§ Mr. BUTCHERasked the Chancellor of the Exchequer whether he will publish the statement recently offered by him dealing with the question of the position of creditors of the head offices of the Deutsche Bank and other enemy banks and creditors of the English and other branches of such banks, and also the position of the customers of these English branches?
§ Mr. McKENNAsupplied the following statement:
In view of the exceptional position of banking institutions and of the very close relations which exist in such cases between the head offices and branches, enemy banks and branches of enemy banks were specially prohibited by Order in Council made under the Aliens Restriction Act from doing business of any kind except for the purposes defined by and subject to the restrictions imposed by licence of the Secretary of State for the Home Department.
Licences have from time to time been issued to enable the branches to complete transactions which had not been completed at the outbreak of war and to realise assets for the purpose of meeting their liabilities, but all these licences have treated the branch banks on the basis of their being for the time being self-contained institutions and have never authorised them to carry out, either by way of completion or otherwise, any transactions on behalf of their head offices or of other branches in enemy countries. Indeed, any liquidation of the domestic transactions of the branches had necessarily to proceed upon the assumption of a complete rupture for the time 792W being of the nexus between the branch and the head office, since any attempt to enable the branches to collect debts due to their head offices or to make them responsible for head office liabilities would not only have been contrary to all the general rules which govern dealings between this country and enemy countries, but would have been impossible in practice owing to the impracticability of obtaining particulars of such debts and liabilities while the war continues.
So far as the branches of enemy banks are placed in a special position by the licences, this special position applied only to transactions to which the branch itself is a party.
The assets of the branch banks are no doubt assets of the banks as such, and being assets in the United Kingdom of enemy corporations they stand in the same position as regards the general liabilities of these corporations in the United Kingdom as the assets in the United Kingdom of other corporations as regards their liabilities, and the Court has power to make vesting orders against such assets under the Trading With the Enemy Acts in respect of claims against the head offices. It is not possible, for the reasons already explained, to deal with such claims by administrative action under the licences, and the proper remedy of the complainants is to apply to the Court. How far the Court may see fit in the exercise of its discretion to make such orders, having regard to the special conditions affecting the branches, is a question for the Court to decide.