H.—25

20

Personal Effects of German Subjects. 2. Despatch dated 18th September, 1919, enclosed copies of correspondence with the German Peace Delegation, Versailles, relative to the treatment by the Allied and Associated Powers of the household and personal effects of German subjects in their countries, having regard to the provisions of Article 297 of the Peace Treaty. The correspondence has been translated as follows : — The Chairman of the German Peach - Delegation to the Chairman of the Peace Conference, Paris. Sir,— Versailles, 24th July, 1919. A specially strong feeling of anxiety has been aroused among the numerous Germans who before the war lived in the countries of the Allied and Associated Powers and returned to Germany on account of the war, owing to those provisions of tho Peace Treaty which refer to the treatment of German private property. These Germans were obliged to leave almost all their movable possessions in their former place of residence, and are now anxious lest these movable possessions also will be compulsorily liquidated in accordance with Article 297 of the Treaty of Peace. They are afraid they will lose in this way not only their business property, but also their household and personal effects. These fears are quite comprehensible, seeing that the right of liquidation which the Allied and Associated Powers have reserved to themselves in Article 297 included, according to wording of the said provision, German property of every description. The Gorman Government believes also that it may assume that the conditions of Article 297 do not imply the intention to subject every kind of German property to sale without exception . In the note of 16th June transmitted to the German Peace Delegation at Versailles it was stated that the sole object of this liquidation was based on the wish to devote the proceeds thereof to covering a portion of the indemnity demanded from the German Reich. There is no need to demonstrate the fact that the sale of second-hand household furniture and utensils, family souvenirs, clothes and linen, scientific material, or articles of a similar nature would not contribute, to any perceptible degree, towards the attainment of that object. In any ease, the advantage accruing to the Allied and Associated Governments through the sale of such objects would bo entirely out of proportion to the prejudice which the Germans concerned, with homes abroad, would thereby have, to suffer. For this prejudice would he not only of a material nature, since the objects concerned are chiefly such as in many cases can only be replaced with difficulty under present conditions, or to which, for obvious reasons, their owners were attached not only for their intrinsic value. Monetary compensation paid by the German Reich would not, therefore, onsure sufficient indemnity to the owners. In addition, the Germans concerned have used every means during the war to retain the possessions in question. In particular they have uninterruptedly paid rents and taxes, which meant no inconsiderable sacrifice for many of them who have been reduced to extremely poor circumstances owing to the loss of their economic livelihood. As these payments were made with the express sanction of the foreign Governments concerned, the owners were justified in believing that their possessions would not be seized after the war. Tho German Government ventures to hope that the Allied, and Associated Governments will not reject these considerations, and that, however the liquidation of German private property may otherwise be settled, they will now give an assurance that objects of the kind described will be exempted from liquidation. Such an assurance would give to numerous people of the less wealthy classes the comforting prospect of regaining possession at an early date of at least those objects which they urgently need, or to which they are particularly attached. I remain, &c., Fheiherr yon Lersner. To Baron Yon Lersner, Chairman of the German Delegation, Versailles. Sir,— Paris, 28th August, 1919. The Allied and Associated Powers have examined the note of the Gorman Delegation dated 24th July, and relative to the provisions of the Treaty of Peace with Germany, referring to the liquidation of the private possessions of German nationals. The German Government was particularly desirous of knowing what treatment would be accorded, in virtue of Article 297, to objects which could only be replaced with difficulty in present circumstances, or to which the owners are attached for reasons unconnected with their intrinsic value. The Allied and Associated Powers wish to state that, while reserving the exercise of the right of liquidation of German possessions within their territory according to circumstances, they do not intend to liquidate personal effects or souvenirs of little value. The French Government nevertheless wishes to point out that on the 26th May, 1917, when protesting against tho liquidation of French possessions ordered by Germany, it asked that household furniture at least might not be scattered. Information which has reached the French Government shows that the German Government took no account of the request addressed to it, which was based on the same feelings as that now formulated by it. In Alsace-Lorraine especially nearly five hundred sets of French furniture are said to have been liquidated on the instructions of the German authorities. I remain, &c, CIEMENCEATJ" 3. Despatch dated 30th March, 1920, intimated that as the Treaty of Peace with Germany had come into force the necessary steps were being taken, in the United Kingdom to give effect to the assurance given to the German Peace Delegation so far as property in the United Kingdom was concerned. It was proposed to adopt a liberal interpretation of the term " personal effects " in dealing with the case of British-born wives of German subjects. The assurance relates only to the property of German nationals, and not to the property of Austrian, Hungarian, Bulgarian, or Turkish nationals, which it was proposed to continue to hold meanwhile. Sequestrated Enemy Businesses. 4. Despatch dated Ist January, 1920, enclosed copy of an agreement which was being concluded between His Majesty's Government and the French Government relative tojjthe reciprocal payment of debts due by sequestrated enemy businesses and other similar questions. This agreement was worded as follows :— " In the liquidation in the United Kingdom of an enemy business or a company controlled by enemies, French nationals will have the same right as British nationals with respect to the restoration of property held on their behalf and for their benefit, the payment of debts owing to them by the business or company which is' liquidated, and their participation as partners or as shareholders in the distribution of the proceeds of the liquidation, provided that debts owing to, and property held on behalf of, the business or company by French nationals are paid or delivered to the person appointed to conduct the liquidation. Similarly, in the liquidation, in France of an enemy business or a company controlled by enemies, British nationals will on the same conditions have the same rights as French nationals with respect to the matters referred to above. The debts referred to above are only those due by or to establishments in the United Kingdom or France." The New Zealand Government decided to adhere to the above agreement.