CZECH ASSETS

New Zealand Herald, Volume LXXVI, Issue 23358, 29 May 1939, Page 10

CZECH ASSETS

NAZIS BENEFIT FUNDS FROM LONDON COMMONS DISCUSSION THE RECENT ANNEXATION By Telegraph—Press Association —Copyright (Received May 28, 5.5 p.m.) British Wireless LONDON, May 27 The possibility of action involving or implying recognition of the German annexation of Bohemia and Moravia, and the circumstances in which the gold held in the Bank of England on account of the Bank for International Settlements, representing deposits by the former Czech National Bank, came to bo released for transfer to the Reichsbank, were two principal questions discussed in the House of Commons yesterday on the motion for the Whitsuntide recess. Mr. A. V. Alexander (Labour — Sheffield), in opening the debate, said Mr. Chamberlain's statement that he could give no assurances as to whether recognition of the annexation would bo given without the House being first consulted was a matter of very great concern to the Opposition. He urged that a statement ought to be made by the Government that no such action as some of them feared would be put into operation. £6,000,000 Transferred to Germany Mr. Alexander recalled the statement made by the Foreign Minister, Viscount Halifax, on March 22 that Britain had protested against the changes effected by the German military action and had said that they were devoid of any basis of legality. He referred also to the indignation expressed in Mr. Chamberlain's Birmingham speech on March 17, which he said strongly reinforced the Opposition's pressure that no consideration should bo given to the question of recognition. Such recognition would be entirely contrary to the principles of Leaguo of Nations.

Mr. Lloyd George asserted that £6,000,000 had already been transferred to the Reichsbank, to which it had no more right than a burglar. It was amazing that the Treasury could have agreed on a decision without consulting tho Government.

Chancellor not Informed The Chancellor of the Exchequer, Sir John Simon, said he did not know if the money had left the country. He would certainly tako the best advice as to whether the Government had gone wrong, but, if the protocols involved absolute assurance to the Bank for International Settlements that its orders should be obeyed, ho did not see how they could fail to obey the orders without breaking treaty obligations. Sir John denied that he had released a great block of Czech assets, and said he had done nothing of the kind. This and other matters had happened months ago. Neither the Czech Legation nor the Bank of England had informed him. "I did not learn about it until March," said Sir John. "I was not asked to authorise the transfer, but if it had been within my power I would have refused it." Sir Archibald Sinclair, Liberal leader, referring to guarantees to countries in Eastern Europe, said the policy it implied could only be brought to success by a tremendous national effort. Ho criticised Britain's appointment of Consuls at Bratislava and Prague, and expressed the hope that whatever the Government did to serve Britain's interests in Prague, either trading interests or the interests of refugees, it would do nothing involving recognition of the German annexation of Czechoslovakia. The constitution of both the Bank of England and the Bank for International Settlements came in for criticism by other speakers during the debate, the former from the Opposition benches. Chancellor Winds up Debate In winding up the debate for the Government, Sir John Simon recalled certain facts regarding the constitution and history of the Bank for International Settlements. He stated that, in order to make qyitc clear its freedom from Governmental interference or the intervention of Governments whose central banks were members of the Bank for International Settlements, it had given to the banks property and assets held in its name on account of others. It enjoyed complete immunity from any form of seizure or embargo. In this connection Sir John said*he did regard it as not without importance that those immunities should bo respected. They might think the Bank for International Settlements could be dispensed with, hut as long as it existed some such immunities were essential to its usefulness. But these immunities did prevent any eflective interference by Britain in the case under discussion. Toward the end of March the Treasury heard that tho Bank for International Settlements was giving instructions for tho transfer of the Czech gold, but it only came to his own knowledge a few days ago, when he found that action was impossible by reason of tho treaty provisions he had cited. Helpless to Prevent Transfer The Bank of England was not a Government bank, and its representatives on the board at Basle were not representatives of tho Government. Sir John maintained that the Government was helpless to prevent the transfer of the gold without breaking * the country's treaty obligations, and ho gave no hope of the Government being able to prevent the transfer at the last moment. If the gold value, which he understood to be in the neighbourhood of £6,000,000, had not already gone through, he promised, however, to reconsider the legal position in all its aspects. Begarding Herr Hitler's seizure of Bohemia and Moravia Sir John said that, as members were aware, tho question of Consular representation at Prague was under consideration, in consultation with other Governmoii' but he could give an assurance that no irrevocable action would be taken until the llouso resumed after Whitsun. BANK'S EXPLANATION (Received May 28, 5.5 p.m.) ZURICH, May 'XI Officials of the Bank for International Settlements explain that they were obliged to transfer the Czech gold to London as the instruction from tho Czech Central Bank bore the correct signature.