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16 PUBLIC RECORD OFFICE, LONDON

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(3.) That the circumstances mentioned in this question are proper to be con- sidered by the Secretary of State in determining to revoke the licence.

(4.) That even if the words " or otherwise receive some limited construction I think that the words enabling the Secretary of State to revoke the licence are so wide that he may revoke it on public grounds, without the necessity of justifying the revocation to a jury, but I should observe that in the probable event of proceed ings by Mr. Kerry on revocation, it might be difficult to avoid stating the grounds on which the Secretary of State acted. In such a case it might be also difficult to prove justification for the revocation on the facts before me, having regard to the vague nature of some of the allegations against Mr. Kerry, his success in previous proceedings, and to the fact that the Colonial Office had, at the date of the grant, Jamaging information as to his character. It is not quite clear what information the Colonial Office acquired only after the date of grant.

It is to be observed that the clause providing that the property left on the Islands by the licensee passes to His Majesty on the termination of the licence, tends to throw doubt on the above construction, as it may be suggested that a for- feiture of property clause is inconsistent with an absolute power of determination without reason assigned, but I think that the nature of the licence, and the fact that the licensee might well trust the Government not to enforce a groundless for- feiture without some compensation, is an answer to that suggestion.

(5.) If it is determined to revoke the licence Mr. Kerry should be informed that the Secretary of State has thought fit to revoke the licence from a given date under the powers reserved by him in that behalf by the Indenture of April 20th,

1904.

The Right Honourable

The Earl of Elgin, K.G.,

&c., &c., &c.

I have, &c.,

W. S. ROBSON.

MEMORANDUM BY THE ATTORNEY-GENERAL.

As I appeared as Counsel for Mr. Kerry in the action which he brought against Lloyds' Underwriters, and which raised many collateral issues affecting his ante- cedents, conduct, and character, I think it would be better for me to refrain from expressing any opinion upon the matters referred to in the report.

JOHN L. WALTON.

10401

No. 30.

(SOUTH AFRICA: PORTUGUESE EAST AFRICA.)

LAW OFFICERS to FOREIGN OFFICE.

[South African Customs Union: Questions arising out of the admission of Mozambique as a member.]

SIR.

Royal Courts of Justice,

March 15, 1906. WE were honoured by your commands signified to us by Sir Eric Barrington in his letter of the 31st January last, stating that he was directed by you to transmit the papers respecting the possibility of admitting the Portuguese colony of Mozambique as a member of the South African Customs Union, and to request us to favour you with our opinion:

(1) Whether under any of the existing Treaties of Commerce a foreign Power would be entitled to claim in any of the British South African Colonies treatment for its goods as favourable as that which would be accorded to those of the Colony of Mozambique if that Colony joined the South African Customs Arrangement?

(2) Whether, if the above question be answered in the affirmative, it may be necessary for a Customs Union to be complete in order to disentitle countries outside the Union to Most-Favoured-Nation Treatment? and

(3) Whether, if so, the South African Customs Union could, having regard to Articles XV, XVII and XXII of the Convention, be regarded as a complete Union?

We have taken the matter into our consideration, and in obedience to your commands have the honour to

Report-

That (1) under the existing treatics of commerce applicable to the South African colonies, a foreign power having the benefit of the most-favoured-nation clause would, in our opinion, be entitled to claim in any of the British South African colonies treatment for its goods as favourable as that which would be accorded to those of the Colony of Mozambique if that Colony joined the South African Customs Arrangement.

The object of the most favoured-nation clause is to secure to each party to the treaty the fiscal benefits that the other party may give by treaty to other nations. There is nothing in the form of the clause usually adopted to suggest that it would be applicable merely because the treaty with a third party was unusually com- prehensive in its scope, unless, of course, the most-favoured-nation clause is itself made subject to an exception in favour of a Customs Union as in the cases mentioned in Mr. Farnall's memorandum.

There seems to be no general practice of nations in favour of the suggestion made in Mr. Farnall's memorandum to the effect that a nation may join a Custom Union with another nation and yet not bring the most-favoured-nation clause inte operation by so doing.

(2) and (3). In any event we think it is doubtful whether, having regard to Articles 15, 17, and 22 of the Convention, the South African Union can be said to be a complete union in the sense contended for by Mr. Farnall.

(1) It is, of course, to be observed that hitherto this country has always main- tained a strict construction of the most-favoured-nation clause, and has contender against any construction or device that would have the effect of limiting the ful scope and operation of that clause.

The Right Honourable

Sir Edward Grey, M.P..

&c.,

Sze..

&c.

We have, &c.,

JOHN L. WALTON, WM. S. ROBSON.

25 Wt 1649 5:06 D & $ 5 24294

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