HL Deb 20 July 1927 vol 68 cc696-707

VISCOUNT TEMPLETOWN rose to draw the attention of His Majesty's Government to the fact that the claim of the Basle Trading Company for the return of their property, confiscated seven years ago in West Africa under the guise of liquidation, or in the alternative compensation, has not yet been settled; and to move for Papers. The noble Viscount said: My Lords, it may be in the recollection of some of those Peers who were in the House on one or two evenings not so very far back that on two occasions I have been asked by His Majesty's Government to postpone this Motion. I have kept it back, but I have not forgotten what the object of it is and possibly your Lordships will allow me in moving, as I now do, this Motion, to make a short statement.

When I put this Motion down originally the situation was this. The Government had not recognised the moral claim of the Basle Trading Company to restitution or compensation. Since I put a date to that Motion the Government have gone so far that they have recognised, and said they recognised, the moral claim of the Basle Trading Company to restitution or compensation, and they have offered to return the property in West Africa. Had that offer been commensurate with what in my humble judgment it should have been, then there would have been no necessity to trouble your Lordships in this matter, but to the offer of the Government there were attached conditions which, in my humble judgment, are impossible for anybody with a business mind to accept. I know negotiations are going on and have been going on for some time, but I venture to think those negotiations are not coming to a satisfactory conclusion as rapidly as one would like to see them, if, indeed, they ever do come to such a conclusion.

I do not wish to go back on the history of this matter as to the justification or otherwise of the Government taking the property, because, in view of the admission of the Government that the Basle Trading Company has a moral claim, it seems to me unnecessary to go into past history. I will, therefore, simply take up this matter from the point where negotiations began. I want to make this perfectly clear at the outset. As far as I am concerned I have nothing whatever to do—I have always refused to have anything to do—with the financial transactions or negotiations between the Government and the Basle Trading Company. I do not care a bit about them. I do not care whether the Basle Company gets half a million more or half a million less. What I do care about is that the shadow which has been cast on our always good name for fair play and justice should be removed, and it is that point and that point only that I wish to make before your Lordships to-day. I believe that the property should be given up in its entirety. I want to see fair play for the people who have had their property taken from them.

I am not going back into what your Lordships may have heard about the action of the Government in regard to the Gold Coast being against International Law. I do not want to quote more than once and that will be the official French opinion. The French had property under the same conditions handed to them. What did they do? When attention was drawn to the fact that it was wrong they had a Commission appointed and in a very short time they returned the whole of the property to the Basle Trading Company. I have made reference to the conditions which have been attached to the offer of the return of the property. I would mention that in the French version, having established the fact that this company had no German connection, these words are used:— That in virtue of the principle of law 'to give up and withhold cannot run,' the question of imposing conditions on the raising of the sequester desired does not arise. That was the French view of whether conditions ought to be attached to it or not. Whether His Majesty's Government at this moment think that is a wrong opinion I do not know, but it seems to be a very reasonable suggestion. What, sort of offer is it when you say: "I give it you back, but I give you back a worthless thing"? I do not know what exactly the Government's answer to me may be, but I had a letter some time ago from the Secretary of State for the Colonies—that was when he first asked me to withhold ray Motion—saying that he was afraid that the only thing to be said was that negotiations were proceeding. If that is the substance of the answer I shall receive to-day, all I can say is that I am afraid I cannot accept that. I will, however, wait and see what the answer of the Government is, and try to make some suggestion as to what in my humble opinion might be done in the circumstances, because a deadlock has arisen.

LORD OLIVIER

My Lords, the matter to which the noble Viscount, Lord Templetown, has drawn the attention of the House, is, I think your Lordships will admit, a very remarkable one. I have had some occasion to be cognisant of it for reasons which do not in the slightest degree affect the debate. During the course of the War this property on the Gold Coast and also property in India which was associated with certain property in Cameroon belonging to the Basle Trading Company—a Swiss Corporation having no connection with Germany—was sequestrated. The French at the end of the War gave back what was sequestrated in Cameroon, but our Government retained possession of what they had appropriated in India and on the Gold Coast and, exercising proprietary rights, conveyed it in trust to a British Company to be administered partly for 5 per cent. and partly for philanthropic purposes. As the noble Viscount has pointed out, we have nothing to do with these conditions. The matter to which the noble Viscount has called attention is the relations between the Swiss Government and their subjects and the British Government. We have the extraordinary situation that, whereas according to the noble Viscount's information the Colonial Office or the Foreign Office—who I apprehend are the more responsible—absolutely recognise now that they had no moral claim whatever to take this property, they have for seven years or more resolutely refused any application of the Swiss Government or of the Basle Trading Company and have refused to take any notice whatever of their claim.

They stood pat upon the fact that they had taken the property and that they had got the property. But they have now made, I gather, some proposals to the Basle Trading Company and we shall hear from the noble Lord what those are. I think, however, you will admit that where an error of that sort has been committed—in good faith, no doubt—and property has been taken which His Majesty's Government now admit (as the French did very much more quickly) should not have been taken, the only reasonable thing to do is either to offer to give back the property, subject, of course, if it has depreciated, to any compensation for depreciation which an equitable commercial arbitrator would assess, or else to make such compensation in full as, again, an equitable commercial arbitrator ought to be able to assess. Those I think are equitable principles, and I do not think we could regard with satisfaction any action on the part of His Majesty's Government that falls short of making full and equitable restitution of all property in as good condition as when it was taken over, or the full value of the property as when taken over. I do hope that the representative of His Majesty's Government is going to give us that assurance.

Of course, certain further matters are involved which have a very practical hearing upon the question. I happen to have seen the balance sheets of the corporation or trust to which this property was handed over, and I have noticed year after year a steady depreciation of the assets of the corporation through trading losses of very considerable amount. The property, through trading losses or otherwise, is obviously at the present time of very much less value than before the War or at the time when it was taken over. Consequently there would appear to be a certain gap to be met. I can imagine that the question of how that gap between equitable compensation and the value of the property is to be met must be troubling His Majesty's Government. They may be very reluctant and tardy in facing the facts, but I think they will have to face them. That may bring them either into conflict with the Chancellor of the Exchequer or into conflict with the Government of the Gold Coast.

I remember more than forty years ago what was called the Florence case in Jamaica. Under the Foreign Enlistment Act Jamaica had confiscated a steamer carrying arms. The matter was tried in Court and it was proved that the Government of Jamaica had no right to confiscate the steamer. A large sum—about £17,000—was given in damages against the harbourmaster of the Colony who confiscated the vessel. Although on that occasion the Colonial Government said they acted in good faith, as representing His Majesty's Government, under the Foreign Enlistment Act, just as the Gold Coast Government acted in good faith on behalf of His Majesty's Government, yet the Treasury held that they could not undertake any responsibility and that the Government of the Colony must pay the whole of the damages incurred. That produced a constitutional revolution. All the elected members of the Council resigned and the constitution of the Government had to be altered. Consequently I can well imagine His Majesty's Government being in a difficulty over the two alternatives which appear to be open to them, either to make good the depreciation of the property out of the Exchequer or to force upon the Gold Coast Colony the onus of doing so. The noble Viscount and I have endeavoured to put before your Lordships a very curious and remarkable case, one which the Government may well have difficulty in dealing with equitably, but which I think there can be no question ought to be dealt with equitably upon the principles which the noble Viscount and myself have suggested.

LORD KYLSANT

My Lords, I have listened with much interest to the remarks of the noble Lord opposite with reference to the Basle Trading Company. I have been very closely associated with West Africa for twenty years. During that period I have served on various Committees and have taken part in the work of chambers of commerce and other bodies dealing with West African development. I therefore approach the subject as one who has endeavoured, to the best of his ability, to develop the trade, commerce and general prosperity of West Africa. The Basle Trading Company was a German-controlled company registered in Switzerland with a share capital of £60,000 having a strictly limited dividend—I think it was 5 per cent.—and also £60,000 debentures, making altogether £120,000. The constitution of this com- pany, the old company, provided for the return to the shareholders in full of that share capital in the event of liquidation. The company carried on operations in the Gold Coast Colony, and under the company's own regulations any balance of profit after providing for the fixed dividend on capital and the interest on debentures, and any surplus assets above the value of £120,000, were earmarked for missionary work, philanthropic work, in West Africa and were not available for the shareholders. When the business and property of the company were, quite rightly, taken over by the British Government, I understand that the sum of £120,000, which was the only interest the shareholders in the old company had in the concern, except the missionary interest, was reserved to the late German or so-called Swiss shareholders and debenture-holders in full. The original German or Swiss holders have therefore no grievance of any kind, for when they are paid off in full they will receive all that they are strictly entitled to and will have no further interest in the matter.

In 1919, at the request of the British Government, the Commonwealth Trust, Limited, a British company, was formed to take over the business with a capital of just over £50,000 and to carry on the work on the same lines as the original company. The Commonwealth Trust has carried on business for over eight years, and although, like all other companies trading with West Africa, it has passed through a very difficult time, it is now, I understand, earning a profit. This company, which, as I have said, is a British concern, employs a very considerable number of British subjects and is doing a large business, principally with Great Britain. To deprive this British company of its interests would involve loss to British trade and British shipping and be an injustice to the company itself, which was formed to carry on its work in this old British Colony. In my view there can be no question of injustice to the Basle Company, as all that is due to the shareholders and debenture-holders under the constitution of the old company has, I understand, been set aside for them by the British Government and will be paid to them in full in due course. If there is any question of injustice to the old shareholders—which I personally do not believe to be the case—it would seem to be a matter for the British Government to deal with by increasing very slightly the compensation of £120,000 set apart for them; but, for my part, I should regret it if they paid even the £120,000.

I submit that it would be committing an injustice to interfere with a British company which has been developing the property far the last eight years. I should like to make it plain that the present British company, with a capital of £50,000, is limited to a dividend of 5 per cent., and airy money that it earns over and above that dividend is used in West Africa for missionary and other purposes. Thus the new company is in exactly the same position as was the old Swiss company, except that it is a British company carrying on British trade and not, as in the past, a foreign company, used as we know that many companies were used before the War. I know another case in Africa of exactly the same kind. I had personal experience of it, and when the War broke out I informed the British Government that a certain company trading in West Africa was controlled by enemies. They told me that all the shareholders were neutrals. Nothing happened for three years, and then they found out the facts that I had given them at the beginning—for I spoke of what I knew—and they came and told me of their decision to take over the company. They took over this Swiss company equally correctly, and I shall be very sorry if they part with £120,000; but, if they do, they are certainly giving the extreme that can rightly be demanded by the shareholders, or could be demanded even if they were citizens of the British Empire, which they certainly were not.

THE PARLIAMENTARY UNDERSECRETARY OF STATE FOR DOMINION AFFAIRS (LORD LOVAT)

My Lords, I can answer the Question that the noble Viscount has put in a very few words. From what has fallen from both sides of the House it will be seen that this is a question that does require, and has received, the very greatest study and that, as the matter is now under negotiation, it probably will not serve any useful purpose to go very deeply into the question to-day. I should like to say, however, that I am sure that no one in the Government could take exception to the way in which the case has been put forward by the noble Viscount, Lord Templetown. I should like to call your Lordships' attention to one or two points. This is not such a simple question as the noble Viscount has, I think, given the House to understand. It is perfectly true that the settlement of it has gone over a number of years and that there are several Departments interested in it, and I think the noble Viscount will admit that in such a case rapid settlement is difficult, if not impossible. Let me point out also that this company is not regarded, as the noble Lord stated, as being originally of wholly neutral origin. I think that, if we examine the case in the light of the evidence that has been put forward, it must be admitted that certainly in the management both of the mission and also of the trading company there was a considerable German element.

I am sure from what has passed that it is the intention of His Majesty's Government to do what is fair. This matter was brought up and examined this year in June and July. Proposals have been put forward on both sides, and I have Mr. Amery's authority for saying that on his departure for overseas he has given, so far as lies in his power, complete authority for a settlement, as and when a settlement may be possible. An appeal has been made to the good sense and the justice of the British Government. I am sure that it is desired to do what is fair, but on the other hand I do not consider that some of the suggestions that have been put forward can in any sense be said to be reasonable. One must remember that this company was originally formed as a trading company of which only five per cent. of the profits should go to the shareholders, and that it had originally only £120,000 of capital. The claim that is before His Majesty's Government is more than six times that amount, and has once been as much as ten times that amount. I do not wish be go into the question of how far the management was German, and I do not wish to take up your time by bringing forward opinions expressed by such a well-known person as Sir Hugh Clifford, but I do feel that it must be admitted that there has been a strong hostile element in the management of this company, and while we should treat justly the shareholders interested, I feel it is a question for close examination of their proper claim.

At a time when, as I have pointed out, we have got to close negotiation on this subject, I would put it to the noble Lord that it is not advisable he should press for Papers. I say that in the first place because it is not usual when negotiations are going on to offer the whole of one's facts to the other side, and, secondly, because the amount of literature which exists in the Colonial Office on the subject is so great that if the noble Lord saw it I am certain he would be the last person who would wish to read it. In either case I would say that whether noble Lords vote for the presentation of these Papers or agree that they should not be presented, I do not see how it is going to help the negotiations, which I sincerely trust may come to a fruitful conclusion.

EARL BUXTON

My Lords, I wish to say a few words with reference to this matter, not as one who has any personal interest but as one who is interested as being a great admirer of the business capacity of the Colonial Office in ordinary circumstances. I agree with two things which the noble Lord said in his opening remarks. In the first place it is not a question on which either he or I can express any view in regard to the claim made by the Basle Trading Company, but I think it is right to say, not in reply to, but as a comment on what fell from, Lord Kylsant, that the Government here have admitted more than once that there are far greater claims than that which has been referred to, and therefore I do not think that merely to offer the £120,000 taken from the company is at all likely to satisfy their claim. Secondly, the noble Lord said that the matter had been going on a long time, not in reference to the German Government but to the Swiss Government, and no doubt it has created a great deal of irritation in Switzerland that the Government here, after admitting that the absorption or taking over of this company was illegal, did not at once, like the French Government in similar circumstances, give back the property intact to the company.

My only comment on the whole matter is this, that it is an unfortunate thing that it has gone on for so long. My noble friend, on behalf of the Government, said that you could not have a rapid settlement in regard to a matter of this complication. I do not know whether noble Lords have followed the intricacies of this question, but it is nine years since the property was confiscated and since this claim was first made, and I cannot see that even the most complicated settlement ought to take nine years to complete. If Lord Templetown will allow me to say so, I think he has shown exemplary patience. For more than four years he has endeavoured to get a settlement, first by arbitration and then in some other way to bring it to a conclusion. All those years he has been sent from pillar to post by the Colonial Office or the India Office, and so far has got no further in the matter. The only person I have ever heard of who showed as much patience as he has was the Importunate Widow. She, by her importunity, got justice, but he, after four years, has got no further than he was at the beginning.

Here is a dispute as to the merits of which I say nothing. Here is a definite dispute in regard to the expropriation of a particular trading company by the British Government during the War. No one attaches any blame to the Governor of the Gold Coast or to the British Government for having, in the circumstances, taken over this property. It was done during the War. No doubt there were considerable suspicions that the company was under German influence, and so far as taking over the company is concerned no blame attaches to the British Government. But not so very long after that Sir John Simon and other legal advisers did give a definite opinion that internationally the property had been taken over illegally, and the British Government did not dispute that decision. One would have thought that in those circumstances it would have been in the interest of those concerned to bring about a rapid settlement, but unfortunately that has not been the case. At least four or five times it has appeared, thanks to Lord Templetown's good offices, that the basis of a settlement had been arrived at, but no settlement has been reached. As soon as they have got near the point of settlement the Government have gone off on some other matter, such as the interest of India and so forth, and no settlement has been reached. After many years of asking whether he might have an opportunity of seeing the Colonial Office the Chairman of the company was at last received by the Secretary of State last June, and certainly he was under the impression, and I think the Colonial Office was under the impression, that they had arrived at a more or less satisfactory conclusion, subject to certain details.

I understand that that settlement has also been discarded, and that a totally new proposal is now being made to the company, on a totally different basis. As I understand the position the difficulty which has really arisen is one referred to by Lord Olivier—namely, the question of the Commonwealth Company. What happened was this When the Basle Company was taken over its property, including a considerable amount of cash, was handed over to the Commonwealth Company, a private company, which under the auspices of the Government were anxious, and very creditably so, to save this property, because after all the basis of it was missionary work, and they were anxious that it should not come to an end. Being more philanthropists than business men they have already lost a great deal more than the original capital, either of their own or of the Basle Company, and the difficulty is that the British Government admit that they have been in the wrong with reference to the taking over of the company, they admit that they have to hand back to this company such assets as are agreed as having been taken over, and have got to make restitution for the loss which has been sustained by the company not having been allowed to trade.

Unfortunately, there is something like £400,000 which the Commonwealth Trust has lost of those assets. They are offering, as I understand, to the Basle Trading Company to hand over to them the value of the property, such as it was when it was first taken over, but subject to the liabilities and the assets of this Commonwealth Trust. Is it not quite obvious that neither the Basle Trading Company nor anybody else can accept such an offer as that without knowing at all events what the liabilities and the assets are? That so far has been refused. It appears to me that all these difficulties and misunderstandings, a sort of tragedy of errors which has occurred, can only now be removed by close communication and close inquiry. Would it not be better, therefore, in the circumstances to have something of the nature of an in- quiry at which the matter can be thrashed out—if, that is, the Government cannot come to terms with the Basle Trading Company? I think it is a great misfortune that a matter of this importance, and affecting the friendly relations between England and Switzerland, should be carried on over such a long period of time. Having had a great deal to do with the Colonial Office, I have the greatest possible admiration for them, but I do not think it increases their credit that they should allow such a matter to go on over a period of nine years. I would ask my noble friend to come to a rapid decision—by which I mean in a few weeks—or, if the Government cannot come to any proper conclusion in regard to the matter, that they should have an inquiry at which both sides might be properly represented.

VISCOUNT TEMPLETOWN

My Lords, with reference to the reply made on behalf of the Government, it was very much what I expected it would be. If not exactly an appeal not to take this Motion to a Division to-day, at any rate it was a very strong request, on the ground that things are getting better and nearer a decision. The question is what steps noble Lords who have kindly helped me would be good enough to support. The Session is coming to an end, and I do not know when this question of negotiation is going to be settled, so I am prepared to do this. I will withdraw my Motion, but I give the noble Lord notice here and now that at the beginning of next Session I shall move for a Select Committee to inquire into the whole circumstances of the taking of this property. I think that is a fair and reasonable suggestion. If anything happens in between which justifies me in not proceeding with that course, then when the next Session arrives there will be no necessity for a Select Committee.

Motion, by leave, withdrawn.