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35.

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Decision of questions as to meaning of “enemy,'

property of the firm," etc.-If any question arises in the course of any liquidation under this Ordinance :

•

(a) As to whether any person is an enemy within the meaning of this.

Ordinance; or

(b) As to whether any asset or property of any enemy declared to be an enemy firm, or of any partner in any partnership declared to be an enemy firm, is an asset or property of the firm, or as to whether any book. or document is the property of the firm;

the question shall be referred to the Governor in Executive Council, whose decision shall be final.

36. Conveyances in fraud of objects of Ordinance void. Any conveyance, assignment, contract, judgment, or other disposition or transaction made, suffered, or entered into by any enemy firm or any partner thereof, whether before or after the passing of this Ordinance, for the purpose of evading or frustrating any of the provisions of this Ordinance or for the purpose of evading or frustrating any that might by law be taken for dealing with the property or business of enemies or enemy firms, shall be deemed to be absolutely void ab initio.

37. General powers of Governor in Executive Council.-The Governor in Executive Council may give directions or make rules in respect of any matter neces- sary for the administration of this Ordinance which is not specifically provided for therein, and such directions or rules on being published in the Government Gazette shall have the force of law.

STATEMENT OF OBJECTS AND REASONS.

1. The object of this Ordinance is to give effect to the direction of the Secretary of State that all enemy firms in the Colony shall be liquidated, and in particular to provide for the conversion of the control of the business of Messrs. Freudenberg & Company into a liquidation.

2. For this purpose it provides that the Governor in Executive Council may appoint liquidators to wind up the business of any enemy firm, and that the con- trollers of the business of Messrs. Freudenberg & Company shall have all the powers. of liquidators in so far as they do not already possess them.

3.

made:-

With a view to the speedy completion of the liquidations, provision is

(a) For the appointment of a special officer to direct and expedite the

liquidations (Chapter III:);

(b) For a special, simple, and expeditious procedure, with a view to the

decision of all legal questions arising therein (Chapter IV.);

(c) For the disclaimer by the liquidator of contracts or interests burdened with onerous obligations, subject to compensation to persons prejudiced (Section 19);

(d) For the reservation of certain questions, which are questions of Imperial policy rather than law, for the decision of the Governor in Executive Council (Section 35);

4. As it may be necessary to postpone the enforcement of any debt or claim, and as any matter arising in the liquidation may prove to be of a protracted character, it is provided that the liquidation may be completed subject to any pending matter or matters (Section 30).

5. In carrying out the liquidation no provision is made for the discharge of debt due to enemy creditors, who are left to pursue their remedies elsewhere after the close of the war (Section 6 (1) (e) ).

6.

On the completion of each liquidation the surplus proceeds are to be paid to the special officer above referred to as Custodian of Enemy Property, and are to be held subject to the order of the Governor (Section 7).

7. Special provision is made for cases in which immovable property of an enemy firm is subject to a charge in favour of an enemy (Section 23 (2)), for casee in which an enemy firm and soine other enemy are jointly interested in immovable property (Section 22), and for cases in which in land acquisition proceedings with reference to property of an enemy firm it appears that another enemy is a person interested (Section 21).

ANTON BERTRAM

Attorney-General.

Attorney-General's Chambers, Colombo,

16th March, 1916

24165

SIR,

No. 44.

STRAITS SETTLEMENTS.

FOREIGN OFFICE to COLONIAL OFFICE.

(Received 23rd May, 1916.)

[Answered by No. 45.]

Foreign Office, 22nd May, 1916. WITH reference to your letter of the 6th instant,* I am directed by Secretary Sir E. Grey to transmit to you herewith a copy of a further memo- randum from the Swiss Minister in London relative to the sale of certain store buildings in Penang which are partly owned by Mr. R. Sturzenegger,

The position appears to Sir E. Grey to be that the Colonial Government are entitled to sell these stores in the course of the liquidation of the business, but will have to pay over to Mr. Sturzenegger his share of the proceeds when the final adjustment of accounts can be made. In the meanwhile, however, Mr. Sturzenegger seems to have established another business of the same nature with the consent of the Colonial Government, and he apparently wants to obtain these stores for the purpose of carrying on his new business. Assuming that the business is one which the Colonial Government regard as unobjectionable, as would appear to be the case, Sir E. Grey sees no reason why an effort should not be made to meet him on this point, and it appears that this could be done if the Colonial Government would allow Mr. Sturzenegger to purchase these stores on behalf of his new firm, the purchase money being dealt with in the same way as the other assets of the old firms which are being liquidated. Mr. Sturzenegger would obtain his share when the accounts are finally adjusted, and meanwhile would procure the use of the

stores.

I am to request that Sir E. Grey may be advised as to Mr. Secretary Bonar Law's views on the above suggestion, and I am to inquire whether Monsieur Carlin can be assured. in reply to his representations, that the local authorities will not destroy the books of the two firms, Messrs. Rautenberg, Schmidt, & Company, of Singapore, and Messrs. Schmidt & Klistermann, of Penang, after liquidation.

I am, &c.,

W. LANGLEY.

Enclosure in No. 44.

THE Swiss Minister presents his compliments to His Excellency the Secre- tary of State for Foreign Affairs, and, in reply to his note of the 15th of April has the honour to give him, according to his request, the following particulars with regard to certain stores in Penang the property of the Swiss citizen R. Sturzenegger.

(1) The property referred to concerns exclusively store buildings, and not pro- visions or stocks of goods; these buildings were used up till now partly by the firm of Schmidt, Küstermann, & Company, now being wound up, partly to let to other After the liquidation of Messrs. Schmidt the premises could be used by the firm of Sturzenegger & Company, started with the consent of the Government of the Straits Settlements.

concerns.

(2) As mentioned in Monsieur Carlin's note of the 14th ultimo, the ownership of the buildings is divided as follows:-Mr. Suhl thirty-five per cent., Mr. Hasche twenty-five per cent., Mr. Sturzenegger forty per cent. The firm of Schmidt, Küstermann, & Company, have paid to the three owners a yearly rent for the use of the offices and store rooms, and, of course, the buildings are not part of the assets of that firm.

Monsieur Carlin seizes this opportunity to add that Mr. Sturzenegger, before leaving Singapore in September, 1915, has had an interview with the Colonial Secretary, the Honourable R. J. Wilkinson, who assured him that, in the cases of

* No. 89.

PUBLIC RECORD OFFICE

Reference :-

TILLICO.885/25

PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-

COPYRIGHT PHOTOGRAPH-NOT TO

IPage 301

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Rautenberg, Schmidt, & Company, of Singapore, and Schmidt, Küstermann, & Company, of Penang, the authorities will not apply Article 6 of the "Alien Enemies Winding-up Ordinance, 1914," and that the books of the two firms will not be destroyed after liquidation. Mr. Sturzenegger is, however, anxious that the atten tion of the competent authorities should once more be drawn to that point in order to prevent the destruction of the books, as this measure would mean a most impor- tant loss for Mr. Sturzenegger, who thus would see himself deprived of irretrievable experience and business knowledge.

Swiss Legation,

12th May, 1916.

24165

SIR,

No. 45.

STRAITS SETTLEMENTS.

COLONIAL OFFICE to FOREIGN OFFICE.

[Answered by No. 47.]

Downing Street, 2nd June, 1916. I AM directed by Mr. Secretary Bonar Law to acknowledge the receipt of your letter of the 22nd May * transmitting a copy of a further memorandum from the Swiss Minister relative to the proposed sale of certain store buildings in Penang which are partly owned by Mr. R. Sturzenegger, and to request you to inform Secretary Sir E. Grey that Mr. Bonar Law sees no objection to the sale of these buildings to Mr. Sturzenegger provided that he is willing to give a reasonable price for them and that the local Government are satisfied that his object in pur. chasing them is not to preserve the interests of his enemy partners with a view to enabling them to recommence trading in the Colony after the War.

2. Mr. Bonar Law is advised that this latter object might be secured if the liquidator of the firm owning these buildings were to convey the buildings to the Governor of the Straits Settlements in trust, (a) to hold during the War on behalf of the three partners of the firm, and (b) to sell (by either public auction or private contract) within twelve months of the end of the War and pay the proceeds to the three partners in their appropriate shares. If this proposal were adopted the Governor of the Straits Settlements would be in a position to let the buildings at a fair rent to Mr. Sturzenegger as a yearly tenant, and the exclusion of German interests could be made a condition of the sale after the War, if His Majesty's Government are then in a position, and decide that it is desirable, to exclude Germans from British territory.

3. Sir E. Grey will observe that this proposal rests on the assumption that the value of the buildings is not immediately required in addition to the other assets of the firm in order to liquidate its liabilities.

4. I am to say that Mr. Bonar Law would be glad to receive any observations which Sir E. Grey may desire to offer with regard to this proposal, but that before any definite steps are taken with regard to approaching the Swiss Minister in London on the matter Mr. Bonar Law would desire to consult the Governor of the Straits Settlements by telegraph.

5. I am to state, with reference to the last paragraph of your letter under acknowledgment, that Sir E. Grey may assure the Swiss Minister that the local authorities in the Straits Settlements will not destroy the books of the two firms Messrs. Rautenberg, Schmidt, & Company, of Singapore, and Messrs. Schmidt & Küstermann, of Penang, after liquidation, and that this assurance can be given at once, if thought desirable.

I am, &c..

G. GRINDLE.

*23798

63

No. 46.

CEYLON.

THE SECRETARY OF STATE to THE GOVERNOR.

(Sent 1.25 p.m., 13th June, 1916.) TELEGRAM.

YOUR despatch 22nd April, No. 224,* enemy firms. Draft Ordinance approved, subject to following :-

Substitute for Section 35 (a), provision that certificate of Governor shall be prima facie proof of enemy character and throw onus of proving contrary upon -claimants. I understand that " enemy" in the draft means enemy subject. Definition to this effect should be included.

As to Sections 29 and 30, see my telegram of 16th May,† necessary alterations should be made.

As to Attorney-General's memorandum, I approve proposals generally, subject to my telegram 9th May and my telegram 16th May.‡

Paragraph 24 of memorandum : (4) proposals approved, (d) St. Andrew's Hotel may be liquidated.

Despatch follows.-BONAR LAW

28097

SIR,

No. 47.

STRAITS SETTLEMENTS.

FOREIGN OFFICE to COLONIAL OFFICE.

(Received 14th June, 1916.)

Foreign Office, 13th June, 1916. WITH reference to your letter of the 2nd instant,|| I am directed by Secretary Sir E. Grey to state that he concurs in the proposals made by Mr. Secretary Bonar Law for dealing with the store buildings in Penang which are partly owned by Mr. R. Sturzenegger.

Sir E. Grey would be glad if the Governor of the Straits Settlements could, as suggested, be consulted by telegraph. so that Sir E. Grey may be enabled to reply at the earliest possible date to the representations made by the Swiss Minister in the matter.

23798

(No. 297.)

No. 48.

CEYLON.

I am, &c.,

A. LAW.

THE SECRETARY OF STATE to THE GOVERNOR. [Answered by No. 70.]

Downing Street, 15th June, 1916.

SIR,

I HAVE the honour to acknowledge the receipt of your despatch No. 224, of 22nd April,* and to refer to my telegram, a copy of which is enclosed, in which approved the introduction of the draft Ordinance a copy of which was enclosed in your despatch, subject to certain modifications.

2. I desire, in the first place, to say that I consider Sir A. Bertram's memo- randum and draft Ordinance a very satisfactory piece of work, which deals com- prehensively with a difficult situation. With regard to the special points in respect of which guidance was asked in paragraph 24 of his memorandum, you will already have learned from my telegram of the 9th May** my views as to the distinction to be drawn between assets substantially involved in the business of a commercial firm

* No. 44.

* No. 43.

† No. 41.

‡ Nos. 40 and 41.

§ No. 48.

|| No. 45.

** No. 40.