PUBLIC RECORD OFFICE
Reference :-
885/25
PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-
COPYRIGHT PHOTOGRAPH-NOT TO
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(1) If the distribution of assets is not to be done in England but in West
Africa,
(a) Should the assets of all the branches of each firm in all the
Colonies be pooled and dealt with collectively, or no??
(b) If not, should the local Government and local traders have prior
claims or any other, and if so, what creditors?
If the assets are pooled who should have priority?
Can debts due in Europe from a head office in Germany to a head office in England, or to Allies or neutrals, be made to rank against any individual branch, or all the branches collectively? (2) If the distribution should take place in West Africa, should the balance of the assets, or, if distribution locally is undesirable, should all the assets, be held until the end of the War locally, or remitted to England for distribution?
(3) If remitted to England, what creditors should be allowed to claim, and
in what priority?
(b) What legislation would be required at home and in the Colonies
to carry this out?
Law Officers reported on 25th May. The report should be studied.
It was
to the general effect that the only claims which should be paid were claims of creditors who had direct transactions with the branches, whether such creditors were British, Allied, or neutral.
The answers in detail were:-
(1) (a) Each branch separately.
(b) No particular priorities save those allowed in bankruptcy.
(c) Does not arise.
(d) A creditor can usually attack a firm wherever a branch is found. (They added in their memorandum that the Controller had discre- tion, and should not exercise it save in case of debts contracted by the branch.)
Balance should be held locally.
(3) Does not arise.
The Law Officers' opinion did not please the Chambers of Commerce, and they all protested, and eventually a conference was arranged for 24th June.
The main points were: (1) the Germans trading in Togoland; (2) collection of debts; (3) the Law Officers' decision and its effect. The upshot was that Governors were to be told not to put on the screw too tight in collecting the debts, and that we should go to the Law Officers again as to the distribution of assets.
On 31st July we telegraphed to Governors to hold up all payments pending instructions, and went to the Law Officers on 4th August.
In the Gold Coast, however, owing to Mr. Mitchell's energy, all the German firme had been wound up by June, and the assets were distributed on receipt of the first Law Officers" opinion before our telegram of 31st July directing suspension got out. Nigeria and Sierra Leone have said nothing.
Gold Coast forwarded a number of cheques payable to people in this country, and some have been paid over. Others have been referred to Home Office for information as to nationality of the payees. There the matter now rests for the present.
B.-In Togoland.
Here the position simple. When Major Bryant entered the country he announced that trade would be disturbed as little as possible, so the German, firms are allowed to go on subject to restrictions against trade with enemy territory. The Deutsche Togo-Gesellschaft is to be closed, however, for trying such com- munications, and we have just suggested taking measures to stop black clerks This, of course, applies to the carrying on the business for their former masters. Colony, not to Togoland.
C.-Real Property, Tugs, Lighters, etc.
Mr. Tennyson pointed out Nigeria had asked whether land was to be sold. that we were winding-up the businesses on grounds of public policy, so as to put the Germans under restraint, and that this would not justify the sale of land.
Mr. Tennyson took the line that we were not justified in extirpating the Mr. Risley pointed out that the enemy trader altogether by selling up his land
"We told the Governors liquidation and destruction of his goodwill would do this. not to sell up land.
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The question of tugs and lighters came up in East Africa, where it was decided that they were akin to real property and should not be sold, but might be leased during the War. We told the West African Governors; and Nigeria asked what happened if lighters could not be leased or used by Government and deterior- ated and the firm hadn't assets enough to keep them in repair. We replied that they might be sold in that case rather than be allowed to become useless, but not otherwise.
Sierra Leone had already sold all such craft to the number of twenty-six in all. Gold Coast had sold two launches; and one lighter and eight surf boats at Lome are being used by Government. Colonial Office,
30th November, 1915.
56578
SIR,
No. 154.
THE SECRETARY OF STATE to THE GOVERNOR-GENERAL AND
(Nigeria. No. 192.)
(Gold Coast. No. 92.)
(Sierra Leone. No. 46.)
GOVERNORS.
[Answered by No. 160.]
Downing Street, 16th February, 1916. I HAVE the honour to inform you that the question of dealing with the assets of the enemy firms which have been liquidated in Nigeria, the Gold Coast, and Sierra Leone, has formed the subject of frequent representations from the Chambers of Commerce most interested, who have urged that in each case creditors of the head office of a liquidated branch, and of any other establishment which is a branch of the same head office, should be allowed to prove their debts against assets of the liquidated branch.
2. The matter had, as you are aware, been referred by my predecessor to the then Law Officers of the Crown, who advised* that the only claims which should be paid from the assets of the branches were claims on account of transactions in which the branches were directly concerned. This advice was accepted by me and communicated to your Government in my despatch No. [811,] [427,] [212,] of the
10th of June last.†
3. The policy thus adopted had the advantage that it greatly simplified the work of distributing the assets, avoided a number of difficult questions which might otherwise have had to be faced, and was in harmony with the principle that these liquidations were rendered necessary by purely. military considerations. I have felt, however, that there was much force in the arguments of those bodies who urged that all claims, whether against the branches or the head offices, should be admitted on due proof of the liability as claims against the assets of the branches, and accord- ingly in August last I caused the new Law Officers of the Crown to be consulted in this matter. It was pointed out to the Law Officers that merchants urged that practically all contracts made by British houses for the delivery of goods to enemy firms in West Africa were made with the head offices in enemy territory and not with the branches in West Africa, and that, if the claims of such British firms were not satisfied out of the assets of enemy firms now held by Government in West Africa, they might never be satisfied, since at the end of the war the enemy Governments might, and probably would, adopt the attitude (whether justifiable or not) that the firms had been wound up by the British Government as far as the British Empire was concerned, and the accounts of British creditors with the firms in question finally closed.
4. Enquiry was, therefore, made of the Law Officers as to whether there was any objection in law to the distribution of the assets of a branch of an enemy firm situated in any British dependency in satisfaction of debts owed to the head office of a British firm, and created by-
* See No. 183, Vol. VII of Law Officers' Opinions.
↑ No. 149.
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