13

H.—25.

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.