139
33J
PUBLIC RECORD OFFICE
Reference :-
CO885/25
PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-
COPYRIGHT PHOTOGRAPH-NOT TO
only firm which is actually being liquidated under the direction of the Govern- ment in the Protectorate is that of L. Deuss & Company, I think it desirable to send you this report in order that the liquidation of Deuss & Company may be continued in accordance with its recommendations. That is to say, in order that the real estate, goodwill, trade-marka, and other permanent assets of the firm in the Protectorate may be realized and a complete liquidation effected.
3. Having regard to the view expressed in your Confidential despatch of the 19th July,* I do not desire to press you to liquidate Mr. Hermann Werth's busi- ness, while no liquidation is necessary in the case of the late firm of Michaelles & Company.
4. Having regard to the increase of available assets likely to result from the application to the liquidation of Deuss & Company of the Committee's recommen- dations, I consider it desirable that as wide a range of non-enemy creditors as I con- possible should be allowed to share in the distribution of the firm's assets. sider, therefore, that the liquidation should not be confined to the payment of debts directly incurred by Nyasaland branches of the firm, but that, if any creditor of the head office in Germany, or of any other branch of the business, presents his claim against the assets in the Protectorate, his claim should be admitted, subject to satisfactory proof being adduced. A claimant domiciled in neutral territory whose debt would not normally have been paid in the Protectorate should not, however, be allowed to rank against the assets until he has exhausted his remedies in enemy territory against the firm.
5. I am in correspondence with the Board of Trade as to the proper action to be taken in the case of trade-marks in which a liquidated enemy firm may have a joint interest with a British subject. As it is possible that Messrs. Deuss & Company may have assets of this kind I shall address you further on the subject when I have received the Board of Trade's view.
6. You should consider whether it is desirable to issue fresh advertisements for claims against the assets of Deuss & Company in order to make it clear that claims in respect of debts incurred by the head office or other branches of the firm will be received. If you should think it desirable to do this, and wish similar advertisements to be issued in this country, you will no doubt furnish me with the necessary particulars by telegraph.
7. I shall be glad to receive a report of your decision on the points raised in this despatch by mail as soon as possible.
I have, &c..
3522
No. 131.
A. BONAR LAW.
EAST AFRICA PROTECTORATE: ZANZIBAR.
THE SECRETARY OF STATE to THE GOVERNOR and THE RESIDENT.
(East Africa Protectorate. No. 129.) (Zanzibar. No. 22.)
Downing Street, 24th February, 1916.
SIR,
[WITH reference to my telegram of 23rd February,t] [With reference to my telegram of 23rd February,† addressed to the Governor of the East Africa Pro- tectorate,] regarding the liquidation of enemy firms, I have the honour to transmit to you the accompanying copy of the report of a Committee appointed by me to consider the question of the liquidation of enemy firms in the British Colonies and Protectorates.
2. It has been decided by His Majesty's Government that the recommendations of the report should be applied to all enemy firms in British Colonies and Pro- tectorates in the absence of special reasons to the contrary, and I accordingly despatched the telegram referred to above embodying the more important part of these recommendations.
3. I am consulting the Patent Office on the subject of the proper method of sale where there is a joint interest in a trade-mark between a British subject and a
‡ No. 2.
* 88242.
| No. 129.
liquidated enemy firm, and, as it seems probable that some of the enemy firms in the Colony may have owned joint interests of this kind, I shall inform you of the results of my inquiry at a later date.
[To East Africa Protectorate only.] 4. With regard to the East African Trading Company mentioned in my telegram, I understand from your despatch No. 34, of the 13th of January,* and from information received unofficially, that the National Bank of India has a charge upon all the assets of this firm in the Protectorate, and that they are selling all assets, including real estate. etc., under Order of Court, while a new British company has been established by Messrs. David Sassoon & Company to take over, so far as possible, the business of the firm in the Protectorate. shall be glad to learn whether this statement is correct.
[4] [5] I observe from [your despatch No. 641, of 25th August last,f] [previous correspondence] that the [firms of Meyer & Company and Denhardt & Company do] [firm of Hintzmann & Company does] not appear to be in the hands of the Official Liquidator [Zanzibar only: although the branch of the firm in the East Africa Protectorate is in liquidation]. I shall be glad to learn whether you see any objection to their being liquidated in accordance with the policy recom- mended by the Committee, and also to receive particulars as to the nature of the business carried on by them and of their connexion with enemy territory.
[5] [6.] In my telegram I also expressed the desire that, where a liquidated firm possesses a head office in enemy territory, all debts of non-enemy creditors, whether incurred by the head office or the branch in the Protectorate, should be allowed to rank against the assets, subject to a reservation with regard to claims of neutral creditors against the head office.
[6] [7] My reference to this subject was due partly to my desire that the greatest possible advantage to non-enemy creditors should be secured from the increase of available assets which the change of policy indicated in my telegram may be expected to produce, and partly to certain advice which I had recently received from the Law Officers of the Crown in connexion with the liquidation of enemy firms in British West Africa.
was informed that in West Africa, with a few exceptions, all European firms having establishments there control the business of their West African branches very closely from the head offices in Europe; that the staff of these branches consists generally of a local manager (who is practically never a partner in the firm) and his subordinates; and that even the manager is usually given but little discretion. In the case of trading firms, he sells the goods which the head office sends him from Europe or the United Kingdom, and he consigns to the head office, or to its order, the produce which he buys from the native producers or middlemen, and the head office disposes of such produce. As a result, practically all the wholesale trans- actions take place, not between the branch in West Africa and other firms in West Africa or Europe, but between the head office and other firms in Europe (including in this term the United Kingdom). Accordingly, in the case of German or other enemy firms established in British West Africa, most of the debts due to manufac- turers in the United Kingdom for goods which have been supplied before the war to branches in liquidation in West Africa are due by the head offices in enemy territory in Europe, with whom alone the British manufacturers have had con- tractual relations; and the same is probably to a large extent the case with debts due by firms in the United Kingdom in respect of produce exported from British West Africa by the branches now in liquidation of enemy firms.
[7] [8] On this statement of facts the Law Officers advised:-
(a) That, in the case of a branch of an enemy establishment having a head office in enemy territory, the liquidator should pay out of the assets of the branch, not only debts directly incurred by the branch, but also debts incurred by the head office or by other branches of the same firm.
(b) That neutral creditors should only be allowed to prove their debts after
they had exhausted their remedy against the firm in enemy territory.
(c) That where there are different branches of the same enemy firm in different Colonies the assets should be pooled after payment of preferential claims in each case.
[8] [9] I am not aware to what extent the assets available for distribution under the system in existence at the date of my telegram had been distributed at
* No. 126.
+ No. 109.
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