HL Deb 23 July 1918 vol 30 cc1049-52

LORD SYDENHAM had the following Question on the Paper—

To ask His Majesty's Government—

  1. 1. Whether steps are being taken to obtain the "further legislation" stated by the Committee appointed by the Board of Trade to be "desirable" in order to enable businesses carried on by "recently naturalised Germans" to be wound up.
  2. 2. On what grounds the Board of Trade has refused the offer of the Board of the South West Africa Company, Limited, to buy out the enemy registered shareholdings, although the Parliamentary Committee, which reported on this company in 1916, advised the Board of Trade that enemy interests should be eliminated.

The noble Lord said: My Lords, I have several times drawn attention in your Lordships' House to the proceedings of Messrs. Ettlinger, and the replies I have received to these questions have never been, to my mind, wholly satisfactory, because the licence to these firms as regard manganese and chrome has been very difficult to understand. It was admitted that the firm had a monopoly of certain chrome sources for sale in France and Italy. It is not in our interests or in the interests of our Allies that this should be allowed. I have since been informed of some further ramifications of this firm. The firm claims a mortgage and control over the Anglo- Espanola Company, which one would not believe to be a German Company, as it really is. We have now the verdict of the Board of Trade, which has dealt with no less than 960 firms, and has gained great experience. This Committee had the advantage of seeing the contract made in 1912 between the Ettlinger firm and Beer, Sondheimer and Company, of Frankfort, who, as we all know, are the greatest agents of the German system of pentration in the metal trades

If your Lordships will pardon me, I would like to read exactly what the Committee said, because it explains the whole situation— 'There are two partners in this firm—Ettlinger, a German, naturalised in 1888, and Bernstein, a German, naturalised in 1903. The deed of partnership is dated 1st July, 1910. The business consisted in buying and selling ores and metals, including those used in the steel and iron industry. The firm was before the war closely associated with firms with German interests, particularly with Beer, Sondheimer and Company, of Frankfort. Following upon other agreements with the last-named firm an agreement was entered into, in June, 1912, to last till June, 1918, and, if no notice to determine was given, to 1921. By Clauses 1 and 2 Ettlinger and Company were bound to act only for Beer, Sondheimer and Company in buying and selling minerals and other materials suitable for the iron and steel industry, and to carry out such business on joint account. Beer, Sondheimer and Company were bound to conclude business in those articles only for joint account with Ettlinger and Company. Clause 7 contemplated financial operations outside the sphere of buying and selling to be shared in equally. It was under this clause that the arrangement came about with Schroeder, Schmidt and Company, which for the present purposes need not be referred to. By Clause 9 any business could be vetoed by either of the parties to the agreement, which means that Beer, Sondheimer and Company had a power to veto the sale by Ettlinger of any of these materials to English buyers. No comment is needed. The Report goes on to say— It is a case of enemy association in which the Committee would recommend winding up without hesitation if it falls within the Act, and the Committee submit that, if it does not fall within the Act, further legislation would be desirable to enable them to deal with it. My Lords, I think that, as the Committee say, further comment is not needed, and I hope that the noble Lord will be able to say that the Government is determined to take the advice of this expert Committee.

My second Question deals with a very simple matter. The South West Africa Company has a large capital, much of which has always been held in German hands, and again I am afraid I must trouble the House with a quotation, which expresses the whole thing in as few words as I think it can be put into. The chairman of this company, at a meeting of the shareholders on June 26 last year, said— The Parliamentary Committee which inquired into the affairs of the company in 1916 expressed a desire to see the enemy interest in question as far as possible eliminated, and advised the Board of Trade accordingly. We have done all we possibly could to give effect to this decision, and have not only interviewed the President of the Board of Trade on the subject, but have also offered to buy out the enemy registered shareholdings, but have so far met with nothing but refusals to the proposals put forward. It is with great interest that we have noticed within the last week the action of the Union Government of South Africa, which has unhesitatingly dealt with enemy holdings in a South African registered company, and thus followed the lead of another of our Colonies, and it may not be unreasonable to suppose that such a decision may, perhaps, tend to alter the official attitude in our case, an attitude which is somewhat difficult for us to fathom, but is no doubt due to some special reason that we are not yet able to understand. I beg to ask the noble Lord what is the special reason in question.


My Lords, on behalf of the Board of Trade I would say that the Board is most anxious to carry out in all these matters the policy which has been already laid down by the Prime Minister and the President of the Board elsewhere. I am very glad to have an opportunity of replying to my noble friend, who is ever zealous in the public interest. The Board of Trade is most anxious to deal with all the cases of this nature, such as those brought forward by the noble Lord, to the best of their ability.

With regard to the first part of the Question, may I say that legislation is being introduced in order to extend the power of the Board of Trade to wind up businesses under the Trading with the Enemy (Amendment) Act, 1916, to cases in which the partnership with persons residing in an enemy country has been dissolved by the outbreak of war, and to extend the provisions of the Trading with the Enemy Acts in certain other respects which experience has shown to he desirable. It is not proposed to provide for the winding-up of businesses carried on by recently naturalised Germans apart from the general question of withdrawal of certificates of naturalisation on which legislation has been introdued recently. If under the provisions of that legislation the person is by the revocation of his certificate remitted to enemy nationality the Trading with the Enemy (Amendment) Act, 1916, will become applicable to any business carried on by him, so that it can be wound up under the provisions of that Act. I trust that in answering this part of the Question it will be quite easily understood that further use will be made of these powers in that respect.

With regard to the second part of the Question, the South-West Africa Company, Limited, is incorporated in England, and its capital is mainly in the form of bearer warrants. There is no absolute evidence that the greater part of the capital of the company is held by enemies, but there is little practical doubt that it is so held. Although the company is incorporated here its operations are carried on mainly in German South-West Africa, where it holds a large tract of land. In these circumstances the company is in substance a German Colonial concern, and the Board of Trade, after consulting other Departments concerned, came to the conclusion that it should be so treated, although incorporated as a British company, and that to deal with the company or its shares in accordance with the compulsory powers contained in the Trading with the Enemy Acts would in effect be disposing of property in hostile territory in allied occupation, and that such a course was inexpedient. As the Company is registered in the United Kingdom it might not be contrary to International Law to deal with the company or its shares under the powers contained in the Trading with the Enemy Acts, but to do so would afford a pretext to the Germans to dispose of property of great value in their control belonging to subjects of Allied powers in territory in their occupation. Some of the directors of the company applied for leave to negotiate with the German shareholders for the acquisition of their shares in the company, and the chairman of the company proposed that he should be allowed to send a letter to the Disconto Geseellshaft in Berlin opening negotiations adn suggesting a possible meeting in some neutral town. In the case of a voluntary arrangement for the purchase of the German shares no difficulty would have arisen as regards compulsory disposal of property in hostile territory in our occupation, but the Board of Trade, after consulting other Departments, considered that there was no sufficient reason to justify permission being given for negotiations of this kind with the enemy during the war. I trust that if the answer which I have given is not considered wholly satisfactory by the noble Lord he will understand that it is my desire as far as I can, representing the Board of Trade here, to give him the fullest information possible, either privately or in this House


I thank the noble Lord for his reply. I am afraid that I can not say it is absolutely satisfactory, but I will not trouble him any more now in the matter. I cannot help contrasting, however, the proceedings taken in America with our proceedings in this country. Only to-day I saw it announced that the Americans have taken action which will put an end for ever to German penetration into the metal trade in America. Here it seems to me that we are leaving means for German penetration after the war.