§ 2.47 p.m.
§ Order of the Day for the Second Reading read.
§ LORD LUCAS OF CHELWORTH
My Lords, the Bill to which I am asking your Lordships to give a Second Reading is an enabling Bill. It is also a highly technical Bill but it enables effect to be given to the decision of His Majesty's Government that German enemy property in the United Kingdom should be collected, realised and the proceeds distributed to persons who establish claims in respect of German enemy debts. The property to be disposed of is closely defined in subsection (1) of Clause 8 on page 6 of the Bill. Therefore, I do not intend to inflict upon your Lordships a long technical description. Broadly, it consists of property in the United Kingdom which belonged directly or indirectly to German owners, including the German State, on or after September 3, 1939.
1207 Under the Trading with the Enemy Act, 1939, all such property had to be declared to Custodians of Enemy Property, who were made responsible for its preservationin contemplation of arrangements to be made at the conclusion of peace.These external assets of Germany in the United Kingdom, along with other similar assets in Allied and other countries, formed part of the reparations settlement agreed upon at Potsdam in July and August, 1945, between the United States of America, the U.S.S.R. and ourselves. I will not weary your Lordships by detailing the terms of this settlement beyond saying that so far as reparation of this kind is in question, and omitting reference to removals from Germany, the reparation claims of the United States of America, the United Kingdom and other countries entitled to reparation were to be met from external assets other than those in Bulgaria, Finland, Hungary, Rumania and Eastern Austria. This was the broad line of division of this particular class of reparation between the Soviet Union and Poland on the one hand, and the Allied Governments upon the other.
The allocation of German external assets falling to countries other than the U.S.S.R. and Poland was carried a stage further by the Agreement on Reparation from Germany which was signed in Paris on January 14, 1946, the full text of which is in Treaty Series No. 56 (1947), Cmd. 7173. Under Article 6A of this Agreement, it was agreed that:Each Signatory Government shall, under such procedures as it may choose, hold or dispose of German enemy assets within its jurisdiction in manners designed to preclude their return to German ownership or control and shall charge against its reparation share such assets (not of accrued taxes, liens, expenses of administration, other in rem charges against specific items and legitimate contract claims against the German former owners of such assets).The German enemy property dealt with under this Bill is therefore placed at the disposal of His Majesty's Government by international agreement, but the wording of the Trading with the Enemy Act, 1939, places a statutory restriction on its disposal. It is for this reason that legislation is necessary to give effect to the decision of His Majesty's Government. As I have already pointed out to your 1208 Lordships, in this Bill we are dealing with property which His Majesty's Government are entitled to take as part of their reparations from Germany. The property can be disposed of as His Majesty's Government choose. They could pay all the assets realised into the Exchequer as some small offset to the burden of war costs which rests upon the taxpayer, but, instead of taking this course, His Majesty's Government have decided that these assets shall be applied, so far as they will go, to meet the claims of creditors against Germany. The decision to distribute these assets in this way amounts in effect to an ex-gratia payment.
The "persons who establish claims in respect of German enemy debts" must, in the view of His Majesty's Government, be restricted as closely as possible to British nationals resident or carrying on business in the United Kingdom who can establish claims in respect of debts due to them from Germany based upon obligations existing on September 3, 1939, This will include obligations towards British persons in respect, for example, of the Dawes Loan of 1924, the Young Loan of 1930, and certain Austrian loans and bonds, as well as outstanding financial and commercial debts contracted by Germans and owed to our own people. There is in Clause 8 (1) (b) a seeming extension of the principle I have just outlined; that is, where provision is made to deal with certain specified loan issues. The Anglo-German Transfer Agreement which is referred to in Clause 8 (1), is a technical document and relates to "British holders," a term which may go rather beyond the definition contained in Clause 8 (1) (a); but the Government of the day had some responsibility for these loans, some of the holders of which had in turn rights against the German Government secured by His Majesty's Government under the Transfer Agreement. We think it right that these responsibilities should be recognised, although actually it seems improbable that, save in exceptional cases, the bonds will be in other than British hands.
It is proposed that there shall be a general pool of assets against which all the claims shall be made. The best estimate, and it is only an estimate, that His Majesty's Government can make of the value of the assets going into the 1209 pool, is of the order of £15,000,000, while the estimated amount of the claims, based upon present information, may range between £100,000,000 and £120,000,000. These can be taken only as rough figures, but in any case it is quite apparent that the dividends will be only small. Your Lordships will see that there is a provision in subsection 4 (c) of Clause 1 under which the scheme of distribution may allow a choice to be given to those creditors who, but for the war and the operation of the Trading with the Enemy Act, would have been able to claim against the assets in the United Kingdom of their particular debtors. This would place these creditors in a preferential position compared with the others and must be regarded by them as a concession. They would then have the option of making a claim against their debtor's assets and no more, or of waiving such a claim and standing with the rest of the creditors in claiming against the general pool. The creditors in question should he in the best position to decide where their particular interests lie, and the Custodian will give what information he can to assist them in making their choice.
The Bill does not make substantive provision for the distribution of the German property. The scheme of distribution is to be prescribed by Orders in Council under which an administrator appointed by the President of the Board of Trade will be given the necessary powers to make the distribution. These Orders in Council will be subject to negative Resolution procedure by both Houses. Under subsection (2) of Clause 1, the Bill specifies a number of important matters for which provision may be made by Orders in Council—for example, the manner and time in which claims should be made, the determination of the question whether the claim is established, any priorities or the extent to which payments will be made, and the admission of claims against particular assets which I have just described.
In preparing the scheme of distribution, we are anxious that we should have the considered views of representatives of the various creditor interests concerned. We therefore propose to appoint an advisory committee composed of representatives of the classes of creditors concerned, which will be advisory only, without statutory powers or standing. Your Lordships will realise that we are dealing 1210 here with public money, and will appreciate, I feel sure, that the responsibility for its distribution must rest with responsible Ministers. The committee will be asked to advise upon the matters which I have already outlined as being subject to Orders in Council, and upon any other matters upon which their advice can be usefully secured, before an Order in Council is drafted. In making this proposal, we hope that when the various creditor interests meet they themselves will settle whatever differences there may be between them and provide a scheme which can be accepted by His Majesty's Government as having the unanimous support of the various interests.
There remain just one or two other matters to which I think it proper to call your Lordships' attention. It is intended to make the scheme of distribution self-supporting. To this end, an estimate of the total cost of administration, including the salaries of the administrator and his staff, will be made, and fees will be collected at a rate which will be calculated to cover the cost. Clause 7 provides the necessary Parliamentary control. As outlined in subsection (2) (g) of Clause 1, it is intended that any residual amounts remaining after distribution has been closed will be paid into the Exchequer. Although provision is not made in this Bill, I think in will meet with the convenience of your Lordships if I mention the position arising regarding liability to taxation by the payment of dividends under this scheme. In past years the Inland Revenue will have given some of the creditors bad or doubtful debts allowances, usually on a provisional basis, in respect of the debts on which dividends will be paid under they Bill. It will be necessary to ensure that the dividends shall be taxable on the basis in force in the period for which the allowance was given. Provision will be made to cover this point in the next Finance Bill.
There remains just one other matter with which I think it proper to acquaint your Lordships. Suggestions have been made as to the propriety of regarding as German enemy property assets which belong to German concerns which are beneficially owned or controlled by British interests. We have been impressed by some of the contentions advanced, and in Committee I intend to put down an Amendment on behalf of His Majesty's Government which I hope will prove 1211 satisfactory. At least, it will go as far as we think practicable. That, in very brief outline, and without worrying your Lordships with any long technical description, is the Bill which I ask your Lordships to give a Second Reading. I therefore beg to move that the Bill be now read a second time.
§ Moved, That the Bill be now read 2a.—(Lord Lucas of Chilworth.)
§ 3.3 p.m.
§ THE EARL OF MUNSTER
My Lords, the noble Lord, Lord Lucas, was correct in defining this Bill as a highly complicated and intricate measure, but he has explained its primary purpose with a lucidity which many of us might well envy. In drawing the attention of your Lordships to certain points, I do not intend to discuss the Bill in any detail, but I desire to impress upon the House, and indeed upon the Government, a few points of some importance which may well call for discussion during the future sages of the Bill. Be that as it may. I hope the noble Lord in charge of the measure will endeavour to elucidate some of the points which I shall seek to raise. The purpose of this Bill, as he explained, is to allow German property which came into our custody through the operation of the Trading with the Enemy Act, 1939, to be used to meet pre-war claims of United Kingdom creditors against German debtors. We have been told that the total value of the assets of the property is estimated at £15,000,000, and that it is anticipated that the extent of the claims will be about £120,000,000, including a claim on behalf of His Majesty's Government of between £3,000,000 and £4,000,000. So it is clear that there will not be a great amount of money for any of the lucky creditors.
As I understand it, Clause 1 is by far the most important of the Bill. It provides, inter alia, for the appointment of an administrator by the President of the Board of Trade, and power is further taken to introduce Orders in Council to make distribution of the money in the prescribed manner. The administrator, it is true, will be assisted by an advisory committee—as was stated by the noble Lord—composed of representatives of various classes of creditors. But, as your Lordships will observe, there is no reference whatsoever in the Bill to the appoint- 1212 ment of the advisory committee. As I understand it, that committee will be invited to give advice before Orders in Council are made upon such matters as the class of debt, its rank for payment and any other question. I would like to ask the noble Lord whether the views of that advisory committee will be published, and whether or not the Government or the administrator will be in a position to override the decisions which have been reached by the advisory committee.
If your Lordships will look at Clause (1) (2) (d) of the Bill you will observe that the Order in Council is to provide for the determination of some very important questions—for example, whether or not the claim of a particular British creditor is established, and also for deciding its amount. The question has therefore to be settled in a Government Department or by an official without, so far as I can see, any possibility of an appeal in which all the facts could be properly ascertained and decided. This clause surely puts in the hands of the Executive or of the administrator final and absolute supreme power to decide highly important questions—and, indeed, questions upon which different views might well be taken. There will be no power to correct or review any of the administrator's decisions, either by appeal tribunal or through Parliamentary action. It seems to me that this procedure is in striking contrast to that followed after the first World War. At that time a tribunal of high judicial quality was appointed, and it went into cases of dispute, heard evidence and arguments and, finally, pronounced judgment, quite apart from views which might be held either by the Executive or by the administrator.
It is true that there is one difference in the circumstances. As yet there is no Peace Treaty with Germany such as there was after the First World War. But is that any reason why His Majesty's Government should take upon themselves the sole right to decide the very difficult questions which must inevitably arise in the distribution of this German enemy property? Under the Treaty of Versailles, arrangements were made for taking decisions as to how debts were to be paid, and in this country a mixed arbitral tribunal was set up to which individuals could appeal if they were dissatisfied. I believe most sincerely that where private 1213 interests are involved it is right for such a judicial body to be set up to hear appeals and to give the final decision. I would here appeal, if I may, to the noble and learned Viscount who sits on the Woolsack, for I feel sure that in those distant days he must have been well acquainted with this body. I do so without wishing to reflect in any way upon the ability of the noble Lord, Lord Lucas, to reply to the specific question of the appointment of the appeal tribunal. I would ask the noble and learned Viscount to examine the case which I have endeavoured to make for the setting up and appointment of such a tribunal.
I turn now to the question of the Paris Agreement on Reparation which was reached, as the noble Lord has said, in 1946. Here I would ask the noble Lord whether in his reply he can give any reasons why legislation has not been introduced at an earlier date, for it is now just on four years since this Agreement was reached. Has the delay anything to do with the option given to this country under Article 6A of that Agreement? Or is it that maybe that His Majesty's Government were in two minds about the best method of procedure? Under this Agreement, which was signed by twenty-six nations, all enemy funds go into a common pool and are divided according to agreed percentages. The United Kingdom and the United States receive the similar amount of 28 per cent. But against our 28 per cent. share there is to be deducted the total German assets within our jurisdiction which are now being distributed under the terms and conditions laid down in this Bill. A further important provision lays down that in making this deduction certain sums, which are set out in Article 6A, can be disregarded—for example, a legitimate contract claim. I have never been very good at mathematics, but it seems to me that the more legitimate contract claims are satisfied, the smaller will be the deduction which we shall have to make for our share of the International Reparations Pool.
His Majesty's Government have announced that contract creditors will have the power to choose, or shall I say opt, between exercising a specific claim or claiming a dividend from the total German assets which are now held in the United Kingdom. In many cases—I 1214 should have thought in all cases—the creditors will have no information at all about the best method of procedure. In all probability the majority of them will drop their specific claims and rely on receiving some share out of the general pool, but, as I have just explained, in the interests of the nation the specific claims should be as high as possible. I am told that nationals in America and in the other States which are signatories to this Treaty are to be allowed to proceed to make specific claims and then to make further claims upon the pool for the remainder. If that is correct, and I believe it to be, it is difficult to appreciate why His Majesty's Government should have been alone in adopting a different course. I do not know whether the noble Lord is in a position to give the reasons which have prompted His Majesty's Government to disallow any creditor in the United Kingdom proceeding by both those specific methods.
I would like to address to the noble Lord one further question of which I have given notice. If I understand the full procedure correctly, His Majesty's Government should have notified the Inter-Allied Reparations Agency of the estimated amount of German assets in the United Kingdom and of the extent of the claims which have been made against them. If the Government have notified the amount of such German assets, have they deducted the total unsecured contract claims which have been intimated to them by British creditors, as they are permitted to do under Article 6A? Furthermore, am I correct in assuming that such deductions can be made only in respect of sums which have been paid out or which it is intended to pay out. If my submission is correct, would not His Majesty's Government have a duty to pay these particular creditors in full?
These are the principal points which I thought fit to address to the noble Lord, Lord Lucas of Chilworth. There are additional points which might have to be clarified at a later date. For example, there is the position of a trust with a German trustee and a British beneficiary. There is the position of a German company, which is itself a subsidiary of a British company, having assets in the United Kingdom. I think the noble Lord may meet that point. A third example is the position of a British woman who 1215 was married before the war to a German and has since regained her British nationality under recent legislation, but the income from whose property in this country is still being paid to the Custodian of Enemy Property. These are questions which might well be raised at a later stage of the Bill. Having made these brief observations, which I hope the noble Lord will endeavour to elucidate, I would say that we on this side of the House will not oppose the Second Reading of the Bill.
§ 3.17 p.m.
THE MARQUESS OF READING
My Lords, one thing about which we seem to be in complete unanimity is that this is a complicated and intricate Bill. Like the noble Earl, Lord Munster, I should like to acknowledge the clarity, without any sacrifice of conciseness, with which the noble Lord in charge of the Bill has explained it to the House. I want to take up very little time, but I would like strongly to reinforce the plea the noble Earl has just made for some form of appeal tribunal to which disputed cases could be referred. This is not a new point of principle so far as we are concerned, because there have been a number of Bills within the recent memory of all of us in which we have endeavoured, not always successfully, to insist that the last word should not be an administrative one. Here once more, in my submission, is an example of the need for a detached and unprejudiced tribunal to say the last word. The administrator, with the best will in the world, is a person appointed by and under the direction of the Board of Trade, and it is his duty to collect as much money as he can and put it at the disposal of persons in this country. That may be a very desirable aim, but, at the same time, in attaining that end there may be obstacles and difficulties which he is, and ought not to be, in the position ultimately to decide.
The noble Earl suggested the revival of mixed arbitral tribunals. Those were tribunals of which I had some considerable professional experience after the last war. My recollection of them is that, composed as they were of a neutral chairman—and I remember with grateful admiration the services of one eminent Swedish lawyer—with a British and German colleague, those tribunals heard 1216 counsel and carried out the normal legal procedure in arriving at their judgments. I think they were a valuable institution, both from the point of view of correctly applying the legal position to these cases and also from the other aspect, which must always be borne in mind, of convincing persons who had claims that those claims were being dealt with in an objective and judicial way. From that point of view, although I know the Government have not been particularly receptive of this notion up to date—because it was discussed in another place—I very much hope that they will give the matter careful consideration before they decide to leave the final decision in the hands of the administrator. It is no reflection upon the administrator: it arises inevitably from the task which is set him that there must be disputed cases, and it ought not to be his responsibility to decide in the last resort the respective rights of the parties.
I wish to deal briefly with two other aspects which have not been dealt with up to now. I think I am right in my information, that at a meeting in Brussels of the Inter-Allied Reparations Committee, I think in November, 1947, certain rules were drawn up under which it was possible to make ex-gratia payments, in certain proper cases and under specified conditions, to persons who had been of German nationality. In May, 1948, the administrator here drew up and published a set of rules designed to carry out the resolutions arrived at by the Brussels meeting. The purpose of those rules was, amongst other things, that where an ex-gratia payment was made, or where consideration could be given to the making of an ex-gratia payment, certain specified conditions must be observed. These applications affected directly perhaps a not very large number of persons who in pre-war Germany committed the inexcusable offence of either being Jews, or of being persons hostile to the Nazi régime, or both. Some of them, not unwisely, foresaw that the situation was going to deteriorate and, although they could not be sure of getting out themselves, they sent some money to countries outside Germany, including this country and the United States.
In order to secure repayment of such money as he may have sent out in those conditions, a person thus placed has to 1217 show, as I understand it, amongst other reservations, that he was a person deprived of his liberty. I am told by those more closely in touch with these matters than I can profess to be, that the phrase "deprived of his liberty" is being, perhaps somewhat unjustifiably, narrowly applied in these cases. It is taken to apply only to cases where a man was actually thrown into prison or into a concentration camp. If a man was confined to a certain area of a town, and not allowed to leave it under any conditions; if he was confined to a particular house—his own or another—in a particular area of the town, so that his residence was known and the Gestapo could put their hands on him at any moment when they desired, that is not regarded as being deprived of liberty. That seems to me to be a somewhat ungenerous and unsympathetic application of that particular provision.
There is another matter which arises in something of the same context—namely, where the claim is made not by the individual who sent out his money, but by his heirs. In order that their application may have any standing at all, it is necessary for them to show that the person under whom they are claiming as heirs died as the direct result of persecution. There must be many thousands of eases in which no one can say how these unhappy people died. How are these heirs to prove that a man who disappeared and was never seen again—whether he went underground and died of exposure; whether he went into some charnel house and was cremated and nothing is known of him since he left his family—died as the direct result of persecution? I suggest that that is putting an impossible burden upon them. I am not asking for the introduction of a new principle: the principle is there and recognised, and I pay tribute to the generosity employed in its recognition. What I am asking is that in these cases a little more elasticity should be introduced into the administrative application of those principles.
The present position is that it has been found in not a few cases that where a man sent out money, in part to this country and in part to the United States, he or his heirs are recovering without difficulty the money which he sent to the 1218 United States, but at the same time they are confronted in this country with the formidable hurdles created by the two particular difficulties to which I have called attention. Therefore, I hope it may be possible for the Government to give an even more extensive assurance than was given in another place that it is proposed to apply these formulæ generously. I ask for the second assurance because I am told that, although there has been a little loosening of the tension in the application of these words since the debate in the other place, still the experience is that it is unnecessarily rigid and un-understanding. From that point of view, it would be very much appreciated if the Government felt able to say that they were going to give a reasonable measure of latitude to the interpretation of those two phrases.
§ 3.28 p.m.
§ LORD LUCAS OF CHILWORTH
My Lords, first of all, I would like to reciprocate the kind things which the noble Earl, Lord Monster, and the noble Marquess, Lord Reading, said about my presentation of this Bill. I have never known aim opposing speaker know quite so much about a Bill as the noble Earl knows about this one; in some things he knows far more about it than I do. Before I reply to the noble Earl on one or two specific points, I would like to make one comment. He stated that there was only one difference between the position to-day and the position arising after the 1914–18 war, namely, that there was then a Peace Treaty, and now there is not. That is only the beginning of the difference, as I can perhaps briefly outline.
After the 1914–18 war, the method of meeting the claims of nationals of the belligerents was concisely laid down in the Peace Treaty because there was a Government with whom a Peace Treaty could be negotiated. This applied not only to the debts of the belligerent nationals, but also to German assets. As the noble Earl quite rightly said, after Versailles, certain organisations were set up. At one end was paid in German marks, and at the other end was paid out British sterling Therefore, these debts could be, and were, settled in full. As I have said, in the first place, we now have no German Peace Treaty; and, secondly, there is no German money. The 1219 money which we propose to distribute under this Bill belongs to the British Government. It has been given to the British Government by international agreement, as I outlined in my opening remarks, and as was confirmed by the noble Earl, Lord Munster. Therefore, the arbitral tribunals which operated after the 1914–18 war had an entirely different task to perform. They performed it, I agree with the noble Marquess, extraordinarily well. Their word was final. They were dealing with matters interpartes, and we are dealing with matters ex-parte. Here we have a sum of money which we think, on the most optimistic guess, will come to £15,000,000. It may fall very far short of that. I hope the noble Lord will not think me irreverent when I say that the obligation placed upon His Majesty's Government is reminiscent of the miracle of the loaves and fishes, because we have claims for about £120,000,000. Therefore, the dividend is going to be small.
Now what will happen if a tribunal is set up? You can set up a tribunal for only one purpose; and that is to listen to disputed claims for payments. Whether the asset which goes into the pool is a proper German asset and should go into the pool is a case for the courts of this country. You can proceed against the administrator. The only argument can be that the share which a person receives out of the pool—whether as a preference creditor or as an ordinary creditor—is not enough. As he is to receive, perhaps, only 2s. 6d. in the pound, I should imagine that everybody would appeal against the administrator, at least on the sporting chance of getting more. Noble Lords will realise that what anyone receives has an effect upon what everyone receives and, therefore, no payment could be made out of the pool until the final appeal had been decided; and years and years would elapse.
As I pointed out, there is no obligation upon His Majesty's Government to nay this money at all. At the present time nobody but His Majesty's Government has any right whatsoever to it. The only rights that anybody will have are rights conferred upon them by Orders in Council to be made under this Bill. As I said, the Government could pay this money into the Exchequer for the benefit of all 1220 the taxpayers of this country, but they thought it better to do it in this way. Administratively, therefore, it would be almost impossible to have an appeal tribunal. Also, I cannot see so many difficulties and dangers as the noble Earl has foreseen in the way in which this would be shared out, because when he said—I think I have his words correctly—that there will be no Parliamentary action, I would respectfully say that I think he is wrong.
First of all, all the actions by the administrator of an administrative kind will have to be authorised by Orders in Council. The Orders in Council will be subject to negative Resolutions in both Houses. There is Parliamentary control there, and the Minister—in this case the President of the Board of Trade—will be responsible. Now I cannot see what he would possibly gain by having this appeal tribunal, and as this property is the property of His Majesty's Government, I think that on principle His Majesty's Government are quite entitled to say how it shall be disposed of, so long as they see that it is disposed of with fairness. To bring judicial action into this matter would upset the whole thing, because there has to be here that same elasticity for which the noble Marquess appealed in respect of another issue.
Will an advisory committee come into it at this stage—that is, in dividing, up the cake so to speak, and advise the Government how it should be divided up?
§ LORD LUCAS OF CHILWORTH
I was coming to that point because the noble Earl asked me: Will the views of the advisory committee be published? I should think not. It is an advisory committee set up to advise the Government on the preparation of their Orders in Council and also the administrator. The whole object of setting up this advisory committee representative of the creditors is that it is hoped that they themselves will be able to devise a scheme which they regard as equitable, fair and workable. Such scheme will be submitted to His Majesty's Government, and would then be put forward to Parliament through Orders in Council. The creditors' views, of course, will be considered. That is the object of having an advisory committee. As I said in my opening, the committee will give advice on all 1221 these matters which are set out clearly in the Bill, and on others about which we think proper to consult them.
§ THE EARL OF MUNSTER
May I ask the noble Lord one question? Can he tell me—I do not suppose he can—how many claimants there are for this German enemy property?
§ LORD LUCAS OF CHILWORTH
I have not the faintest idea. I was coming to that point in answer to one question which the noble Earl asked me—namely, will the Minister override the committee? The ultimate responsibility must be ministerial, so the Minister will be quite at liberty to accept or reject wholly or in part any advice he receives from any advisory committee.
§ LORD LUCAS OF CHILWORTH
And the administrator too. I was also asked: Have we made any notification under the Paris Agreement of the amount of claims on this question of contractual debts? The accounting procedure under the Paris Agreement is a continuing procedure, and it would be inadvisable for me to say, even if I knew, what stage it is in to-day. It is obvious that we do not know at the present time the amount of the assets, the amount of the claims or the number or the amount which would rank as contractual debts, because they have still to be collected. They have not all been collected now, and they can be collected only when the time comes to set up this organisation.
As regards these debtors and creditors who the noble Lord thinks will improve our position as regards 28 per cent. of the reparations to which we are entitled under the Paris Agreement, let me say first of all that the administrator or the custodian will give these creditors all the help he can. If he has the information at his disposal, he will tell them the value of a specific asset and what is the amount of the claims against that specific asset. Therefore, it will be in the interests of the creditor to find out that information, and he can then make up his mind whether he will take a chance of getting a larger bite of the cherry by going for his specific asset, or whether he will stand a better chance in the pool. It is manifestly 1222 unfair to all the other creditors to allow this class to have two bites at the cherry. They have all along claimed that they gave credit only to people of standing. They should by now have all the information at their disposal, If they have not, then I think the custodian will be able to help them. But to say, if a person is disappointed after prosecuting his first claim and does not get the dividend, that he can then come into the general pool, is an argument which I do not think can be sustained for long; that would be making not only a new class of preferential creditor, but of secured creditor as well. It is news to me that if Smith makes a claim against Jones and fails, he can then make a claim against the assets of Robinson—and that is, in effect, the argument. I am afraid that as at present advised we do not favour the appointment of an appeal tribunal in any way.
I now turn to the argument of the noble Marquess. I hope he will not think I am lacking in sympathy with the case which he has made. But he will, I am sure, readily admit that in deciding these matters there has to be some criterion; and we adopted the rules arrived at by the Inter-Allied Reparation Agency. I will not weary your Lordships by reading them all. We have gone as far as we possibly can. We have honoured these rules not only in the strict letter but in the spirit also. In this Bill, under Clause 1 (6) the door is still left open.
I will convey to the proper authority what the noble Marquess has said and see whether any slight relaxation can be made. If the noble Marquess will give me any case which he thinks is of a border-line nature, I will undertake personally to see that the matter is considered. I think that I have already dealt with the other points raised by the noble Marquess, and I trust your Lordships will now give this Bill a Second Reading.
§ On Question, Bill read 2a, and Committed to a Committee of the Whole House.