TRADING WITH THE ENEMY

Dominion, Volume 9, Issue 2695, 15 February 1916, Page 6

TRADING WITH THE ENEMY

GOVERNMENT'S POWERS AND DUTIES

STATEMENT BY ATTORNEY-GENERAL

A COMPREHENSIVE REVIEW

■WHAT. THE AUTHORITIES HAVE DONE

"From inquiires made by me on > all sides, lam satisfied that every care 'is taken to detect enemy trading; that we have ample power, to deal with the offence us it is defined by the Imperial Government, and that little, if any, business which is illegal escapes the watchful eye of the New Zealand Customhouse officers and the Censor." The passage quoted above appears in an important statement 011 the vexed question of trading with the enemy furnished to the Press yesterday bv the Attor-ney-General (the Hon. A. I,'. Herdman). The Minister has gone into the whole question comprehensively, and in his statement which follows indicates in succinct form the extent of the legislation passed by the New Zealand Parliament to meet enemy trading, and also what has been.done by the Government to bring that legislation into operation, and the eil'oct it has liad. "As there appears to be some misconception about the powers and duties of the Government in reflation to trading 'with alien enemies during a time of war," said Mr. Herdman, "I think that it might be useful if. I state the position as it is understood by me. To )>egin with, ] think that trading with the enemy in time of war is banned by nations upon the principle that every trading transaction which is to the advantage of an enemy in enemy territory helps to strengthen the enemy nation as a vital fighting force. I do not think that trade between rival nations at war- is interdicted with tho object of destroying a nation's power after peace has supervened upon a state of war, but it is stopped .for the purpose of reducing a nation to, a state of impotence whilst hostilities are in progress. ' In Brri&in and America. Tor many years it has been law in (Jreat Britain and America that upon tho commeacemant nf hostilities coitfmercial intercourse between subjects of the contending belligerent States becomes illegal. An alien oncmy, except under license and except in certain unimportant instancog which need not be mentioned, cannot sue in British courts, and at tho outbreak of war he may be expelled from its terri- | tory, if, boing a noncombatant, he is resident in a country witb which his own nation is at war, and if he does not leave voluntarily within a fixed time. But if a subject of an enemy country is permitted either tacitly or expressly to remain at large in England under a license from tho Crown, he; 16 exonerated from the disabilities of an enemy for such time as he stays, and, he is placed in-tho same'position as other foreigners.'

leave for, enter, or communicate with any port or place In tin enemy country. "(s) Not to enter into any commercial, financial, or other contract or obligation with or for the benefit of an enemy. "(!)) Not to enter into any transaction) with an enemy if and when they aro prohibited by an Order-in-Council made and published on the recommendation of it Secretary of State, even though the'y would otherwise be permitted by lavr. "Enemy" Defined! "The expression 'enemy' in the proclamation of September 9 is stated to mean 'any peisou or body of persons, of whatever nationality, resident or carrying on business in the enemy country, 'out does not include persons of enemy nationality 'Vlu< ire neither resident nor carrying on business in the enemy country,' ami in the same proclamation it is provided that where an enemy has a branch locally. situated in British, Allied, or neutral territory, not boing neutral territory in Europe, transactions, by or with such branch -shall_ not lie treated a-s transae. tons by or with an enemy. The Goodwill of Neutrals. ■ "Tho British law as enunciated in tho proclamations issued by His Majesty may bo taken to bo a carefully thought-out attempt to deal with the extremely 'difficult and delicate situation which arises when a country at war is faced with tho problem of destroying the trado of its enemy, whilst at the same time it ohdeavours to disturb as little, as possiblo the business of neutral countries, whoso goodwill and perhaps practical corniner. cial assistance may be vital to its success in the war. To have the goodwill of neutral countries like the United States, Holland, Norway, Sweffen, an 3 Denmark is obvionsly of '"sifphflffii 1111porbuco to us at present, so .a policy v.,i,feTi means a maximum amount of destruction to enemy trade and a minimum of inconvenience to the legitimate trade of neutral Powers, who may bo our friends, would seem to bo a sound one. Tho principle which has apparently influenced British statesmen in their general attitude is the principle that it is not the nationality of the person, but liis placo of business dnring the war that is Important. What, Constitutes an Offence.'

Aliens' Registration Act. "In Great Britain registration under the Aliens' Registration Act and Order-in-Council in effect.licenses'an enemy subject to remain in England during good . behaviour arid','subject-'to any conditions which in tho interests of-public safety ! tie authortles'may think it necessary to • impose, and it enables an enemy subject to sue in British courts and to carry 011 his business. The effect of a Proclamation published in tho New Zealand Gazette on August 19, 1914, was to confer similar privileges u.pon alien enemies residing in New Zealand at the outbreak of war.' Tho subject of an enemy country residing in Now Zealand may trade as a British subject may trade, but, like a British subject, ho must not trade with tho enemy. Nor must he trade with a British subject residing in enemy territory, for that is trading with the enemy. Lord Lindley, in the course of a judg-, ment which ho delivered, declared that 'when considering questions arising with an alien enemy it is not the nationality of a person, but his place of business during war that is important.' Legislation in New Zealand. "When war broke out between Great Britain and Germany trading with tho enemy was not an offence in New Zealand. The Criminal \-ode Act passed in 1893, now the Orimes Act, 1908, had in effect abolished common law offences, so on August 4, 1914, we had no power to interfere with persons who traded with the enemy. It therefore became necessary to devise legislation which would enable the State to put a stop to any attempt at commercial intercourse with persons residing in the enemy's country, and we passed a law founded upon Proclamations relating to trading with the enemy issued by the King after the outbreak of war. The Trading with the Enemy Act, 1914, makes trading with the enemy as described in the King's Proclamation of September D, 1914, and in other Proclamations in substitution therefor, or in amendment or extension, thereof, an offence, and renders a person guilty of tho offence liable to imprisonment for five years or to a fine not.exceeding £1000, or both to such imprisonment and such fine. A body corporate is liable en indictment to a line not exceeding ,£SOOO. "In legislating the New Zealand Parliament held tho opinion that uniformity in matters of international practice at the present juncture was of supreme importance, and unhesitatingly adopted the principles set out by the Imperial ai2 - thorities in the proclamations which I have just referred to. "By the proclamation issued on September 9, 1914, persons resident or carrying on business in the Dominions were warned of their duties and obligations to the Crown. Prohibitions. "From and after tho date of the proclamation of September 9 the following prohibitions were to have effect, and persons resiacnt or carrying on business or being in the Dominions wero warned. "(1) Not to pay any sum of money to or fur the bpnefit of an enemy. "(2) Not to compromise or give security for the payment of any debt or other sum of money with or for the benefit of . an enemy. "(IS) Not-to act on behalf of an eHMny . in drawing, accepting, paying, presenting • for acceptance or payment, negotiating, 01 I otherwise dealing with any negotiable in--1 strum en t.

"It is not nscessary to set out in detail the contents of tho proclamations issued by tho King, and the provisions of.our Trading With the Enemy Acts. If 'I give the effect of theso measures it will be sufficient. ' ; . "First: It is an offence to trade with any person or body of persons of whatever nationality resident or carrying on business in the enemy country. "Second: It is an offence to have trade transactions with a branch of an enemy's business in neutral territory in Europe. "Third: Under a special Proclamation it is an offoncc to trade with any person or TVdy of persons of enemy nationality resent or carrying on business in China, Siam, Persia, Morocco, Liberia, and Portuguese East Africa. "Fourth: It is an offence to trade with any branch of an enemy's business in China, Siam, Persia, Morocco, Liberia, and Portuguese East Africa. "Fifth: In my opinion it is an offence to trade with a branch of an enemy's business locally situated anywhere if tho trading is not bona-fide with the branch, and any transaction with the head offico situated in tbe enemy territory is involved. "Sixth: The Proclamations contain some su'GTdiary provisions relating to the issue of licenses ajid to the business of insurance companies; but these need not be discussed by me now. Suspicious Cases. "It is recognised that direct trading vyith the enemy will rarely be practised, for it can be detected without difficulty, but an ingenious enemy who Irishes to evade the law will carry out his purpose surreptitiously. The law as it stands is quite strong enough to punish with severity tbo person who is proved to trade eitner directly or indirectly with an enemy in enemy territory. But there are many cases in which we may not have proof of an offence, but tho circumstances may be so suspicious as to warrant interference. To meet cases of this kind stringent regulations have been passed under the vV'ar Regulations Act, 1914. "Firstly: Wc have a- regulation which, gives the State control over goods leaving r™ leal.and. 'N'o goods shall be exported from New «?jalai)d or shipped for export from New Zealand to any place other than British territory until a statutory (Rclaration of ultimate destination has been made in respect thereof in accordance with these regulations.' This, and other regulations, give the Customs authorities power to supervise and scrutinise the whole of the oversea trade of the Dominion. Collectors and other Customs officers are prohibited from purmitting goods to be shipped until tho declaration has been made; or if the officer has reason to suspect or believe that the declaration is untrue. _ j "Secondly: Legislation has been passid which enables the Government to prohibit the exportation of goods which would be specially useful to tho enemy, and advantage has been taken of this law to prohibit the export from New Zealand except with the oonsent of the Crown of numerous articles. "Thirdly: Another regulation has been passed which gives us control over goods 1 imported from certain countries into NewZealand. A similar regulation is in force in Great Britain. 'No goods imported into New Zealand from Norway,' Sweden, Denmark, Holland, Switzerland, or Italy i shall be delivered from the control of the ; Customs until tho importer has delivered to tho Collector of Customs , a certificate 1 or origin uiereof in accordance with these regulations.' "This regulation imposes upon the Customs authorities the duty of examining 1 with scrupulous care all goods which are imported inlo New Zealand from cottn- - tries adjacent to Germany and Austria . and the war wine. r Drastic Powers,

*'(•1) Not to accept, pay or otherwise | deal with auy negotiable Instrument which is held by "or on behalf, of an enemy; provided that this prohibition shall not be deemed to be infringed by any person who has no reasonable ground for believing that the instrument is, held by or on behalf of an enemy. "(5) Not to enter into any new transaction, or complete auy transaction alreadv entered into with an enemy in any stocks, shares, or other securities. "(II) Not directly or indirectly to supply to or for the use or benefit of. or obtain from, an enemy country or an eneii'v anv goods, wares, or merchandise; nor directly or indirectly to supply lo ov for the use 'or benefit of, or obtain from, an enemy couutry or in enemv am- goods, wares, or merchandise; nor'direellv or indirectly to supply to or for tit'- use or benefit of, or obtain' f rom, nnv person any goods, wares, or merchandise for or by way of transmission lo or frnm .mi enemy country or an enemy; nor directly or indirectly'to trade in or carry auy »oods, wares, or merchandise destined for dr coming from an enemy country or an enemy. [ "(7) Not to nmait anr British allio to

"Fourthly: Perhaps tho most drastic power donfwred upon the officers of the State by regulation is that contained in t'lie regulation which empowers the Collector of Customs to detain goods except those coming from Great Britain or a British possession which he has reasonable ground to suspect are ot' enemy manufacture. The following is portion of the regulation: 'When any goods are imported into New Zealand directly or indirectly I'rmn any country other than the United Kingdom or a British possession, and a I'oiloclor of Customs has reason to believo that the goods are of a kind, description, or quality not customarily exported from that country to New Zealand prior to the com.-neucement of the present war, or if he' has reasonable grounds for suspecting that the goods are <ii' enemv manufacture, origin, or ownership, or' that the importation thereof is contrary to the law as to trading with the enemy, lie may detain those goods, and they shall not he delivered from tlifl control of the Customs until the Collector is satisiied that the goods are not of enemy manufacture, orHii, or ownership, and that they have not Keen imported in violation of the law? ns to tr.nlii',j tho enemy.' . . . | <ti»o of a, Collector of Onfitows m.

to the country from which any goods liave lieen imported into New Zealand etial], for the iJurposes of thesa regulouons, l>e iinal miu cjiiciudivt.'

"Fifthly.—lt is an otfence to communi- 1 cate or to attempt to communicate by letter, telegram, or in any other manner, whether directly or indirectly, through an intermediary in Now Zeaiand or elsewhere, with any person, firm, or companioning or carrying on business in the territory of any State at war with His Majesty. "sixthly.—Special power is given by regulation to the Postmaster-Ueueral to prevent postal or telegram from being forwarded or delivered to psrson?, linns, or companies in New Zealand or elsewhere who arc supposed to be engaged in any business undertaking, correspondence, or communication of a nature injurious to the public safety. Since the outbreak of war the power given by this regulation has lieen exercised on numerous occasions when circuni. stancos have Jed the Government to suspect that persons in America or in neutral countries are acting as agents for the enemy. •

"Seventhly.—An alien enemy is prohibited from assuming in New Zealand a name other than that by which lie was originally known, and ho is prevented from changing the style of a iirm or a partnership or luainess name.

Incorporated Companies,

"Eighthly.—Special regulations . were passeu. enabling us to ueal with incorporated companies in which alien enemies are interested,, or which bear a relation to any company, iirm, or person being or cairying on business in enemy turmurv. A regulation enables the Attorney-General to appoint the Public Trustee the controller of such a company, and in his capacity as controller to tilKe and -retain possession of the company's 'property. lUudur this regulation the property of tiio Continental (J. and S. Kubber Company, Ltd., was seized and placed under the control of the Public Trustee.

"A further regulation givcg the Attor-ney-General certain powers "in respect of companies, firms, or persons carrying on businesses in which an alien enemy is interested. if the business of the company is being carried on in a way calculated to mislead the public as to the persons interested in the business, or as to the nature of tho business, or as to the relationship between the company, firm, or person and alieu enemies, the Attor-ney-General may prohibit tho company, firm, or person from . carrying on that business.

"These, I think, are the principal steps of a legislative character which, have been taken since the outbreak of war to provide against tlio enemy trading with us and to prevent persons in this country trading with tho enemy.

To Check Illicit Trading. | '•The person who wishes to indulge in illicit trading with the enemy will lind his course beset with difficulties. If lie attempts to trade direct with Germany, lie will bo stopped by the Customs authorities. If he attempts to correspond with or send trade documents to persons living in the enemy country or with enemy persons or Anns living in neutral countries, ho has to run the gauntlet of tho ccnsor, who watches with care inward and'outward mail matter, especially tho correspondence of enemy subjects. Export* from New Zealand and imports into Now Zealand arc watched by vigilant Customs offioera, who are ompowered to stop an) attempt to export which they suspect is supported by a declaration which i. j untrue, and who have full authority to deal with suspicious imports. "In the case of goods coming to Now Zealand from Great Britain or from any other British possessions, wo ha.vo reason to know that the Board of Trade and British Customs officers in other parti of th« world are constantly on the lookout for illegal trading, and we are from timo to time notified by the Imperial authorities of persons and firms in neuIral countries who f are known, to have enemy sympathies and with whom this country •« warned not to have dealings.

Action by the Authorities, "Since tho outbreak of war two hundred and twenty cases of suspicions trading have been investigated. In eleven cases warrants wero issued authorising tho inspection or seizure of books, under Section 6 of the Trading with the Enemy Act, 1914. Proceedings were instituted against two persons and.convictions were obtained in both cases. , "I liave been informed by the Defenco authorities that' three hundred and fiftyfive enemy subjects have been interned in New Zealand since the commencement of hostilities. Two hundred and eightysix persons are still prisoners of war. persons have been released on parole, and forty-one persons are at present on parole. "Enemy subjects have been removed from the Public Sen-ice, and the cases of thirty-six alleged enemy subjects have been investigated by the Aliens Board since it was created. "Lastly, the police have received clear and precis© instructions to watch enemy subjects closely and to report immediately should anything suspicious como to their knowledge about the business or habits of enemy subjects. Samoa and Tcnga, "Complaints have been made about enemy trading in Samoa. People forget that Samoa is not British territory but German torritory in the military occupation of British troops, just as Belgium is still Belgian torritory oocupied by the German army. "Again, reference is made to 'tho state of allairs in Tonga. It is suggested tbat the New Zealand Government Should interfere to suppress German trade there. Apparently it is not understood that the Now ZealaJid Government has no more authority over Tonga than it has over China. Tonga is an independent State under British protection, and the New Zealand Government has no jurisdiction over it. We can make representations to the Imperial Government that enemy trading is oil the increase in Tonga, and Mr. Massey has done this, but we have no moro power to step in and interfere with the local business of Tonga than has the Government of Australia power to interfere with the administration of Fiji.

A Strange Practice. "Complaint has been irade by one merchant that goods are permitted to come from Holland to British countries when certificates are issued by the British Consular Officer residing in the neutral country to the effect that not more than 25 per cent, of the value of the article exported: has boon manufactured in the enemy country. The practice does seem a strange one, but it is the result of an arrangement entered into by the British authorities with the Government of the neutral State, and we are bound during a time of war to respect any agreement,relating to matters of trade which the Imperial Government niakes with a neutral Power. As I have said already, it is of supreme advantage to ifae Empire that its central Imperial Government and Dominion Governments should be on friendly terms with neutral States, especially those in tbe neighbourhood of England. Tho 25 per cent, of enemy labour or material is no doubt a concession granted in order to secure some advantage from the neutral State. Had the gentleman who raised the point known the whole of the circumstances he would not, I am jure, have suggested laxity on the part of the local authorities. A Vigilant Government, "From inquiries made by mo on all sides I am satisfied that every care is taken to detect enemy trading; that we have ample power to deal with the offence as it is defined by the Imperial Government, and that little, if any, business. which is illegal escapes the watchful eye of the New Zealand Customhouse officer and the censor. _ "If tho existing machinery is insufficient, it can be added to and improved very easily, and that will most certainly lte done if the Government has the least cause to suspoct that the enemy is gettin" any advantage, and if any intimation is given to us by the Imperial Government that any extension of our presout law would be of advantage to t.he Umpire. "In a war without a parallel in history, unparalleled conditions are bound to arise, and it is certain that situations iincl problems that are difficult and without precedent will continue tn perplex the anxious public man until the world ii again at peace. "Sometimes we may ho appearing to give a slight trade advantage to the enemy, through neutral countries, but Matical husiness man wftA mes pr»«_

perly desires to see enemy trade exterminated should not overlook the fact that in times of war it may lie necessary for the authorities in Britain to give away a little to a neutral in order to fain some important advantage over our foe.

Difficult Problems, "The complexities of commerce in the twentieth century, the immense vol time of the world's trade, tho vast area of world space over which the conttict is actually raging, and the culm contempt whicn at least (me of our adversaries lias, shown for solemn undertakings aim lor the principles ami usages whicu are supposed to regulate' the conduct of civilised oe'lligerents, distinguish the present war from all other international oontlicts, and make the problems which it gives rise tc most difficult, i'eople, therefore, should not become irritated or surprised if in New Zealand they occasionally catch glimpses of what would appear to be German slimness and craft m the business i life of the country. On the contrary, they should view the situation reasonably and calmly, and they can rest assured that those responsible for the government of A'«w Zealand in theso days of difficulty are doing their best to stamp out enemy trading, and that they are ready and anxious to do more as soon as urere is proof that | the national safety and Imperial interests require that mora should be done."