HL Deb 31 January 1918 vol 28 cc269-75

1. That any director of the company or any partner of the firm, or the individual, or any manager or other principal officer employed by the company, firm, or individual, is a person who is or has been an enemy.

2. That in the case of a company, any capital of the company is or was at any time after the twelfth day of November nineteen hundred and seventeen held by or on behalf of an enemy, including any stock or shares of the company-vested in the custodian by virtue of any order made under the Trading with the Enemy Acts, 1914 to 1916.

3. That the company, firm, or individual is or was at anytime after the twelfth day of November nineteen. hundred and seventeen party to any agreement, arrangement or understanding, which enables or enabled an enemy to influence the policy or conduct of the business.

4. That the company, firm, or individual is or was at any time after the twelfth day of November nineteen hundred and seventeen interested, directly or indirectly, to the extent of one-fifth or more of the capital profits or voting power in any undertaking whether or not in the United

Their Lordships divided:—Contents, 38; Not-Contents, 174.

Kingdom, engaged in business of a kind to which this Act Applies, in which enemies are also interested, directly or indirectly to the extent of one-fifth or more of the capital profits or voting power.

5. That the company, firm, or individual, is by any means whatever subject, directly or indirectly, in the conduct of their or his business to enemy influence or association.

6. That, in the case of a company, the company has issued share warrants to bearer and has not given notice under this Act requiring the holders of the share warrants to surrender their warrants for cancellation.

For the purposes of this Schedule— The expression "enemy" means a subject of an enemy State and an enemy controlled corporation. The expression "enemy State" means Germany, Austria-Hungary, Bulgaria, and Turkey. The expression "enemy controlled corporation" means any corporation—

  1. (a) where the majority of the directors or the persons occupying the position of directors by whatever name called, are subjects of such a State as aforesaid; or
  2. (b) where the majority of the voting power is in the hands of persons who are subjects of such a State as aforesaid, or who exercise their voting powers directly or indirectly on behalf of persons who are subjects of such a State as aforesaid; or
    3. 271
  3. (c) where the control is by any means whatever in the hands of persons who are subjects of such a State as aforesaid; or
  4. (d) where the executive is an enemy controlled company or where the majority of the executive are appointed by an enemy controlled company.

The expression "capital" in relation to a company means any shares or securities issued by the company which carry, or would if the necessary formalities were complied with, carry any voting power with respect to the management of the company and shall also include debentures and debenture stock and money lent to the company.

VISCOUNT HALDANE moved, in the first Condition, to insert the words "within five years before the passing of this Act" after the word "or," where it lastly occurs. The noble Viscount said: The reason I move this Amendment is the extraordinary limitlessness of the condition as it stands. The words by themselves look innocent, but when you come to the definition at the bottom of the page you see— The expression 'enemy' means a subject of an enemy State and an enemy controlled corporation. The expression 'enemy State' means Germany, Austria-Hungary, Bulgaria, and Turkey. The Amendment of the noble Lord will not affect what I am going to say. The point is that according to this a man who forty years ago was an Austrian and got himself naturalised, and has been carrying on business all this time in this country, is preceluded, unless a special licence of the Board of Trade is given, from taking part in the direction of a company or being a partner of a firm. It is very awkward if the Bill is to go through in this form, and I will tell your Lordships why. There are certain industries where non-ferrous metals are most extensively used and some of the most prominent members of those industries are persons of remote enemy origin. That is to say, they were German or Austrian subjects many years ago but are now among our most loyal people. Take, for instance, such a place as Sheffield. There are those who have held high office as mayor of the city, who are engaged in the great metal industries of the place, who yet are of remote enemy origin, and who will certainly be affected by this provision. In the industries of Sheffield more and more such metals as vannadium and tungsten—metals which, whether they are enumerated in the definition of Clause 9 or not, are metals to which the Act will certainly be applied—must be used for the purpose of those industries, and the people to whom I referred are precluded from assisting in getting them. Some of our most important men of business come within this category, as the matter stands. It may be twenty or thirty years since they belonged to an enemy nationality and they may be the most loyal people we have in the country, and vet they are struck by the Bill as it stands. Therefore, I suggest that what I think must have been the result of an oversight—the leaving of this definition without any limitation—should be subjected to this limitation, by putting in after the word "or" in line 6 the words "within five years before the passing of this Act." In that case anybody who within five years before the passing of the Act has been an enemy will be struck at, but anybody who was so at an earlier period will be free. Whether five years is the right period or not, twenty or thirty years, which the Bill proposes at the present time, seems to me to be altogether too long.

Amendment moved— Page 7, line 6, after the second ("or"), to insert the words ("within five years before the passing of this Act").—(Viscount Haldane.)

LORD HYLTON

I am afraid that the Amendment moved by the noble and learned Viscount is one that the Government cannot accept. Your Lordships will remember that I pointed out yesterday that there is no question of refusing a licence ipso facto to a naturalised British subject, but, for the reasons which I stated, it is the opinion of the Government that it is necessary that these persons should have their cases reviewed and that investigation should be made. On the last Amendment I said I did not wish to trouble your Lordships by repeating to-day what I had already said in the Second Reading debate yesterday, but I may remind the noble and learned Viscount who has moved this Amendment that I had then to point out that there had been cases within the knowledge of the Board of Trade where naturalised British subjects had been found, even since the war had broken out, to be engaged in trading with the enemy. There is a case where the books of a firm of that kind were found to have been wilfully destroyed. Those who were responsible for the drafting of the Bill are of the opinion that it is necessary that in the case of all naturalised British subjects their position should be taken into review and investigated. I am afraid it is quite impossible to exempt from the operations of the Bill, as the noble and learned Viscount wishes, those who have been naturalised for more than five years.

VISCOUNT HALDANE

If the Government have set their face against remedying what seems to me a grievous injustice, I, of course, cannot help it. It is not worth putting the Committee to the trouble of a Division if the Government have taken that attitude. I have expressed my protest as strongly as I can.

LORD BALFOUR OF BURLEIGH

I do not know whether I can change the opinions of the noble and learned Viscount. I do not know whether the guarantee of a period of years is sufficient in this case. The point is not the length of time, but whether the person who has been naturalised has behaved himself like a British subject. There are some, undoubtedly, who have, and I hope their number is a much larger number than those who have not. The point of the Bill is to give power to scrutinise the records of those who have been naturalised and see whether, as I said last night, they have "played the game." A period of years is not a sufficient guarantee; it is the personal character of the man that is the best guarantee.

VISCOUNT HALDANE

I should be much more influenced by the observations of the noble Lord but for the wording of subsection (2) of Clause 1—a licence is to be refused "unless the Board of Trade are of the opinion that the grant of the licence is expedient." The presumption is one which places the burden on the individual which he would find it difficult to overcome, and if the clause had been drawn as the noble Lord, Lord Balfour suggests, I should not have objected.

THE LORD CHANCELLOR

I will put to the noble and learned Viscount the class of case to which he refers. The Board of Trade might be of opinion that it might be expedient to grant a licence if it were established that the man, who was born a German, had been for a long series of years a loyal subject. In those circumstances the Board of Trade, of course, would have to exercise their discretion, and it may be that they would come to the conclusion that there was no danger and the licence might be granted. I think that in those circumstances there is none of the grievous injustice to which the noble and learned Viscount referred. Naturalisation does not operate as a complete change, and, as we have learned by experience, there may be cases in which, although naturalisation has been gone through, the sympathies remain as they were before.

Amendment, by leave, withdrawn.

LORD HYLTON moved, in Condition 1, to leave out the words "an enemy," in order to insert "a subject of a State which is now at war with His Majesty or an enemy controlled corporation." The noble Lord said: At present the condition in the Schedule is as follows:—"That any director of the company or any partner of the firm, or the individual, or any manager or other principal officer employed by the company, firm, or individual, is a person who is or has been an enemy." I move the substitution of the words of which I have given notice as I am advised they are necessary to cover the case of a firm where the partner is an enemy controlled corporation. The expression "enemy" has been defined to mean Germany. Austria-Hungary, Bulgaria, and Turkey, but the present wording, in the opinion of the Board of Trade, is unsatisfactory. It is doubtful whether a naturalised British subject of German origin, who lost his German nationality before the outbreak of the war, can be described as a person who has been an enemy, and the Government are of the opinion also that perhaps the suggestion might be taken to be rather unnecessarily offensive. It is, however, a drafting question.

Amendment moved— Schedule 1, page 7, line 7, leave out ("an enemy") and insert ("a subject of a state which is now at war with His Majesty or an enemy controlled corporation").—(Lord Hylton.)

LORD HYLTON move an Amendment in the definition of the expression "enemy." The noble Lord said: This is merely a drafting Amendment and there is no change in substance. The present definition, which was altered in another place, is thought not to be quite satisfactory. We think this is better.

Amendment moved— Page 7, line 34, leave out from ("of") to the end of line 37, and insert ("a state which is now at war with His Majesty and an enemy controlled corporation ").—(Lord Hylton.)

First Schedule, as amended, agreed to.

Remaining Schedule agreed to.