, that more than one third of the issued share capital or of the directorate of the company immediately before or at any time since the commencement of the present War was held by or consisted of persons who were subjects of, or resident or carrying on business in, a State for the time being at war with His Majesty."

That is quite clear. What happens? It appears to me that in such a case the Board of Trade takes special powers to make a short cut, without the intervention of a magistrate, to investigate affairs, and no more. What are they going to do? What is the policy of the Government? Have they any means in mind by which they believe they will be able to secure the wages to people in this country and yet prevent the profits from going to the enemy? That is really what we want, but Clause 2 does not do it. It says how the investigation is to be made, but it does not give us the slightest idea of what the Government are going to do if they find that 90 per cent. of the shareholders are in Berlin. It is an incomplete Bill unless we have some indication from the Attorney-General that he has in mind some practical steps which will secure to the working classes the wages with which we do not want to interfere, and at the same time make sure that the profits which accrue during the War will not go to the benefit of the enemy.

Mr. BOOTH

I hope the Government will not yield too readily to amendments such as my hon. Friend (Mr. J. M. Henderson) has suggested. To stop immediately the work of German electrical firms, as the hon. and learned Member for Exeter pointed out, may inflict great damage upon working people here. I have a case before me where a German firm is erecting a machine, the first of its kind in this country. It is almost finished, but can only be finished by German skilled workmen who know the machine. No English workman knows it, and there is no completed machine working in this country to be taken as a model. For anyone to say that that must be stopped, and that the thousand workmen who will be thrown out of employment must go to my hon. Friend to find work—

Mr. J. M. HENDERSON

I must protest. I did not include any existing contracts. I referred to future business.

Mr. BOOTH

The hon. Member used the illustration of the banks. That is to stop business instanter.

Mr. HENDERSON

Banks are not made to stop business instanter. A receiver is put in to see that they do not take any fresh business, but only finish the contracts which they had taken up before the War.

Mr. BOOTH

My hon. Friend may think that in the case to which I have referred the putting in of a Government official, receiver, or liquidator will finish this German machine, but it will not. It requires one or two German experts. What is the object of getting the machine finished? Not to send money to Germany; it will not be sent. The finishing of that machine in the West Riding of Yorkshire is vital to the employment of hundreds of men whose families have to be supported. I put that as a case in my knowledge. I think we are much better in the hands of the Government, the hon. and learned Member for Exeter (Mr. Duke), and the hon. and learned Member for Norwich (Sir Frederick Low), than in dealing with manuscript Amendments suggested by my hon. Friend.

6.0 P.M.

Mr. POLLOCK

I hope the Attorney-General will proceed with this Bill to-night. There seems to be very common agreement that the Bill is necessary, and I do not think that the suggestions of the hon. Member for West Aberdeen ought to make us hesitate to pass the Committee stage to-night. This Bill is really the complement of the Proclamation issued last night and published this morning. In order to carry out the Proclamation to its logical and legitimate conclusion we ought to pass this Bill as rapidly as possible. I appreciate the point put by the hon. Member, but he is looking at only one aspect of the matter. Provided the business is done by a company which is an English company, although the capital may be owned by Germans and its directors may be largely Germans, if it is an English business filling up a gap in the present commerce in England the business ought to go on. If there is any attempt to remit to the enemy any money from that company that is met by the Proclamation of this morning, and the result will be that the German masters, or German shareholders, will not be able to get the fruits of the business. Many concrete cases have been given. If you do not pass the Bill in its present form, if you attempt to stop business which is now carried on, you will take away the possibility, not only of private persons, but of the Government themselves being supplied with very necessary material for providing details of muniments of war. I am familiar with at least two or three concerns in the county of Warwickshire where a large number of workmen are employed to make detailed portions of electrical apparatus which have to be passed on to other electrical apparatus makers to be completed. If you stop the work done in Warwickshire, you will necessarily stop the completing work carried on in other parts of the country. The shares of a particular company that I have in mind are very largely held in Germany, and a good many of the directors are probably Germans. If you stop that, you only clog wheels which require to run as smoothly as possible, and actually prevent munitions of war being obtained by this country. That is an aspect which must not be forgotten. While you regard with natural patriotic dismay the prospect of the enemy hereafter reaping any reward from commercial activity, you must remember that at the present time it is essential to carry on business and not to put difficulties in the way of commercial activities which are largely required and fostered by the Government themselves. The point which the hon. Member for West Aberdeen has raised may be met by a very slight Amendment in Committee, and inasmuch as the Clauses which are possibly subject to Amendment are very few, I hope the Attorney-General will proceed at once, in order that we may pass this Bill, which, as I have said, is the necessary compliment to the Proclamation.

Mr. LESLIE SCOTT

On a point of Order, Mr. Deputy-Speaker. This is a Bill which is limited to making provision in respect of penalties for trading with an enemy, and for purposes connected therewith. The main object of the Bill is to provide for easy penalties, and an easy means of enforcing the law, as it is outside the Bill, The law outside the Bill is partly common law, and partly the result of the Proclamation which has been issued by virtue of the Royal prerogative. The very interesting question raised by the hon. Member for Aberdeen, which has been debated, is as to what constitutes trading with an enemy. This is a subject outside this Bill, important though it be. This is a Bill which, in my humble judgment, simply recognises the existing position in this country, and proposes certain remedies to enable the Government to apply the Proclamation and the common law of the land. I submit that it is highly desirable that this Bill should be proceeded with. It is very simple in its character, and very limited in its scope, and it should be forthwith disposed of to-night. If the subject which was raised is one that ought to be dealt with, it should be dealt with in a different Bill, and after further explanation.

Mr. DEPUTY-SPEAKER

I take it that the hon. Member's point of Order is this: Will it be an order in Committee to alter the Bill in the direction suggested by the hon. Member for Aberdeen?

Mr. LESLIE SCOTT

In effect, Sir, it is that, because I was under the impression that the Attorney-General was going to defer to the suggestion that this was a subject for discussion in Committee, and was therefore not going to take the Committee stage to-night. If my point of Order is right, the matter is outside the Committee stage?

Mr. DEPUTY-SPEAKER

That point of Order must be taken in Committee when that stage is reached. But for the information of the House I think I may say, that so far as I understand the question of the hon. Member, he is quite right; the title of the Bill precludes Amendment arising on the point.

Mr. RAWLINSON

It is, I think, within the scope of the Bill to say that this Bill shall only apply to certain businesses existing at the present time, which would meet the point raised by the hon. Member for Aberdeen. This is a Bill which deals with procedure undoubtedly, and which gives exceptional power to the Government to deal with offences against the common law, and it would be an order to limit, if necessary, that power to certain offences, and not to the whole of the offences at common law at the present time.

Mr. JOYNSON-HICKS

On Second Reading we are, I think, entitled to take rather a wider range than that allowed in Committee, and perhaps the point of Order raised should be left as you suggested just now, and the further points taken in Committee?

Mr. DEPUTY-SPEAKER

Whoever may be Chairman of the Committee can deal with the matter, but the House appears to require a little guidance on the broad question. We do on the Second Reading of the Bill, allow suggestions to be made that something ought to be in the Bill which is not in it, or that it goes further than hon. Members like, but when we come to the Committee stage the Chairman cannot accept Amendments which are outside the scope of the Bill.

Mr. JOYNSON-HICKS

There are two points of the Bill to which I want to refer shortly. The first is in regard to the points discussed by the hon. and learned Gentleman the Member for Leamington, in regard to these companies which are English companies, and the capital and directorate of which are mostly held by alien enemies. I am perfectly clear that nobody wants to stop business being carried on; no one in this House wants that. But the question which I directed to the Board of Trade was not in any sense directed towards stopping English works. My point goes a little bit further than the point raised by the hon. Member for Leamington. He seems to think it is sufficient if under the Common Law, or under the provisions of the Proclamation, dividends are not sent out of this country. I think that we want to go a step further. In regard to some of these companies, I think you require to be perfectly clear where public work for the War Office or for the Admiralty is being done, not that the profits only are not taken out of the country, but that official secrets are not taken out of the country; that the work being done will be properly done—with German brains, if you like—for I am quite willing to take advantage of German brains in this vast electrical industry—and I would be one of the first to admit all that our country owes to German brains in this respect.

When, however, we know that several of these large electrical engineering firms which to-day are doing work for the British Admiralty are in touch with the secrets of the inside of our ships, it is essential that the Board of Trade should go a step further, and that Clause 3 of this Bill should not be utilised merely by the appointment of a receiver, and the prevention of the dividends going out of the country, but that where there is reason to suppose that Government business is being done by these thinly veiled German firms—however desirable it may be from the workman's point of view to keep them in existence—that there should be a receiver, or some control, or a Government official of some kind appointed to take charge of these concerns, working through the existing management to see that nothing detrimental to the interests of this country is done. That can be easily done without interfering with the work, as suggested by the hon. Member for Pontefract just now, for no one wants to interfere with the workmen, but we do not want Government secrets and ideas to get out to our alien enemies at the present time. The next point is one which arises both on the Bill and on the Proclamation. The Bill, I take it, is to provide for the punishment of offences under the Proclamation, and, of course, under the common law. If the learned Attorney-General will look at Clause 5, Sub-section (6) of the Proclamation, dealing with the question of insurance, he will see that it reads:—

"Not to make or enter into any new marine, life, fire or other policy, or contract or insurance with or for the benefit of an enemy; nor to accept or give effect to any insurance of, any risk arising under any policy or contract of insurance (including re-insurance) made or entered into with, or for the benefit of, an enemy before the outbreak of war."

The House, of course, knows that an enormous business is done by our insurance companies with re-insurance companies in foreign States, and more particularly in Germany. I do not know whether the House knows that what are called treaties are made as to the actual risk, that in the books of the English company it is entered that such and such a risk has been put into the treaty, and the German company thereby admits, and foreign re-insurance companies admit, merely on the production of the English companies books, that that risk has been taken.

Mr. BOOTH

And vice versa.

Mr. JOYNSON-HICKS

Yes, and the other way about. But under the provisions of this Proclamation, Clause 5, Subsection (6), it seems to me to be perfectly clear that no English insurance company having at the moment a treaty with an alien insurance company can do any more insurances of risk with that foreign country. I take it that that is clear. But when I get to the end of the Proclamation and read Clause 6, I find it says:—

"Provided always that where an enemy has a branch locally situated in British, allied, or neutral territory, not being neutral territory in Europe, transactions by or with such branch shall not be treated as transactions by or with an enemy."

I want to know what that means? I want to know whether that does not really cut away the whole foundation of the policy of the Bill and of the Proclamation? Nearly every one of these big alien insurance companies have got some kind of branch or office in this country—a mere office with a few clerks, it may be. If these are to be considered as a branch office of the insurance company, and are to go on writing these risks, in accordance with the original treaty made by the alien enemy, the whole use of the earlier part of the Proclamation seems to be out of court. I suggest to the learned Attorney-General that that is a very important point in connection with insurance practice at the present time, and I ask him, in view of the promise of the Prime Minister this afternoon, to explain exactly what is meant by that second part of the Proclamation. Does the Government really desire that English insurance companies are to be able to go on reinsuring their risks with alien companies for the benefit of those alien companies, and that, sooner or later—when the War is over, if you like—the profits of that business, whether accumulated in this branch or not, or whether retained in the coffers of the English company till the War is over, are to be sent to these alien enemies' companies?

It is a point of vast importance to the City. I will not say that this Bill has been rushed, but the insurance companies have not had much time to look into it, and I do ask the right hon. and learned Gentleman to make a perfectly plain statement as to what the position is. I should like to go further, and impress upon him to make either now or shortly the statement asked for yesterday as to what is the legal position in regard to these contracts with aliens. Perhaps he will forgive me for saying that I think he treated my hon. Friend the Member for Birkenhead rather brusquely yesterday. Doubtless he may have made the remarks he did with his bright smile, but that does not appear in the cold print of the OFFICIAL REPORT. It really looks as if he had told my hon. Friend that he might go outside, and get outside the best advice—

Sir J. SIMON

No, I was referring to his next-door neighbour.

Mr. JOYNSON-HICKS

It is not apparent in the OFFICIAL REPORT who that next-door neighbour was. But every lawyer in the City of London, and nearly every commercial man who trades with Europe, is to-day in doubt in regard to this question. There has not been any precedent at all provided us. The unfortunate lawyer—and I am quite sure my barrister Friends will agree with me—has no precedent in England, though there are a few cases in regard to the American War sixty years ago. I have asked the Prime Minister—doubtless the right hon. and learned Gentleman saw my question—that the Law Officers of the Crown should on this occasion go quite outside their usual province and should offer guidance to the vast commercial community of London, who do not know what their position is under these contracts. I have asked that in view of the present situation they should make a statement, so far as they are able to do so—I do not ask the Attorney-General to go further than that—as to what the law is. It is quite clear that the commercial community cannot get any decision from the Law Courts until the War is over; therefore the whole business of London, so far as it concerns alien contracts entered into with German and Austrian merchants prior to the beginning of the War, is to be held up unless we can get some decision of this kind. The Prime Minister this afternoon very kindly said that though it is quite outside the ordinary scope of the Law Officers' duties, he is considering very carefully whether they cannot make some such statement. I venture to appeal to the right hon. and learned Gentleman that he should create a precedent on this occasion. We all know his knowledge of the law, and we should all be perfectly content to be guided by it in the City of London. It would be an inestimable advantage, instead of forcing the commercial community to go to hon. and learned Gentlemen either on this or that side of the House, and get perhaps diametrically opposite opinions, if the Law Officers of the Grown would get together and give to the commercial community the benefit of the very best opinion they can on this very difficult question.

Sir J. SIMON

With the leave of the House I should like to say one or two words before the Second Reading is put from the Chair. As regards the last matter, to which the hon. Gentleman opposite has referred, I would remind the House that at about a quarter past three the Prime Minister told the hon. Gentleman that the matter was under his consideration, and that being so, he will not expect me, in the absence of the Prime Minister, to make a further statement on that subject at a quarter past six.

Mr. JOYNSON-HICKS

That is the second question that was asked. Ten days ago it was under consideration.

Sir J. SIMON

That, obviously, is not a matter that I should be expected to deal with now. Although very important matters have been raised in this Debate, I do not think there is any difference of opinion about this Bill. My hon. Friend the Member for West Aberdeenshire put some points which occurred to him. I do not at all take the view that his object and intention are in any way different from the objects and intentions of the rest of us. I am sure he will agree with me that we want, on the one hand, to take every security proper and possible to prevent, in those times of war, the enemy profiting by transactions hero, and, on the other hand, we do not want to take any steps which are going to interfere with British interests or handicap British commerce and employment. My hon. Friend is of the same view. He suggests that certain business which he has in mind might perhaps be dealt with in the manner in which certain foreign banks in London have been dealt with. I shall see that his suggestions are carefully considered. But the foreign banks are not dealt with under this Bill or the Proclamation. They are dealt with under the Alien Restriction Act, which the Home Secretary carried through the House a short time back, and therefore the suggestion he makes, if adopted, would have to be carried out under that Act, and do not come within this Act at all. On the other hand, this Bill does go a long way, I think, to give the necessary security. Really, there is not only no disadvantage, but there is a good positive advantage, from some points of view, in treating an enterprise in this country, even if it has got considerable enemy element in its composition, as British. You have this great advantage, that if you are prepared to treat it, since it is established in this country, as British, then if it enters into any commercial transaction or dealings with its parent enterprise in a hostile country it is committing a crime, whereas if you regard it as a foreign enterprise you cannot treat it in that way.

We cannot lay down the rule that every company registered in this country is to cease business because its directors in a large way are Germans, or that its list of shareholders is largely German. We would rather do this: We treat it as required to observe the same strict law as we observe ourselves, and consequently, if it enters into financial or commercial dealings with the enemy country, it will come under the same penalties as we impose upon another under this Bill. I suggest that is the best way to approach the matter, and in order to carry that out we have, as my hon. Friend has observed, taken power in the Board of Trade to examine books and documents of any enterprise in this country against which such suspicion may arise, and more particularly where its composition is predominantly foreign, in order that we may make quite certain what is the nature of the business which it is carrying on and whether there is any real ground for supposing that they are keeping up communication with the enemy firm; and in the third Clause of the Bill we have taken power to get appointed in proper cases a representative or receiver or manager, or whatever you may call him, who will have the power of seeing that the enterprise is carried on in the way in which it ought to be carried on. I do not think this principle ought to be disputed. My hon. Friend's suggestion is one well worthy of consideration, I well understand that he, and everybody else here, puts suggestions forward in the public interests with the real desire to see that our national interests are safeguarded, and I will have them carefully considered from that point of view. If my hon. Friend's suggestion was to be followed out, it would not be under this Bill but under the Aliens Restriction Act. I do not know whether the House will think it right to allow me to get the Committee stage of this Bill now. If there is any opposition in any quarter I should not persist in it, but it would be a convenience to get it now. There is a great deal that has to be done, and if this was out of the way we would be free to deal with other matters, but if there is any opposition I will defer it, because the whole merit of this legislation is that it should command the universal assent of the House. I shall ask for the Second Reading of the Bill now, and unless objection is taken I shall also ask for the Committee stage.

Mr. PETO

Can the right hon. and learned Gentleman tell me whether I am to understand that he does not see any means of preventing profits made by these businesses ultimately going to shareholders who are enemies?

Sir J. SIMON

I should be very slow to say at present that it would be right either to say or do anything in the nature of confiscation of what is, after all, the private property of others. After all, the adoption of that policy its capable of provoking considerable reprisals. I would rather set the example in the matter by being careful to preserve such property, in order that when the time comes we may be able to come forward with clean hands and inquire what has been the German attitude to our interests in the enemy country. That is my suggestion to the hon. Member, and for that reason it seems to me we do not need to make any change in the Bill in that way. An hon. Member asked a question about insurance. I had my attention called to that difficulty. It may be necessary to make some special prohibition about profits in connection with re-insurance, and if the hon. Gentleman will take that answer now I assure him the matter shall not be overlooked.

Mr. ANNAN BRYCE

I should like to ask the right hon. Gentleman a question with regard to a point I raised yesterday. He said yesterday that in contracts for transference of shares which had been entered into before the War it would be possible to make a difference, but the Proclamation definitely says no transaction with regard to shares whenever entered into can be completed. It expressly forbids the completion of transactions with regard to shares. That, therefore, would prevent the completion of the transference of shares. With regard to the question of insurance and the common method by which fire insurance companies work and by which they get a share of the premium of risk, the Proclamation says that new contracts for insurance are not to be entered into. The Attorney-General suggested yesterday that learned counsel might be consulted with regard to what was in the contract of insurance, and whether permanent treaties under insurance were or were not valid after the War. Numbers of eminent counsel have been consulted, and large fees have been paid for their opinions, and they have differed toto cœlo, and I think the Proclamation should be made clear as to whether there was a treaty or whether it is a new contract. If it is an old contract they would be entitled at the end of the War to receive premiums. It is an extremely important point and is exercising the minds of insurance companies all over the country, and it would be a great advantage to have the Attorney-General's opinion on the matter.

Mr. LESLIE SCOTT

I say candidly, and in public, that I have already advised that those re-insurance treaties are dissolved, and that the existence in this country of the agent of the foreign country makes no difference. The business cannot go further on the ground that it is dealing with the enemy, and each new risk is a new contract, and what I call the particular attention of the Attorney-General to is that if this is a sound view Article 6 of the Proclamation must be altered.

Question, "That the Bill be now read a second time," put, and agreed to.

Bill read a second time.

Resolved, "That the House doth immediately resolve itself into the Committee on the Bill."—[Sir J. Simon.]

Bill accordingly considered in Committee.

[Mr. WHITLEY in the Chair.]

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1. CLAUSE 1.—(Penalties for Trading with Enemy.) 1,005 words
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2. CLAUSE 2.—(Power to Inspect Books and Documents.) 1,749 words
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3. CLAUSE 3.—(Power of Board of Trade to Apply for Receiver in Certain Cases.) 1,079 words
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4. CLAUSE 4.—(Short Title and Construction.) 289 words