H.—25

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Causes or Delay in the Clearing Procedure. introductory portion of this report I referred briefly to one cause of delay in the finalization of Clearing Office claims—viz., the absence of any Treaty provision which would secure the final disposal of contested claims within a limited period. The following extract from the last report of the Controller of the Central Clearing Office clearly sets out the position : — The two principal causes which operate to prolong the life of the Clearing Office are (1) the unavoidable delay in obtaining awards from the Mixed Arbitral Tribunal owing to the congested state of its list, and (2) the fact that the Treaty contains no specific provision for finally disposing of contested claims under Article 296, as the Clearing Office has no power to require a creditor whose claim has been contested to refer it for adjudication to the Mixed Arbitral Tribunal. The Clearing Office was very concerned to find a remedy for these two evils. To obviate the delay in obtaining awards of the Tribunal it was suggested that additional divisions should be appointed, but apart from the expense which such appointments would entail there are obvious objections to the indefinite multiplication of divisions, which would lead inevitably to confusion and a possible conflict of jurisprudence. The existing procedure of the Tribunal is doubtless essential for the proper presentment of complicated cases involving difficult questions of law and fact, but it would seem to be inappropriate for the determination of the more simple issues which are raised in a large proportion of the cases awaiting trial. In these circumstances, a scheme was prepared by the Clearing Office for the appointment of an additional division, with summary jurisdiction and with power to dispense with an oral hearing, and to determine the case upon the written evidence. It was an essential feature of this scheme that the British, and German members of this new division should be properly qualified officers of the respective Clearing Offices, who would be fully acquainted with the nature of the claims to be adjudicated upon and with the decisions of the various tribunals which were applicable to them. The outline of this scheme was submitted to the principal trade associations, and was unanimously approved by them. As regards the second cause of delay, the remedy appeared to be obvious, and in June, 1921, I approached the Controller of the German Clearing Office with a proposal that after the lapse of a certain fixed period from the date when a claim was notified the debtor Clearing Office should have the right finally to reject it, and unless, within a certain further period to be agreed upon, the creditor or the creditor Clearing Office referred the claim so rejected to the Mixed Arbitral Tribunal, it should be excluded from the clearing procedure. It was an essential part of this proposal that, if it were agreed to in principle, a joint application should be made to the Tribunal by the Government agents to give effect to it by an appropriate rule. This proposal did not meet with the approval of the German Controller, and although renewed from time to time it was not accepted. It resulted that a vast number of claims remained " in the air," and the conclusion of the clearing procedure was thereby indefinitely postponed. In June last an invitation was sent to the German Government to send delegates to London for a general discussion as to the appropriate measures to be adopted to expedite the clearing procedure. This invitation was accepted, and the discussions took place at the Clearing Office and extended over several days, and in the result an agreement was come to which it is confidently expected will attain the desired object of hastening matters towards a conclusion. A copy of the agreement referred to is annexed to this report (Appendix XI), from which it will be seen that the proposals of the Clearing Office for the appointment of a Third Division of the Tribunal, with summary jurisdiction, and for the final rejection of contested claims, are agreed to. The Tribunal will be asked to make rules to give effect to this agreement. The agreement also contains a provision that interest shall run on awards for compensation upon the conditions specified therein. This concession will be found beneficial to British claimants. 31. The agreement referred to in the above extract contained a clause providing that it should not apply in the first instance to the British dominions or to India, but nevertheless it should, at the request of His Majesty's Government, made within a prescribed period, be made to apply to any of the said dominions which had adopted Section 111 (Clearing Office provisions) of the Treaty of Versailles or to India, either in the same form and upon the same terms or with such modifications as might be agreed upon. The provisions of the agreement were carefully considered, and upon my recommendation, made in view of certain consequences of the adoption of the agreement, it was decided not to adhere to it, but the High Commissioner was instructed to arrange with His Majesty's Government for the submission to the German Government of a modification of the agreement upon lines acceptable to the New Zealand Government. So far the result of this submission has not been reported by the High Commissioner. Final Date for Acceptance of Claims under Article 296 of the Treaty of Versailles. 32. In paragraph 43 and following paragraphs of my last report I stated that the Ist May, 1.924, had been fixed as the last date upon which notification of a claim must actually reach the debtor Clearing Office in order to come within the provisions of Article 296 of the Treaty of Versailles. As a consequence of this provision there has been an almost complete cessation of claims from the German Clearing Office. A few claims are still coming to hand in cases where the claim was listed in the first instance to the British or some colonial Clearing Office and it was found upon examination that the claim was properly within the scope of the New Zealand Clearing Office. Provided that such claims were notified to the Central Clearing Office prior to the Ist May, 1924, they must be regarded as within time. It will be seen from a comparison of the figures in regard to German claims appearing elsewhere in this report that the additional claims received for settlement during the past year totalled £3,785. Residence of Claimants : Reciprocal Agreements under Article 296 (/) of the Treaty of Versailles. 33. The following extract from the last report of the Controller of the Central Clearing Office sets out the position asjjto certain agreements entered|into in terms of paragraph (/) of Article 296 of the Treaty of Versailles : — In order that a creditor may be in a position to prefer a claim under Article 296 of the Treaty he must possess, inter alia, the qualification of residence within the territory of the contracting Power of which he is a national. Paragraph (/) of this article provides, however, that the Allied and Associated Powers who have adopted the clearing procedure may agree to apply its provisions to their respective nationals established in their territory, so far as regards matters between their nationals and German nationals. To give effect to this provision agreements were concluded between His Majesty's Government and the Governments of France, Belgium, and Siam, adopting each other's nationals resident within their respective territories. These agreements enable British creditors resident in France, Belgium, and Siam to put their claims through the Clearing Offices of those countries and secure for them the benefits of the clearing procedure from which, owing to the absence of the necessary British residential qualification, they would have been otherwise excluded.