sumed all the liabilities of the Transvaal Government under its guarantee.58

The case of the Dynamite Concession involved the monopoly for the exclusive manufacture and sale of explosives in the Transvaal. This monopoly was vested in the Transvaal Dynamite Company, which was controlled by German interests. Upon the recommendation of the commissioners, the British Government cancelled this concession, upon the ground that the company had violated the conditions of its contract, and had secured the legislative condonation of its breach of conditions by bribery and corrupt practice.

The case of the Netherlands South African Railway involved a concession granting to a Dutch company an exclusive right to construct and work all main railway lines in the Transvaal. During the war the company, through its local officials and with the approval of the directors, pursued a course of open hostility to the British Government, facilitating the members of its staff in assisting military operations against the British, making arms and ammunition for the Transvaal Government, destroying bridges in British territory, and going far beyond the purposes of its charter, the terms of its concession, or the requirements incident to its being under the local authority of the Transvaal Government. The Commission recommended the cancellation of the concession, partly upon the ground of its excessively active participation in the hostilities carried on against the British Government, and partly on the ground that the grant of such a wide-reaching monopoly and its ownership and control by foreign (chiefly German) capital, was injurious to the public interest. The British Government cancelled the concession, but assumed the entire liability of the company's debentures, and undertook to indemnify all those who had become shareholders prior to the outbreak of war, excepting the managers and agents of the company and the Transvaal Government. It is said that out of some 14,000 shares the British Government paid for all but about 500. The policy of

58 "This concession appears to have been lawfully entered into, and honestly carried out. The railway performs a useful service to the principal industry of the country in facilitating the immigration, and will form an important link in the chain of communication with the Northern Territory, to which it will presumably be extended." Parl. Papers, 1901. So. Africa, Cd. 623, p. 59.

making compensation to the holders of the company's debentures and stock rather than to the company itself seems somewhat questionable, . since such a procedure produces uncertainty and confusion, and cannot but shake the confidence of future investors.59

Within the compass of a short paper it is not practicable to make an examination of the Continental practice. The weight of authority seems to lend support to the view that concessions are generally binding upon the receiving state; but the practice of European countries is not always consistent nor altogether uniform.60

59 For a detailed report of the facts of the case, and criticism of the action of the British Government, see Sir Thomas Barclay's Problems of International Practice and Diplomacy, p. 47. Sir Thomas Barclay seems to have in mind, however, rather the physical assets of the railway company than the value of the concession belonging to it.

60 Fiore says: "The annexing government succeeds to the rights and obligations resulting from contracts regularly stipulated by the ceding government in the relative public interest of the territory ceded." 1 Fiore, No. 356, p. 313.

Also see, for instance, the judgment of the Court of Cassation of Florence rendered on July 26, 1878, in which the court said: "The principles of public law provide that when it is a case of partial cession of territory the obligations contracted by the state with regard to the ceded territory pass with that territory to the state which succeeds"; and again on December 15, 1879, the same court said: "By public law, the state which succeeds in one part of the territory of another state is bound, independently of special conventions, by the obligations legally contracted by the latter regarding the territory in which it succeeds."

After citing various expressions to the same effect by leading jurists, Keith, in his Theory of State Succession, adds:

"In addition to the jurists there is a formidable list of treaties. The treaty of 10th November, 1859, confirms railway concessions granted by the Austrian Government (Art. 2) and recognizes all contracts regularly made by that Government (Art. 9). The treaty between France and Sardinia of 23rd August, 1860, states (Art. 5) that France succeeds to the rights and obligations resulting from contracts regularly made by Sardinia for objects of public interest concerning especially Savoy or Nice. The treaty of 30th October, 1864, between Austria, Prussia and Denmark contains (Art. 17) a precisely similar stipulation, as does the treaty of 3rd October, 1866, between Austria and Italy (Art. 8). England, in ceding the Ionian Islands in the treaty of 29th March, 1864 (Art. 7), stipulated that Greece should take over all contractual obligations; so all trading and mineral concessions by the Government were safeguarded by the treaty for the cession of Heligoland of 1st July, 1890 (Art. 9). The concessions of British subjects in Swaziland were guaranteed by Art. 7 of the Convention with the Transvaal of 10th December, 1894. The United States treaty with Spain of 10th December, 1898, provided for the recognition of contracts and concessions,

VII

VÍ CONCLUSION

The suggestion that concessions, to be binding, must have been granted with a view to the general improvement or benefit of the locus ceded, is the peculiar contribution of America. Although there have not been as yet enough ruling upon this particular matter to justify calling it a settled American doctrine, it has been sufficiently enunciated to demand the consideration of all interested in this branch of the law. Yet the "benefit test," equitable and sound as it seems, is not entirely without disadvantages and difficulties. Where the receiving state is not bound by the concession, the rule may lead to the practical result of depriving concessionaries of any recourse, since the ceding state may be extinct, or unwilling to accord them any compensation. It is also subject to the objection that it opens up to the courts of the receiving state a possible way of avoiding liability upon concessions, by the simple assertion that the concession was not in fact granted for the benefit of the locus ceded. Even to a court sincerely anxious to do justice, it presents a test which may be attended with considerable difficulty of application. For all these reasons one cannot prophesy what may be its future.

On the other hand, the rule has many manifest advantages. Abstractly, it seems clear justice that a state, acquiring territory by conquest or cession, should not be saddled with debts and obligations which it never itself undertook and which were never created for the benefit of the territory acquired by it. In fact, a rule of absolute liability regardless of benefit would seem actually unjust. Although

including patents and copyrights. So the Bank of Annecy, in Savoy, is confirmed in its concessions by Art. 6 of the treaty of the 23rd August, 1860, while Art. 8 of the same treaty protects patents. The treaty of the 3rd October, 1866, contains (Art. 10) a similar recognition to that of the treaty of Zürich regarding railway concessions. The treaty of the 11th December, 1871 (Art. 10), confirms patents granted to Frenchmen in Alsace-Lorraine; the treaty of 1st July, 1890, recognizes Lloyd's signalling rights in Heligoland (Art. 12-6), besides other Government concessions. It may also be added that the Prussian Government in taking over Hanover, Hesse, Frankfort, Nassau and Schleswig-Holstein (Royal Patents of 3rd October, 1866, and 12th January, 1867), which are cases of annexation by conquest, took over and recognized all Government concessions and contracts." Keith's Theory of State Succession (1907), pp. 66, 67.

the test of the benefit may be difficult to apply, the difficulty of applying the "property test" is incomparably greater. Furthermore, after a few decisions have settled the general principles by which "benefit" is to be determined, many of the difficulties of application will disappear. "Benefit" should be interpreted in a broad way. It need not necessarily signify the direct and immediate financial benefit of the ceded territory; it is enough if the concession was granted to further the general progress and development of the country. The building of a railway, the opening up of a country's resources, the furthering of a district's industry and economic development, may all be for the general benefit of a country. But a concession for exploitation, granted, at the expense of the local district, for the gain of the granting government as the chief end in view, would clearly not be for the benefit of the locus ceded; and it would seem unjust that the receiving state should be saddled with such an obligation. The danger of attempting to enforce as international law a sweeping generalization, making all concessions binding upon the receiving state, is that the injustice of cases such as that suggested will tend to cause a reaction in favor of the view, which has been already advanced by some writers, that no concessions are legally binding upon the receiving state.

Whether or not the "Benefit Rule" will be permanently incorporated into international law only the future can tell. The law will doubtless be freshly moulded by the judicial and administrative decisions in the years following the termination of the present world conflict, when the whole question of succession will assume a new and large importance. May it not be that by the adoption of the "benefit test" as suggested by the practice of the United States, international law may reach a closer approximation to the eternal principles of justice, or "jural postulates," which must be at the foundation of all law which endures?

FRANCIS B. SAYRE.

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.1 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.