CUSTOMS (WAR POWER) (NO. 2) BILL. (Hansard, 20 July 1915)

§ Mr. PRETYMAN
Perhaps the House would like a short explanation of this Bill, as it is to some extent a reference to former legislation. There was a Proclamation against trading with the enemy issued on 9th September last which replaced the original Proclamation at the outbreak of the War, and under that Proclamation, the main Proclamation that governs any trading with the enemy, the term "enemy" is expressly confined to persons trading in an enemy country, and the terms of that Proclamation exclude persons of enemy nationality who are not resident or carrying on business in an enemy country. Those persons are not affected by the Proclamation. On 18th September this House passed an Act which really legalised the Proclamation, and a further Act was passed on 10th March called the Customs (War Powers) Act. Under that Act certain powers were given to the Customs authorities to prevent trading with the enemy—powers in regard to the import and export of goods through the ports of this country—enabling the Customs authority, as part of their duties, to demand such proofs and such declarations as would satisfy them that no trading with the enemy was going on. That has proved satisfactory, with certain minor Amendments which have since been assented to by the House; but, generally speaking, that was satisfactory so far as trading with the enemy is concerned in the enemy country.
It has latterly come to the notice of the Government, however, that certain enemy firms were carrying on a very large business in China, in Siam, in Persia, and in 1455 Morocco, and that these enemy firms were maintaining large commercial enemy interests in those countries, and, being unable under present conditions, fortunately, to obtain a full supply of goods from enemy countries, they were, by indirect channels, procuring the goods to sustain their own enemy commercial interests in those countries which I have named, from Great Britain. I think the House will agree, in the first instance, that it is very desirable to prevent that going on, and under the present law, which I have indicated, the Customs can only carry out their duty, under the Act to which I have just referred, when the trading which is going on with the enemy is that defined in the Royal Proclamation, that is to say, persons actually residing in enemy territory. The effect of this Bill is to extend the power of the Customs to treat as trading with the enemy goods not only destined for an enemy country but to an enemy person or an enemy firm resident in the four neutral countries I have named. That is the exact effect of this Bill, and it goes no further than that. If the House assents to the principle, I propose to follow the same course as with the other Bill—to take the Second Beading now and the other stages at a later date.

§ Mr. HOLT
Surely the Bill must go a little further than the hon. and learned Gentleman says. He says it is to deal with trading with the enemy in China, Morocco, and the other two places he mentioned—countries in which something like extraterritorial rights are being carried on. Does the term "neutral" not equally affect trading with other countries?

§ Mr. PRETYMAN
I omitted to say that before this Bill was introduced a Proclamation had been issued forbidding trading with the enemy in those four countries. After issuing that Proclamation, which we thought was legitimate, we came to the House to ask for powers to carry out the terms of the Proclamation. The Bill does go wider than that, and would enable us by a subsequent Proclamation to extend the prohibition to trading with the enemy firms in any other neutral country.

§ Mr. HOLT
I think that is very objectionable. Any person who is connected with the Financial Department of the Government of this country knows that it is exceedingly desirable to stimulate the export trade of this country to the highest possible level. Now we are bringing in a 1456 Bill obviously to restrict it and put every sort of impediment in the way of trading with foreign countries by asking them to prove that the person they are trading with is not a person of German nationality. I know a good deal about trading in China, and it is very doubtful whether it is a good thing to stop trading there. If you stop trading with enemies you will strengthen the position of neutral countries. I do not know whether those responsible for this Bill are conversant with trading in China, but the effect of stopping trading with Germans in China will only increase the trading of the Danish Corporation. Taking the case of China alone, it is not certain that the prohibition of trading with the enemy is going to be good for British traders in the long run. You have to consider what is going to happen after the War.
Personally, I do not like giving these very wide powers with regard to trading with the enemy. We all know the original proposal, that you were not to trade with a person who was resident on the further side of the enemy's trenches, and that we all understood. If you are now going to-bring in a general prohibition against trading with individual enemies in every part of the world, you will bring about a state of commercial confusion which will do you more harm than the enemy. The whole question of trading with the enemy is purely a question of balance. If we can get 25s. and the enemy 20s. I am in favour of trading with the enemy, but if the enemy gets 20s. and we only get 15s. it is better not to trade with the enemy. The only justification for this is, if you believe you are the stronger of the two parties, anything that will injure both parties is advantageous to you. Of course, if you have the worst position it is to your disadvantage. Upon this matter of trading with the enemy an enormous amount of nonsense has been talked. It is only on these grounds that I believe the prohibition of trading with the enemy, even in Germany, can be defended, and it can only be justified on the ground that you are stopping a practice that is favourable to the weaker side. If you go much further than this you will produce greater damage to this country than you are doing damage to the enemy. I think we have every conceivable reason for improving our export trade and conserving our financial resources. I do hope that the Government will be a little careful how they proceed with this kind of legislation.

§ Mr. CAVE
The observations of the hon. Member have ranged very far indeed, and I think that with regard to some of the things which he has said we should not be disposed to agree with him. Many hon. Members would entirely disagree with him as to the character and desirability of trading with the enemy. Really the points which he has raised, and in which I can see that he takes a deep interest, do not arise upon this Bill as I understand it. The Government yielded, as most of us know, to very great pressure from British traders in China and elsewhere, and after consideration, indeed, long consideration, issued a Proclamation which makes it illegal for British traders and British persons in China, Persia, Morocco, and Siam to trade with the enemy there. The Proclamation has been made, and the position of things at present is that whereas British subjects abroad are prevented from trading with these enemy traders British subjects at home are not under the same disability and can trade with them without incurring a penalty. The effect of this Bill, as I understand it, is that where the trader here makes a declaration, a solemn declaration, that the goods which he is shipping are intended for a certain person or a certain place, and when, as a matter of fact, the goods go elsewhere he shall be subject to a penalty. For myself, I think that is in itself a desirable thing. Without pledging myself to every word in the Bill—no doubt it will be considered in Committee—I do think that the principle of it is a right one. I may say—I have seen a good deal of it—that it has happened sometimes that where we have been preventing neutral traders, for instance, from sending their goods to enemy countries, all the time British traders have sent their goods directly or indirectly to the very same destination, and it acts very unfairly indeed upon the neutral trader. That is the kind of thing I should like to see stopped, and I hope that more and more those who are concerned in the export of goods from this country will be dealt with in the same way in this respect as neutral traders. Therefore I think it is right under this Bill to treat the British exporter in the same way as the British trader abroad, and that both should stand on the same footing.
I should like to see the principle of the Bill extended a little further, although I dare say it cannot be done under this Bill. There are many cases, I see hundreds of 1458 them in the course of my work in connection with contraband, where declarations are made by traders as to destination and where the declarations are not observed. It is very difficult to impose or to exact a penalty in those cases. In some cases you can enforce the bond which is given, but where no bond is given you have very little remedy except to remember the offence when next the trader comes for an export licence or something of that kind. I should like there to be the possibility of imposing a severe penalty in those cases as well as those referred to in this Bill. At all events, I think the principle of the Bill is right; and, while there are a few words which may require consideration in Committee, I hope that the House will pass the Bill on its Second Reading.