DEBTS DUE TO EX-ENEMY NATIONALS.

HL Deb 30 November 1920 vol 42 cc774-80

LORD PARMOOR rose to ask His Majesty's Government whether the recent Regulations relating to debts due to ex-enemy nationals are limited to post-war debts, and under what conditions favourable consideration is given in respect of prewar debts due to ex-enemy nationals.

The noble and learned Lord said: My Lords, on two former occasions in your Lordships' House I raised this question of what I call the virtue of confiscation of ex-enemy debts after the termination of the war, although according to the common law of this country the right to recover those debts arose as soon as the war itself came to an end. But I had an opportunity of communicating with the Board of Trade in reference to the Question which I am now going to ask, and that enables me to put the Question in a short form, as I think the noble Lord opposite would appreciate, because I know he has had information from the Board of Trade as to the exact nature of this information which I desire to obtain.

The first Question which I ask is whether the recent Regulations relating to debts due to ex-enemy nationals are limited to post-war debts. I have had enormous correspondence asking me whether recent Regulations were so limited. On the face of the Regulations they appear to be general, but on information supplied to me they apply only to ex-enemy nationals as regards post-war debts. I am perfectly well aware as to the conditions under which the question of post-war debts was brought before the Board of Trade. It was pointed out by the great shipping carriers of this country that unless they were to lose the carrying trade they must be put into the position, as regards goods carried on behalf of ex-enemies, to guarantee them against the confiscation of those goods. In fact, if there, had been a scheme to do the worst as regards the carrying trade, it would have been to place it under this disability that in certain circumstances goods entrusted to them for safe carriage and delivery might be confiscated as against the owners. I know that representations were made in that sense to the Board of Trade, and the Regulations at any rate have that effect on post-war debts.

The next question is very important, and I particularly hope that full information may be given. It is well known that Lord Justice Younger has been appointed Chairman of the Committee to deal with the question of allowing necessitous persons to have a portion of their property immediately restored to them. I believe the limitation is £1,000 as regards certain ex-enemies, and £200 in the case of Germans. That does meet the case which I raised on a previous occasion, that this confiscation of debts presses with special hardship on poor persons who perhaps have no other source of income and livelihood except what these debts provide. Take the case of a man having invested all his money in insurance, and the conditions having arisen under which the insurance money became due—he has no other source of income of any kind—it is especially hard that a debt of that kind should not be recognised; in fact that the legislation has made it impossible he should receive that payment which the insurance company might desire to make.

On a previous occasion I mentioned that large numbers of poor German people, governesses and the like, were really starving—that is not at all too strong a word—because debts due to them were being withheld under the Treaty terms. I recollect that on that occasion the Lord Chancellor said he would look into the matter to see if some relief might be given. I believe some relief has been given—namely, that the Committee has been appointed with Lord Justice Younger as chairman (and no better chairman could be selected), but I want to know what are the terms of its appointment. From information which has been given to me I believe they are to consider what is called necessitous cases—that is, the case of poor people such as I have suggested; but if there are any more specific terms of reference to the Committee I hope the noble Lord will make them public. I can assure him that these poor foreigners find the greatest difficulty in ascertaining how they may obtain a remedy even if a remedy is practicable and possible. It is very difficult for a foreigner who has a bad know- ledge of the language of this country to ascertain what his rights are unless they are explicitly and publicly stated.

There is a third ease to which I want to call attention. I wish my noble friend Lord Bryce was present, but this Question has come on at a very late hour. It is a matter with which he is specially acquainted. There are certain cases where writers of great eminence have their manuscripts and libraries in this country. One particular case has been brought to my notice. Surely it is especially hard that under these circumstances a man should not be entitled to his library and his manuscripts. I was informed by the Board of Trade, and I think I am entitled to refer to their information, that it was a matter which was being considered, and that this class of hardship would probably be put an end to on consideration. I cannot say that any promise was given that it would be, but I hope the noble Lord will be able to tell me that in a case of this kind the property will not be detained, but that persons whose livelihood depends on writing and research will be allowed to have the return of their books and manuscripts which happen to be in this country. These are the special points on which I ask for information; I have given the Board of Trade full information as to the matters to which I desire their answer may be directed.

LORD ASKWITH

My Lords, before the noble Lord replies I should like to ask whether it is possible to him to supplement his reply with a correlative statement. The noble Lord's question is "under what conditions favourable consideration is given in respect of pre-war debts due to ex-enemy nationals." It would be interesting and most satisfactory to a great many people in this country if he could deal with "what favourable consideration is being given by the German Government to our own nationals." The points to which I would call his attention are, Has Germany been paying? If not, has she given any intimation when she is likely to pay, particularly debts under Article 297 which are payable at pre-war rates? Have the British Government been taking any steps to get payment, and have any recent arrangements been made on the subject? I understand that the President of the Board of Trade, who has been taking some interest in the matter, has sent an envoy to Berlin, and that some move has been made on this long delayed question. If the noble Lord is at liberty to give any information on the matter it would be welcomed by many people in this country.

LORD SOMERLEYTON

My Lords, I will reply to both my noble friends as fully as I can. With regard to the first Question on the Paper, I understand that Lord Parmoor refers to the recent announcement made to the German Government with which I will deal in more detail in a moment. This announcement did not refer in terms to post-war debts only, but in a sense is practically confined to post-war debts. Other debts are dealt with by different provisions of the Treaty. The answer is, therefore, practically in the affirmative.

The only provision in the Treaties of Peace to the best of my information relating to post-war debts due from this country to ex-enemy nationals—that is, debts resulting from transactions undertaken after July, 1919, when permission was given for the resumption of trading relations with Germany—is contained in a paragraph of the Reparations Clauses; that is paragraph 18 of Annex II. This paragraph is a very general one, stating that— the measures which the Allied and Associated Powers shall have the right to take in case of voluntary default by Germany, and which Germany agrees not to regard as acts of war, may include economic and financial prohibitions and reprisals, and in general such other measures as the respective Governments may determine to be necessary in the circumstances. These very general terms would include the seizure of the property of German nationals in this country, including debts clue to them. As was explained by the Chancellor of the Exchequer in another place, His Majesty's Government felt it to be impossible to continue to maintain a threat which injuriously affected British interests without offering any real security for the execution of the Treaty, since, so long as private German property in this country and in particular private bank balances belonging to Germans were exposed to seizure, it was fairly certain that if the moment ever arrived when this country desired to put paragraph 18 into operation there would be no appreciable property to seize. The paragraph thus operated merely to keep business away from London and to make Germans keep their balances in neutral currencies, a course which was inconvenient to all parties and involved clear loss to this country without any countervailing advantages.

In view of these considerations His Majesty's Government informed the German Government in the latter part of October that, among the measures which they might take in given circumstances, they did not intend to exercise their rights under paragraph 18 of the Reparations Annex to seize the property of German nationals in this country in the case of voluntary default by Germany, and it was explained that this applied to German property whether in the form of bank balances or of goods in British bottoms or of goods sent to this country for sale.

My noble friend also asks under what conditions favourable consideration is given in respect of pre-war debts due to ex-enemy nationals. The rights conferred by the Reparations paragraph are not limited according to the date when the debt arose, and these particular rights will not be exercised in the case of any debts. Debts falling due before the outbreak of the war, or arising from pre-war transactions and falling due during the war, however, are affected by provisions established under another part of the Treaty for quite different reasons. The economic clauses of the Treaty of Peace give the right to the British Government to charge the property of ex-enemy nationals, which was in its territory or under its control at the date of the coming into force of the Treaty of Peace, with the payment of certain classes of obligations to British nationals. This charge has been established by the Treaty of Peace Order in Council, and applies to pre-war debts due to Germans in the same way as to other German property here. The reasons for this charge and the manner in which it will be exercised have already been discussed by your Lordships on a Question which was asked by the noble Lord in this House on June 9 last The Lord Chancellor then stated that the question whether and how far it would be possible to mitigate hardship caused to ex-enemy nationals in particular cases as a result of the charge would be carefully examined, and I am happy to be able to inform your Lordships that machinery has been established and is already in operation with a view to considering such cases of hardship.

A Committee has been appointed by the Board of Trade, consisting of Lord Justice Younger, Brigadier-General Cockerill, and Sir Malcolm Macnaghten, to advise upon applications received from ex-enemy nationals by the Public Trustee in the case of German nationals, or by the Administrator of Austrian and Bulgarian property, for the release of their property within certain limits upon the ground of necessitous circumstances. The limits, which have been communicated to the Committee, are property to the value of £.1,000 in the case of ex-enemy nationals now resident in this country, and to the value of £200 in the case of ex-enemy nationals formerly resident here and now resident elsewhere. In addition to capital, income may be released up to a reasonable amount. The property released may, of course, include pre-war debts due to ex-enemy nationals as well as other kinds of property.

I may, perhaps, take the opportunity of mentioning, since I have referred to the discussion which took place on this subject more generally some months ago, that it is also proposed to release from the charge household furniture and effects, personal belongings and family souvenirs, and implements of trade belonging to ex-enemy nationals up to an amount of £500, in addition to the amount of storage and other charges, in cases where the income of the ex-enemy national does not exceed the equivalent of £400 a year.

Articles such as personal belongings and family souvenirs of no intrinsic value will be released irrespective of the amount of the owner's income. These concessions are already operative in the case of Austrians and Bulgarians, and they will become applicable in the case of German nationals upon the conclusion of an agreement with the German Government upon various questions relating to the execution of this part of the Treaty of Peace, which it is hoped will be signed in the course of a week or so. Applications for the release of furniture, and such things by persons outside this country will require to be made to the applicant's Government, who will have a representative in London for the purposes of such matters. I trust that this answer meets all the points raised by the noble Lord, Lord Parmoor.

With regard to the supplementary questions asked by Lord Askwith I am glad to say that a great deal has been effected by the Board of Trade in the direction in which they are asked. I do not think it is necessary to state here the method under which the amount of the pre-war debt is arrived at. It is probably well known to the noble Lord who asked the Question, but I can explain it if he desires. Up to the present the German Government have paid us £9,000,000, all of which has been used in paying to British creditors their debts at the pre-war rate of exchange. In addition to debts the proceeds of the sale of British property which was liquidated in Germany during the war have now been admitted by Germany to the amount of over £5,000,000, and this sum has been paid to the claimants. Some difficulty has, however, arisen in regard to the Treaty provision for the payment of proceeds at the pre-war rate of exchange, but it is hoped that the amount of the remaining proceeds will be settled without undue delay and payment effected. I hope this answers the noble Lord.

LORD ASKWITH

I am much obliged to the noble Lord.

LORD PARMOOR

I wish to thank the noble Lord for the very full answer he has given. It shows the advantage of explaining to the Department concerned, when a Question is put down, exactly what information one desires to obtain.