§ 109. Mr. BUTCHERasked the Chancellor of the Exchequer whether, in view of the fact that it is only British interests that are regarded in the winding—up of alien enemy banks, there is any sufficient reason why nominees of German banks should be employed as brokers for selling securities belonging to such banks on the London Stock Exchange in preference to firms of brokers of British origin; whether he will give instructions that in future only firms of brokers of British origin shall be employed in selling securities belonging to German banks on the Stock Exchange, and that firms in which the partners, or some of them, are of enemy origin shall not be so employed; and whether, if he has not got the necessary legal authority to give such instructions, he will forthwith apply to Parliament for such authority?
§ Mr. McKENNAThe brokers employed by the three German banks are all members of the London Stock Exchange who are elected annually. The firms employed number thirty-seven, of which fifteen are composed of partners exclusively of British birth and twenty-two of partners partly British born and partly naturalised. Of the latter group of twenty-two firms, the partnership element consists of forty-two persons of British birth, forty-two persons of enemy origin who are naturalised, and four of allied 1535 and neutral birth. I will try and arrange that brokers of British origin will be employed in the future.
§ 110. Mr. PENNEFATHERasked if the licences to trade which have been issued to enemy-owned banks can be withdrawn; if so, whether the Board of Trade contemplate their withdrawal at any particular period or under any given circumstances; if so, what is the period or what are the circumstances; and if the withdrawal of these licences will be followed by winding-up under the Trading With the Enemy Act?
§ Mr. McKENNAThe licence issued to the Deutsche Bank, the Dresdner Bank, the Disconto-Gesellschaft, and two Austrian banks, to which I presume my hon. Friend refers, cannot be called a licence to trade, inasmuch as the only business which may be transacted under the licence consists of such operations as may be necessary for making the realisable assets of the bank available for meeting their liabilities to British, Allied, and neutral creditors, and for discharging those liabilities as far as may be practicable. Outside this the licence does not enable any banking business to be done; and no such banking business has been done by these banks since the commencement of the War. The licence can be withdrawn, and in the case of the Deutsche Bank, where the main object of the licence, namely, the payment of British, Allied, and neutral creditors has been attained, has already been withdrawn. In the case of the other two German banks the licence will be withdrawn as soon as the object of the licence is attained. There is no necessity to wind up the banks under the Trading With the Enemy Act, as the present procedure makes a formal winding-up under the Act quoted unnecessary.
§ Mr. BUTCHERWhat is the date of the withdrawal of the licence?
§ Mr. McKENNAI think that appears in a later question.
114. Sir H. DALZIELasked the Chancellor of the Exchequer what is the remuneration agreed to be paid to Sir William Plender for acting as controller of the various German banks in London?
§ Mr. McKENNAThe professional fees of the controller and the expenses incurred by him are payable out of the funds of the banks, and there is no charge against public funds in respect of his services.
§ The fees received by Sir William Plender for his own services and those of his clerks from August, 1914, to 30th June, 1916, were:—
| £ | ||
| Deutsche Bank | … | 1,100 |
| Disconto-Gesellschaft | … | 950 |
| Dresdner Bank | … | 850 |
| 2,900 |
§ 116 and 117. Mr. BUTCHERasked the Chancellor of the Exchequer (1) whether, in view of the fact that the realisation of the assets and the discharge of the liabilities of the Deutsche Bank to British, Allied, and neutral creditors have now been completed and that, by the terms of the licence of 19th September, 1914, the, business of the Deutsche Bank was limited to the operations necessary for making the realisable assets of the bank available for meeting such liabilities, that licence will now be revoked and the business of the bank brought to an end; and (2) whether, in view of the fact that the realisation of the assets and the discharge of the liabilities of the Dresdner and Disconto—Gesellschaft banks to British, Allied, and neutral creditors have now been completed, except that the liabilities to the Bank of England have not yet been fully discharged, and that, by the terms of the licence of 19th September, 1914, the business of these banks was limited to the operations necessary for making the realisable assets of the banks available for meeting such liabilities, that licence will be revoked and the business of the banks brought to an end except so far as may be necessary for the purpose of discharging their liability to the Bank of England?
§ Mr. McKENNAThe discharge of liabilities, which was the object of the licence given to the Deutsche Bank, the Dresdner Bank, and the Disconto—Gesellschaft, has, in the case of the Deutsche Bank, been practically completed; and the licence in that case was revoked yesterday. The licence will be revoked in the case of the Dresdner Bank and the Disconto—Gesellschaft as soon as the necessary discharge of liabilities has been completed. There is not very much more to be done, and it is hoped that the licence will be revoked in the case of these two banks shortly. In order to complete the second branch of what has to be done in connection with 1537 these banks, namely, the divesting of the banks of any money and securities held by them on behalf of customers, a further licence will be required authorising the necessary correspondence and transfers, and also providing for the continuance of supervision and control for those purposes.
§ Mr. BUTCHERI understand that the new licences will in no way authorise their renewing any sort or kind of banking business?
§ Mr. McKENNAThat is so, Sir. The new licences, like the old, do not authorise any business in the ordinary sense of the term to be undertaken. We regard it as essential that the link between these banks and their British customers should be broken. In order to break that link it is necessary to return to the owners of securities those securities which are now owned by these banks. If that is to be done it is necessary that the banks, for that purpose, should be licensed to carry on that particular business.
§ Mr. BUTCHERWill the correspondence which will have to take place with Germany be carried on by British subjects here rather than by German subjects?
§ Mr. McKENNAThe correspondence will be by the authorities of the bank and the owners of these securities who are British subjects. What we desire is that the securities should be sent back to the owners, in order that all connection between the owners of these securities and the banks should be broken. If that were not done, the effect would be that after the War these British subjects would be writing to the banks to know what had become of their property. We want to settle up with them once and for all.
§ Mr. JOYNSON-HICKSWhy was that not done two years ago?
§ Mr. McKENNAIt is being done as fast as it can be done; but it is very, very difficult.