HL Deb 08 March 1916 vol 21 cc313-6

LORD SYDENHAM rose to ask His Majesty's Government—

  1. 1. What measures have been taken to regulate or restrict the chartering or purchase of British ships during the period of war.
  2. 2. What control is exercised over chartered vessels which continue to fly the British flag.
  3. 3. Has it been rendered impossible for aliens of enemy nationality to charter British vessels.

The noble Lord said: My Lords, the shortage of shipping at the present moment is giving rise to many and grave difficulties, and it is tending, and may perhaps tend still further, to increase the cost of many commodities of first-class importance to the country. The main reason of this shortage is, of course, the very large number of ships which have had to be taken up for direct and indirect purposes connected with the war, which has naturally had the effect of destroying to a great extent the carrying power of the mercantile marine of the Allies for purely trade purposes. We are told that the matter is receiving the closest attention of the Government, and there is a general hope and expectation that measures will be taken to check the deplorable waste of tonnage which has occurred and at the same time to fulfil all the really necessary needs of the Army in the field. But in the present stringent circumstances it is natural that the chartering and the sale of British vessels to aliens should have given rise to a certain amount of apprehension, and I have ventured to put my Questions on your Lordships' Paper in order that the Government may be in a position to remove any doubts and to make the matter perfectly clear.

I understand that powers have recently been taken to control the operations of chartered ships by a system of licences, which prevents any one of those ships from leaving port without the permission given by the licence. I hope that method will prove effective, but I should have thought it would have been more simple to insist upon a licence being obtained before a charter was granted to an alien. There are existing restrictions upon the sale of ships to aliens, but I believe that to a great extent those restrictions have been nullified by a system of mortgaging which has lately come into use. The procedure is this: A British ship is mortgaged to an alien; the mortgage is registered in the alien country; the interest is not, paid, and the mortgagee then forecloses and secures judgment in his own Courts. I believe that most neutral countries have passed legislation which prevents their ships being mortgaged in that way, and I suggest that we might do the same here, and bring this system, which seems to me to be a thoroughly wrong one, to a complete end.

I hope that the licensing system will effectually prevent a British ship under an alien flag from taking a cargo to, say, the port of Rotterdam. I mention Rotterdam, because I regard that as a particularly dangerous port and hardly a Dutch national port under the operation of the Rhine Navigation Treaties, which have taken away some of the powers of the national Government with regard to that port. It has been brought to my notice that two Germans in a neutral port have chartered British vessels since the war began, and one of them has, or had until very lately, two such ships under his charter. I do not know whether those persons have been naturalised in the country in which they reside or in this country, but in any case we now have sufficient experience to understand that naturalisation in such cases is absolutely futile. We have before us the striking spectacle of full-fledged American citizens engaged in plotting, and plotting successfully, against the lives and property of their nominal fellow-citizens. That gives one an idea of the value of naturalisation in this state of war! If chartering is not permitted without licence and without the inquiry which the granting of a licence would demand, it would prevent aliens of enemy origin from obtaining tonnage under our flag. It is with the hope that His Majesty's Government will make these important questions perfectly clear to the country that I have put the Questions which stand in my name.

THE MARQUESS OF LANSDOWNE

My Lords, I need not say that we will gladly place at the disposal of my noble friend on the Cross Benches any information in our possession as to the matters with which his Questions deal. We are, of course, all aware that until the war broke out the transfer and chartering of vessels went on without any restriction whatsoever. It soon, however, became evident that it was imperatively necessary to deal with the matter. My noble friend does not at all exaggerate the immense importance of the scarcity of tonnage at the present moment, and it is clear that it is necessary to watch with the closest possible scrutiny any attempts to alienate British tonnage either permanently or for a time.

The first step was taken at the end of the year 1914, when owners of shipping were notified that they would be required to acquaint His Majesty's Government whenever there was a question of selling any ships belonging to them. But early in last year, as my noble friend is no doubt aware, a very important Act was passed through Parliament—I refer to the British Ships Transfer Registration Act. Under that Act it is laid down that no transfers are valid unless they have previously been approved by the Board of Trade; and I am able to say that this approval is given very sparingly and not without the closest scrutiny of the facts. One measure of precaution is invariably taken whenever such a transfer is permitted. A bond is required of the purchaser binding him not to use the ship for an improper purpose—by which I mean for the purpose of directly or indirectly assisting the enemy; and that bond has to be backed by a London bank. I am told that this provision acts as a very substantial deterrent in the way of any attempt to elude the provisions of the Act. Subsequently two Orders in Council were passed—one on November 10, 1915, and the other on February 15 of the present year. Under those Orders in Council no British ship registered in the United Kingdom may proceed on any voyage without licence from the Licensing Committee appointed by the Board of Trade. The earlier of those two Orders in Council, I may explain, had only reference to voyages from a foreign port to a foreign port; the later one extended the operation of the first Order, and made it apply to all voyages no matter where taken. I am assured that under these Orders in Council a very effectual control is maintained by the Transport Department of the Admiralty. It is part of the arrangement that the Transport Department receives once a month from the owners of all ships a Return showing the position and commitments of the ships. These Returns are indexed and kept up to date, so that it is possible for the Admiralty at any moment to determine within a day or two the position of a particular ship and the extent and nature of her commitments. Apart from this, a very large proportion of British ships have been already requisitioned and are consequently under the direct control of His Majesty's Government.

Then my noble friend asked a Question with regard to the possibility of aliens of enemy nationality chartering British vessels. As to that, I have to say that it is certainly conceivable that there might be cases in which a British vessel was chartered by an alien enemy, acting, of course, through a neutral intermediary and thereby concealing his own identity. My noble friend evidently had in his mind some nefarious conspiracy of that kind when he spoke just now of a case in which the vessel in question had been mortgaged and in some way or other the transaction had been masked in that manner. These things are no doubt conceivable, and I am not prepared to say that they never happen, but I am assured that it is very difficult, indeed, for them to happen. All these operations are closely watched. They are watched not only by our own Consuls in all parts of the world, but to some extent by the trade rivals of the people concerned, who are apt to give a useful hint if anything of the kind is happening. We believe that under the present system of close control it should be possible to reduce to a minimum the risk of any such evasions of the Act and of the Orders in Council. I need not say that if my noble friend is able to put his finger upon any weak spots in the present system and to offer us suggestions as to the manner in which the present arrangements might be tightened up we shall gladly avail ourselves of his suggestions. But in the meantime, according to the information which reaches me, there is not any very serious risk of an abuse of the present arrangements.

LORD SYDENHAM

I have to thank the noble Marquess for his full and reassuring reply. As regards the case of the two Germans to which I have referred, I gave the names of the people and of the two ships that had been chartered to an official of the Admiralty, so that it is all in their hands.

House adjourned at twenty minutes before Six o'clock, till Tomorrow, a quarter past Four o'clock.