Lords Sitting of 16 December 1915

RETURNS, REPORTS, &c.
Civil Servants and the new Recruiting Scheme—Treasury Circular, dated 30th November 1915, as to the position of Civil Servants in connection with the new Recruiting Scheme: Presented (by command) and ordered to lie on the Table.
Lunacy—Report to the Lord Chancellor of the number of visits made, the number of patients seen, and the number of miles travelled by the Visitors of Lunatics, pursuant to the Lunacy Act, 1890, between 1st April and 30th September 1915:
National Insurance Acts—The National Health Insurance (Compensation Agreements) Regulations (Wales), 1915, dated 10th December 1915:
Diseases of Animals Acts, 1894 to 1914— Orders defining a Foreign Animals Quarantine Station in the Port of London for the purposes of the Foreign Animals (Quarantine) Order of 1896—

No.9620, dated 7th December 1915;

No.9625, dated 9th December 1915:

Laid before the House (pursuant to Act) and ordered to lie on the Table.
Army—List of exceptions to the Army Regulations as to Pay, Non-effective Pay and Allowances sanctioned by the Treasury during 1914–1915:
Presented (pursuant to Royal Warrant, dated 27th October 1884), and ordered to lie on the Table.

COMPANIES OF ENEMY CHARACTER BILL. [H.L.]
Order of the Day for the House to be put into Committee, read.
Moved, That the House do now resolve itself into Committee.—(The Earl of Halsbury.)
THE LORD CHANCELLOR (LORD BUCKMASTER): My Lords, before putting the question that the House do now go into Committee on this Bill I think it right that I should take the opportunity of making a further statement as to what the attitude of the Government will be in
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regard to these proceedings. When the noble and learned Earl moved the Second Reading of the Bill I pointed out that there was no doubt that the position of companies owned or controlled by or in any way constituted of alien enemies was a strange and startling one, and I quite recognised the importance of the position being thoroughly examined, and, if necessary, of having legislation that might make the matter regular and plain. I therefore, as your Lordships may remember, welcomed the discussion that arose on the Bill and pointed out that no objection would be taken to its Second Reading. The noble and learned Earl desires to proceed with the Bill in Committee now without any further delay, and it becomes necessary that I should make a little fuller statement as to the reason why the Government adopt the position I have stated.
The strange and unusual position of companies constituted in the manner described is one which, so far as the war is concerned, can produce no evil results at all. It may well be that when the period of hostilities is ended the whole matter had better be put upon a sound and reasonable foundation; but if your Lordships will allow me a few moments I think I can satisfy you that there is no danger whatever to this country from permitting this condition of affairs to continue during hostilities. And for this reason. The position of these companies has been very carefully regulated by Statutes which have been passed since the war began and which are known as of an emergency nature, in their very character and terms existing only for the duration of the war. One of the last of these Statutes, a Statute that was passed at the end of 1914, contains this provision—
"Where, on the report of an inspector appointed to inspect the books and documents of a person, firm, or company under section 2 of the principal Act, it appears to the Board of Trade that it is expedient that the business should be subject to frequent inspection or constant supervision, the Board of Trade may appoint that inspector or some other person to supervise the business with such powers as the Board of Trade may determine, and any remuneration payable and expenses incurred shall be paid by the person, firm, or company."
Section 2 of the principal Act, to which reference is made, is a section which among other things contains this provision—
"Where it appears to the Board of Trade, is the case of a company, that one-third or more of

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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 on behalf of 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, the Board of Trade may… give to a person appointed by them …. authority to inspect all books and documents belonging to or under the control of the person, firm, or company."
So that as the law stands to-day the position is this. Where the share capital of a company to the extent of one-third—not the predominant amount, but onethird—or where one-third of the directorate is held by or on behalf of or consists of persons who are alien enemies, there is power to inspect and to appoint a supervisor who may exercise in regard to that company all the powers which the Board of Trade may give. It is quite plain, with regard any such company, that the Board of Trade can take entire control of its affairs, regulate the whole of its business, and, if necessary, prevent its instituting suits, and can indeed do, through the operation of their inspector, all that could be done by the directors of the company themselves. In those circumstances it is difficult. to see how a company whose share capital is held to the extent of one-third by alien enemies can possibly be so used as to be a danger to the State.
I think it right to point out that the Bill which the noble and learned Earl has introduced does not go so far as the existing provisions. The noble and learned Earl's Bill provides that —
"Where it shall appear to the Attorney-General that any company registered in the United Kingdom is owing to the character of its directors or of its shareholders, or to any other cause, of a predominantly enemy character, he shall present a petition to His Majesty in Council praying that such company may be declared by His Majesty in Council to be an enemy company."
The words "of a predominantly enemy character" would require proof that the share capital and the voting power were held by alien enemies to such extent that they were able to control the whole of the operations of the company. It is in those circumstances that proceedings could be taken under the noble and learned Earl's Bill and the company declared to be an enemy company; and an Amendment is to be proposed by Lord Wrenbury which suggests that where proceedings are taken before a Court, the Court may have the same power and may thereupon declare the company to be an enemy company. The
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result of that would be, of course, that the company would be quite unable to collect its debts and quite unable to carry on its business unless it had a special licence. Instead of being, as now, in the position of a company whose actions are watched and controlled by the Board of Trade, it would be in the position of a company who could not carry on business at all, or, if it were left unaffected, it would be carrying on business protected by the Statutes as they existor not protected at all. I submit to your Lordships that one thing is plain—namely, that so far as it is possible to apprehend trading by a company in this country controlled by enemy aliens of such a character as to be hostile to the interests of this country full power exists, and nobody suggests that it has not been exercised by the Board of Trade, to take such a company under their complete control and prevent the possibility of any dangenats activity.
The matter does not end there. There are companies it this country which, though the shareholding is largely in the hands of alien enemies, are none the less companies which are carrying on business at this moment essential for the economic safety of this country I do not desire to mention the names of these companies, but I think they must be present to many of your Lordships. I should have thought it obvious that what you would desire in regard to such companies would be to secure that they should carry on their business for the benefit of this country, and at the same time to prevent the possibility of any of the profits being diverted into enemyhandsduring hostilities. The whole of that is provided for by the Trading with the Enemy Acts, so that there is no chance of money earned by a company of alien shareholders going to alien enemies either in payment of debts or distribution of dividends, and there is no risk of a company with alien shareholders getting outside the controlling power exercised by the Board of Trade under the provision to which I have referred.
If it is suggested that the present powers are ineffectual, I think it would be of the utmost importance that instances should be afforded of cases where it is thought that the powers given have failed to effect the object which these Acts were designed to secure. If such instances were given; I should be glad to have them investigated;

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but up to the present no such instances have been put forward, and it is clear that if such instances were well known they would have been indicated to the Board of Trade. If, on the other hand, it is suggested that the Board of Trade are supine and have failed to take action where action ought to have been taken, then the matter should be made public in order that the Board of Trade should be able to defend themselves. At present His Majesty's Government are unable to see that this Bill will immediately secure any object of value, and for that reason they are unable to take any part in approving of the discussions in the Committee stage. I have only to add this in conclusion, though I trust it is unnecessary to do so. I should very greatly regret if it were thought that this action signified, or could even bear the appearance of expressing, any discourtesy to the noble and learned Earl who has brought in this Bill, or any lack of appreciation of his labours in attempting to deal with a matter which I know he regards as of great public importance. Our action is not at all due to that, but to the reasons I have stated.
THE EARL OF HALSBURY: My Lords, the first observation I have to make is that this is a most irregular proceeding. Why did not the noble and learned Lord, if this is what the Government have determined to do, move that the Bill be read a second time this day six months? But the noble and learned Lord first of all acquiesces in the Second Reading and then makes a speech the whole object and purport of which is to show that the Bill ought not to have been brought in. Is this another instance of the Government being unable to make up their mind one way or the other? For my own part I entirely repudiate the sort of notion that has been brought forward that there is no harm in alien enemies carrying on business and earning dividends in this country while the war is in progress. Is that common sense? At all events it does not strike me that the point requires very much argument on my part. I certainly shall proceed with the Bill, and I hope your Lordships will carry it. Imagine what would be said in Berlin if an English company under the phantom of its being a German company, which everybody knew to be untrue, was attempting to carry on business there. What do you think would happen to it? I know, and I think your
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Lordships will be able to conjecture. So far as I understand, the noble and learned Lord is suggesting that we should not go into Committee on this Bill. I persist in my Motion that we should.
LORD WRENBURY: My Lords, should like to say a few words on what has fallen from the noble and learned Lord on the Woolsack, because I am not sure that he correctly appreciates the position of affairs. He has referred to the emergency legislation which is already in operation. One great flaw in that legislation, to my mind, resides in this—that it is based upon a numerical calculation of the proportion of the shareholders. If one-third of the shareholders are of a particular mind, then one view is to be taken; if a less number are of a particular mind, then another view is to be taken. When you are talking of the members of a corporation you mean those who are the registered holders of its shares or are otherwise in point of law the holders of interests in the company; but those persons may very well be trustees for others, and there is no reason why those others should not be alien enemies. Any veto, therefore, upon action or facility for the appointment of a supervisor based upon a mere calculation of the numerical holding of shares may be, and under circumstances will be, fallacious, because it may well be that as between your two-thirds and one-third, having regard to the extent to which the registered holders of the shares are in point of fact trustees for beneficial owners who are alien enemies, you fail to reach the bottom of the mischief.
As the law stands and while the decision of the Court of Appeal in the Continental Tyre Company's case is, as it must be taken to be for the moment, the law of this country, it is competent to any such company as the Continental Tyre Company to sue in the King's Court. Although in point of fact it is comprised of persons who are alien enemies, it is entitled to approach the King in his Court and ask for relief. That is a matter which might be of vital importance in such circumstances as these. Supposing there has been a contract by way of covenant between that corporation and one of its servants by which the servant has bound himself not to serve another master or to trade in competition with the company employing him. As the law stands, the company could sue him upon that covenant and

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obtain an injunction to restrain him from using his energies in serving another master or trading in such a way as to interfere with the trade of the corporation which in point of fact, by my hypothesis, is an alien enemy. It appears to me that this is a serious state of things.
Take another case. It is said that if the mere matter of the suit be the collection of debt there is not much harm in a foreign corporation collecting a debt due to it because, when it has got it, it cannot hand the money over, and it may be that it will never reach the enemy country. Whether the precautiens for the purpose are sufficient I do not stay to inquire. I will assume that they are. But if you allow that state of things to go on it is competent to the plaintiff in the action, an alien enemy, to sue a loyal British subject, to obtain judgment against him, to issue execution against him, and to use all the armoury of the law for the purpose of enforcing in favour of an enemy rights against a loyal subject of the Crown. The Lord Chancellor has suggested that if a supervisor is appointed he can, amongst other things, control litigation. I have not looked into that point. It may be so. But I can see that it would be difficult for him to do so in such a case as I have put, where a covenant had been entered into. In such a case it would be difficult for the supervisor to say that such an action should not be brought. I do not know upon what principles he could proceed in saying that the company whom he supervises, whose interests he is, so far as they are legitimate, bound to take into account, should not be allowed to sue because the result would be that a British subject would be attacked. I think that legislation is wanted for the purpose of putting this matter right, more paticularly fur the purpose of preventing a corporation which is an enemy from approaching the King in his Court and asking for relief against a person who is a loyal British subject. To my mind it is illusory to take into consideration that a certain proportion only of the registered holders are alien enemies. The truth may reside in a totally different direction. It may be—and if matters continue as they are it will be—that they are merely trustees for other persons, and those other persons, alien enemies, will be only concealing themselves behind the cloak of a registered holder who, by the hypothesis, is a British
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subject. This matter is one which to my mind requires legislation, and I hope that your Lordships will proceed with the Bill.
THE MARQUESS OF LANSDOWNE: My Lords, I am sure it is not necessary for me to say that I could be no party to any action in this House which involved any kind of discourtesy to my noble and learned friend who sits opposite and who has introduced this Bill. His position in the matter is perfectly plain. His Bill has been in preparation for a long time, and I understand that he did not proceed with it only because there seemed to be reason to anticipate that the question at issue was likely to form the subject of a final legal decision. That decision has not been reached, and I understand that there is no immediate prospect of such a decision being arrived at. In those circumstances the noble and learned Earl thought himself justified—and I should be the last person in the world to suggest that he was not-—in presenting his Bill to your Lordships' House. But it did seem to some of us, considering the importance of the subject and the very few days which had been given us in which to examine the Bill, and considering also the fact that Amendments of great importance had been put on the Paper by the noble and learned Lord on the Cross Benches (Lord Wren-bury), that it was not unreasonable to suggest that a few days more at any rate should be given to us in which to examine what on the face of it is a somewhat difficult and embarrassing situation. In support of that view I understood the noble and learned Lord on the Woolsack to tell the House, speaking with all the weight of his authority, that in his opinion the existing emergency legislation already on the Statute Book was not only sufficient to deal with at any rate some of the cases which my noble and learned friend has in view, but even went further than his Bill would go. The Lord Chancellor also remarked, I thought somewhat pertinently, that no arguments had been adduced to show that the emergency legislation had been insufficient for the purpose for which it was intended. I have no knowledge or experience which justifies me in pronouncing an opinion as between those two views. All that I venture to say as a layman is that I think enough was said by the noble and learned Lord on the Woolsack to show that we should not be any the worse for having a little more time to consider the matter.

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One other point I may, perhaps, mention. My noble and learned friend (Lord Halsbury) dwelt particularly upon the position of British-owned companies in Berlin. He said, Is it conceivable that a British-owned company in Berlin would be allowed to proceed with its operations in the same way that we are allowing certain alien-owned companies to go on with their work in this country? I am assured that no steps have been taken either in Germany or Austria-Hungary up to the present for the purpose of preventing the businesses of British-owned companies registered there from being carried on. That is, perhaps, pertinent to the case we have in view. But I rose really more because I was anxious that my noble and learned friend should not suppose that there was any desire to treat him with discourtesy. The matter is in his hands and in the hands of your Lordships' House, and if he desires to pursue the discussion of the Bill in Committee we cannot prevent him doing so; but we feel bound to point out that in our view the circumstances are not such as to render it possible for us to take a useful part in the discussion.
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL OF DONOUGTIMORE in the Chair.]
Clause 1:
Procedure for obtaining royal declaration that a company is an enemy company.
1.—(1) Where it shall appear to the Attorney-General that any company registered in the United Kingdom is, owing to the character of its directors or of its shareholders, or to any other cause, of a predominantly enemy character, he shall present a petition to His majesty in Council praying that such company may be declared by His Majesty in Council to be an enemy company.
(2) Any officer or shareholder of the company, not being an enemy of His Majesty, may enter a caveat, addressed to the Registrar of the Council at the Council Office, against such declaration.
(3) If His Majesty shall refer any such petition to the Judicial Committee of the Privy Council, the said Committee shall proceed to consider the same, and any officer or shareholder of the company who has entered a caveat shall be entitled to be heard by himself or counsel on the petition.
(4) The Judicial Committee, after considering all the circumstances of the case, shall report to His Majesty in Council.
(5) If the Judicial Committee report that the company is of a predominantly enemy character, it shall be lawful for His Majesty in Council to declare such company to be an enemy company, and any ship belonging to such company shall
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forthwith become the property of His Majesty the King.
(6) It shall be lawful for His Majesty in Council to make rules of procedure and practice for regulating proceedings on such petitions and, subject thereto, such proceedings shall be regulated according to the existing procedure and practice of the Judicial Committee.
(7) The costs of all parties of and incident to such proceedings shall be in the discretion of the Judicial Committee.
LORD WRENBURY: The first Amendment which stands in my name is to strike out, at the beginning of subsection (1), the words "registered in the United Kingdom," for the purpose of substituting the words" incorporated under and subject to the laws of some part of His Majesty's Dominions." The object of this Amendment allay be stated in very few words. There was a learned Junior of the Chancery Bar who passed a long, laborious, and lucrative career in finding means of escape from many salutary provisions of the Companies Acts, and if this phrase remains in the clause in the form in which it stands now it would enable a person who wished to display similar ingenuity to exercise it effectually. The registration of companies in this country involves the providing of certain information, and in order to escape from that the device was resorted to of incorporating the company in Guernsey, in the Channel Islands, instead of in the United Kingdom. The result was that certain provisions of the Companies Acts became inapplicable. The words in the clause are "registered in the United Kingdom." The result of retaining those words would be that it would be easy to evade the Bill by procuring registration elsewhere, and then showing, and truly, that the Bill did not apply. It is to meet this that I propose to substitute the words which I have read to your Lordships. The words themselves are taken from the Merchant Shipping Act, except that there the words are "body corporate established under and subject to," whereas the words which I propose will run "company incorporated under and subject to," which is the same thing. I suggest this Amendment in order to broaden the operation of the Bill and to make it apply to any corporation incorporated under the law prevalent in any part of His Majesty's Dominions.
Amendment moved—
Clause 1, page 1, line 6, leave out ("registered in the United Kingdom") and insert ("incorporated under and subject to the laws of some part of His Majesty's Dominions").—(Lord Wrentrury.)
THE EARL OF HALSBURY: I accept the Amendment.
On Question, Amendment agreed to.
LORD WRENBURY: I now move to substitute the word "members" for "shareholders" in subsection (1); and I shall propose later to do the same in subsection (2) and subsection (3). Your Lordships may be aware that a company may be incorporated as a company limited by shares, or it may be incorporated as a company limited by guarantee and not having a capital divided into shares, or it may be incorporated as an unlimited company not having a capital divided into shares. By using the word "shareholder" you are confining the Bill to that sort of company which is limited by shares, whereas if you use the word "member" you apply it to all classes of company. The Amendment, therefore, broadens the scope of the Bill.
Amendnumt moved—
Clause 1, page 1, line 7, leave out ("shareholders") and insert ("members").——(Lord Wrenbury.)
On Question, Amendment agreed to.
LORD WRENBURS: I now come to an Amendment of a more substantial character. The noble and learned Earl in the first subsection of this clause uses the words "of a predominantly enemy character." I am desirous of showing what is the proper meaning to be attached to those words. In this connection what you have to consider is this. The members of the company may hold the shares and beneficially own them also; but, on the other hand, they may hold the shares and be trustees for other people. You have to consider those two kinds of cases. Then, further, it may be that the persons beneficially interested in the shares are alien enemies, whereas the registered holders of the shares are British subjects. As the decision in the Continental Tyre Company case now stands, the corporation as a separate entity is treated as being a person capable of being enemy or friend; it is treated as having a character of its own. That decision is that the corporation, being a British corporation by virtue of a British registration, is therefore British and is a British person. It therefore has a character under that decision, and its
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character is British. Now the language of this clause is that where it shall appear to the Attorney-General that any company registered in the United Kingdom is, owing to the character of its directors or of its shareholders, or to any other cause, of a predominantly enemy character," and so on. The company has a character, according to this decision. The clause runs that you are to determine whether it is friendly by "the character of its directors or of its shareholders." I confess that leaves me in some difficulty. It is as if you were to say that you were to judge whether Smith was an alien enemy or not by the character of his butler or his agent. You are to regard the character of one person by reference to the character of another. I am not sure how that matter is to be resolved. I suppose that it could possibly mean no more than this, that you would regard the fact that Smith had a German butler as some evidence that Smith had pro-German tendencies.
The phrase now in the clause is so capable of raising contention that I wish to define it, and I propose to do so by the new subsection standing in my name on the Paper. It runs, "For the purposes of this Act a company is of predominantly enemy character when the majority of its members, or of the persons beneficially entitled to or interested in the shares, or interest in the company, whether in number or in voting power, or in authority or in influence, or its directors or the majority of its directors, are alien enemies." I have sought in those words to cover every case, You will notice that this is not answered by saying, "Nine-tenths of the shareholders are British, and only one-tenth is German," because it may be that although the majority in number is British the majority in voting power is not, because the votes may go the other way. If, again, both the majority in number and the majority in voting power be British but the fact be that the British shareholders never attend the meetings, because, let us say, they are held in some place in Germany which is not accessible, then you may find that, although both in number and in voting power the British are in a majority, yet in point of fact in being able to use their power they are still in a minority. I want the tribunal who have to investigate the facts to take all these things into consideration, and not stop by saying that the registered owners of the

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shares are British. They should go behind that and see whether they are trustees for. Germans, and also go beyond that and see whether the British are really the majority in number, in voting power, in authority, in influence. I have been unable to think of wider words and under these words I conceive that the tribunal could exhaust everything which would go to show whether or not the company is of a predominantly enemy character. I propose the insertion of this new subsection because it seems to me that the words "of a predominantly enemy character" may lead to endless discussion, and because if you supply a definition of this sort you have then a basis on which you can determine whether or not the required quality has been satisfied of the company. If any one can suggest wider words, I will gladly accept them.
Amendment moved—
Clause 1, page 1, after line 11, insert as a new subsection:
"(2) For the purposes of this Act a company is of predominantly enemy character when the majority of its members, or of the persons beneficially entitled to or interested in the shares, or interest in the company whether in number or in voting power, or in authority or in influence, or its directors or the majority of its directors, are alien enemies."—(Lord Wrenbury.)
THE EARL OF HALSBURY: I am afraid I cannot accept this Amendment. I think it is a very good canon of legal drafting that whenever you proceed to specify everything minutely you in fact limit. I have chosen the word "Predominantly" because that will leave it to the tribunal itself to ascertain the fact in the ordinary mode by which such things are ascertained. When you attribute some intention, you find out whether you are right by looking up the facts, circumstances, actuating motives, and so forth. I do not propose to specify anything. I leave it to the tribunal. I think the tribunal is best fitted to decide whether or not a company is of a predominantly hostile character, and if it is, then, by whatever means the tribunal has ascertained that fact, the circumstances follow. I am quite sure that if you attempt to show in what way you are to ascertain the predominantly hostile character of a company you will certainly limit the provision in some way, because you will be assuming beforehand, in drafting your Bill, that you are contemplating all the circumstances that can arise, and that is absolutely impossible.
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It is better to have a broad, simple proposition, and to leave it to the decision of the tribunal in what way and by what evidence they think desirable. I am therefore unable to accept my noble and learned friend's Amendment.
LORD WRENBURY: The noble and learned Earl is, perhaps, the most competent judge of how his meaning is best expressed, and as he has not accepted the Amendment I will, by leave of the House, withdraw it.
Amendment, by leave, withdrawn.
Amendment moved—
Clause 1, page 1, line 12, leave out ("shareholder") and insert ("member").—(Lord Wrenbury.)
On Question, Amendment agreed to.
Amendment moved—
Clause 1, page 1. line 18, leave out ("shareholder") and insert ("member").—(Lord Wrenbury.)
On Question, Amendment agreed to.
Clause 1, as amended, agreed to.
Clause 2:
Effect of such royal declaration.
2. If His Majesty in Council shall declare a company registered in the United Kingdom to be an enemy company, it shall henceforth during the present war be deemed to be an enemy within the meaning of all royal proclamations and statutes dealing with trading with the enemy, and all such disabilities and other consequences, whether at common law or under any royal proclamations or statute, shall attach to the company and to its property, and to any dealings by or with such company, as if it were a company incorporated and carrying on business in an enemy country:
Provided that the Registrar of Companies shall not remove the name of such company from the register, but shall notify therein that the company has been declared an enemy company, with the date of such declaration, and in any case in which such declaration shall be applicable to such records, and be removed from the Register of British Shipping.
LORD WRENBURY: I move to omit from the beginning of Clause 2 the words "registered in the United Kingdom," and to insert "incorporated as aforesaid." This is merely consequential upon what was done in the previous clause.
Amendment moved—
Clause 2, page 2, line 10, leave out ("registered in the United Kingdom") and insert ("incorporated as aforesaid").—(Lord Wrenbury.)
On Question, Amendment agreed to.
LORD WARENBURY: I move to strike out from the next line of the clause the. words "henceforth during the present war." I do so upon the ground that they are redundant. If there is no war, of course there is no enemy.
Amendment moved—
Clause 2, page 2, line 11, leave out ("henceforth daring the present war").—(Lord Wrenbury.)
THE FART OF HALSBURY: This is only drafting, and I do not object.
On Question, Amendment agreed to.
LORD WRENBURY: I now move to omit the words "as if it were a company incorporated and carrying on business in an enemy country," and to insert "as if it were a natural person who was an alien enemy." The object of this Amendment is simply to make the matter more clear. The earlier part of the clause says that the company dealt with is to be "deemed to be an enemy within the meaning of all Royal Proclamations." I apprehend that Royal Proclamations do not generally address themselves to corporations but to natural persons, and if you reduce the corporation to a natural person it. will fall within all Royal Proclamations.
Amendment moved—
Clause 2, page 2, lines 17 and 18, leave out. ("as if it were a company incorporated and carrying on business in an enemy country") and insert ("as if it were a natural person who was an alien enemy").—(Lord Wrenbury.)
THE EARL OF HALSBURY: I cannot accept this Amendment. Instead making it clearer, it appears to ale to make the matter more obscure.
Amendment, by leave, withdrawn.
THE EARL OF HALSBURY: I move to delete from the proviso at the end of Clause 2 all words after "declaration" where it first occurs. Somebody or other— who it was remains a mystery—first discovered that there was a Register of British Law. I am not, familiar with any such register. Then the word "Shipping" was substituted for the word "Law." But I move that all words after the word "declaration" be struck out.
Amendment moved—
Clause 2, line 22, leave out all words after ("declaration").—(The Earl of Halsbury.)
On Question, Amendment agreed to.
Clause 2, as amended, agreed to.
Clause 3 agreed to.
LORD WRENBURY: I now move the first of a series of new clauses which deal with a new subject-matter, and I am afraid I shall have to trouble your Lord ships with a few observations in order to show why the are necessary. Your Lordships will remember that in the case in question the Continental Tyre Company sued the Daimler Company for the purchase price of certain tyres which had been supplied. The Daimler Company were perfectly prepared to pay for the tyres and they paid into Court the purchase money, but upon patriotic grounds they raised the question that the Continental Tyre Company was in substance a German company and could not sue them. That matter was argued and discussed, and the Court of Appeal decided that the Continental Pyre Company, inasmuch as it was a British corporation incorporated under Statutes in this country, must be treated as being British.
The facts as regards the company were these. There was in Berlin a certain company with a German name, which I do not remember, which carried on the business of the manufacture of tyres for motor vehicles. It established, as appears to be the custom, subsidiary companies in other countries; and, amongst others, it established in this country a British corporation which was called the Continental Tyre Company. That company had a capital of 25,000 shares. The facts as proved were that all the directors of the company were German subjects resident in Germany, that all the shareholders, the holders of the 25,000 shares, were Germain subjects, largely, I think, resident in Germany—I am not sure that all were— and that there was one share not held by a German subject resident in Germany but held by the manager or secretary of the company, and he was a German who was a naturalised British subject. In that state of things as the law at present stands that corporation, although in point of fact it was indisputably German heart and bone, was for all purposes of suing to be treated as if it were a British company. In other words it was competent to German subjects, by going through certain formalities required by our law, to clothe themselves in a garment or put themselves behind a mask under which they were entitled to go into Court and say "We are British and are entitled to sue."

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If that be the law—and I must take it that it is the law as matters stand at present—it appears to me to present a very serious state of things. As I said just now, it would enable a company of that sort, suing on a covenant, to restrain a British subject for the benefit of the alien corporation; it would enable an alien corporation to bring actions to recover debts, and to enforce a judgment, if they got one, by execution against the defendant in that action; and many other cases might be put in which the corporation would be entitled by litigation, although it was an alien enemy, to sue British subjects. The object of the new clause which I am now proposing is to put an end to that state of things. When you are considering whether the corporation which is suing is or is not German, the first operation of this clause is to say you may go behind the corporation and see who are the holders of its shares, and the question will be resolved according to whether they are British or alien enemies. When you have got to that stage, you may find that another corporation is a holder of some of the shares, and that holder may again be a German company. Then you have not got to the bottom of things. You have to provide then that if there be a holder of any of the shares in the first company who is again a corporation, you may treat that corporation in the same way, and so you may go on until you have arrived at last face to face with the natural persons who really are the persons moving in the matter.
I will ask your Lordships to look at my proposed clause to see that the effect is what I say. In the first place, all the proposed new clauses standing in my name are governed by the initial words "In any legal proceeding." This part of the Bill would apply only if the corporation comes to sue. If the corporation does so then in that legal proceeding, if it is material to determine whether it is or is not an alien enemy it is to be regarded as not being in law a legal person apart from its corporators—you get rid of the corporate existence for this purpose—but as being a body not corporate composed of the persons who are the holders of the shares or other interests in the corporation. These words will enable you to say, "This plaintiff is composed of persons who are alien enemies." The next words effect this, that any body corporate which is such a holder shall in
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like manner for the same purpose be regarded as being a body not corporate, and so on with every other corporation as you proceed down the scale; so that the effect of those words is that you bring before the eye of the Court the natural persons and see whether they are British or alien enemies.
The dominant words of my new clause provide, when you have thus found out who the people are, that if the Court shall be satisfied that the majority of the members of the first-mentioned body corporate, whether in number or in voting power or in authority or in influence, are, or that its directors or the majority of its directors are, alien enemies, the Court may declare the corporation to be an alien enemy, and thereupon the corporation shall be under the same disabilities and shall for all purposes stand in the same position as if it were a natural person who was an alien enemy. This is a clause which will enable you to find out who are really the individuals at the back of the corporation, and if you find that the majority of them in number, voting power, authority, or influence are alien enemies, then the Court in that legal proceeding is enabled to declare the party an alien enemy, and all the consequences will ensue that would follow if he were a natural person and were an alien enemy.
Amendment moved—
After Clause 3 insert the following new clause:
"In any legal proceeding in which it shall be material to determine whether a body corporate is or is not an alien enemy the body shall for that purpose be regarded as not being in law a legal person apart from its corporators but as being a body not corporate composed of the persons who are the holders of the shares or other interests in the corporation, and any body corporate which is such a holder shall in like manner for the same purpose be regarded as being a body not corporate composed of the persons who are the holders of the shares or other interests in the corporation, and so with every body corporate which is the holder of shares or other interests in another body corporate. And if the court shall be satisfied that the majority of the members of the first-mentioned body corporate whether in number or in voting power or in authority or in influence are or that its directors or the majority of its directors are alien enemies, the court may declare the corporation to be an alien enemy, and thereupon the corporation shall be under the same disabilities and shall for all purposes stand in the same position as if it were a natural person who was an alien enemy."—(Lord Wrenbury.)
THE EARL OF HALSBURY: Not without hesitation am I disposed to accept this new clause, but the reputation of the noble and learned Lord on such a subject is such

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that I hesitate to refuse to acquiesce in the Amendment; but I feel the danger of making the Bill more complex than it already is. At any rate I will take the risk in deference to the noble and learned Lord's authority, and accept the Amendment.
EARL LOREBURN: I do not rise so much to say anything in regard to the merits of my noble and learned friend's Amendment, which has been accepted, as to make this observation. This decision in the Continental Tyre Company's case was a decision of the Court of Appeal in England, and in coming to their conclusion the learned Lords Justices differed from my noble friend Lord Wrenbury. Lord Wrenbury is admittedly the highest authority in the United Kingdom upon this branch of the law. I think we should all confess that without any doubt.
LORD WRENBURY: You are forgetting Lord Lindley.
EARL LOREBURN: Lord Lindley is another great authority. On the merits of the decision in the Continental Tyre Company's case I cannot say anything, because it is possible that I may have, sitting in your Lordships' House judicially, to express an opinion whether or not that decision is a right decision. But this I feel quite satisfied of, that the decision does complicate the law a great deal, and it pushes to a greater length than hitherto it has been pushed the doctrine that a company is a person in the eye of the law. Without expressing any opinion as to what ought to be the conclusion from an appeal, I cannot help thinking that the Government should facilitate the case being brought to this House in order that the law may be finally settled by the authority of this House and in order that we may know whether the opinions of the five Lords Justices who held as they did are to prevail against the opinion of my noble and learned friend Lord Wrenbury. As I understand, the party who failed in this litigation had no objection at all to handing over the money; they objected in order that the interests of the nation should not be prejudiced by giving practically an alien enemy company the right to sue. I cannot help thinking that if His Majesty's Government were to sanction a small expense—it would not be much—they would be able to put this matter on a right footing at once by
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ascertaining whether or not the decision of the Court of Appeal is sound. The hearing of the case could be expedited, and it is possible that all the difficult questions raised by the noble and learned Earl's Bill would be largely averted by the result. I do not say that against my noble and learned friend's Bill, because I think this Bill is right; but there might be a shorter cut to settle the whole thing by reconsidering in this House whether in point of law the decision in this case was a good decision or not.
THE LORD CHANCELLOR: I quite feel what the noble and learned Earl has just said. I think it must have been plain to the minds of all your Lordships that the final and complete determination of the case would be by far the most satisfactory preliminary to a discussion of a Bill of this nature. I can assure the noble and learned Earl that I will take care that his suggestion is placed in the proper quarter, but I cannot premise that funds will be provided for the purpose of carrying on this litigation. It is always a very unsatisfactory thing for the Government to interfere and provide funds to enable a litigant for any purpose to prosecute a claim against another. I had heard that this case was coming before your Lordships' House. I have always carefully abstained, when this matter was under discussion, from expressing with any authority the statement that it was in fact coming, because I have never been able to ascertain that in fact it was. But there has been a considerable amount of statement that it was believed it was coming, and I can only say, if it is coming,, that as far as it is possible for me to control the affair I will undertake that every means of expediting the hearing shall be granted.
THE EARL OF HALSBURY: I understood the noble Marquess to say that there was now no chance of an appeal.
THE ATARQUE OF LANSDOWNE: did not say there was no chance, because I do not know. I said I understood that the noble and learned Earl's expectation that there was to be a decision of your Lordships' House sitting judicially had been disappointed, and for that reason I thought he was warranted in asking the House to give his Bill a Second Reading.
On Question, Amendment agreed to.
LORD WRENBURY: The second clause which I propose to add to the Bill is one to work out a point of detail in the first. There may, of course, be (say) three registered holders of a share. Let us suppose that two are British and one German, or two German and one British. You have to determine in those circumstances whether the holders of that share are to be treated as of the one complexion or the other. The operation of the clause is that if there are more than one person registered as holders of a share and some are and others are not alien enemies, then if the Court is satisfied that the majority in number, voting power, authority, or influence are alien enemies, all are to be treated as alien enemies.
Amendment moved—
Insert the following new clause:
"If more persons than one are registered holders of or are beneficially entitled to or interested in any share or interest in a company and some of such persons are and others are not alien enemies and if the court shall be satisfied that the majority of such holders or of such persons beneficially entitled or interested in number or in authority or in influence are alien enemies then the court may declare that the rights disabilities and obligations of all such persons in respect of such share or interest shall be the same as if all of them were alien enemies, and such declaration shall have effect accordingly."— (Lord Wrenbury.)
THE EARL OF HALSBURY: I cannot accept this Amendment.
LORD WRENBURY: I withdraw it.
Amendment, by leave, withdrawn.
LORD WRENBURY: The next clause which I move to insert is one which has to do with the rights of alien holders. The effect of it is that an alien enemy who is the holder of a share is to have no right, vote, interest, or benefit in respect of the share. It is necessary to add a proviso. The operation of the proviso is only this, that if a company being a private company sinks below two in number or being a public company sinks below seven in number there is an immediate right to wind up the company, because there are a less number of holders than is provided by the Statute. The proviso is that notwithstanding the share is thus one held by an alien enemy in respect of which he has no right, vote, interest, or benefit, he shall be counted for the purpose of keeping up the minimum of two or seven as the case may be.
Amendment moved—
Insert the following new clause:
"Every person who is the registered holder of or is beneficially entitled to or interested in any share or interest in a company shall so long as he bears the character of an alien enemy have no right, vote, interest or benefit in or in respect of such share or interest, provided nevertheless that in determining whether the number of members is reduced below two in the ease of a private company or below seven in the case of any other company he shall for that purpose and that purpose only not be disregarded if but for this section he would be a member."—(Lord Wrenbury.)
On Question, Amendment agreed to.
LORD WRENBURY: My fourth new clause is again simply working out the first clause. There may be a registered holder who is a British subject but who holds for a person beneficially entitled who is an alien enemy. The provision in this clause is that in those circumstances the beneficial owner—a German beneficiary and not the nominal owner, the trustee on the register—shall in all questions relating to the rights, disabilities, and obligations of an alien enemy be deemed to be the holder of the share. So that if in fact the ownership of the share is alien, although nominally upon the register it is British, regard will be had to the beneficial title and not to the legal title.
Amendment moved—
Insert the following new clause:
"When a share or other interest is held by one or more person or persons in trust for another person or persons, and the beneficial owner or owners is or are or any one of them is an alien enemy or alien enemies, such beneficial owner or owners and not the trustee or trustees shall, in all questions relating to the rights, disabilities, and obligations of an alien enemy, be deemed to be the holder or holders of the share or other interest."—(Lord Wrenbury.)
On Question, Amendment agreed to.
LORD WRENBURY: The last Amendment in my name deals with a totally different subject-matter. Your Lordships will remember that in the first section of the Merchant Shipping Act, 1894, there are four definitions of the persons who are qualified to be owners of British ships. The fourth of those is, "Bodies corporate established under and subject to the laws of some part of His Majesty's Dominions and having their principal place of business in those Dominions." So that a corporation has only to satisfy those two qualifications to enable it to be the owner of a British ship. Be the fate of the decision in the

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Continental Tyre Company case what it may it will make no difference whatever to the operation of these words in section(d) of the Merchant Shipping Act, 1891, because even if you are to look behind the corporation to the corporators on a question of disloyalty it will remain a corporation established under our laws. At present the persons owning a British ship may be alien enemies, and that is a thing which I consider ought not to continue. My Amendment will add a third qualification to the corporation if it is to own a British ship—namely, that it must be a body corporate, of which all the corporators and all the parsons beneficially entitled to or interested in the shares of and interests in the corporation are persons falling within some one of the preceding sub-clauses (a) (b) and (c). Those are—(a) natural-born British subjects; (b) naturalised British subjects; and (c) persons made denizens by letters of denization. The effect of this will be that a British corporation established under our laws and having its principal place of business here must be able to predicate of itself that all its corporators are either natural-born British subjects, naturalised British subjects, or persons made denizens by letters of denization.
Amendment moved—
Insert the following new clause:
Section 1 (d) of the Merchant Shipping Act, 1894, shall be amended by the addition thereto of the following words and being bodies corporate of which all the corporators and all the persons beneficially entitled to or interested in the shares of and interests in the corporation are persons falling within some one of the above sub-clauses (a), (b), and (c).—(Lord Wrenbury.)
On Question, Amendment agreed to.
Remaining clause agreed to.
The Report of Amendments to be received on Tuesday next, and Bill to be printed as amended. (No.188.)

INDICTMENTS BILL. [H.L.]
Order of the Day read for the consideration of Commons Amendments.
THE LORD CHANCELLOR: My Lords, I ask your Lordships' permission to postpone for a short time the consideration of the Commons Amendments to this Bill. I only recently had an opportunity of seeing them, and I should like to have ample time to consider them before calling your Lordships' attention to them.
Consideration of Commons Amendments put off to Tuesday next.

EVIDENCE (AMENDMENT) BILL.
Amendment reported (according to Order), and Bill to be read 3a on Tuesday next.
MIDWIVES (SCOTLAND) BILL.
Read 3a (according to Order), with the Amendments, and passed, and returned to the Commons.
EDUCATION (SMALL POPULATION GRANTS) BILL.
Second Reading (which stands appointed for Tuesday next) put off to Wednesday next.

THE DANISH TRADE AGREEMENT.
LORD STRACHIEhad the following Notice on the Paper—
To ask the Lord President of the Council whether it is the case that the Foreign Office have entered into an Agreement with Denmark whereby that country can import food or other goods and re-export them to neutral or belligerent countries.
The noble Lord said: My Lords, it is some time since I put this Question upon the Notice Paper. Since then a good deal has happened in another place. There has been attempt after attempt there to get some explanation of the policy and the attitude of His Majesty's Government in regard to the Agreement which has been entered into with certain traders in Denmark by the Foreign Office, and therefore, of course, by Majesty's Government. The House of Commons have not the power to discuss this question when they think fit, but only at Question time. It has therefore been very easy for the Government up to now practically to say: "We will tell you nothing about it"; though I notice that yesterday one concession was made. The Prime Minister stated that he world at some time— it was not stated when—lay upon the Table of the House a statement with regard to the Agreement. That I venture to think is hardly satisfactory. If this is not to be treated entirely its a secret document it is much better that the whole Agreement should be seen, and that the country should know exactly what the position is as regards this question of imports into and re-exports from Denmark to other countries.
It is rather curious to find that an Agreement has been made by His Majesty's Government, not with the Kingdom of Denmark, but with two trading companies —the Merchants' Guild of Copenhagen and the Industrial Association of Denmark. I do not suppose that many of your Lordships know the constitution of this particular Guild or this Industrial Association. As far as we know they may be largely composed of enemies of this country. Lately your Lordships were discussing a Bill dealing with the difficult question of trading with the enemy. I venture to ask the noble Marquess Lord Lansdowne, who I understand will reply this afternoon in the place of the Lord President of the Council, to whom my Question on the Paper is addressed, why this Agreement was made with certain traders in Denmark and not with the country of Denmark itself. I would also like to ask him whether it is a usual thing for a Government to enter into secret Agreements with traders of a foreign country during such a state of things as the present, when a great many difficulties may be raised. It has been said—and in my Question on the Paper I ask specifically as to this—that under this Agreement these goods can be re-exported from Denmark into Germany. The House will see that this is very important indeed, because if there is anything in the Agreement which allows this it is certainly stultifying our object—if this is the object of the Government—to prevent as far as possible any food or other goods going into Germany which may be useful to the enemy in the prosecution of the war. Is it a fact that Danish traders can under the Agreement export to Germany in limited quantities certain articles such as china, ink, earthenware, cheese, and machinery? It is also asserted that they are able to re-export into Germany from Denmark in unlimited quantities beer, leather, matches, malt, coffee, tea, and clothing. It is a very important matter that we should know exactly the true state of things, because, naturally, a great deal of unrest has been raised in the country from the statements which have been made and which remain as far as I am aware uncontradicted. To me, as an old Member of another place, it seems rather a curious thing that during the whole of the continual attacks in the House of Commons the Secretary of State for Foreign Affairs has never himself dealt with the matter but has left it entirely to the Under-Secretary; and the Under
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Secretary, it has been noticed, has constantly said that he does not know the position and will have to make inquiry. That appears to be an unsatisfactory state of things. But we are fortunate to-day in having the noble Marquess here. As a member of the Cabinet he will be able to say from his own knowledge whether this question was considered by the Cabinet and the Government before the Foreign Office entered into this Agreement about which there is so much controversy.
One cannot help wondering whether there has been a change of policy. Is the policy of the Foreign Secretary and of the present Government different from the policy which was announced by the Prime Minister in March last? Mr. Asquith then said that henceforth our policy was to prevent commodities of any kind from reaching or leaving Germany. He declared—
"There is no form of economic pressure to which we do not consider ourselves entitled to resort. The British Government hold themselves free to detain … ships carrying goods of presumed enemy destination or ownership."
He added—and this seems to me very important—that we were not going to be hampered by "juridical niceties." After such statements it is very curious that at the present moment we have this secret Agreement which apparently enables Denmark to import an enormous amount of articles and to re-export them to Germany. Even if there is no power under this Agreement to re-export to Germany, it is obvious from what has been going on in the past that Denmark is importing much larger quantities of articles, such as those I have mentioned, than ever before. She cannot be doing it for her own population; therefore the inference is that she must be supplying goods to the enemy.
It is very remarkable, not only with regard to Denmark but as regards other countries, the enormous amount of stuff that neutrals are importing in comparison with the figures before the war. Take Holland, as an example. In 1914 we exported to Holland only 399 tons of linseed oil, while in a similar period of this year we exported 29,511 tons. Then Holland exported to Germany in the first nine months of 1914 4,803 tons, and in a similar period of this year she exported to Germany 79,000 tons, of linseed oil. Those figures seem very remarkable; and it looks as if

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the statement of the Prime Minister—that we were going to put such pressure on Germany that she could not obtain goods at all, that no juridical niceties were going to be observed, and that we were going to see, come what may, that Germany was not going to receive goods to enable her to carry on the war—has certainly not been carried out. We have a right to ask why it is that up to now that declaration of the Prime Minister has apparently not been carried out.
What at the present moment in practice is really happening is this. Our Fleet is stopping neutral ships carrying contraband. But when those contraband goods have been stopped they are taken into the Prize Court. It is proved before the Prize Court that these goods are going to a neutral country in excessive amount, but the ships and the goods are released by the Court because no legal proof can be shown to the Court that the goods are intended directly for Germany. That again seems in direct contradiction to the statement made by the Prime Minister that we were not going to be hampered by juridical niceties and that the object of the Government was, come what may, to prevent Germany getting goods in any way. It is perfectly obvious that the consignor is not going to be so foolish as to say that he is consigning the goods for any other purpose except legitimate trade in Holland, or Denmark, or wherever it may be. Therefore under present conditions the Court says, "You can give us no actual proof where the goods are going," although there is great suspicion. Therefore they are released and go on quite unhampered.
I am informed that under present conditions the Government allow trading with neutrals. The consignor of goods may be a German or a suspect neutral, the negotiating agent may be actually on the black list and the consignee a neutral, yet that is not sufficient to allow the goods to be confiscated. Is not that really splitting hairs? Is it not playing into the hands of the Germans and enabling them to get goods through in neutral bottoms and through neutral sources? It seems to me that we are simply playing with this matter. What, then, is the use of our great Fleet and our boasted command of the sea when goods are allowed to go into enemy countries? And coming on top of all this we have a secret Agreement—made not even with a foreign Government
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but with foreign traders—which His Majesty's Government, for some reason or another, decline to allow either House or the country to see. If this Agreement is in the interests of the country, what possible objection can there be to laying it before Parliament. I am much too new a member of this House to move that this secret Agreement should be laid upon the Table, but I venture to make the suggestion. Perhaps later on it may be thought fit to do so. I feel certain that the people of the country would think your Lordships were doing a great service if you were to insist that this Agreement should be laid before Parliament so that they may be made aware of its provisions and an end put to the existing unrest, because undoubtedly the country in this as in other matters are beginning to lose confidence in His Majesty's Government.
THE EARL OF PORTSMOUTHhad on the Paper a Notice on the same subject.— namely:
To call attention to a statement widely circulated in the Press that certain Danes have negotiated a Treaty or arrangement of some kind with Great Britain whereby articles exported from Great Britain can be re-exported from Denmark to other countries; and to move for Papers.
The noble Earl said: My Lords, with your Lordships' permission I should like to recall to your memory what was stated by the Prime Minister during a debate in the House of Commons in March of this year. The Prime Minister not only spoke very plainly on that occasion of what our intentions were, but he made use of these words—
"I propose now to read the statement which has been prepared by His Majesty's Government, which declares in plain and unmistakable terms the view which we take, not only of our rights but of our duties."
Therefore the Prime Minister entered upon a very much larger field than the mere question of the assertion of any definite rights. He went on to say—
"Germany has declared that the English Channel, the North and West coasts of France and the waters round the British Isles are a 'war area,' and has officially notified that all enemy ships found in that area will be destroyed and that neutral vessels may be exposed to danger. Germany is adopting these methods against peaceful traders and non-combatant crews with the avowed object of preventing commodities of all kinds, including food for the civipopulation, from reacting or leaving the British Isles or Northern France."

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Since the Prime Minister made that declaration this policy has been deliberately adopted and carried out by the Germans. It has not been particularly successful, but there was the intention; and so far as they were able to do it they have carried out that policy. Then the Prime Minister went on to say—
"Her opponents" [that is, the opponents of Germany]" are therefore driven to frame retaliatory measures in order in their turn to prevent commodities of any kind from reaching or leaving Germany."
And he added—
"If, as a consequence, neutrals suffer inconvenience and loss of trade we regret it, but we beg them to remember—"
I beg your Lordships also to remember—
"that this phase of the war was not initiated by us."
If I may say so, that was a very plain and distinct statement. It was a pledge, and it was the charter also of our policy of sea power. It is not unreasonable, therefore, that great interest should be aroused in the country, and, if I may say so, great suspicion amounting to great indignation that anything should be done to tamper with the full effective force of our sea power. And that is all the more felt because this Agreement with Denmark has been, for reasons which have never been explained, sedulously kept secret.
I—I think in company with many other gentlemen of influence—have seen this draft Agreement. It is a draft Agreement —now, I understand, an Agreement—with the Merchants' Guild of Copenhagen and the Danish Chamber of Manufacturers on the one part, and on behalf of the Foreign Office on the other. I understand that the Danish Government has not formally signed it, but that it has given the Agreement what it calls "unofficial approval." I am loth to trouble your Lordships with more details than I can help, but I should like with your permission to state what goods, so far as I can judge from the draft Agreement—a copy of which I have in my possession—the Government allow to be re-exported to Norway and Sweden. They allow the re-export to Norway and Sweden of a long list of goods, including coffee, cocoa, steel, iron, other plates or sheets, machines, tools and instruments, ovens, tea, tobacco, feathers, glass, paper, salt and soda, draperies, wool and cotton, linen, cloth, linoleum, carpets, mahogany, sanitary goods, grass seed, cakes, biscuits, macaroni,
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and a large number of other articles; and they do this under a rule that makes the importer pledge himself to apply for permission to the Merchants' Guild and the Danish Chamber of Manufacturers and obtain from them the requisite guarantee. But in the Agreement which I have seen that guarantee had not been drafted Supposing a guarantee has been inserted I would ask your Lordships, as men of the world, and men of business, how is it going to be enforced? These agents in Norway and Sweden, to whom these goods are to be re-exported from Denmark, may be, and I have not much doubt they probably are, largely Germans, or traders with German interests, or traders in debt to Germany working on German capital. Having dealt with the goods which may be re-exported to Norway and to Sweden, I should now like to say a few words upon the articles which may be re-exported from Denmark direct to Germany. These articles are divided into two classes.
VISCOUNT MIDLETON: I do not wish to interrupt the noble Earl. But, as a matter of order, can this Agreement be discussed unless it is to be laid on the Table? Would the noble Marquess (Lord Lansdowne) tell us? I believe that as a matter of Parliamentary practice an Agreement of this kind, unless the Government are going to laid on the Table, cannot be discussed. Will it be laid on the Table?
THE MARQUESS OF LANSDOWNE: We do not intend to lay it. The course which the noble Earl is taking may be extremely inconvenient, but it is for him to decide whether he wishes to pursue it.
THE EARL OF PORTSMOUTH: It may be inconvenient, but I think I may state what I know. It is within the competence of the noble Marquess to follow me and say that my information in regard to these matters is incorrect. I can assure the noble Marquess that I speak on this point only from a strong sense of public duty. I have not the slightest desire to take advantage of the Government, but I think the country ought to know how far these goods can be re-exported into Germany.
Now to proceed after what seems to me to have been perfectly unnecessary interruption. The following articles may be re-exported to Germany, I understand in limited quantities taking it from the point of view of money: spirits, £7,500 per

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quarter; china, £5,000 per quarter; earthenware, £7,500 per quarter; toys, £2,500 per quarter; printing inks, £5,000 to £10,000 per quarter; rennet—which I should have thought was a matter connected with food—rennet (for cheese), £7,500 per quarter; and machinery, £50,000 per quarter. I now come to the articles which I understand can be re-exported Germany in unlimited quantities. They include beer, matches, leather goods prepared with imported tanning materials, malt, coffee, chocolate, tea, fresh and dried fruit, women's and children's clothing, clocks, and watches. There is a certain irony about all this. It is worthy of note that while the British workman is being docked of his beer the Foreign Office thoughtfully provides beer in unlimited quantities for the German workman, and that while the poor English woman has to pay more for her tea the "pundits" of the Foreign Office, to quote a phrase of the noble Marquess opposite—
THE MARQUESS OF LANSDOWNE: It was not my phrase.
THE EARL OF PORTSMOUTH: In any case I think it is a very good one. While the poor English woman has to pay more for her tea, the "pundits" of the Foreign Office thoughtfully provide that their German friends shall be supplied with unlimited quantities of tea and coffee. Again I am told that malt is to go to Germany. We know that malt constitutes a most excellent and valuable feeding stuff for cattle and is very much needed by Germany now that her imports from Russia are closed. I would also call attention to this fact, that a German demand for malt must raise the price both of grain and of shipping freights to this country. Coffee, chocolate, and tea are all commodities every one of them suitable and fitted for Germany's fighting forces.
Now I come to another point. I should like to bring to your Lordships' notice a few of the names of these Danish gentlemen who constitute the trading bodies with whom our Foreign Office are doing business. The first name on the list is Abrahamson; then we have names like these: Buelow, Gammeltoft, Gluckstadt, Karl Meyer, Hesserschmidt, and Schmidt. I confess that these names do not seem to me to bear any close relation to Danish names, to the descendants of the Vikings or the sons of the Sea Kings; and one cannot help
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having a sort of suspicion that behind all this business there is a trail and odour of finance which is not very creditable and not at all pleasant.
Having stated what I know about the terms of this Agreement, I should like to refer to one other point in connection with it. The noble Marquess (Lord Lansdowne), in the course of a debate which I raised with regard to the Declaration of London, made use of this language. He said—
"There are other people to be thought of, and when the noble Earl and his friends airily treat these questions as if there were no such people as neutrals, I venture to think they make a very great mistake."
And my noble friend Lord Bryce on the same occasion made use of these words—
"The noble Earl seemed to me rather to ignore the fact that in all the operations we are conducting at sea neutrals as well as belligerents are involved."
I beg with all humility to say that I have never kept out of my mind reasonable regard for neutrals. I agree entirely with the sentiments expressed by the noble Marquess and by Lord Bryce, but I should like to bring before your Lordships what it seems to me from a layman's point of view constitutes a very serious international objection to an Agreement of this kind.
Let me deal first with the provision for re-export into Germany. Speaking as a layman, it has always seemed to me that whatever substance lay at the back of the Order in Council of March, 1915, resides in the fact that this Order created not a technical blockade but a blockade modified to meet the existing changes in economic and commercial conditions. I believe it is indisputably true that one of the invariable principles of blockade has been that the blockading Power shall not in any form grant exemption or preference from the operation of the blockade. This is not a technical point but lies in the sense of the nations that preferences are essentially impossible. Consequently it has always been a defence in a Prize Court that the blockade was ineffective or was suffered to be knowingly violated. The written Agreement, therefore, of the Foreign Office to permit direct shipments into Germany through Denmark is preferential treatment which would abrogate any existing blockade under International Law.
My second objection to this Agreement from the point of view of neutrals is this.

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Apart from the considerations respecting blockade which I have ventured to touch upon, certain foodstuffs like tea, cocoa, and like products are permitted to be imported into Denmark and thence to be re-exported into Germany. These foodstuffs are conditional contraband, and, on account of what has been done by the German Government and of the orders of the German Government, have been treated virtually as absolutely contraband. An Agreement now executed in favour of Denmark deliberately permitting the introduction of contraband articles into Germany does seem to me to constitute further preferential treatment. I do not understand how Great Britain could in any Prize Court assuming to administer principles of International Law seize American tea, cocoa, or products consigned to Germany herself if the provisions of this Danish Agreement be properly pleaded.
The last objection from the point of view of neutrals is this. The third Article of the Danish Agreement permits exports from Denmark into Norway and Sweden. It is to be assumed that our Government still limits shipments from the United States into Norway and Sweden. If that is so and I presume it is—we have presented an Agreement between Great Britain and Danish concerns in effect regulating without any consultation with Norway, Sweden, or the United States trade between these three neutral countries. In other words, Great Britain and Denmark are assuming to control the trade between the United States and Sweden by an Agreement to which neither the United States nor Sweden is a party. I pass over the workableness of the Agreement, and its aspects from the British point of view. I only say that I cannot imagine any logical argument which does not see in this Agreement preferential treatment for Denmark over the United States. In questions of contraband and blockade since the inception of International Law—I think I am correct in saying in the presence of many distinguished lawyers—preferential treatment is abhorrent.
I move for Papers, and I do so for the following reasons. In the first place, this Agreement constitutes a complete departure from the pledge of the Prime Minister in March. The country is entitled to be placed in full possession of a commercial Agreement with private individuals involving a complete change of policy. My
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second reason is that the Cabinet is the Committee elected by Parliament for executive purposes. Consequently—and this is my third reason—holding this matter to be of grave importance, it is eminently disquieting to know, from the very evasive answer which the Prime Minister gave in the House of Commons, that this Agreement was not drawn up with the consideration of the Cabinet. My fourth reason is this. The Government are proposing by postponing the General Election to disfranchise for the time being the constituencies. This being so, surely the public have a special, an emphatic claim to look to Parliament for enforcing every safeguard and control that is necessary for the proper conduct of the war.
The noble Marquess may perhaps ask me, What has this Agreement to do with the conduct of the war? I reply that it affects it vitally and directly. Our troops are splendid, but our political and military strategy have not been so successful. The one formidable force which Germany feels and dreads is the silent pressure of the Navy. To weaken that in the smallest degree is, in my opinion, treachery to the country. If the noble Marquess says that this Agreement does not weaken the pressure of the Navy, let him lay these Papers on the Table of the House. Let him have the courage of conviction and dare to face publicity. Nothing less will prove or satisfy the public that the insuperable objections of Lord Robert Cecil are other than that the whole transaction cannot stand the light of day. I beg to move the Motion that stands in my name.
Moved, That there be laid before the House Papers relating to a reported Treaty or Arrangement with Great Britain whereby articles exported from Great Britain can be re-exported from Denmark to other countries.—(The Earl of Portsmouth.)
LORD DEVONPORT: My Lords, it is, I think, a matter of common knowledge that during the earlier period of the war our naval operations were restricted to a large extent by the control exercised upon them from headquarters. And when I say "headquarters" I do not mean naval but political headquarters. I need not recite the incidents that occurred. We are all familiar with them, and I do not think the statement will be challenged. That state of affairs endured for at least seven months, and it was only when the submarine policy

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of the Germans came into existence that the Government seemed really to awake to the fact that we were engaged in war. Then it was that the Prime Minister made the statement which has been quoted by both the previous speakers, and that statement was the forerunner to the promulgation of the Order in Council. The Order in Council, in most definite, clear, and unmistakable terms endorsed—if I may use such a term with regard to an Order in Council—the declaration made by the Prime Minister, and it gave to the country hope and encouragement that at last the policy of weakness was to come to an end.
This is what the Order in Council said. After reciting the incidents that had occurred on the part of Germany to justify the Order in Council being promulgated—it is clearly described as a retaliation against the actions of Germany—the Order says—
"His Majesty has therefore decided to adopt further measures in order to prevent commodities of any kind from reaching or leaving Germany."
I recite that from the Order in Council, because though in effect the Prime Minister used the same words his words have not statutory effect, but the Order in Council has. The declarations of the Prime Minister were translated into statutory form. As I have said, the effect of the promulgation of the Order in Council was that we were able to feel that at last we were to have the full advantage of the might and influence of the British Fleet, upon which we had always been taught to believe, and did believe, that we could rely. I think the people of this country have an accurate instinct as to what this great weapon means. They have never hesitated to support it, and were any parliamentarian to attempt to vote against the upkeep of the Navy he would receive but short consideration from his constituency. The public in this country believes that the power of England on the sea is irresistible, and that, whatever may be our misfortunes by land, sooner or later the Fleet will get us out of our difficulties. Any one who has studied the history of the Napoleonic times sees over and over again that it was the Fleet that broke Napoleon's power; although his career was terminated on the field of Waterloo it was the Fleet that tore him away from his Allies and finally brought him to his ruin. When the Order in Council was promulgated the country was encouraged in the way I have described, but it has not taken long for this apparently
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firm action on the part of the Government to prove somewhat delusive. Why is that? Because since the promulgation of this Order the Government have, by a series of indulgences to neutrals, prevented the enemy from feeling the full consequences of our blockade.
The noble Earl (Lord Portsmouth) has recited many of the articles that through the agency of this Agreement are to be enabled to pass into Germany—articles which, if they came along on the sea, would under the Order in Council be stopped by our Fleet. If therefore you allow them to get in, as it were, by some back door I think I am justified in saying that by a series of indulgences to neutrals the Government is sparing the enemy from the full consequences of our blockade. I have with me some figures of the commodities that are being imported in large quantities by the Netherlands Government, by Sweden, and by Denmark; but I will not trouble the House by giving them, as I think the figures quoted by Lord Portsmouth and Lord Strachie are sufficient in themselves to prove that enormously increased quantities of various commodities are going into those countries. The only inference, the only deduction, to be drawn from the figures is that commodities are finding their way through those countries to the enemy.
Now a word or two about the Agreement itself. The Government, for some incomprehensible reason, declare it to be so vitally secret that they dare not reveal it. The noble Marquess said just now that he will not reveal it; he refuses to lay it on the Table of the House. This particular group of manufacturers in Denmark consists, I believe, by Statute of practically every trading concern in the country. There appeared in the Globe—on Monday, I think it was—a letter of an official character front the President of the Guild. He wrote because the competency had been called into questior of this Guild to speak for the trading community of Denmark, and he pointed out that not only did he represent through the Danish Chamber of Manufacturers and the Merchants' Guild all the industrial concerns in Denmark, but that by an ancient Statute every trading concern—there were a very few exceptions—was ipso facto a member of this organisation. So we arrive at this point, that the information contained in this sacred and secret document is in the

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possession of all the industrial concerns in Denmark; yet it is denied to us. But if I may say so, the Government do not preserve their own secret. It is a matter of common knowledge that a certain group of Members of Parliament were called together and shown this document at the hands of a member of the Government. That has been said in the House of Commons; it has never been denied, and I have every reason to believe it is true.
Now as to whether the Cabinet were consulted in connection with this document. That has been challenged, and it has not been denied. Rumours fly about in all directions, and this is the price and penalty you have to pay for concealing this document from the House of Commons and from this House. If it is an innocuous document, why not let us know its contents? But it is not really concealed. Copies of it are as plentiful as can be. The noble Earl has a copy of it, and I am bound to say that I have been favoured with a copy. Everybody I meet who is taking a passing interest in the matter seems to have in his pocket a copy of the document. These copies have been quoted from by many speakers and the validity of the copy, or the accuracy of the information conveyed from the copy, so far as I have been able to glean up to the present moment, has never been impugned. The noble Earl made it sufficiently clear, I think, that the Agreement gives the power to these neutrals to transmit goods to the enemy, and therefore I will not trouble your Lordships, as I had intended, by reading the paragraphs in the Agreement that make that abundantly clear.
There is another point that has been touched upon in another place and again here to-night—namely, as to the responsibility of the Foreign Office for this document. It would, of course, be an extraordinarily serious thing were the Foreign Office permitted to usurp the functions of Government and enter into arrangements of this kind with possibly far-reaching consequences. And in this connection—I do so in no hostile sense—I quote appositely, I think, certain words used by Sir Edward Grey that were published in a Report made by the German Ambassador who was here in this country when war broke out. On his return to Berlin Prince Lichnowsky gave an account of his last interview with our Foreign Secretary. Sir
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Edward Grey, I believe, sent for him and gave, or was reported to have given, reasons why we found it incumbent on ourselves to enter the war. But the words that have a bearing on this situation, assuming that the Foreign Office is and has been usurping the functions of Government, are these. He is said to have told Prince Lichnowsky that he was "remote from every idea to crush Germany." Those words have been credited to Sir Edward Grey. If they represent his views then and now, that might be some key to the negotiation of an Agreement of this kind, because it is certain that as long as arrangements of this kind are permitted we shall never succeed in crushing Germany in the way we hope to do by bringing to bear the weight of our Fleet against her by blockade.
I wish to put two questions. One has been referred to by the noble Earl. First I should like to ask, What is the consideration for this Agreement? Governments, like individuals, do not make great concessions of this kind unless they are going to receive some consideration. Here, again, rumour is busy. Rumour says that the consideration is this, that we are seeking certain things from Germany that we find it difficult to get along without, and that this is to be the consideration. I should doubt it, but that is what rumour says; and it is well that the noble Marquess should be made aware of the rumour and that he should, if possible, have the opportunity of giving his views as to its accuracy. If that were true it would, of course, be a shocking condition of affairs. It would be simply this—that in return for services rendered, instead of maintaining the Order in Council and preventing commodities of any kind entering into or leaving Germany, we should be aiding and abetting to the contrary. That is an unthinkable situation. But if you will give us the Agreement you will not be subject to suspicion; we shall have the facts in front of us. I am only pointing out the evils and the price you are paying for your concealment.
THE PRESIDENT OF THE BOARD OF AGRICULTURE AND FISHERIES (THE EARL OF SELBORNE): The noble Lord tells us that he has read the document itself. He must know that is not in it.
LORD DEVONPORT: What is not in it?
THE EARL OF SELBORNE: The consideration from Germany.
LORD DEVONPORT: I did not suppose it was. It would be a very funny document if it contained the consideration. I think that is a very poor point to make. Of course, the consideration would not be stated in the document. I never suggested it was.
THE EARL OF SELBORNE: Then your observation about laying the document on the Table is not to the point.
LORD DEVONPORT: If the noble Earl will persuade his colleagues to produce the document there will be no room for any controversy. I hope that even now at the eleventh hour we may persuade them to do so. The second question I want to ask is as to whether this Agreement constituted a preference to Denmark. The noble Earl opposite has dealt with this point. The lot of a neutral is not a happy one, especially when one of the belligerents happens to be the greatest naval Power. His trade is hampered and interfered with, but to that, of course, he has to submit. But the law of nations lays down clearly and unmistakably that in the treatment of neutrals there shall be uniformity and no preference, and if any such preference could be shown it would have far-reaching consequences. Indeed, it might bring you into conflict with one or another of the neutrals. It might bring you into conflict with the United States, if it could be proved—and have heard from Americans over here that the point is already engaging their attention—that you were giving one of the neutrals a preference. In the first place they would treat with contempt your Order in Council; they would defy you, and, what is more, they would be justified in defying you because you would be acting contrary to the law of nations.
I claim that we are entitled to be made aware of the terms of this Agreement. I believe that there are other Agreements subsisting with other neutrals. Some are in course of arrangement or consideration. If that is so, it is incumbent on the Government to let us know the situation, not only in relation to Denmark itself, but also in regard to any Agreements that may have come into existence that we know nothing about. I am perfectly certain that we are discharging a public duty of the highest importance when we enter our protest against any policy of secrecy in matters of this kind. I am sorry if I have said anything to offend the susceptibilities of any member of the
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Government. If I have I cannot help it, because I feel that it is only right and proper that this matter should be made public.
THE MARQUESS OF LANSDOWNE: My Lords, the questions which have been put by the two noble Lords opposite are intended, and they do not dissemble the fact, to compel His Majesty's Government to produce and make public the Agreement which has lately been entered into between this country and two great Danish trading associations. The question of making public this Agreement has, as the noble Lords opposite are well aware, been more than once raised, And upon each occasion it has been stated clearly and explicitly that we did not think it desirable in the public interest that the Agreement should be published. To that conclusion we adhere, and much as I regret to disappoint the two noble Lords I am bound to tell them that we are not prepared to meet their wishes in this respect. Nor are we prepared by making admissions or contradictions in regard to particular provisions which may or may not be within the compass of the Agreement virtually to give away its contents to the two noble Lords. I am asked why we are so secretive, considering the fact that the contents of this Agreement, or what purport to be the contents of this Agreement, have been frequently quoted in public discussions. Indeed, an attempt has been made to quote them in this House to-night.
THE EARL OF PORTSMOUTH: I beg the noble Marquess's pardon. I did not make au attempt—I did quote them.
THE MARQUESS OF LANSDOWNE: lf the noble Earl wants to have it that way, by all means.
THE EARL OF PORTSMOUTH: I Prefer it that way.
THE MARQUESS OF LANSDOWNE: What I say to the noble Earl is that I am not prepared to admit that the fragmentary citations which he gave afford at all a sufficient or complete account of the contents of the Agreement. Nor do we intend by these citations to have our hands forced into the production of an authoritative account of the Agreement itself. Let me assure the House that when we refuse this information it is not from any desire to shield ourselves. Suggestions have been

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made in the course of this debate which, apparently, go to show that we have sacrificed the interests of this country, and that because we know we have done so we are unwilling to confess to what we have done. I can only tell your Lordships, and I am sure you will not doubt my sincerity, that in my belief this Agreement is a good Agreement for this country, and that it will help us, and not interfere with us, in carrying this war to a successful conclusion.
But we have a great deal more than our own reputations to think of in this matter. Let me mention very briefly one or two other considerations which seem to me to be entitled to weight when we come to discuss whether this Agreement should be published or not. It is an Agreement between this country, and some great trading corporations in Denmark which I think we were told a moment ago represent the whole of the commercial interests of that country. There are several different interests to be taken into account. We have to think of the effect upon the enemy of the publication of the whole of this arrangement. We have to think of the effect that will be produced upon the country with which we have made it. We have to consider the effect upon other neutral countries; and last, but not least, we have to think of the effect upon our own interests.
As regards the enemy, I suggest to your Lordships that as the primary object of this Agreement is to prevent goods from passing to the enemy through neutral channels, it is, on the face of it, not desirable that we should proclaim upon the house-tops what steps we are taking for that purpose. In regard to Denmark, it has to be borne in mind that she is—you have only to look at the map to realise the fact—in a position which exposes her very much to pressure from Germany. It seems to me that we should be likely to increase the prospect of that pressure if we were to reveal the whole of the details of the arrangement which we have entered into with the Danish traders. At any rate, I do not think we ought to make this arrangement known unless we have reason to believe that it would be agreeable to the Danish Government that we should do so. Then there is the case of the other neutrals. This is not the only Agreement into which we have entered. There is the Agreement with the Netherlands Oversea
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Trust, there is a Swiss Agreement and there are other minor Agreements with groups of traders in different countries. None of these have been published, and if we were to publish this Agreement it would be impossible for us to refuse a demand that the whole of the Agreements should be made public. In addition to that, we have to consider this point. It is part of our policy to enter into Agreements of this kind. Would it make it easier or more difficult for us to make advantageous Agreements with other neutrals if the whole of the terms of the existing Agreements were already public property? I do not believe it would make it easier. I think the noble Lord, Lord Devonport, suggested a moment ago that it would be a very desirable thing if the public in this country were placed in a position which would enable it to control negotiations of this kind. I venture to differ wholly from that.
LORD DEVONPORT: I must contradict that. I said nothing of the kind. I was speaking only about the Agreements being made public. I never suggested that the public should control negotiations.
THE MARQUESS OF LANSDOWNE: I thought the noble Lord referred to the desirability of the public having some knowledge of negotiations of this kind, presumably in order that the public might influence their course.
LORD DEVONPORT: Yes; knowledge when the deed is done. That is not controlling negotiations. That is quite a different matter.
THE MARQUESS OF LANSDOWNE: If I misheard the noble Lord, I regret it. I pass to another complaint that was made by, I think, all three speakers who have addressed us. It was suggested that this Agreement involved something like discrimination in favour of Denmark as against other neutral Powers; and Lord Devon-port told the House, quite correctly, that it is part of the acknowledged law of blockade that the blockade should be effectual and of general operation. I do not admit that this Agreement or any of the Agreements into which we have entered can be properly described as involving discrimination in favour of the countries concerned. The object of these Agreements—and this cannot be too distinctly known—is to provide that our blockade

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policy should be as efficient as possible and should work as smoothly as possible in regard to all those whom it affects. If it comes to the charge of discrimination, I am certainly prepared to say that we are ready to enter into corresponding Agreements with other neutrals if they so desire it. Of course in these matters there must be a certain amount of elasticity, and whatever Agreements are entered into must have some regard to the conditions of the country with which you are dealing, its geographical situation and its commercial status.
Let me point out to the noble Lord on the Back Bench (Lord Devonport) where his theory that there must be uniformity would lead him. I understand him to contend that. we ought not to make an Agreement with one neutral unless we made Agreements with all the neutrals, and that all the Agreements must be run in exactly the same mould. That seems to me to be an absolutely absurd position for us to take up; and I, for one, put altogether on one side the complaint that there is anything that could be properly called discrimination in the Agreements into which we have entered.
Although I am unable to say anything as to the contents of this Danish Agreement, I should like to say a few words on the general question of policy involved in arrangements of this kind. Your Lordships have been told this evening that because we have entered into these arrangements with Denmark and with other neutral Powers we have therefore undone to that extent whatever good was achieved by the Order in Council of March 11 of this year; and noble Lords have brought up in support of that charge the memorable announcement of the Prime Minister that it was the intention of this country as a measure of retaliation for the conduct of our enemies to prevent commodities of any kind from reaching or leaving Germany. Let me in the first place say that nothing in this Agreement touches in any way our belligerent rights of search and capture. That, I think, is an important point. The noble Earl (Lord Portsmouth) quoted, and evidently was pleased with his quotation, the passage in the Prime Minister's speech in which my right hon. friend went on to point out that these severe measures which we were about to adopt must inevitably occasion inconvenience to neutral traders. That, of course, is obvious. You cannot
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take measures of this kind without inconvenience to neutrals. But the Prime Minister was very far from adding to his announcement words to the effect that in the pursuit of our object we should not shrink from subjecting neutral countries, however friendly and however blameless, to any amount of suffering and inconvenience.
THE EARL OF PORTSMOUTH: I did not say that.
THE MARQUESS OF LANSDOWNE: No; I am saying that the noble Earl argued as if our pledge committed us to pursuing the objects of our blockade—
THE EARL OF PORTSMOUTHindicated dissent.
THE MARQUESS OF LANSDOWNE: That really was the argument of the noble Earl, although he shakes his head. What we have said throughout was that it was our desire to minimise the amount of inconvenience occasioned to neutral Powers, and that subject to the efficient conduct of our blockade operations we should endeavour to mitigate their effect so far as neutral traders were concerned. I should like to put it to the noble Earl, Is that really an unreasonable policy for this country to pursue? We put in the first place the maintenance of an efficient blockade, and, subject to that, we put the minimisation of inconvenience to neutrals. I suggest to the noble Earl that this is a policy which is demanded from us by considerations of common fairness and justice, and not only by those considerations but by considerations of our own self-interest. I cannot conceive anything more unfortunate for this country than at a moment when we have the whole of the forces of our enemies arrayed against us we should also be confronted by the resentment and ill-will of the whole of the neutral Powers.
Assuming that that is our policy—the two-fold policy of carrying out our blockade and avoiding needless inconvenience to neutrals—it seems to me that the policy which we have adopted in regard to these Agreements is by far the most hopeful mode of giving effect to our own principles. What are the bases of that policy? In the first place, we have endeavoured to arrive, in consultation with the neutrals concerned, at an understanding as to the amount of the different commodities

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required by those neutrals for their own normal and legitimate consumption. We have endeavoured to arrive at an understanding that when that amount is exceeded it should be admitted that there arises at once a presumption that the excess goods imported are for enemy destination. In the next place, as machinery for carrying out this policy, we have endeavoured to provide for the establishment in the neutral country concerned of a competent body ready to assume responsibility for recording the amount of the goods passing into the country, for receiving those goods, and for seeing to their proper distribution. These arrangements may, it is true, not be perfectly watertight. I do not think that you will devise any arrangements which will not leave some opportunities for the defeat of your precautions. But I believe that arrangements on these lines are the best arrangements possible in view of the extreme difficulty of the case with which we have to deal.
I would like your Lordships to consider what would be likely to happen if no such arrangements as these were to be made with the neutral countries concerned. I go so far as to say that in the case of a country situated as Denmark is, in close propinquity to the country of our enemies, unless you have some arrangement of that kind you will find that you are helpless to prevent great quantities of supplies from passing through neutral channels into the hands of your enemies. The temptation to carry on business of this kind is enormous. There are vast profits to be made. There is corruption on every side. The noble Lord on the Front Bench opposite (Lord Strachie) spoke of what we expected from our Fleet in the way of preventing supplies passing to our enemies. My Lords, your Fleet may be never so powerful but it will not be able to prevent goods passing through what I may call the back doors through which our enemies obtain most of the things they require. Unless you can obtain a working arrangement with the neutral country itself, an arrangement which that country will respect and which it will endeavour to carry out to the best of its powers, I believe you will be helpless to prevent the passage of almost unlimited quantities of supplies to Your enemies. And let it be remembered that unless you set up some responsible body of this kind in the neutral country
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to conduct the business for you the mere fixation of a limit representing the normal consumption of certain classes of commodities by the neutral Power will not help you in the least.
Look what happens. You hold up ships carrying cargo which you suspect is going to the enemy. You may find that you have let through an amount of a particular commodity representing the full limit to which the neutral country is entitled for its own consumption. But if, as time goes on, you find more cargoes coming in and the papers of the ships which carry them are in order and there is no proof of enemy destination, you are absolutely helpless, and you have really to acquiesce and see all these supplies passing through, in spite of your precautions. These difficulties, I will not say disappear entirely, but are very much diminished if you have, as we have in the case of the Danish Agreement and in the case of the Netherlands Agreement, a competent body which is able to issue the necessary certificates, to keep proper records, to see to the distribution of the commodities, and, when the limit has been reached, to place on record the fact that it has been reached, and that the time has come when anything in excess of that limit may be regarded by common consent as being destined for the enemy. The procedure is I will not say simple, but it is simpler than any other; and it has this great advantage, that it obviates those delays and uncertainties which are beyond all else galling and irksome to the neutral traders.
There is one other point about which I wish to say a word. Various observations have been made as to the paternity of this Agreement. It has been suggested that the Cabinet had nothing to say to it, that it was the offspring of the misdirected ingenuity of a single Foreign Office official; and it was pointed out that when the matter came up for discussion in the House of Commons it was Lord Robert Cecil, and not Sir Edward Grey, who dealt with it. My Lords, all these ingenious theories rest upon a very unsubstantial foundation. The policy of this Agreement is the policy of His Majesty's Government, and it has been within their cognisance and under their consideration for many months past. It is true that the application of the policy and the details of the arrangements under which the

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policy is carried out must necessarily be dealt with by the Departments concerned. The business of the Government could "not be carried on if all matters of this kind were dealt with by the Head of the Department himself. But let me say, and I say it emphatically, that the policy is not the policy of any one Department; it is the policy of His Majesty's Government as a whole, and we assume the fullest responsibility for it.
The noble Lord who spoke first (Lord Strachie) referred to the announcement made by the Prime Minister last night to the effect that a statement dealing with our policy in regard to these questions was being prepared and would be shortly laid. I understood him to say that this would not be satisfactory. Perhaps he had better wait until he sees it. But I think he will be disappointed if he expects to find in it an authorised version of the Danish Agreement. I can hold out no hope of that. And for the reasons which I have tried to give to the House, I must resist the Motion for Papers with which the noble Earl who spoke second concluded his speech.
LORD SYDENHAM: My Lords, this question is a very grave and difficult one. It is a national question; it could almost be called an international question, as every one of the Allies is interested in it. I think there are a number of noble Lords who would like to speak on this subject, especially after hearing the weighty speech of the noble Marquess. I therefore move that the debate be adjourned until Tuesday next, if that day would be convenient to His Majesty's Government.
THE MARQUESS OF LANSDOWNE: As there is a great deal of business before the House in the early days of next week, I venture to suggest that it would be better that we take the adjourned debate on Monday.
Moved, That the debate be adjourned until Monday next, December 20.—(Lord Sydenham.)
On Question, the further debate adjourned to Monday next.

THE BATTLE OF LOOS.
LORD ST. DAVIDShad the following Question on the Paper—
To ask His Majesty's Government, with reference to a speech made by the Lord President of the Council on the 16th November, 1915, in which he said—
"I come now to the infinitely more serious question which was indicated by my noble friend, I am bound to say with great care, and more fully developed by my noble friend on the Cross Benches, Lord Sydenham—I mean the question of the attack at Loos in the later part of September, when, as was currently reported and as has been repeated by my noble friend to-night, a success was missed owing to the failure to bring up reserves at the proper time. Well, I am not able to enter into the discussion of that question at all this afternoon. The whole matter is in this sense sub judice that it is the subject of close military inquiry at this moment by the highest authorities; and in those circumstances it clearly would not he becoming in me to say anything upon it at all—in any case I should be most unwilling to embark on a discussion of the merits or demerits of a particular strategical movement undertaken on their own responsibility by Generals. But that, of course, is not precisely the point, because the question is rather one as to whether in this particular instance neglect took place, and, if there were neglect, who ought to be held responsible for it "
whether the "close military inquiry by the highest authorities" is now completed; and, if so, whether the Government could, without disadvantage to the Public Service, make any statement upon the subject; and to move for Papers.
The noble Lord said: My Lords, when I put this Question on the Paper I was riot aware, naturally, of the announcement that was going to be made as to the change in the command in France. Since that announcement I see no advantage in pursuingt his matter further, and therefore I do not propose to put my Question.
House adjourned at ten minutes past Seven o'clock, to Monday next, a quarter past Four o'clock.