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THE NATIONAL ARCHIVES

CO 537/1374

Please note that this copy

at this copy is supplied subject to the National Archives' terms and conditions and that your use of it may be subject to copyright

restrictions. Further information is given in the enclosed "Terms

and Conditions of supply of National Archives' leaflet.

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Citing the manual for American Armed Forces (FM 27-5 APNAV

50 E-3) the defendant alleges that among the functions of the occupying

authorities are included the liquidation of banks and the custody and

administration of the property of enemy nationals, which do not belong

to the occupied territory. But the same manual incorporates the

Hague Regulations which prohibit the confiscation of private property.

The cited functions, under the authority of said regulations, can in no

way authorize or sanction the confiscation and disposition of private

property in case of war, and much less of the credit which is the sub-

ject matter in this case, The functions mentioned in said manual

pertain to the custody and administration, but not to the power to

confiscate. Furthermore, such functions may only temporarily be

exercised by the belligerent occupant, in accordance with Article 43 of

the Hague Convention, in order to re-establish and maintain, as soon as

possible, public order and security in the occupied territory. And it

should be observed that in the present case the Japanese invader went further than the limits of compulsory administration and sequestration permitted, as he not only liquidated banks but also appropriated for himself and disposed of their assets in open disregard of his obligation not to confiscate private property. Such acts of appropriation or

nationalization of a corporation for the benefit of the occupant are

equivalent to a permanent measure with final effects, and transcend the

duration of a temporary occupation. Such acts are consequently illegal;

and according to Feilchenfeld (p. 107) no such case has been recorded

down to the year 1939.

Speaking of the authority of an occupant over the business of the inhabitants of an enemy country, Oppenheim (Vol 2. p. 313 n ) says

that the occupant cannot liquidate it "although he may place them under

his control, and, assuredly, he should not sell their real property even

though the purchase price is to be delivered to the legitimate owner

at the close of the war". Upon the same subject matter, McNair (p.341)

commenting on the decision in the case of Bank of Ethiopia v. Naitonal

Bank of Egypt and Liguori (1937 Ch. 513) says "that undoubtedly a belli-

gerent occupant would be entitled in the interests of the welfare of the