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Session 11. 1923. NEW ZEALAND.
ENEMY PROPERTY IN NEW ZEALAND (THIRD REPORT ON) BY THE PUBLIC TRUSTEE AS CUSTODIAN OF ENEMY PROPERTY AND CONTROLLER OF THE NEW ZEALAND CLEARING OFFICE.
Presented to both Houses of the General Assembly by Leave.
CONTENTS. Paragraphs Introduction .. .. .. .. .. .. .. .. .. .. .. 1-4 Part I. —Realization and Disposal of Enemy Property in New Zealand. Right of Allied and Associated States to retain and liquidate Enemy Property .. .. .. .. 5-8 (i.) Provisions in Treatios of Peace re Private Property, (ii.) Disposal and Crediting of Final Balances, (iii.) Payment of Compensation to Former Enemy Subjects, (iv.) Commonts made by Lord Justice Younger's Committee. Rotention and Liquidation of Enemy Property in New Zealand .. .. .. .. .. 9-10 (i.) Collection of Enemy Moneys and Realization of Enemy Property under the War Regulations (ii.) Action required by Treaty of Peace Order, 1920. Release of Property of Persons who have acquired the Nationality of an Allied or Associated Power under one of the Principal Treatios of Peace .. .. .. .. .. .. .. ..11-12 Release of Property hold under the Provisions of the War Regulations belonging to (i) Persons of British, Allied, or Neutral Nationality; (ii) Porsons destitute of Nationality; (iii) Persons who have acquired the Nationality of an Allied or Associated Power .. .. .. .. .. .. 13-15 Grounds upon which Property belonging to Enemy Subjects may be released .. .. .. .. 16-20 (i.) Former Enemy Subjects who have been permitted to remain in New Zealand, (ii.) British-born Wives or Widows of German Subjects readmitted to British Nationality since 10th January, 1920. (iii.) Germans in Necessitous Circumstances. Recommendations regarding order in which properties should be released .. .. .. .. 21-23 (i.) Report of Special Committee appointed by Imperial Board of Trade (ii.) Decisions of Imperial Authorities regarding Proposals of Lord Justice Younger's Committee, (iii.) Action taken in New Zealand. Delivery to the New Zealand Government of Securities held by German Subjects .. .. .. 24 Alions repatriated from New Zealand .. .. . . .. .. .. .. .. 25-27 (i.) Duties regarding property of Prisoners of War. (ii.) Repatriated Dalmatians, (iii.) Repatriated German and Austrian Subjects. Part II. —Settlement oe Debts between British Nationals Resident in New Zealand and German Nationals Resident in Germany. _ Paragraphs Establishment of New Zealand Clearing Office .. .. .. .. .. .. .. 28-29 London Agent for New Zealand Clearing Office .. .. .. .. .. .. .. 30-31 Total of Claims received for Settlement through Clearing Office . . .. .. .. .. 32 Classification of Claims .. .. .. .. .. .. .. .. .. .. 33 Progress regarding Disposal of Claims .. .. .. .. .. .. .. .. 34-35 Losses incurred through German Vessels seoking Refuge in Neutral Ports on Outbreak of War: Dame Franz v. German Government; Hourcade v. German Government .. .. .. .. .. 36-37 Compensation Claims :I. W. Raymond v. Gorman Government .. .. .. .. .. 38-41 Claims for Inheritances in Germany : Executors of Cathorine Saunders V. German Government .. .. 42-43 Closing-date for Acceptance of Claims under Article 297 of the Treaty of Versailles .. .. .. 44 Claims by New Zealand Nationals still outstanding : Complaints re Delay in Payment of Claims .. .. 45 Anglo-German Mixed Arbitral Tribunal: Procedure in submitting Claims to the Anglo-German Mixed Arbitral Tribunal —Claims under Article 297—Claims under Article 296 .. .. .. . . 46-48 Decisions of Mixed Arbitral Tribunals .. .. .. .. .. .. .. .. 49-50 (1.) Dissolution of Loan Contract undor Article 299 (a) —Kitzinger v. Dann —Gunn v. Gunz—Public Trustee v. Enders'scho Erbon. (2.) Disposal of Security doposited for Debt —British Clearing Office v. Gorman Clearing Office in re claim by William Brandt, Sons, and Co. against Ludwig and Tillmann. (3.) Liability of Government for Payment of Debts established against its Nationals —Seligman v. Liebermann. (4.) Compensation for British Goods seized by Germany—McLeod, Russell, and Co. v. German Government —Sternberg v. German Government. (5.) Treaty varies Municipal Law —Hardt v. Stern —Fisher v. Biehn.
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Paragraphs System of Accounting between Central Clearing Office and German Clearing Office : Monthly Accounts— Default by Germany .. .. .. .. .. .. .. . . .. 51-52 System of Accounting between Central Clearing Office and New Zealand Cloaring Office .. .. .. 53-54 Part 111, —Miscellaneous. „ , Paragraphs Council of Allied Controllers .. .. .". .. .. .. .. .. .. 55-56 German Church Property, Christchurch .. .. .. . . .. . . .. .. 57-58 German Property in Samoa .. .. .. .. . . .. .. . . .. 59 Restitution of Property in Germany belonging to British Nationals .. . . . . .. .. 60 Comparative Statistics of Allied Clearing Offices . . .. .. . . .. .. .. 61 Conclusion .. .. .. . . .. .. .. .. .. .. .. 62 Appendix I. —Principal Despatches received prom His Majesty's Secretary of State for the Colonies IN REGABD TO ENEMY PIUIPHRTY. Retention and Liquidation of Bearer Shares. Inquiry from Reparation Commission as to the Final Balance in favour of Germany arising under Articles 296 and 297 of the Treaty of Versailles. Appendix II. —Accounts. (1.) Claims in respect of "Enemy Debts," under Article 296 of the Treaty of Versailles, due to Allied Creditors by German Debtors as at 31st March, 1923. (2.) Claims in respect of " Enemy Dobts," under Article 296 of the 'Treaty of Versailles, owing to German Creditors by Allied Debtors as at 31st March, 1923. (3.) Claims by Allied Nationals, under Articlo 297 of tho Treaty of Versailles, for Compensation in respect of Damage or Injury inflicted upon their Property Rights and Interests in Gorman Territory by the Application of Exceptional War Measures or Measures of Transfer. (4.) British Empire Account with the German Clearing Office to 31st March, 1923.
BE PORT. To the Hon. the Attorney-General, Wellington. Sir, — I have the honour to submit a report on the work performed daring the year ended 31st March, 1923, in connection with the duties carried out by the Public Trustee in his capacity as Custodian of Enemy Property and as Controller of the New Zealand Clearing Office, together with a summary of the more important relative information received during the period under review. 2. Every effort has been made to ensure the early completion of this work, but it has been found desirable in a number of cases where property or the proceeds thereof are held in pursuance of the War Regulations to postpone taking final action in order to act in harmony with the practice of the Imperial Government in connection with similar cases in the United Kingdom. Furthermore, in regard to tho claims portion of this work it is evident from the experience of the last twelve months that considerable delays are bound to occur. In some cases a period of two years or more has elapsed in obtaining definite replies from the German Clearing Office regarding British claims or acknowledgments of letters from this Office contesting German claims against British nationals in New Zealand. Many of the matters which have not yet been disposed of, being under action either with the German Clearing Office or with this Office, are of great complexity, and the task of determining what is the present legal position is rendered more difficult by tho inability of the parties to supply satisfactory evidence in support of their claims. This state of affairs can only be expected after the lapse of years which has taken place since business relations were dislocated owing to the outbreak of the Great European War. A number of claims will probably need to be submitted to the AngloGerman Mixed Arbitral Tribunal for decision. While this Office is prepared to supply to claimants or to the alleged debtors any information which has been received concerning the legal points involved in these claims, the persons concerned are usually urged as a matter of policy to consult their own legal advisers be-fore informing this Office what steps they desire to be taken on their behalf. Many of the points raised are novel, and frequently an authoritative ruling can only be obtained by submitting the matter to the Mixed Arbitral Tribunal. Several letters have been received from New Zealand firms expressing appreciation of the help afforded by this Office in the prosecution of their claims, or in the preparation of contests to claims received from the German Clearing Office. From the foregoing remarks it will be realized how difficult it is to form a satisfactory idea when final settlement is likely to take place. 3. In accordance with the plan adopted in preparing previous reports, the subject-matter of this report has been arranged under three main headings, as under :— I. Realization and disposal of Enemy Property in New Zealand. 11. Settlement of Claims by or against British Nationals resident in New Zealand. 111. Miscellaneous. Part I contains a summary of the action taken in connection with the registration and realization of enemy property in New Zealand in pursuance of the various War Regulations, and the final disposal of the proceeds of such property in accordance with the terms of the various Treaties of Peace. Part II contains a brief statement of the additional information received since the date of the last report regarding the procedure adopted in connection with the settlement of debts and claims between British nationals resident in New Zealand and German nationals resident in Germany, together with a statement regarding the debts due by or to the nationals of the other ex-enemy Powers.
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Part 111 contains those matters not falling under either of the first two headings, but which are considered to be of sufficient general interest for incorporation in this report. 4. I have deemed it advisable; to refer briefly to several matters dealt with in my previous reports to enable the developments during the year to be readily perceived. PART I.—REALIZATION AND DISPOSAL OF ENEMY PROPERTY IN NEW ZEALAND. Right of Allied and Associated Powers to retain and Liquidate Enemy Property. 5. Provisions under Treaties of Peace re Private Property. —By Article 297 of the Treaty of Versailles, and the similar provisions in the Treaties of Peace with Austria, Hungary, Bulgaria, and Turkey, the Allied and Associated Powers have reserved the right to retain and liquidate (if it is deemed expedient) all property rights and interests within the territory of such Allied or Associated Powers belonging at the date of the coming into force of the respective treaties to such German, Austrian, Hungarian, Bulgarian, or Turkish subjects or companies controlled by them. The property rights and interests so retained and liquidated may be charged in the first place by the Allied or Associated Power concerned with the payment of the amounts due in respect of — (1.) Claims by the nationals of that Allied, or Associated Power witli regard to their property rights and interests, including companies and associations in which they are interested in German, Austrian, Hungarian, Bulgarian, or Turkish territory ; or (2.) Debts due to the nationals of such. Allied or Associated Power by German, Austrian, Hungarian, Bulgarian, or Turkish nationals. (3.) The payment of certain claims growing out of acts committed by the German, Austrian, Hungarian, Bulgarian, or Turkish Government or authority before the Allied or Associated Power entered into the war. In the second place thoy may be charged with tho payment of amounts due in respect of claims by the nationals of such Allied or Associated Power with regard to their property rights and interests in the territory of the other former enemy Powers in so far as those claims are otherwise unsatisfied. The power to retain and liquidate property applies to the property rights and interests of German, Austrian, Hungarian, Bulgarian, and Turkish nationals irrespective of their place of residence, whether it is in former enemy territory or in territory belonging to an Allied, Associated, or Neutral Power. (3. Disposal and Crediting of Final Balance. —Any final balance in favour of Germany or any of the other former enemy Powers shall be reckoned, in accordance with the provisions of Article 24.3 of the Treaty of Versailles or the similar provisions in the other treaties, as credits to Germany or such other former enemy Powers in respect of their reparation obligations. These credits are given through the Rejiaration Commission. 7. Payment of Compensation to former Enemy Subjects. —Under paragraph, (i) of Article 297 of the Treaty of Versailles, and similar paragraphs in the other Treaties of Peace, the Governments of the former enemy Powers have undertaken to compensate their nationals in respect of the sale or retention of their property rights or interests in Allied or Associated States. 8. Comments made by Lord Justice Younger's Committee. —The intention of these provisions has been clearly outlined in the following extract taken from the interim report, dated sth May, 1922, of the committee appointed by the Board of Trade to advise upon applications for the release of property of ex-enemy aliens in necessitous circumstances : — The treaties have not in these clauses, as seems to have been supposed, ignored the hitherto well-established principle of international law that private property of an enemy subject on land is restored to him after peace. Clause 297 proceeds upon the basis of that principle, and gives effect to it by purporting to bind the former enemy Power concerned to make to each of its nationals whose property has been retained by an Allied or Associated Power compensation for the value of the property so retained. It is true that the obligation is expressed in languago less precise than was prudent, and this lack of precision has provided scope for evasion, which is unfortunate, but the intent of the Treaty is clear enough. Each ex-enemy Power accepted tho obligation, and accordingly, on a loyal construction of the Treaty, all that really ought to have happened as tho result of that clause was that there was thoreby effected by agreement between tho two Governments concerned a transfer to and an assumption by the Government to which the national in question owed allegiance of the obligations of the Allied Government with referonco to the safety after the peace of his private property within its borders ; or, phrasing it in another way, just as during the war the nationals of every belligerent Power wore either prompted or compelled to hand over to their own Government their private property and investments on the terms' that tho State became their debtor for the value, so now that operation has by virtue of the treaties been earried out with reference to tho property rights and interests of the national in former enemy territory—not an unreasonable position in whioh to place the national of a defeated belligerent if, as is right, the burden of the novation laid upon the belligoront Government is always borne in mind. Eor when the matter is so regarded there is no serious interference with legitimate proprietary rights. If the clause had in the result been fully operative by the complete fulfilment on the part of the national's Government of its Treaty obligation towards him, no former enemy national possessed on the stated day of property rights or interests hero would have materially suffered. His loss, such as it was, would not have been operative for any greater interval of time than was administratively requisite to enable his own Government to make forthcoming for him, so soon as his property had been appropriated for Treaty purposes, the full compensation intended for the Treaty, and, on this footing also, no discrimination between one enemy national and another was relevant or requisite. If no enemy national was to bo injured in his property values no enemy national could properly claim protection at our hand. Retention and Liquidation op Enemy Property in New Zealand. 9. Collection of Enemy Moneys and Realization of Enemy Properly under the War Regulations. —ln my two previous reports, concise statements regarding the policy and action taken in connection with the collection of enemy moneys and the realization of enemy property in New Zealand will be found under the following headings : (1) Supervision and liquidation of enemy firms ; (2) Enemy goods arriving in New Zealand subsequent to the outbreak of war ; (3) Registration of enemy property in Now Zealand ; (4) Collection of enemy moneys; (5) Enemy goods held in New Zealand on consignment; (0) Sale of shares in New Zealand companies belonging to enemy subjects; (7) vVdministration of New Zealand estates of enemy subjects dying during the period of the war.
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10. Action required by the Treaty of Peace Order, 1920. —The necessary powers for retaining and liquidating enemy property in New Zealand in accordance with the various Treaties of Peace are contained in Part II of the Treaty of Peace Order, 1920, and its amendments. It is declared therein that all moneys in the hands of the Public Trustee as Custodian of Enemy Property are vested in the Public Trustee in trust for His Majesty, and that such moneys and property so vested are to be retainod and liquidated in accordance with the provisions of the treaty. This right to retain and liquidate enemy property in New Zealand, may be exercised at the discretion of tho New Zealand Government, which, has decided as a matter of policy to follow as a general rule the practice of the Imperial Government in connection with similar cases in the United Kingdom. In regard to the amounts collected in pursuance of the War Regulations, the principal actions required to be taken by the Public Trustee may bo stated as follows : — (1.) To peruse carefully all papers relating to each case to ascertain whether there are reasonable grounds for suspecting that the owner is not of former enemy nationality, or that there are any special factors on account of which it may not be desirable to retain and liquidate such property. (2.) In cases where there is any doubt concerning the ownership of the property, to take such action as may be necessary to ascertain the facts. (3.) If there are no special reasons why the property should not bo credited (and the onus of proof is on the person seeking to establish grounds for the release of the property), the amount is credited to the German Liquidation Account, or the Liquidation Account of the appropriate other former enemy Power, on a schedule containing the name and address of the enemy owner, a short description of the property for identification* purposes, the gross proceeds, the expenses and commission of tho Custodian of Enemy Property, the amount (if any) released for direct payment to the owner, and the net amount carried to the credit of the German Liquidation Account. Release of Property of Persons who have acquired the Nationality of an Allied or Associated Power under one of the Principal Treaties of Peace. 11. The Treaties of Peace with Germany and Bulgaria expressly stipulate that the term " national " as used in connection with the right to retain and liquidate property as mentioned in the foregoing paragraph does not include any person who acquires ipso facto under the provisions of the treaty the nationality of an Allied or Associated Power — e.g., an inhabitant of Alsace-Lorraine. In the case of Austria and Hungary the term " national " does not include any person who within six months of the coming into force of the respective Treaties of St. Germain and Trianon shows that he has ipso facto acquired in accordance with the provisions of those treaties the nationality of one of the new States, or of any State receiving territory which was formerly part of Austria-Hungary. 12. As regards New Zealand, very few applications on the foregoing grounds for the release of property in New Zealand have been received, but the Administrator of Austrian Property, London, reports that between three and four thousand property-owners have lodged claims with him for the release of their property on the ground that they have acquired Czecho-Slovak, Scrb-Croat-Slovene, Polish, Roumanian, or Italian nationality. In order to review these claims, and to detect any fraudulent attempts to obtain the release of property on fictitious grounds, the Administrator has found it essential to create a special. Nationality Section, acting under the supervision of experienced and trained lawyers, for the purpose of carefully scrutinizing the evidence on which these claims are based. In all cases where property in New Zealand has been released under this heading the claimants have supplied to the satisfaction of the British authorities proofs of the acquisition of Allied or Associated nationality. The following paragraph, taken from the first report of the Administrator of Austrian Property (p. 17), shows the necessity for the exercise of special care in this connection : — It is a matter of common knowledge that, between the date of the Armistice and before and even after the signature and ratification of the Treaty, a large number of Austrians whose right to citizenship were located in German Austria purported to acquire rights in transferred territory, and by virtue of these recently acquired rights they are now attempting to establish claims to the release of property here. Those claims are being resisted, and it is expected that the inquiries and investigations of tho Nationality Section will result in preservation of property to which it was intended that British and Allied nationals should be entitled to look for satisfaction of their claims. Release of Property held under the Provisions of the War Regulations. 13. Persons of British, Allied, or Neutral Nationality. —ln order to prevent any remittances being forwarded-from New Zealand which might inure to the assistance of a former enemy Power, the War Regulations defined " alien enemy " so as to include all persons who were resident in enemy territory, irrespective of their nationality. In accordance with the War Regulations dated 3rd April, 1916, the Public Trustee, as Custodian of Enemy Property, collected moneys belonging to persons resident in the former enemy territory who have now supplied satisfactory evidence that they are of British, Allied, or Neutral nationality. In such cases a summary of the position is submitted to the Hon. tho Attorney-General in order that he may formally authorize the release of the property. 14. Persons destitute of Nationality. —It is possible that prior to the outbreak of war a former German national may have lost his German nationality without acquiring the nationality of any other country. It was held by Mr. Justice Russell in the Chancery Division of the High Court of Justice, in the case of Stoeck v. The Public Trustee and Attorney-General (1921, II Ch. 67), that a denaturalized German was not a German national within the meaning of the Treaty of Versailles as regards the retention and liquidation of property. Several applications for the release of property in New Zealand have been received under this heading.
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15. Persons who hair acquired the Nationality of cm Allied or Associated Power. —The various Treaties of Peace provide that former enemy nationals who acquire the nationality of an Allied or Associated Power in accordance with the provisions of the treaty will not be considered as former enemy nationals whose property is subject to retention and liquidation (see paragraph 11 supra). Grounds upon which Property belonging to Enemy Subjects may be released. 16. Former Enemy Subjects who have been permitted to remain in New Zealand. —In my previous reports it was stated that the New Zealand Government had decided not to exercise any power of retention and liquidation which it may have under the various Treaties of Peace in regard to the property rights and interests of former cnomy subjects who have been permitted to remain in the Dominion. It is understood that a similar policy has now been adopted in Australia. 17. British-born Wives or Widows of German Nationals readmitted to British Nationality since 10th January, 1920. — In accordance with the policy adopted, by the Imperial authorities, it has been decided to release property in New Zealand belonging to British-born women who married German subjects prior to the war, and who since the 10th January, 1920, have been readmitted to British nationality either as widows or divorcees. Several amounts have already been released under this heading, and several other cases are at present under consideration, but no definite action can be taken until it has been ascertained whether the amounts should be credited through the German Clearing Office Account under Article 296, or that any right to require these amounts to be credited in accordance with the Clearing Office procedure is waived by the German authorities. 18. Germans in Necessitous Circumstances. —On the 15th. October, 1920, the Board of Trade (Imperial) appointed the following gentlemen —viz., the Right Hon. Lord Justice Younger, G.B.E. (Chairman); Brigadier-General G. K. Cockcrill, C.8., M.P. ; and the Hon. Sir M. M. Macnaghten, K.8.E., K.C. —to be a committee to advise upon applications from ex-enemy nationals for the release of their property, chargeable in accordance with the Treaties of Peace, within the limits laid down by His Majesty's Government. 19. Tho limits referred to in the Warrant of appointment were as follows : — On their appointment in October, 1920, the committee were authorized to recommend tho release (1) to cx-onomy nationals now resident in the United Kingdom of property to the value of £1,000 ; and (2) to ex-enemy nationals formerly resident in the United Kingdom but now resident elsewhere of property to tho value of £200. In addition to property, tho committee were authorized to recommend the release of income up to a reasonable amount. On 16th August, 1921, the committee were authorized to recommend tho release to the owner, in order that he might resume business, of the proceeds of a business wound up under the Trading with the Enemy Acts up to a sum of £5,000, whore tho owner was before the war and had since been permitted to remain resident in the United Kingdom, and whero the committee considered that it was desirable in tho national interest. 20. After considering the proposals contained in the interim report of this committee, the Board of Trade decided that the maximum amount of which the committee may recommend the release from capital in the case of German nationals formerly resident in the United Kingdom but now resident elsewhere should be increased from £200 to £500. In New Zealand a similar policy has been adopted, with the exception that property in New Zealand belonging to German subjects, or subjects of the other former enemy Powers who were permitted to remain in New Zealand, was not at any time subjected to any charge under the Treaty of Peace Order, 1920, or its amendments. Recommendation regarding Order in which Properties should be released. 21. Report of Special Committee appointed by Imperial Board of Trade. —The question to what extent and what classes of property should be retained and liquidated has been carefully investigated by the committee appointed by the Board of Trade in connection with the release of property of ex-enemy aliens in necessitous circumstances. After commenting on the injury likely to be caused to the international financial reputation of Great Britain owing to the belief, caused by the failure of the former enemy Governments to pay compensation to its nationals, that their property has been confiscated, the committee reports in the following terms : — Thoy have set themselves to consider whether any system of marshalling these British property rights and interests is practicable which would in its possiblo ultimate result relievo from total loss of their property those former onomy nationals for whom this country is most concerned either by sympathy or in interest. The present situation is that there is no compensation forthcoming at all for any ex-enemy national other than a Gorman : not readily for any German other than one resident in Germany ; and possibly not for her, if she be female, if she was of British or Allied birth. The most favoured German is probably in the eyes of this country the least eligible for preference of any ex-onemy national affected by the treaties. Even, however, for him tho compensation is fractional only. Now, tho committee gather from tho Clearing Office reports to which reference has already been made that there is serious ground fo anticipate an ultimate default on the part of all the former enemy Governments concerned in making payment to this country of their Clearing Office balances. The British Government have not involved British creditors in the consequences of any such default. They have not passed the risk on : they have assumed it. It may well be that the only fund available for satisfaction of the deiiciency so shouldered will be the property rights and interests with which these observations havo been dealing. In all probability, however, their value is far more than enough to mako that deficiency good. So soon as it is made good, the retention of tho residue may cease to have the same importance. It may well be that it will then be released in whole or in part. It is in anticipation of that possibility that the following suggestions are made. They have two objects : First, to throw final loss first on nationals with the least claim upon this country, or in whose prosperity this country has least interest; second, to throw the loss in every case on the class of property right or interest which may with loast unfairness to the national concerned be first resorted to. In other words the first set of suggestions is intended to rank in their order of merit the nationals concerned ; the second is mainly to accentuate the eligibility for realization of some kinds of property charged over other kinds. The committee, however, would again repeat that in their view no classification of nationals in categories can ever be completely satisfactory. There will always bo individuals in every class, however strictly defined, who on personal demerits should lie excluded from benefit; there will always bo individuals in every class, howover destitute of qualification, who on personal merit would have their property exempted. In other words, unless exemption is complete and immediate there must always be work for a dispensing authority which considers each case as it is.
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With these reservations the committee would venture to classify the former enemy nationals concerned in the following order of morit: — 1. British-born ex-onemy nationals —such nationality having been acquired only upon and by reason of marriage. 2. Ex-enemy nationals resident here at tho outbreak of war and permitted at its close cither to remain in or return to this country. 3. Ex-enemy nationals wherever now resident whose property rights and interests here, to an extent not exceeding £2,000, represent earnings or savings from earnings made hero. 4. Other ex-enemy nationals in the following order: (1) Hungarians, Austrians, Turks, Bulgarians; (2) Germans. Tho committee suggest that the property rights and interests of these classes retained under the treaties should bo realized and applied in tho inverse order to that above given. The committee would add that according to their information the United States have exempted the property of the class in America corresponding to class 1, and South Africa the class which there corresponds to class 2. The committee in these circumstances hardly deem it necossary to labour the reasons which have led them to this classification. They are probably sufficiently obvious. They would only say this. The first class comprises Britishborn marriod women whose property hero almost always consists of property settled upon their marriage and is usually held by British trustees for their benefit. Appeals from this class have been specially numerous, many of them very painful. The second class comprises every degree of allied sympathy and servico on the part of those included in it: the property represents property lawfully acquired by these people while resident here : they will probably be the last to be compensated by their own Government; and if their property here be taken they may become chargeable on the rates. The third class includes the repatriated governesses, cooks, housekeepers, waiters, and other humble folk, many of them of long residence here, of high character, and now destitute in their own country. In very many cases their property here consists of Post Office Savings-bank balances and investments in British funds. This suggestion of the committee, if effect can be given, to it, will reserve till the last, for return to tho owners, if such return be resolved upon, the property rights and interests of those who have deserved best of this country, or whose olaims upon it arc strongest. The object is to preserve, so long as may be, thoir property from the Clearing House procedure. So soon as it is credited under that procedure it ceases to be open to exemption. 22. Decisions of Imperial Authorities regarding Proposals of Lord Justice Younger's Committee. — At a conference to consider the proposals of Lord Justice Younger's committee with regard to the release of enemy property the Imperial authorities decided : — (1.) That the liquidation of property of all Germans outside the United Kingdom must be proceeded with by the Public Trustee without regard to the question of the release. As far as possible, however, tho liquidation of property of Germans allowed to reside in the United Kingdom should be postponed. (2.) The crediting of the proceeds of German property other than "enemy debts" to the German Government through tho Clearing Office should be postponed in the following oases : (a.) Where tho owner is a woman born of British parents who became German by marriage and the property comes from British sources ; (6) where the owner resided in tho United Kingdom before the war and is now permitted to reside there; (c) whore the property of the owner (wherever now resident) in the United Kingdom represents earnings or savings from earnings made there up to an amount not exceeding £2,000. Tho Public Trustee, in order to ascertain in which cases he should postpone crediting, should examine the records of tho Younger Committee and consider any other ovidenco brought to his attention, but he is not required to make inquiries elsewhere. 23. Action taken in Neiv Zealand. —On receipt of particulars of the foregoing decisions, instructions were immediately cabled to the High Commissioner to withdraw from the German liquidation sheets which had been forwarded to him for transmission to the German Clearing Office certain amounts falling within those classes in which it had been decided to postpone crediting in the meantime. As soon as further information is received concerning any subsequent decisions made by the Imperial authorities the matter will be submitted to the New Zealand Government for consideration and direction. Delivery to the New Zealand Government of Securities held by German Nationals. 24. As advised in my previous report, Germany is required under paragraph 10 of the Annex to Article 298 of the Treaty of Versailles to deliver to the New Zealand Government all securities, certificates, deeds, or other documents of title held by its nationals relating to property rights or interests situated in the Dominion, including any shares, stocks, debentures, debenture stock, or other obligations of any company incorporated in accordance with tho laws of New Zealand. The securities handed by the German Government to the New Zealand representative under the above provision have proved to be almost worthless. The only securities for which a market could be found realized £22. The fact that the other securities were valueless was duly communicated to the representative of the German Clearing Office in London. A reply was then received suggesting that these certificates should be handed back to the German Government for return to their former owners, as "Germany would otherwise experience difficulties in compensating its nationals in respect of these securities. As it was ascertained that the British Government had already returned valueless securities to the German Government, it was decided to adopt a similar policy, and action has been taken accordingly. Aliens repatriated erom New Zealand. 25. Duties regarding Property of Prisoners of War. —A summary of the functions fulfilled by the Public Trustee in connection with the property in New Zealand belonging to the aliens who were interned during the war was contained in my previous reports. As a general rule the property belonging to the aliens who were repatriated from New Zealand, either at their own request or otherwise, was realized in pursuance of the War Regulations dated 24th July, 1916, and its amendments and the proceeds thereof were remitted to the High Commissioner for New Zealand in London for payment to the persons concerned in accordance with the policy of the Imperial Government in connection with similar cases in the United Kingdom.
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26. Repatriated Dalmatians. —It appears that most of the Dalmatians who were repatriated from New Zealand have acquired the nationality of the Kingdom of the Serbs, Croats, and Slovenes, and consequently under the Treaty of Peace with Austria are entitled to receive direct payment of the proceeds of any property belonging to them which had been realized in New Zealand. In order to facilitate payment and to ensure that the amounts were paid to the correct persons, a list of the amounts payable was handed by the High Commissioner to the London Legation of the Serbs, Croats, and Slovenes. It was arranged that upon production of the necessary receipts signed by the persons beneficially entitled thereto the amounts would be released and handed to the Legation. Payment of all the amounts has not yet been made, and the High Commissioner is endeavouring to dispose of the matter as early as possible. 27. Repatriated. German and Austrian Subjects. —In a despatch dated 30th October, 1920, the Secretary of State for the Colonies advised that the British Government had decided to release the moneys under their control, belonging to repatriated German and Austrian prisoners-of-war and interned civilians which, had been retained at the time of their repatriation, provided that those countries carried out their obligations in regard to the payment of amounts belonging to or earned, by British prisoners-of-war. Subsequently the High Commissioner was advised by the Foreign Office that it had been decided to release the money for the benefit of the individual German subjects to whom it was due, and that as it was understood that the German Government had already paid the sums in question to their nationals, arrangements were being made for payment to be effected through the German Government on receipt of a definite statement that the sums had actually been paid by the German Government free of any deduction to the prisoners concerned. In a memorandum dated Bth November, 1922, the High Commissioner advised that although arrangements were made through the Foreign Office in October, 1921, to release the moneys held by him through the German Government, no action appears to have been taken by the German authorities to pay the amounts to their nationals concerned. It is understood that a meeting is being arranged between British and German representatives to consider the question of the payment of the amounts held by the Imperial Government, and on receipt of information regarding any decisions arrived at the matter will be submitted to the New Zealand Government for directions as to the action to be taken in connection with the sums derived from New Zealand. PART lI.—SETTLEMENT OF DEBTS BETWEEN BRITISH NATIONALS RESIDENT IN NEW ZEALAND AND GERMAN NATIONALS RESIDENT IN GERMANY. 28. As stated in previous reports, the New Zealand Government decided to exercise its option under paragraph (e) of Article 296 of the Treaty of Versailles, and established a Clearing Office, known as the " New Zealand Clearing Office," through which must be settled almost all debts between British nationals resident in New Zealand and German nationals resident in Germany. 29. The Treaties of Peace with the other former enemy Powers contained similar provisions, but as the claims against the nationals of these countries which had been notified to the Custodian of Enemy Property were very few it was decided not to establish Clearing Offices with these Powers. London Agent op New Zealand Clearing Office. 30. For the convenience of New Zealand firms whose London branches or agents hold the records of their pre-war continental trade, it was decided in 1920 that the High Commissioner should act as the London agent of the New Zealand Clearing Office in connection with claims by or against the London offices of these New Zealand houses. In addition to these duties the High Commissioner receives and transmits all correspondence between the Central Clearing Office and the New Zealand Clearing Office, and also attends to the adjustment of the accounts. 31. I wish to record my appreciation of the assistance rendered by the High Commissioner and his staff in the accurate and painstaking manner in which the Clearing Office work has been carried out. Total op Claims received for Settlement through Clearing Office. 32. The claims received for settlement through the New Zealand Clearing Office to 31st March, 1923, are as follows : —■ Total. Claims- under Article 296 : — £ (a.) By New Zealand nationals against German nationals .. .. 49,249 (b.) Claims by German nationals against New Zealand nationals .. 203,060 Claims under Article 297 : — Claims by New Zealand nationals .. .. .. .. 52,508 £304,817 Classification of Claims. 33. Claims between British nationals residing in New Zealand and German nationals residing in Germany which call for settlement through the Clearing Office may be classified under the following headings : — 1. Claims under Article 296 : — (a.) On account of debts which became payable before the war (Article 296 (1) ) : (b.) On account of debts which became payable during the war and arose out of transactions or contracts with nationals of an opposing Power resident within its territory, and of which the total or partial execution was suspended on account of the declaration of war (Article 296 (2)) : (c.) On account of interest or capital sums which have become payable before and. during the war in respect of securities issued by New Zealand or by Germany (Article 296 (3) and (4)).
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2. Claims under Article 297 : — (a.) In respect of the sale of British property in German Territory liquidated during the war under exceptional war measures : (b.) In addition to the actual amount realized by the sale of their property in Germany, British nationals are also entitled under the above-mentioned article to compensation for any loss or damage which they may have sustained by reason of such sale or application of exceptional war measures. The Treaty provides that the amounts payable under this heading mast be determined in each case by the Anglo-German Mixed Arbitral Tribunal. Further information will be found in paragraphs 38-41 headed " Compensation Claims." Progress regarding disposal of Claims . 34. Owing to the considerable delay which, takes place in obtaining replies from the German Clearing Office, and to a lesser extent from many of the New Zealand firms concerned, it is reasonable to expect that the final disposal of these claims will not be made until the expiry of a long period. 35. The following table indicates the progress which has been made to the 31st March, 1923 : — (a.) Claims by New Zealand Nationals against German Nationals. 212 claims forwarded to German Clearing Office through Central Clearing £ s. d. £ s. d. Office .. .. .. .. .. .. ... .. 49,219 I. 4 Claims withdrawn in whole or in. part in response to letters of contest lodged on behalf of German firms, &c. .. .. .. 10,861 5 4 Claims wholly or partly acknowledged by German firms and admitted to German Clearing Office (interest & s. d. £4,336 14s. 2d.) .. .. .. .. 15,272 18 1 Less admission made in error cancelled, (interest £1 9s. 4d.) .. .. .. 4 6 6 15,268 11 7 26,129 16 11 Balance, being claims still under action.. .. .. £23,119 4 5 In addition to the sum of £15,272 18s. Id. admitted as shown above, interest thereon amounting to £4,336 14s, 2d. has also been credited by the German Clearing Office and paid to the claimants. Payment of the claims under this heading is made by this Office as soon as the necessary admissions are received from the German Clearing Office. From the information supplied in paragraphs 51 and 53 it will be seen that the sums collected from New Zealand debtors in settlement of claims received through the German Clearing Office constitute the primary fund out of which New Zealand creditors received payment of their claims. (b.) Claims by German Nationals against New Zealand National?. 1,368 claims received from the German Clearing- Office through the £ s. d. £ s. d. Central Clearing Office .. .. .. .. .. .. 203,059 16 1 Claims retransferred to the Central Clearing Office as not applicable to New Zealand .. .. .. .. .. .. 1,254 3 4 Claims withdrawn in whole or in part by the German Clearing Office in response to letters of contest lodged on behalf of New Zealand firms, &o. .. .. .. .. .. .. 13,232 14 8 Claims acknowledged in whole or in part by New Zealand firms and admitted to the German Clearing Office .. .. .. 26,239 6 7 40,726 4 7 Balance, being claims contested, defective, or under action .. £162,333 11 6 Treaty interest amounting to £8,768 2s. sd. has also been credited to the German Clearing Office in connection with the debts admitted. ■ The disposal of the amounts collected from New Zealand nationals is briefly indicated under the preceding subparagraph. (c.) Claims by Neiv Zealand Nationals against Germany under Article 297 of the Treaty of Versailles. Ten claims forwarded to the German Clearing Office through the Central £ s. d. £ s. d. Clearing Office .. .. .. .. .. .. .. 52,508 6 3 Claims acknowledged in part by Germany and admitted to the New Zealand Clearing Office .. .'. .. .. .. 1,353 5 8 Claims withdrawn in part by New Zealand nationals on acceptance of offers of compensation .. .. .. .. . . 323 2 1 1,676 7 9 Claims under action, &c. .. .. .. .. £50,831 18 6 In addition to the £1,353 ss. Bd. admitted as above, offers of compensation amounting to £171 have been received in respect of these claims. As regards payment of the compensation offered see paragraphs 38-41.
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Losses incurred owing to German Vessels seeking refuge in Neutral Ports on the Outbreak or War. 36. Several claims have been lodged with this Office by New Zealand firms on account of losses and extra expense incurred by them owing to German vessels carrying cargo consigned to them seeking refuge in neutral ports on the outbreak of the war. From the legal opinions which have been received by this Office it appears that no claim against the German steamship companies will lie under Article 296 or 297 of the Treaty of Versailles, as the German bills of lading specifically contract the companies out of all liability in such circumstances. On the 20th March, 1923, the High Commissioner for New Zealand in London was requested to ascertain from the Imperial authorities whether British nationals who have suffered loss under the above heading might successfully prefer claims against the German Government under the provisions of Articles 231. and 300 (d.) of the Treaty of Versailles. These articles read as follows : — Article 231. —" Tho Allied and Associated Governments affirm and Germany accepts the responsibility of Germany and her allies for causing all tho loss and damage to which the Allied and Associated Governments and their nationals have been subjected as a consequence of tho war imposod upon them by the aggression of Germany and her allies." Article 300 (d). —" Whore a contract betwoen enemies has boon dissolved by reason either of failure on tho part of either party to carry out its provisions or of the exorcise of a right stipulated in tho contract itself the prejudiced party may apply to the Mixed Arbitral Tribunal for relief. The Tribunal will have the powers provided for in paragraph (c)." It is provided by paragraph (c) of Article 300 that if restoration is inequitable or impossible the Mixed Arbitral Tribunal may grant compensation to the prejudiced party to be paid by the German Government. 37. In the case of Dame Franz v. German Government and Hourcade v. German Government (Recueil des Decisions des Tribunaux Arbitraux Mixtes, 1922, I, p. 781) the Franco-German Mixed Arbitral Tribunal held •— (1.) That an Allied national whose luggage had been booked in Germany for Prance, then dotained and sold by order of tho German railway company, was entitlod to claim an indemnity for tho non-execution of the transportation contract entered into botween himself and the railway company. (2.) That Germany, under Article 231 of the Treaty, having acknowledged the responsibility of the war and of its consequences, the German State cannot take advantage of an oxception of main force due to tho war, where litigation is incurred with Allied nationals. As soon as further information on the foregoing subject is received the New Zealand firms who have notified claims to this Office will be informed of the position if the Imperial authorities are of the opinion that such claims could properly be enforced. Compensation Claims. 38. As mentioned under paragraph 33 (2) (b), British nationals arc entitled to such compensation as may bo awarded by tho Anglo-German Mixed Arbitral Tribunal in respect of any loss or damage which they may have sustained by reason of the sale of their property by the German authorities or the application of exceptional war measures. 39. In the case of I. W. Raymond v. The German Government the Anglo-German Mixed Arbitral Tribunal held that where the German Arbitration Court for War Economics has assessed the value of goods subject to exceptional war measures the amount of such assessment shall be credited, under the provisions of Article 297 (h) (1) of the Treaty of Peace. If the claimant proves that the amount so assessed does not represent the true value of the goods an additional sum is awarded by the Tribunal; such later sum, together with interest on the aggregate of the two sums, is treated as compensation payable under Article 297 (e). (Recueil des Decisions des Tribunaux Arbitraux Mixtes, 1922, 11, p. 523.) 40. The position regarding the payment of these claims is set forth, in the following extract from the second report of the Controller of the Central Clearing Office, p. 4 : — The amount of. compensation awarded is an obligation of the German Government, but as collateral security a charge has been created under Order in Council pursuant to the permissive provisions of paragraph 4 of the Annex to Section IV of the' Treaty over the property of German nationals in British territory in favour of this class of claimant. This charge is, however, postponed in favour of claimants in respect of debts and proceeds of liquidation to whom a prior charge has been given over the same property. Until, therefore, the first two classes of obligations have been covered by cash realized from the sale of the charged property, there will be no funds availablo for distribution amongst the ultimate encumbrancers. The Public Trustee, who is responsible for tho liquidation, of German property in ihis country, is making every effort to expedite its sale, but the matter is ono of very great difficulty having regard to the nature of the charged property and, in many cases, to conflicting claims to its ownership. Owing, however, to his endeavours, the prospects of these claimants are becoming more favourable, and. it is hoped to make a distribution on account in the course of a few months. The difficulties of this Department in providing the necessary funds to meet the various classes of claims for payment of which it is responsible will be greatly accentuated in the future by the default on the part of the German Government, referred to hereafter, to meet its obligations to the Clearing Offices on the monthly accounts. This will throw the liability, which should be met in cash by the German Government, upon the ultimate chargces. It is hoped that the efforts, referred to above, which are being made by the Public Trustee and the negotiations which are taking place with the German Government for securing payment of the debt balances will ultimately safeguard the position of these claimants. B"' 41. Since tho foregoing report was published information has been received that the Central Clearing Office has been authorized by the Treasury (Imperial) to pay a dividend to the claimants who have been awarded compensation. This dividend is payable out of the balance of the proceeds of liquidation of German property in Great Britain after provision has been made for meeting the first charge upon such proceeds of liquidation— i.e., after provision has been made for — (a) The estimated amount of any balance payable by Germany under paragraph 11 of the Annex to Article 296 which Germany has not yet paid ; (b) an estimate of tho amount still, to be credited under Article 297 (h) (1) in respect of the proceeds of liquidation of British property in German territory.
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Particulars regarding the payment of the first dividend are contained in the following Board of Trade announcement, dated sth January, 1923 : — The Controller of the Clearing Office announces that a first dividend, will be paid upon all awards of the Mixed Arbitral Tribunal for compensation under Article 297 (e). Awa.rds of £50 and under will be paid in full. Claimants whose awards exceed that amount will receive £50 on account and a dividend of 2s. Od. in the pound on the balance. Payable orders will bo issued by the Clearing Office on the 15th instant to all claimants who have obtained awards up to that day. Tho dividend upon subsequent awards will be paid on the fortnightly pay-day next after the date of such awards. It has been decided to make payment to New Zealand claimants out of the proceeds of German property realized by the Custodian of Enemy Property, in conformity with the foregoing decision. Claims for Inheritances in Germany. 42. Several claims for amounts due to British subjects in Now Zealand under the wills or intestacy of German subjects who died in Germany during the war have been lodged for settlement through this Office. As these sums were not payable before the war, or, becoming payable during the war, did not arise out of transactions or contracts of which tho total or partial execution was suspended on account of the declaration of war, this Office has been advised that such claims do not fall within the Clearing Office procedure laid down by Article 296 of the Treaty of Versailles. Inquiries were then made to ascertain whether the amounts due to these claimants were included within the meaning of the term "cash assets" referred to in paragraph (h) (2) of Article 297 and paragraph 11 of the Annex to Section IV of Part X of the Treaty. 43. A brief summary has now been received of the case of the Executors of Katherine Saunders v. German Government, in which the Anglo-German Mixed Arbitral Tribunal refused to award valorization of a legacy in marks which had not been the subject of an exceptional war measure on the ground that " cash assets " to be dealt with under Article 297 (h) are only such as have come into the hands of an official of the German Government as the result of an exceptional war measure. Further inquiries are being made to ascertain whether any assistance or relief can be afforded to such claimants. Closing-date for Acceptance of Claims under Article 297 of the Treaty of Versailles. 44. The following announcement was published in New Zealand Gazette dated 31st May, 1923, p. 1559 :— The Public Trustee, as Controller of the New Zealand Clearing Office, announces that he is in receipt of information that upon representations made by the British Clearing Office, London, to the Anglo-German Mixed Arbitral Tribunal for an extension of time for the lodging of claims for proceeds of liquidation of property in Germany and/or for compensation under Article 297 and 300 (b) of the Treaty of Versailles in respect of damage inflicted upon their property rights and interests in Germany by the application of exceptional war measures, measures of transfer or measures of execution, the Tribunal has fixed the 31st December, 1923, as the final date for such claims to be sent into the local Clearing Offices, after which date no further extensions of time will be granted for the registration of such claims. Claims by New Zealand Nationals still outstanding. 45. In regard to the claims by New Zealand nationals which have not yet been admitted by the German Clearing Office, the following is an extract from a memorandum dated 13th February, 1923, from the High Commissioner for New Zealand to the Right Hon. the Prime Minister which sets forth the position : — I have the honour to inform you, for the information of the Dominion Controller, that a number of claims lodged by New Zealand nationals against German nationals under the provisions of Article 290 of the Treaty of Versailles are still outstanding, and great difficulty is being experienced by this office in obtaining from the German Clearing Office not only the admission of these debts, but also any definite statement regarding the German attitude towards them. This office has repeatedly communicated with the German Clearing Office requesting that these outstanding New Zealand claims be settled as soon as possible, but this procedure appears to have had little effect, for admissions in connection with tho claims in question have subsequently been made in only a very few cases. On 30th November last a list, setting forth the present, position of several of the outstanding Now Zealand claims, in which large amounts are involved, was forwarded to the Berlin representative of the British Clearing Office, with a request that he might be so good as to endeavour to obtain a settlement of same by the German authorities. From inquiries made here at both the Central and Australian Clearing Offices it would seem that the only effective method of obtaining an early settlement by the German Controller of these outstanding claims is for the creditors in New Zealand (in eases where they are certain their claims are in order) to bring the matter before the Mixed Arbitral Tribunal for a decision. As instances of the effectiveness of this procedure I would draw your attention to the two following eases : — 1. Claim No. 550014, by against £742 19s. 9d. —Settlement of a part of this claim, amounting to £137 7s. 2d., could not be obtained from the German authorities, although correspondence between the German Controller and this office had been going on for over eighteen months. On the 4th October last notice of the creditor's intention to take this claim before the Tribunal, if not settled within twenty days from 27th September last, was served on the German Controller by this office. The result was that on 4th November last the German Controller admitted the debt, plus interest, without the matter being referred to the Tribunal for a decision. 2. Claim No. 500108, by against , £443 7s. —This claim was also outstanding for some considerable time. In December, 1921, tho matter was taken up by , who, after making several communications with the German Controller through this offico and not being ablo to obtain a reply thereto, duly requested me, on sth July last, to serve notice on the German authorities that the claim was being submitted to the Tribunal. This notice was served on the German Controller on 20th July last, and the result was that on 28th October an admission for the greater part of the debt was received by this office, together with a contest for the balance, without tho matter coming before the Tribunal for their decision. The attitude taken up by the Controller of the Central Clearing Office regarding the delay in settlement of outstanding British claims is outlined in the following extract from page 7 of his Annual Report, dated 22nd September last:— " Complaints : Frequent complaints are still made by creditors of the delay in payment of their claims, and for this delay they blame the British Clearing Office. As explained in my previous report, onoe a claim has been notified to the German Clearing Office it is out of the control of this Department. Upon the receipt of notice from the
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German Clearing Office of the admission of a debt it is paid by this Department, but, whilst continual pressure is exercised upon the German responsible authorities, both direct and through the representative of the Department in Berlin, to expedite the admission of claims, the Clearing Offices possess no compulsory powers. The remedy provided by the Treaty for delay in admission is for the creditor to bring the matter before the Mixed Arbitral Tribunal, and if he establishes his claim to its satisfaction he obtains an award and the amount is paid by this Department. All outstanding claims, other than those recently lodged, have been contested by the German Clearing Office upon grounds which have been notified to the individual creditors. If the grounds of contest arc disputed by a creditor and are persisted in by the debtor or by the German Clearing Office, it is for the creditor to appeal to the Mixed Arbitral Tribunal." Anglo-German Mixed Arbitral Tribunal. 46. The functions of tho Mixed Arbitral Tribunal established in accordance with the provisions of Article 204 of the Treaty of Versailles were briefly explained in my previous reports. 47. The status of the Mixed Arbitral Tribunal is explained in tho following quotation from the second annual report of the Controller of the Central Clearing Office, p. 8 : — I desire to remove an impression, which appears to be somewhat general, that the Mixed Arbitral Tribunal is part of the Clearing Office organization. This is, of course, an entire misapprehension. The Mixed Arbitral Tribunal is an independent international Court which is not subject to any outside control and is presided over by a neutral jurist. It frames its own rules and determines its own procedure, and gives its decisions in accordance with the view which it takes of the evidence adduced before it. Where the Clearing Office is a party to proceedings before the Tribunal it appears as an ordinary litigant, and, except by argument, can exercise no influence whatever over its decisions. 48. A short outline of the procedure adopted by the Central Clearing Office and British creditors in submitting claims against Germany to the Tribunal for decision has been prepared in the High Commissioner's Office, and is reprinted for general information : — Procedure in submitting Claims to the Anglo-Oerman Mixed Arbitral Tribunal. All procodure is govorned by Statutory Rules and Orders, 1920, No. 2062, Rules of Procedure of the AngloGerman Mixod Arbitral Tribunal, constituted under Article 304 of tho Treaty of Versailles, a copy of which was published in New Zealand Gazette No. 13, of 10th February, 1921. Claims under Article 297 (see para.' 33 of this report). —If the claim is not agreed to tho Treuhandor notifies the British Clearing Office of his intention to reject it, and the claimant is then advised by the Clearing Office that a preliminary objection has been lodged to this claim. The claim is then officially contested by the Trouhander on Form C.A. Upon receipt of this form the Clearing Office informs the claimant, by registered letter, of the decision arrived at, and advises him that if he wishes to proceed with his claim he should procure a copy of the rules and regulations referred to above. As outlined in theso rules and regulations, it is then necessary for tho claimant to prcparo a memorial, which should be forwarded to the Mixed Arbitral Tribunal direct by tho claimant within the required time. A copy of this momorial is then forwarded by tho Mixed Arbitral Tribunal to the Treuhander, who in due course prepares a defence, or, as it is officially termed, a " response " thereto. This " response " is communicated by the Mixod Arbitral Tribunal direct to tho claimant, who has the right of reply thereto. The prosecution of tho claim by means of correspondence shall proceed through the Mixed Arbitral Tribunal until such time as that body decides that " written proceedings shall close." The Mixed Arbitral Tribunal then decides on a date upon which tho claim shall be heard, and sends direct notification to the Treuhandor, the claimant, a,nd also to the Clearing Office concerned. The claimant must make his own arrangements to be represented at tho hearing. Tho British Cloaring Office does not represent individual claimants before the Mixed Arbitral Tribunal unless a case involving a " test " point is involved. After the hearing of the case by tho Mixed Arbitral Tribunal this body notifies all the parties concerned, in writing, as to the decision arrived at, and the decision is conveyed to the Clearing Office concernod by moans of a copy of tho formal judgment of the Tribunal itself. Tho British Clearing Offico effects settlement of tho claims upon recoipt of the Mixed Arbitral Tribunal judgment. In " agreed " claims, whore tho Treuhander offers compensation and tho claimant agrees to accept same, this decision is notified to tho Clearing Office concernod on form C.M.A.T. If " settlement out of Court " takes place after tho case has gone before the Tribunal, tho same procedure as that adopted for compensation applies. Claims under Article 296. —If claimant has not obtained a satisfactory result under this article he should then submit his claim to tho Mixod Arbitral Tribunal, but must give the opposing party notification through the Clearing Offices of a timo-limit within which claim must be settled or it will be referred to the Tribunal. If no satisfactory reply is received in the specified time he must then proceed to lodge a momorial with tho Mixed Arbitral Tribunal, as is done under Article 297, outlined above, the only difference being that the claim will be against a party or an individual and not against the Treuhander. In all other particulars the same procedure as in Article 297 shall apply, except that credits shall be dealt with as provided on the ordinary forms in use under Articlo 296. Decisions of Mixed Arbitral Tribunals. 19. The decisions of the various Mixed Arbitral Tribunals established between the Allied and Associated Powers and the former enemy Powers are published monthly by the Librairie do la Societe du Recueil Sirey of Paris. Unfortunately, this office has not yet been able to obtain a complete set ot these publications, but it is hoped to secure the missing numbers at an early date. The information contained therein indicates the developments of international law regarding the treatment of private property, and is also of great value in advising persons concerning what action they should take in prosecuting their claims or in contesting claims rendered against them. 50. Attached to the second report of the Controller of the Central Clearing Office is a report of his legal adviser, who has supplied therein summaries of the more important of the decisions pronounced by the Anglo-German Mixed Arbitral Tribunal on points of principle. Summaries of several of these decisions are given hereunder : — (1.) Dissolution of a Loan Contract under Article 299 (a). (a.) The case of Kitzinger v. Dann (Recueil, I, p. 847) raised the important point as to whether, in order to bring a debt within Article 296, the maturity of which would in the ordinary case under German law have depended upon at least three months' notice, such notice was essential, having regard to the dissolution of the contract of loan under Article 299 (a) of the Treaty. The Tribunal in that ease held that the contract of loan between the creditor and debtor must be treated as dissolved as from the outbreak of war, giving rise under the exception contained in Article 299 (a) to an immediate obligation to repay the sum lent thereunder, and that the debt therefore became repayable during the war, and was recoverable through the Clearing Office. (h.) The further case of Ounn v. Gunz (Recueil, 11, p. 202) came before the Tribunal, in which the British creditor Bought to recover under Article 296 and by virtue of Articlo 299 (a) payment of a loan of 12,000 marks which he had
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made to tho German debtor prior to the war. Under the agreement botwecn the parties this sum could bo repaid from the Ist July, 1916, at the rate of 2,003 marks yearly on the creditor giving three months' notice. In that case the Tribunal held that, notwithstanding the dissolution of the contract effected by Article 299 (a), the contract must continue to govern the repayment which had to take place ; that such dissolution had, without any notice from the creditor, made payable the debt according to tho terms of, and at the date when such debt was stipulated to be payable by, the contract itself ; accordingly, such instalments as beeamo due from the Ist October, 1916, to the Ist October, 1919, inclusive, were payable in sterling at tho pre-war rate under Article 296, but the remaining two instalments, which could not under tho contract have fallen due until 1920 and 1921, could not bo claimed through, tho Clearing Office. The Tribunal added, that this conclusion was not substantially in conflict with the decision in Kitzinger v. Dann (supra), in which case the only question at issue was the necessity of giving notice. In that ease, subject to the question of notice, the amounts were clearly due, and tho contract contained no terms as to payment at fixed dates, as in the case before them. (c.) Another analogous case involving an important point of principle was that of the British Clearing Office against the Gorman Clearing Office in the matter of Public Trustee v. Enders'sohe Erben. There the British creditor, acting as executor of a British national who died in 1915, claimed payment under Article 296 (2) at the sterling equivalent at pre-war rate of a loan of 20,000 marks granted before the war by the British national to certain German nationals upon mortgage of lauded property in Germany. Tho German Clearing Office contested the claim on the ground that the debt oxisted under a contract of mortgage which came within the exceptions mentioned in paragraph 2 (c) of tho annex to Section. V, Part X, of the Treaty, and was accordingly not dissolved at the outbreak of war, and that, as the necessary three months' notice to redeem had not been given, the sum had never become payable during the war. The British Clearing Office maintained that under German law there were two contracts —(1) a personal contract of loan, and (2) the contract of hypotheca or mortgage —and that tho former contract, which was distinct and separate from the other, must be considered as having been dissolved as from the outbreak of war, leaving only the pecuniary obligation to repay tho debt subsisting. The German Clearing Office contended that the debt was not separable from tho mortgage, and that the repayment of the loan would lead to the extinction of the mortgage contract contrary to paragraph 2 (c) of the above-mentioned annex. The Tribunal referred to the decision in the case of Gunn v. Gunz (supra) to the effect that Article 299 (a) of the Treaty applied to contracts of loan and superseded for such contracts notice required either by the contract or by domestic law. They considered that it lay in the very nature of the contract of mortgage that it was only accessory to and dependent on tho existence of the debt which was thereby guaranteed. If the dissolution of the contract of loan led to the total or partial repayment of the debt to the creditor, the effect of such repayment on the mortgage must bo determined according to the law which was applicable. They were, therefore, of opinion that tho contract of loan was to be considered as having been dissolved as from the time when tho parties became enemies, and that, accordingly, the amount of the loan became a debt payable during the war and eamo within Article 296 of tho Treaty. (2.) Disposal of Security deposited for Debt. Tho question as to the right of a British national to claim repayment of a debt from a German national under Article 296 in a ease where security had been deposited for the debt came before the Tribunal in the important case of tho British Clearing Office ?;. the German Clearing Office in tho matter of a claim by Win. Brandt, Sons, and Co. against Ludwig Tillmann (Recueil, I, p. 554). The German debtor did not contest the amount of the claim, but the Gorman Clearing Office contended that as security has been given to the creditor they would contest the claim until tho security was handed over. This the British Clearing Office refused to do, on the ground that, under paragraph 4 of the annex to Section IV, Part X, these securities were subjected to the charge imposed on the property of German nationals situated in British territory. They claimed that tho right of retention of the security under Article 297 (b) was an absolute and unqualified right; that no contrary stipulation excluding the security from the effect of Article 297 (6) could be found, but that, on the contrary, Article 296 (a) expressly provided, that tho debt must bo settled solely under the terms of that article, and that accordingly the British creditor was not entitled to realize the security and pay himself out of it. This the British Clearing Office argued involved no hardship upon the debtor, as he would, under Article 297 (/*), be entitled to a credit through the Clearing Office for the full value of the security. The Tribunal refused to adopt the contention, of the German Clearing Office that the effect of the Treaty was merely to constitute the German Government as a surety as regards the British Government, and decided that tho rights of the British Government under Articlo 297 could not be held to have been affected or limited in the way suggested, and that even if the implication of suretyship thus arose it would not affect Article 297 (b), which would override it. They therefore held that the German Clearing Office had no right to demand either the handing-over of the securities deposited by the German debtors with the British creditors as a condition of crediting the British Clearing Office with the full amount of the debt admitted by the debtor, or to demand that the debt should be reduced by tho amount of the proceeds or value of tho securities. (3.) Liability of Government for Payment of Debts established against its Nationals. Under Articlo 296 (b) of the Treaty the Governments of the respective countries are made responsible for the payment of enemy debts due by their nationals, except, inter alia, in cases where before the war the debtor was in a state of bankruptcy or failure or had. given formal indication of insolvency. The Tribunal had to consider the meaning of these words in the claim of Seligman v. Liebermann (Recueil, I, p. 730) for various amounts lent by the British creditor to the German debtor before the war, and also for certain further moneys which fell to be paid by the British creditor during the war for the debtor by virtue of a contract. The debtor had not apparently contested the claim, but the German Government intervened on the ground that at the date of outbreak of war the debtor was insolvent, and that therefore the Government guarantee specified in Article 296 (b) did not take effect. It was admitted that the debtor was not bankrupt before the war, although some evidence was called to show that he had for some time prior thereto been in embarrassed circumstances and owed more monoy that he was in a position to pay. The Tribunal did not consider that the debtor "was in a state of failure in the sense which they attached to that expression, and came to the conclusion that the Treaty had really contemplated an official statement of insolvency of tho debtor before the outbreak of war as a necessary condition for the exclusion of the Government guarantee. No such official statement of insolvency had in fact been made, and accordingly the Tribunal declared that tho guarantee of the German Government for the debt could not bo excluded. They further refused to admit an alternative claim put forward by the German Government that, on payment to the creditor of the sum awarded by the Tribunal, that Government should be entitled to receive from the creditor certain insurance policies which had been formerly assigned to the creditor by way of security. This point, they held, was covered by the former decision in the case of Brandt v. Tillman (supra). (4.) Compensation for British Goods seized by Germany. Turning to tho cases relating to exceptional war measures and liquidations, probably the most important of these docidod by the Tribunal up to the present time is that of McLeod, Russell, and Co.u. the German Government (Recueil, I, p. 547). This was a case in which the British claimants claimed a credit under Article 297 (7*) (1) and also compensation under Articlo 297 (e) in respect of tho requisition by the Gorman authorities of certain bales of juto warehoused in Hamburg at tho outbreak of war, the price for which had been assessed by the Roiehswirtschaftsgoricht. The jute had been requisitioned by the civil authorities at tho instanco of tho military, and the German Govemmont contended that the measure under which the requisition had boon made was of a general nature equally affecting the
13
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property of persons other than enomios, and not directed against enemy property as such, and that accordingly the only remedy was that provided by the reparation clauses of the Treaty. The Tribunal held that tho German Government was responsible for tho taking of the jute, and that there was no indication that at the time of seizure jute was being taken from ovorybody who possossed it by virtue of any collective order. The question, therefore, whothor such other cases might have been contemplated by the provisions of tho Treaty did not arise. Thoy considered that the present case came within tho provisions of Article 297 (e) of the Treaty of Versailles, and that thoy had j urisdiction to deal with it. Upon the case coming on for further hearing an order was made to the effect that the claimants, who accepted the value of tho goods as assessed by the Rcichswlrtsehaftsgoricht as reasonable, were ontitlod to a credit through the Clearing Offico in sterling at tho pro-war rate to the amount of tho assessment. A somowhat similar decision was given in the caso of Sternberg against the German Government, in which the British claimant sought to recover a sum of £300 in respect of certain bales of cotton goods seized by the Prussian War Office at the port of Hamburg. The Germans again set up tho argumont that tho expropriation took placo under a statute of general application, and not directed solely against enemy nationals. At the hearing, however, tho latter contention was not insisted on, and the Tribunal hold that the fact that the moasure in quostion was not directod against enemy property as such did not deprivo it of the character of an exceptional war measure within tho moaning of the Treaty. A further contention that tho taking-over of the production and distribution of woven material into a common administration was not an exceptional war measure foil to the ground in view of an ordor of the German Government which made it cloar that the particular seizure was not made as part of the administration in common of goods of its class, but was similar to the requisition already dealt with by the Tribunal in MeLeod, Russell, and Co. v. German Government. The Tribunal were accordingly of opinion that the claimant had a good claim under Article 297 of the Treaty. (5.) Treaty varies Municipal Law. In tho case of Hardt v. Stern a German creditor claimod a debt owed by a firm of two British and two American partners. The Tribunal held that ovory claim and every debt of a mixed partnership is to participate in the clearing procedure after the share of tho neutral has been earmarked and excluded, and the municipal law of either country which involves a different method of enforcing rights must be disregarded, because to have regard morely to tho facts of any particular case and to decide it by nothing more than the " mechanical " application of municipal law of one country would defeat the real object of the Treaty and exclude oases which the Treaty was intended to cover. The municipal laws of the countries must be rologated to a position in which they will not render impossible a settlomont according to the intention of tho Treaty. The proportion, which each partner would have received of tho assets of the firm in tho ovent of the winding-up on the 4th August, 1914, is the propor moasure for the proportional division, which should bo ascertained as if tho share duo to oach partner out of tho procoeds of liquidation had been calculated by moans of a balance-shoot drawn up on that date. In doing this a fair ostimate should bo made, and not a precise calculation. Tho Tribunal will, for purposos of procedure, not require that claims shall bo against individual partners by namo, but will allow claims to bo brought against the firm in the firm's name, and the liability of any partnor who is not a national of the State concornod can bo contested by him or tho debtor Clearing Office. The non-British partner's share of tho debt to a German creditor is subject to the charge. The above decision was confirmed in a claim against a German mixod partnership (Fisher v. Biohn). System of Accounting between the Central Clearing Office and the German Clearing Office. 51. The system of accounting between the German Clearing Office and the Central Clearing Office, London, is clearly set forth in the following paragraphs taken from the second annual report of the Controller of the Central Clearing Office, dated 26th September, 1922, pp. 4-6 : — Monthly Accounts. —As explained in my previous report, tho settlement of tho class of pecuniary obligations referred to in Article 296 and described as " enemy debts " is effected through separate monthly accounts rendered by oach of tho Allied Clearing Offices to Germany. In these accounts are assembled the admissions on both sides, and the balance, if in favour of an Allied Clearing Office, is, by the terms of tho Treaty, payable in cash within seven days of tho presentment of the account. In November, 1920, tho German Government gave notice that it would bo unable, for a time at least, to meet its obligations to the Allied Clearing Offices, and in tho following month it mado default in payment of the amount then due. The matter was roforred by the Brussels Conference to tho Directors of the Allied Clearing Offices, and discussions then ensued between them and representatives of the German Government. It was urged by the latter that the necessity of providing variable amounts from month to month in Allied currency without the possibility of estimating in advance the sums required had provod vory embarrassing to the German Treasury, and with a view to meeting this apparent difficulty tho London agreement of the 10th June, 1921, was entered into between the Allied Controllers and the German Government, which varied the method of payment by substituting fixed monthly instalments of £2,000,000, divisible pro rata amongst tho Allied Offices, for tho uncertain amounts which a strict adhoronco to the Treaty provisions Would have entailed. It was estimated that these fixed instalments would be inferior to the amounts which would have become payable under the provisions of the Treaty, but should it prove otherwise tha German Government was given the right to denounco tho agreoment at any time and to revert to the mothod of Xiayment required by tho Treaty. Owing to the grave delay on tho part of the German Clearing Offico in crediting claims, many of which had long since boon admitted by the debtors themselves, it resulted that on many of the accounting periods all tho Allied Clearing Offices were in debit, and in consequence the German Clearing Office declined to pay tho instalments of £2,000,000 on these occasions. To compel admission of their just claims it became necossary therefore for creditors to take proceedings before tho Mixed Arbitral Tribunal, which necessarily resulted in further delay and oxpenso. In August last tho German Government notified the Allied Powers interested that it would be unablo to meet its engagements to the Clearing Offices under the above agreement unless tho instalments payable thereunder wore reduced to £500,000 a month, and default was subsequently mado in payment of the instalment then about to bocome due. The agreement was thereupon denounced by tho Powers interested, who have referred tho matter to the Allied Controllers to come to a new arrangement with tho Gorman Government as to the settlement of these balancos in the future, with instructions that such arrangement must receive the approval of tho Reparation Commission. In consoquonce of these instructions, I, in company with my French and Belgian colleagues, attended a sitting of tho Reparation Commission in Paris on the 15th Soptember, at which, after a full explanation of the position of tho Clearing Offices, certain proposals were submitted for the consideration of tho Commission. A meeting of the Council of Allied Controllers has also been summoned, and a requost has boon addressed to tho German Government to appoint delegates with whom tho Allied Controllers can confer with a view to negotiating a new agreement for the settlement of the outstanding balances between the Allied and German Clearing Offices. Whilst upon the subject of the monthly balancos I desire to point out that the difficulty in which tho German Clearing Office finds itself in providing the sums owing to Allied creditors arises solely from the fact that the German Clearing Office law of the 24th April, 1920, did not apply tho provisions of the Treaty, but sought to reliovo German debtor nationals of their obligation thereunder af the expense of the German Budget.
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Under Article 296 of the Treaty debts are payable in Alliod currency at the pre-war rate of exchange, and undor paragraph 14 of the annex to Soetion 111 the Alliod and ox-enemy Governments who adopted that sootion undertook to invest their respective Clearing Offices with all tho necessary powers to onforce these provisions. Whilst, however, the observance of this Treaty requirement was imposed upon their debtor nationals by all the Allied and the other ox-onomy Governments, Germany, by her Clearing Offico law, relieved her debtor nationals of this obligation and transferred the resultant burden to her Budget. Even this was not the limit of the benefits accordod to German debtors by the German Clearing Offico law, for in the caso of those debtors who had contracted debts in Allied currency, thoy were relieved of their liability under their contracts on payment to the German Clearing Office of the amount of their debts in marks at the pre-war rate of exchange. Had the German Clearing Office law given offect to the Treaty provision there would have beon no resultant loss to the German Government, for tho position of a Clearing Office is merely that of an agent for the collection and paymont of the dobts owing by and to its nationals. It is truo that, undor the terms of tho Treaty, all tho Governments, both Allied and ex-onemy, guarantee tho payment of tho dobts owing by their nationals, but any loss arising under this guarantee may, under paragraph 9 of the annex to Section 111 of tho Treaty, bo covered by a deduction from the amounts credited to them by tho Opposing Clearing Offices on account of their creditor nationals. Germany has, in fact, availed herself of this permissivo provision and has mado large deductions from the sums credited by tho Allied Offices to tho German Clearing Offico, which have far exceeded any loss that sho might havo sustained under the above guarantee had she givon offect to the other provisions of the section by her internal legislation. It is to this causo —namely, the relief voluntarily accorded by Germany to her debtor nationals at the expense of hor Budget—that tho default on tho part of tho German Clearing Offico in mooting its obligations is attributable. Default by Germany. 52. Information has been received that since September, 1922, Germany has been in default in paying the balances under Article 296 owing by hor to the British Empire. A copy of the British Empire Accounts prepared by the Central Clearing Office, London, from the 10th January, .1920, to the 31st March, 1923, is attached to this report, showing, inter alia, — (1.) That the cash payments made by tho German Clearing Office to the Central Clearing Office in accordance with paragraph 11 of the annex to Article 296 of the Treaty of Versailles amounted to £23,634,845 2s. 9d. (2.) That tho balance due by Germany to the Central Clearing Office as at the 81st March, 1923, was £1,899,813. System of Accounting between Central Clearing Office and New Zealand Clearing Office. 53. The Central Clearing Office keeps a New Zealand Account, which is credited with all claims admitted by the German Clearing Office in respect of debts due to British nationals in New Zealand, and which is debited with debts admitted by the New Zealand Clearing Office as due to German nationals. Until September, 1922, the balance of this account was settled monthly. If there was a balance in favour of the Central Clearing Offico the High Commissioner paid the amount to that office out of the New Zealand Clearing Office funds held by him ; if, however, tho balance was in favour of the New Zealand Clearing Office the Central Clearing Office paid, the amount to the High Commissioner. 54. In December last the Central Clearing Office advised that when Germany fails in her payments under paragraph 11 of the annex to Article 296, as she has done since September, 1922, the monthly balance due by the Central Clearing Office to New Zealand will remain unpaid until Germany commences again to make payment on account of her monthly balances under the above-mentioned paragraph. As soon as Germany recommences payments the money received will be applied pro rata between the Central Clearing Office, the New Zealand Clearing Office, and the other Dominions and Allies under the reciprocal agreements in proportion to their balances for October month until the whole of these balances have been extinguished. New Zealand is in credit in respect of October and November, but will not be paid these balances until Germany resumes payment of her monthly balances. If New Zealand should subsequently be in debit she will not be asked to pay this debit until Germany's payments for that month's balances commence. Interest will be charged or credited to New Zealand upon these monthly balances at 5 per cent., but payment of this interest will only take place month by month in the same manner as the payment of the. principal moneys for each month. • PART 111.-MISCELLANEOUS. Council of Allied Controllers. 55. In advising New Zealand firms regarding claims by or against them considerable help has been afforded by the information contained in the confidential reports of the meetings held by the Controllers of the Allied Clearing Offices. 56. The following paragraph regarding these meetings is quoted from the second report of the Controller of the Central Clearing Office, London, p. 8 :— Since the date of my last report, meetings of the Council have been held in London, Paris, and Strasburg, at which numerous complicated questions that had arisen in tho course of the operations of the different Allied Clearing Offices were discussed. The proceedings were animated by the same spirit of loyalty and unanimity to which I referred in my previous report, and tho united and varied experience of the members of the Council has assisted in finding solutions to many of the problems which had hitherto seemed well-nigh insoluble. Apart from periodical meetings, tho members of tho Council continually correspond with one another, socking advice and keeping one another informed of any important decisions at which they may arrive, and this has led to unanimity of practice, which has greatly assisted in the smooth working of the Clearing Offices. I desire to record my especial appreciation of the services so willingly rendered to me at all times by my French colleague, M. Alphand, whose mastery of the various Treaty problems has been of invaluable assistance to mo.
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German Church Trust Property at Christchurch. 57. By section 78 of tho Reserves and other Lands Disposal Act, 1917, the property belonging to the German Church Trust at Christchurch was vested in the Public Trustee upon such trusts and with such powers, discretions, and authorities as the Governor-General in Council might from timeto time direct. The Public Trustee has been collecting the rents and making such repairs as were necessary from time to time. 58. On behalf of this congregation a petition addressed to His Excellency the Governor-General in Council was presented praying that this property be now vested in the Evangelical Lutheran Concordia Conference Trust Board. The petition was favourably considered by the Government, and the necessary legislation to give effect thereto was included in section 54 of the Reserves and other Lands Disposal Act, 1922. Under the provisions of this section the property is now vested in the Evangelical Lutheran Concordia Conference Trust Board subject to trusts to be declared by the Governor-General in Council. These trusts were duly declared by Order in Council dated 23rd April, 1923, and published in New Zealand Gazette No. 40, dated 3rd May, 1923. German Property in Samoa. 59. In accordance with the provisions of the Treaty of Versailles the New Zealand Clearing Office is required to transmit to the German Clearing Office schedules showing the value of the German plantations in Western Samoa which have been retained by the New Zealand Government in pursuance of Articles No. 121 and 297 (b) of the Treaty of Versailles. The present policy of the New Zealand Government with respect to these properties which now comprise the Crown Estates of Samoa was indicated in its first report on the Territory to the League of Nations. (See parliamentary paper A.-4, 1922.) Considerable difficulty is being experienced in determining what is a proper basis of valuation to be adopted in giving credit to the German Government in connection with the properties retained. In regard to Gorman property retained in New Zealand this difficulty does not arise, as all German property retained in pursuance of the Treaty of Peace is sold and the net proceeds thereof are credited to the German Liquidation Account. The preparation of the schedules regarding Western Samoa is at present receiving attention by the Samoan authorities, and every effort is being made to have this work completed at an early date. Restitution of Property in Germany belonging to British Nationals. 60. A copy of a Board of Trade announcement elated 25th September, 1922, in connection with claims for restitution of property in Germany has been received, reading as follows : — Notice is hereby given by tho Board of Trade that no claims against Germany for restitution undor the provisions of Article 238 of tho Treaty of Versailles of cash, securities, or other property seized or sequestrated in occupied territory will be entertained by their Reparation Claims Department except in cases which have been notified to tho Reparation Claims Department, Cornwall House, Stamford Street, London S.E. 1, and full particulars of which have been furnished prior to 28th October, 1922. All claims for restitution which have been notified to the Reparation Claims Department, but in respect of which all tho particulars and information which have been asked for by tho Reparation Claims Department have not been furnished prior to 28th October, 1922, will be presumed to have been abandoned. No claims falling within this category have been notified to this office. Comparative Statistics of Allied Clearing Offices. 61. It is considered that the comparative tables of the operations of the Belgian, French, Italian, Siamese, Greek, and British. Clearing Offices as at the 31st March, 1922, compiled by the Controller of the Central Clearing Office, and published in his second report, will be perused with great interest and have therefore been reprinted in tho appendix to this report. The Controller of the Central Clearing Office refers to these tables in the following terms : — For the information relating to the operations of tho Allied Offices contained in these tables I am indebted to my colleagues. A study of these tables will enable an estimate to be formed of the work already accomplished by the different Allied Offices towards completion of the clearing operations. As regards the British Office, the figures are brought down to date in footnotes to the separate tables. Conclusion. 62. A summary of the more important despatches and communications from the Imperial authorities will be found in the appendix of this report. Several statements of accounts prepared by tho Controller of the Central Clearing Office have been reprinted, as it is considered that they will be read with considerable interest. I have, &c, J. W. Macdonald, Public Trustee, as Custodian of Enemy Property and Controller of the New Zealand Clearing Office.
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APPENDIX. PRINCIPAL DESPATCHES RECEIVED FROM HIS MAJESTY'S SECRETARY OF STATE FOR THE COLONIES IN REGARD TO ENEMY PROPERTY. (1.) Retention and Liquidation of Bearer Shares. (New Zealand.— Dominions No. 184.) My Lord, — Downing Street, 7th June, 1922. I have the honour to request Your Excellency to inform your Ministers that the Controllers of the British and French Clearing Offices have agreed that the liquidator in France of a German or other ex-enemy business may realize bearer shares in companies registered in the United Kingdom, and coupons belonging thereto which come into his hands in the course of the liquidation, and may retain the proceeds thereof as proceeds of the liquidation of the business, and that the liquidator in the United Kingdom of a German or other ex-enemy business may deal similarly with bearer shares in French companies and coupons belonging thereto. A translation of a circular notice issued by the French Clearing Office is enclosed. 2. The Controller of the French Clearing Office is anxious that a similar arrangement should be made as regards the treatment by French liquidators of bearer shares in companies registered in the self-governing dominions and the treatment by liquidators in the dominions of bearer shares in French companies. I shall be glad to learn what reply your Ministers would wish, to be returned to Mr. Alphand. I have, &c, Winston S.. Ght/rohtll. Governor-General His Excellency the Right Hon. Viscount Jellicoe, G.C.8., 0.M., G.C.V.0., &e. [Translation.] French Foreign Office (Office for Property Rights and Interests), 140 Avenue Malakoff, Paris, 30th March, 1922. Cieoijlar No. 129.—Paymknt or Got/tons in Respeot of Bearer Shares in British Companies. Difficulties have arisen in the oasc of the payment of coupons in respect of bearer shares in British companies, particularly when those shares have been liquidated in France for account of ex-enemy nationals. In order to avoid those difficulties in future the Controller of the Clearing Office and the Director of the Office for Property Rights and Interests have reached an agreement for the adoption of the following procedure : When French liquidators desire to realize bearer securities or British coupons they shall subscribe a declaration as per specimen at foot, which they shall send to tho bank entrusted with the negotiation. Declaration. (1.) I hereby declare that the coupons or bearer securities forwarded by me, pursuant to my letter of advice of the —! —, for sale or presentation for payment, are not forwarded for account or benefit of an enemy national, and that no sum derived from tho said sale will be paid to an enemy national. (2.) I hereby also declare that the coupons and the securities appertaining thereto (or tho bearer securities) referred to in the enclosed list which I am forwarding for sale or presentation for payment, were, on the 4th August, 1914, the property of , a national of an ex-enemy Power, whose property was placed under sequestration by tho French authorities oh the —-—, and that lam forwarding tho said coupons and securities in my capacity as liquidator of the property subjected to the said sequestration. I heroby authorize you to make for my account and under my responsibility any declaration that may be necessary relative to the securities referred to above. N.B. —In the present declaration it is agreed that the expression " enemy national " is understood to refer to every individual or juridical person whatever his (or her) nationality residing or transacting his (or her) affairs in an enemy country with regard to which no Treaty of Peace is in force (exception being made of persons who have of right already acquired, by application of the Treaty of Peaco, the nationality of an Allied or neutral Power). As regards persons who have acquired securities of British companies as the result of the liquidation of the property of ex-enemy nationals prior to the conclusion of the present agreement, and who find that they are refused payment of their coupons, they shall be at liberty to apply to the liquidator who caused the securities to be sold, in order to have a declaration as per specimen referred to above issued to thorn. If difficulties arise in the application of this procedure it would be in the interests of the liquidators to apply to the Public Trustee, who, as it follows from a letter from Mr. Grey dated the 21st September, 1921, lias declared his willingness to intervene in order to remove these difficulties. Finally, holders of bearer shares in British companies who have not acquired the securities from a liquidation of enemy property must, in order to obtain payment of the coupons or securities drawn for payment, furnish the following proofs : (a) Tho namo, address, and nationality of the owner of the security on the 4th August, 191.4, and since that date ; (b) the namo, addresses, and nationalities of the different persons to whom the security has since belonged ; (c) the names and addresses of the persons with whom the security was deposited on tho 4th August, 1914, and since that date ; (d) substantiating documents in support of tho above declaration— i.e., tho contract showing the purchase of the security irl the original, or the certified copy of this note, a.nd. an extract (attested by a notary public) from the books of the bank which had the custody of the said security, an extract which must specify the name, address, and. nationality of the owner, the number and initial of tho series of the security, its value, the date on which it was deposited, and, if possible, the date upon which it was redeemed. As regards the nationals of Alsace-Lorraine who are the owners of British bearer securities, the fact that they wore the owners of a.ny security on the 10th January, 1920, is insufficient. If they acquired the security or the coupons during tho war, a thorough inquiry is made, with a view to ascertaining in what circumstances the said nationals acquired them, and the decision in each case depends upon tho result of that inquiry. The Director of the Office, Alphand. (New Zealand.—No. 223.) My Lord,— Downing Street, 24th October, 1922. With reference to your Excellency's despatch, No. 216, of the 19th August, I have tho honour to request you to inform your Ministers that His Majesty's Ambassador at Paris has been asked to inform the French. Government that the Government of Now Zealand concur in the extension to New Zealand of tho agreement concluded by the Controllers of tho British and French Clearing Offices with regard to the liquidation of ex-onemy bearer shares. I have, &c., Winston S. Churchill. Governor-General His Excolloncy the Right Hon. Viscount Jellicoe, C.C.8., 0.M., G.C.V.0., &c.
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Inquiry from Reparation Commission as to the Final Balance.in Favour of Germany arising under articles 296 and 297 of the treaty of versailles. (New Zealand. —No. 175.) My Lord, — Downing Street, 14th September, 1922. With reference to my predecessor's telegrams of tho" 8th November, 1920, and to Your Excellency's telegram of the 4th December, 1920, I have tho honour to transmit to you, to be laid before your Ministers, a copy of a letter from the British Delegate on the Reparation Commission, communicating an inquiry from the Commission as to the final balances in favour of Germany arising under Articles 296 and 297 of the Treaty of Versailles. I should be glad to learn what reply your Ministers would wish to be returned to this inquiry as regard New Zealand and Western Samoa. I have, &c, Winston S. Churchill. Governor-General His Excellency the Bight Hon. Viscount Jollicoe, G.C.B., O.M., G.C.V.O., &c. (Report No. 305. —Enclosure.) British Delegation, Reparation Commission, 131 Avenue des Champs-Elysees, Paris, 27th July, 1922. May it flease Your Lordships,— Adverting to previous correspondence in regard to the liquidation of ex-enemy property under Article 297 of the Treaty of Versailles, I have the honour, in Sir John Bradbury's absence, to transmit herewith, for Your Lordships' information, a copy of a letter dated the 30th ultimo from the Finance Service of the Reparation Commission, requesting information with a view to the eventual establishment of the credits to be given to Germany under Article 243 (a), as to the probable or actual amounts of any final balances in favour of Germany under Article 290 or Article 297 of the Treaty, throughout the British Empire, India, &c. Your Lordships will observe the special request which is mado by the Finance Service, in pursuance of Article 297 (h), in the case of Egypt. I shall be glad if I may be favoured in duo course with Your Lordships' instructions as to the reply which should, be returned to the Finance Service's inquiries. I would add that I am in agreement with the conclusion arrived at by the Finance Service in the penultimate paragraph of its letter regarding South Africa. Copies of this letter and of its enclosure have been communicated, to His Majesty's Embassy, Paris. I have, &c, B. M. KlMBALL-CoOK. (No. 13/72.) Sir, — Reparation Commission, Finance Service, 30th June, 1922. I am instructed, by the Managing Board of the Finance Service to refer to previous correspondence addressed to you with regard to the application of Article 297 (h) of the Treaty of Versailles, in which you were requested to furnish information in respect of the liquidation of ex-enemy property and the amount of its proceeds. Articlo 243 of the same Treaty states : " The following shall be reckoned as credits to Germany in respect of her, reparation obligations : (a.) Any final balance in favour of Germany under sections 3 and 4 of Part X (economic clause) of the present Treaty. ..." Under these provisions the Reparation Commission has therefore to credit to Germany—(1) Any final balance in favour of that country arising out of settlement of debts through tho Clearing Offices under Article 296 of the Treaty of Versailles ; (2) any final balances in favour of Gormany resulting from the net proceeds of the liquidation of ex-enemy property dealt with by the Clearing Offices as provided for by Article 297 of the Treaty of Versailles. In order that the Reparation Commission may be in a position to fulfil its duty under Article 243 (a), 1 am to request you to furnish the Finance Board with an estimate of the final balance in favour of Germany resulting from the operations of the Clearing Offices in regard to both Articles 296 and 297 (h). Should, these operations be already completed, the Board would be glad to obtain a statement showing the actual final balances in question. It is also requested that tho same information be furnished in regard to Australia, New Zealand, Newfoundland, India, and Canada, as well as in regard to colonies, protectorates, and those territories mandated, to Great Britain under Article 22 of the Treaty of Versailles. The Finance Board further points out that in regard to countries not adopting the Clearing Office arrangement under Section 111, Part X, the Reparation Commission, has in accordance with the Article 297 (h), to credit to Gormany the cash value of ex-enemy property retained by the interested and Allied Governments and not disposed of according to provisions of Article 297 (h) 2 — i.e., not applied in payment of claims and debts in respect of damage iiiflieted upon the property of nationals of the Government in question situated in German territory by the application of German war legislation. The Board understands that this is the ease with Egypt, which did not adopt the Clearing Office arrangement. In regard to the Union of South Africa, which is in the same position, the case has already been explained in the British Delegation's letter of 26th February, 1921. It is recalled that the Reparation Commission decided on 2nd June, 1921, that the action of the Union Government of South Africa did not constitute a retention of the property for which credit should be given to Germany. Unless new factors are brought to the knowledge of the Commission, this decision appears to settle the question with regard to the Union of South Africa in so far as the Reparation Commission is concerned. 1 am accordingly to request you to furnish the Finance Board with the estimate of the value of ex-enemy property retained by the Government of Egypt, or, in case the operations of liquidation are now completed, with definite figures showing the valuo of the property in question which is to be placed to the credit of Germany on Reparation Account. I am, &c., The National Secretary, British Delegation. A. Antonnes. t
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(2.) Position in regard to Claims in respect of Enemy Debts, under Article 296 of the Treaty of Versailles, owing to German Creditors by Allied Debtors. As at 31st March, 1922.
(1.) Position in regard to Claims in respect of Enemy Debts, under Article 296 of the Treaty of Versailles, owing to Allied Creditors by German Debtors. As at 31st March, 1922.
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| Of the Claims notified. Claims notified to the German Clearing Office to 31st March, b922. Contested by the German Clearing Office Still under and withdrawn by the consideration by the Creditors, or German Clearing Office, disallowed by the practically all having Mixed Arbitral been contested. Tribunal. Principal Amount only. Principal Amount only. Note. —The amounts in these two columns include Treaty interest to date of admission. Cash received Casn id 'craringoCe. 11 to Allied Creditor, Admitted by the German Clearing Office Allied Country. No. Principal Amount No. Principal Amount of Claims. " I Interest thereon. Total Amount admitted. £ s. d. Belgium .. 15,788 5,405,927 4 3 5,916 Great Britain .. 90,320 62,835,279 19 3 57,969 Paris Office .. 85,621 24,970,43117 11 43,791 Strasburg Office 87,325 27,076,659 3 10 9,960 Greece .. .. .. 1,114,393 15 7 Italy .. .. .. 214,458 12 3 Siam .. .. .. 114,770 0 11 £ s. d. 1,532,493 15 0 28,544,209 6 11 7,364,542 10 5 6,049,260 19 5 13,009 11 10 464 0 8 15,014 2 4 £ s. d. 114,164 1 5 5,890,771 5 8 1,304,604 13 11 464,956 6 6 £ s. d. 1,646,657 16 5 34,434,980 12 7 8,669,147 4 4 6,514,217 5 11 13,009 11 10 594 18 11 15,474 5 10 £ s. d. 25,098 18 10 7,052,952 19 7 1,302,317 18 3 553,240 12 9 869,415 3 1 £ s. d. : £ s. d. 3,848,334 10 5 2,585,749 8 10 27,238,117 12 9 20,077,559 15 9 16,303,571 9 3 4,775,285 9 0 20,474,157 11 8 ■ 4,093,679 1 0 231,969 0 8 773 0 11 213,994 11 7 Nil 53 0 11 19,719 8 8 £ s. d. 1,435,468 19 1 34,434,980 12 7 4,382,872 8 0 3,598,285 5 4 13,009 11 10 Nil 10,293 18 8 130 18 3 460 3 6 99,702 17 8 Note. —As regards the claims of the Allied Clearing Offices, these are, of course, preferred in the currency of the country concerned, but for the sake of comparison they have been converted into sterling at an arbitrary rate approximating to the average rate of exchange on London.
Of the Claims notified. Claims notified to Allied Clearing Office to 31st March, 1922. Allied Country. Admitted to German Clearing Office. Contested and Withdraw n by the German Clearing Office or Disallowed by the Mixed Arbitral Tribunal. Still under consideration, practically all having been contested. No. Principal Amount. No. Principal Amount of Claims. Interest thereon. Total Amount admitted. Principal Amount only. Principal Amount only. Belgium Great Britain France — Paris Office Strasburg Office Greece Italy Siam .. I 61,274 .. i 245,699 163,764 133,165 £ s. d. 2,500,241 6 9 51,342,334 8 2 11,819,917 11 5 6,876,509 0 1 1,203,982 6 7 772,925 15 1 270.928 15 0 8,452 109,364 £ s. d. 146,732 6 2 11,593,746 4 7 £ s. d. i 3,273,557 7 2 £ s. d. 146,732 6 2 14,807,303 11 9 £ s. d. 915,146 5 1 4,096,591 1 1 £ s. d. 1,438,362 15 6 35,651,997 2 6 75,250 13,041 3.350,016 19 0 321,970 7 3 21,057 6 10 6,560 19 7 2,101 12 2 590,241 1 7 20,769 7 0 2,502 17 2 111 18 5 3,940,258 0 7 342,739 14 3 21,057 6 10 9,063 16 9 2,213 JO 7 342.935 10 1 102,460 2 2 183,291 17 4 4,614 9 7 8,126,965 2 4 6,452,078 10 8 999,633 2 5 766,364 15 6 264.212 13 3 Note. —-As regards the claims of the German Clearing Office, these are, .of course, preferred in the currency of the country concerned, but for the sake of conrparison they have been converted into sterling at an arbitrary rate approximating to the average rate of exchange on London. s
H.—25
19
(3.) Position in regard to Claims by Allied Nationals, under Article 297 of the Treaty of Versailles, for Compensation in respect of Damage or Injury inflicted upon their Property, Rights, and Interests in German Territory by the application of exceptional War Measures or Measures of Transfer. As at 31st March, 1922.
Allied Claims. German Property in Allied Territory. In respect of Claims Notified, Credits have been given for — Payments to Allied Claimants. Allied Country. Notified to Germany under Article 297 (A) and (e). Proceeds of Liquidation under Article 297 {h). Property Restored under Article 207 (/). Compensation awarded by the Mixed Arbitral Tribunal or agreed to by the German Government under Article 297 (e). Total Credits. I • Proceeds of Liquidation. Article 297 (h). | Compensation. Article 297 (e). Property Realized. Credited to Germany under Article 297 (A). Belgium Great Britain .. France — Paris Office .. Strasburg Office £ s. d. 11,970,267 8 0 57,970,746 14 10 £ s. d. 275,331 6 7 15,393,252 7 11 £ s. d. £ s. d. £ s. d. Nil .. 275,331 6 7 46,353 16 9 2,080,120 13 11 17,519,732 18 7 £ s. d. £ s. d. £ s. d. £ s. d. Nil Nil Nil Nil 14,948,034 8 4 Nil 36,334,791 12 0 11,747,717 2 2 4,562,966 6 6 373,127 9 9 922,669 9 8 Nil 1,640,491 6 9 243,075 12 8 \ 2,806,236 9 1 Nil Nil 338,989 16 2 243,075 12 8 8,553,272 8 8 7,143,923 4 2 Nil Nil 2,735,080 7 6 Nil Greece Italy .. Siam .. ». Nil Italy had not begun to deal with Article 297 matter Nil Nil Nil s on 31st March, 1922. Nil Nil 484,829 2 3 1,898 4 4 193,434 10 5 Note. —As regards the claims of the ..Allied Clearing Offices, these are, of course, preferred in the currency of the country concerned, but for the sake of comparison they have been converted into sterling, at an arbitrary rate approximating to the average rate of exchange on London.
H.—25.
(4.) British Empire Account with the German Clearing Office. From 10th January, 1920, to Monthly Account, under Paragraph 11 of the Annex to Article 296 of the Treaty of Versailles, from the Month of March, 1923.
Approximate Cost of Paper. —Preparation, not given ; printing (1,225 copies), £32.
Authority : W. A. G. Skinnek, Government Printer, Wellington.—l923.
Price Od.]
20
Monthly Balances under Paragraph 11 of Article 296. Interest under tfie Agreement for fixed Monthly Payments. Set Balances each Month to the Credit of Month. Payable by German Clearing Office. In favour of German Clearing Office. In favour of the British Clearing Office. In favour of the German Clearing Office. Cash Payments by German Clearing Office. i British Clearing Office. 1 German Clearing Office. 1920. June July August September October November December £ s. d. 103, 3i9 16 1 3,230,750 6 10 2,363,317 14 7 3,143,071 13 6 1,035,723 13 4 £ s. d. 17,008 14 5 £ s. d. £ s. d. £ s. d. £ s. d. £ s. d. " 86,311 1 8 3,230,750 6 10 2,363,317 14 7 3,143,071 13 6 357,530 6 6 678,193 6 10 Totals 9,876,183 4 4 374,539 0 11 9,501,644 3 5 1921. January February March April May June July August September October November December 2,630,267 17 4 1,099,871 2 5 940,373 11 6 232,811 15 8 452,794 0 8 1,752,671 10 7 277,241 10 5 120,260 2 1 183,300 18 5 401,393 11 4 1,236,676 5 2 164,618 17 2 2,781 2 10 373 10 10 1,013 10 1 1,612 14 5 7,711 16 1 800 16 0 5,880 2 8 5,565 8 10 4,632 12 5 3,102 15 5 1,788,903 16 5 1,688,501 10 7 792,981 0 1 864,915 19 6 2,000,000 0 0 47 0 8 1,510,938 2 8 4,768 5 1 868,435 10 10 676,745 3 9 90,895 18 5 238,662 0 8 58,752 13 2 80,106 1 5 392,428 13 1 196,287 12 4 1,316,452 1 10 1,138,716 12 3 746,723 18 5 381,585 19 6 1922. January February March April May June July August September 122,980 15 1 736,236 14 4 119,146 12 1 833,910 1 11 855,727 18 2 980,585 18 4 780,383 10 5 190,166 13 2 426,322 16 2 376 15 3 280 15 6 1,620 8 11 985 3 6 2,351 1 7 1,785 11 4 1,454 9 11 6,105 15 5 2,155 14 10 4,661 12 6 1,024,000 5 11 737,791 8 7 2,000,000 0 0 175,753 2 0 281,204 19 2 88,720 16 4 279,264 4 9 424,662 17 3 264,887 5 10 553,636 0 11 436,840 10 5 342,507 8 5 1,488,234 0 2 513,753 17 3 Totals 24,249,306 9 7 24,249,306 9 7 539,157 18 1 4,825 14 6 45,764 11 4 23,244,546 17 5 424,662 17 3 October 14 October 16 November 15 .. 123,027 3 5 144,243 18 6 123,027 3 5 301,635 13 10 157,391 15 4 34,364 11 11 I Totals 24,249,306 9 7 24,249,306 9 7 539,157 18 1 4,825 14 6 45,764 11 4 23,634,845 2 9 34,364 11 11 October November December 272,123 9 10 214,188 14 5 318,398 10 9 691 2 0 1,262 7 7 2,214 1 0 307,179 3 9 522,630 5 9 843,242 17 6 1923. January February March 28,731 4 7 10,853 4 9 1,006,354 7 8 3,566 3 3 3,331 4 8 3,734 5 3 875,540 5 4 889,724 14 9 1,899,813 7 8 Totals 26,099,956 1 7 26,099,956 1 7 I' 539,157 18 1 19,624 18 3 45,764 11 4 23,634,845 2 9 1,899,813 7 8
Permanent link to this item
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Bibliographic details
ENEMY PROPERTY IN NEW ZEALAND (THIRD REPORT ON) BY THE PUBLIC TRUSTEE AS CUSTODIAN OF ENEMY PROPERTY AND CONTROLLER OF THE NEW ZEALAND CLEARING OFFICE., Appendix to the Journals of the House of Representatives, 1923 Session I-II, H-25
Word Count
19,746ENEMY PROPERTY IN NEW ZEALAND (THIRD REPORT ON) BY THE PUBLIC TRUSTEE AS CUSTODIAN OF ENEMY PROPERTY AND CONTROLLER OF THE NEW ZEALAND CLEARING OFFICE. Appendix to the Journals of the House of Representatives, 1923 Session I-II, H-25
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