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TREATMENT OF ENEMY ALIENS
(Being Part XV of Some Questions of International Law in the European War, continued from previous numbers of the JOURNAL)
MEASURES IN RESPECT TO PROPERTY AND BUSINESS
A. IN GREAT BRITAIN
The English Custodian. The outbreak of the war found in nearly every belligerent country vast amounts of property, both real and personal, owned by persons of enemy nationality or domicile. Likewise, enemy persons were the owners or shareholders in many business and industrial enterprises, corporations, partnerships, etc. With a view to preventing such property from being used or such business from being conducted in a manner prejudicial to the national defense or for the benefit of the enemy, the governments of all the belligerent countries very early adopted measures for placing enemyowned property and enemy business enterprises under the control or supervision of the public authorities.
In Great Britain, such property was placed under government control by the Trading with the Enemy Amendment Act of November 27, 1914, which directed the Board of Trade to appoint a custodian of enemy property for England and Wales and another for Scotland and Ireland. For England and Wales the public trustee, an officer already in existence, was designated to perform the duties of custodian. He was charged with the duty of "receiving, holding, preserving and dealing with such property as might be paid to or vested in him in pursuance of the act.” The courts were empowered to vest in the custodian any property, real or personal, belonging to
1 For figures on the value of such holdings, see Clunet, Journal du Droit International, 1915, p. 286, 1917, p. 496; Strasburger Post, July 18, 28, 1917, in Facts about the War, Paris Chamber of Commerce, August, 1917. See, also, Eccard, Biens et Intérêts Français en Allemagne, 1917, pp. 26-27, and Bruneau, l'Allemagne en France, 1914.
or held or managed for or on behalf of any enemy, whenever they were satisfied that such disposition was expedient. All such property was declared to be exempt from attachment or seizure in execution of a judgment, although the custodian was allowed to pay debts due British subjects from the income thereof, if so ordered by the courts.? Subject to this exception, the custodian was to hold all property placed in his custody until the end of the war, for the benefit of its owners, provided their own governments accorded reciprocity of treatment to British subjects. The custodian was further empowered to place on deposit with any bank, or to invest in any securities approved by the Treasury, any moneys paid over to or received by him in pursuance of the Act, and any dividends or interest received on account of such deposits or investments were to be dealt with in such manner as the Treasury might direct. Any sum which, had a state of war not supervened, would have been payable to or for the benefit of an enemy subject in the form of dividends, interest or profits, was to be paid to the custodian and not to the enemy claimant. All holders of enemy property and all managers of companies in which enemy aliens held an interest were required to furnish the custodian within one month full particulars concerning all shares, stocks, and interests held by enemy aliens in such property or companies. Creditors of enemy aliens and persons entitled to recover damages against an enemy alien were authorized to make application to the High Court for an order empowering the custodian to sell or otherwise dispose of the property of any enemy alien against which a British subject might have such a claim. The transfer by an enemy alien of any securities, debts, bills, notes or obligations, after the outbreak of war, was declared to be illegal, unless they were bona fide transactions and made for value received before November 19th.3
2 In the case of Krupp Aktien Gesellschaft (1916 W. N. 234), Mr. Justice Younger held that British creditors of enemy aliens were not entitled to interest on such debts. Thereupon the rules issued in pursuance of the Act were promptly amended so as to allow interest in such cases. Solicitors' Journal, Vol. 60, p. 534; Law Times, July 1, 1916, pp. 150-151.
3 Text of the Act in Pulling's Manual of Emergency Legislation, Supp. II, pp. 19-27, and Baty and Morgan, War, Its Conduct and Legal Results, pp. 512523.
The Controller. With a view to insuring the carrying on of enemy enterprises whenever the public interest so required, the Trading with the Enemy Act of September 18, 1914, authorized the Board of Trade, whenever it had reason to believe that the management of any business by an enemy alien or company was likely to be so affected by the war as to prejudice its continuance, but the carrying on of which was demanded by the public interest, to apply to the courts for the appointment of a controller of the firm or company, the said controller to have the power of a receiver or manager, subject to such restrictions as the court might think fit. By an act of January 27, 1916, the powers of the controller were extended to those of a liquidator, including the power to pay debts, distribute assets, etc., and the Board of Trade was empowered, whenever it appeared that the business of any person, firm or company was by reason of its enemy nationality or the nationality of its members being carried on wholly or mainly for the benefit of or was under the control of enemy subjects, to prohibit or wind up such business." Already by a proclamation of August 10, 1914, enemy aliens had been prohibited from engaging in the business of banking, except with the written permission of a Secretary of State and subject to such conditions and restrictions as he might prescribe. The proclamation further prohibited enemy alien banks from parting with any money or securities, but required them to deposit the same in such custody as they might be directed. The power conferred on the Board of Trade by the Act of January 27, 1916, was freely exercised and hundreds of enemy companies and business enterprises were closed and large quantities of German-owned property also appear to have been sold at auction by the public trustee.
4 His powers were judicially interpreted in the case of Hazelberg Aktien Gesellschaft, W. N. (1916), and are analyzed in the Law Times of November 4, 1916, pp. 141-142.
5 It will be noted that no application to the courts for an order to wind up such business was required. This feature of the law is criticized by the Solicitors' Journal and Weekly Reporter, Vol. 60, p. 216. See also the Law Quarterly Review, Vol. 32, p. 249.
B. IN FRANCE
Basis of French Policy. French policy in respect to enemy property and business enterprises was similar in principle to that of the British Government. The decree of September 27, 1914, which corresponds to the British Trading with the Enemy Act, made no provision for placing enemy property under the control of a public custodian nor for putting the management of enemy business enterprises in the hands of a controller. Nevertheless, it was assumed at the outset that the government must exercise control over all such property and enterprises in the interest of both the national defense and the maintenance of the economic life of the nation. Moreover, such a policy was justified as a legitimate measure of retaliation against Germany for having closed her courts to French citizens and for having placed certain French houses in Germany under sequestration.? In France, proceedings against enemy property and business enterprises were initiated, not by Parliament, but by the courts in the exercise of their common law jurisdiction, although regulations were issued by the government from time to time for the guidance of the courts and the parquets in exercising their powers of control."
6 Compare Valéry, "De la Condition en France des Ressortissants des Puissances Ennemis," Revune Général de Droit International Public, 1916, pp. 374 ff., and Clunet, Journal du Droit International, 1916, p. 7.
7 See Valéry, article cited, who emphasizes the character of the French measures as a legitimate act of reprisal for the German pillage and confiscation of private property in France; also Fauchille, Les Attentats Allemands contre les Biens et contre les Personnes en Belgique et en France, ibid., 1915, pp. 257 ff., and Reulos, Manuel des Séquestres, p. 2. In fact, however, the German Government had only excluded from access to its courts enemy subjects domiciled outside the Empire. Frenchmen domiciled within the Empire were free to sue in the German courts.
8 The Germans complained that the policy of sequestration adopted by the French courts was illegal, but Reulos (Les Séquestres et la Gestion des Biens des Sujets Ennemis en France, Clunet, 1917, pp. 24 ff.), shows that this policy was entirely in accord with the established practice of the French courts in dealing with abandoned property or property held by persons who for reasons of public policy should not be left in control of it.
9 The various circulars and decrees relating to the matter may be found in Reulos, Manuel des Séquestres; Dalloz, Guerre de 1917; and a collection entitled Législation de la Guerre de 1914 (Librairie de Soc. du Recueil Sirey). See also Signorel, Le Statut des Sujets Ennemis (1916), pp. 128 ff.
Appointment of Sequestrators. With the departure from France of a considerable number of German and Austro-Hungarian subjects at the outbreak of the war and the abandonment of their property, French creditors applied to the courts for the appointment of administrateurs-séquestrateurs of the property thus abandoned with a view to insuring its conservation and the ultimate recovery therefrom of the sums due them. Likewise the parquets took the initiative in applying to the courts for writs of attachment of goods and merchandise belonging to enemy houses of trade, irrespective of whether the owners were in France or had departed. The first court to act upon such applications was the Civil Tribunal at Havre, which on October 2, 1914, issued an order for the seizure of the merchandise belonging to a German house in that city,10 this partly for the purpose of preventing it from finding its way to the enemy and partly upon grounds of general public policy.11 This mode of procedure in respect to enemy property commended itself to the Minister of Justice, and on October 8th he communicated the text of the decision of the Tribunal of Havre to the various parquets with the suggestion that, as it seemed to be of such a nature as to constitute jurisprudence,” it be brought to the attention of the presidents of the tribunals and the procurators of their districts.12 By a circular of October 13th, M. Briand, then Minister of Justice, went further and “invited" the presidents of the Court of Appeal and the procurators-general thereof to proceed to seize and to put under sequestration all goods and merchandise, all funds (deniers), and generally all movable and immovable property belonging to or held by or for any German or Austro-Hungarian houses of trade, industry or agriculture in France, whether those houses had ceased or not their operations since the outbreak of the war.18 They were admonished not to allow any such
10 Text in Reulos, pp. 42-43, and Clunet, 1915, pp. 419 ff.
18 The law of January 22, 1916, provided that French holders or managers of enemy property should upon their request be considered as sequestrators of the property in their possession, and such property should be regarded as under their care. They were “sequestrators by law” as contra-distinguished from "judicial sequestrators” who were appointed by the courts.