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collected by the German frim and were mixed with the general moneys of the firm it is not always possible to remit. Even where the winding up will probably result in a surplus the cash is not always available, and where the local branch is insolvent a difficult legal position arises which is still under considera- -tion.
4.
It is difficult to see what action could be taken by this Government to mark disapproval of the failure of the German firms to observe the strict terms of the letters of lien. There are three objections to the institution of any crimin- -al proceedings. One is a permanent reason, the second depends on a fact which it may or may not be possible to ascertain, and the third may be only a temporary reason. The first reason is that it is very doubtful if any offence has been committed. The second is that it is not known whether the London accepting houses were entirely ignorant of the general practice of the German firms to ignore the strict terms of the trust receipts or whether they did not acquiesce in the practice. The third reason is that the persons concerned are now not amenable to the jurisdiction of our Courts. No other means of marking disapproval of the practice has been suggested up to the present. It would be possible to legisla- -te so as to make such a practice illegal, but such legislation would be of little avail if the London acceptance houses were willing to accept a risk similar to that to which they have as a matter of fact been exposed all the time in dealing with the German firms. It appears therefore that a great deal must depend on the attitude which may be adopted by the London finance houses
after the war towards the German firma.
5.
I would therefore venture to suggest, though with some diffidence, that if any pressure can be exerted on the
London accepting houses it should be applied in the direction of
induring them to insist on the strictest adherence to the terms
of the letters of lien and to insert in the form of letter of lien
an express condition that the goods must not be parted with until
F