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PUBLIC

RECORD OFFICE

Reference :-

mmmmmCO.885/25

PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO

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I may be informed of your reasons for so thinking before any action is taken to You will no doubt coin- invite foreign purchasers to make offers for the assets. municate with me by telegraph if necessary.

4. I enclose, for your information, a copy of the special conditions as to the nationality of purchasers which were employed at the sale of an important business A form of statutory recently disposed of as a going concern in this country.

declaration is attached. In order to make paragraphs 2 and 3 of these conditions plain reference should be made to Mr. Bonar Law's Circular despatch of the 15th of July. The special provisions which have, according to paragraphs 2 and 3 of the conditions, to be introduced into the constitution of the purchasing company follow the lines of the specimen form of articles a copy of which accompanied the last-mentioned Circular despatch. You may think it desirable to adopt these or similar conditions in cases of special importance; in other cases it may be sufficient to use conditions containing paragraph 1 of the special conditions referred to above, and also providing that no corporation more than twenty-five per cent. of the issued capital or voting rights of which is held by, or subject to the control of, foreigners shall be allowed to purchase. The conditions should, of course, also provide for an appropriate statutory declaration to be made on behalf of any purchasing corporation.

5. The conditions suggested in the preceding paragraph do not definitely preclude the possibility of subsequent transfer of the property purchased out of British control. I am advised that this object can only be obtained by special legislation, the use of a bond being undesirable for the reasons already mentioned. There are, however, objections to legislation applying to all property of the kind now in question and directed against transfer to any foreign interest whatever, and I do not think that it would be desirable to introduce general legislation on these lines. Nevertheless, if you consider it specially desirable in any case, for economic, military, or other public reasons, to keep the property sold permanently or for a period under British control, you should secure legislation which could be based on the relevant clauses of the draft Nigerian ordinance already referred to, subject to the alterations necessary for the extension of the restriction to foreign interests. corporation under foreign control" In any such adaptation the definition of

should be as follows:---

་་

Corporation under foreign control" includes--

(a) A corporation of which any of the directors, or persons occupying the

position of directors by whatever name called, is a foreigner.

(b) A corporation twenty-five per cent. or more of the issued capital or voting rights of which are held by, or directly or indirectly for or at the disposal of, foreigners or foreign corporations.

(c) A corporation which is by any other means, whether of a like or a different character, in fact under the control, directly or indirectly, of foreigners, foreign corporations, or corporations under foreign control.

(d) A corporation the executive whereof is a corporation within (a), (b),

or (c), or a foreign corporation. Moreover, as it will not be desirable to apply the restrictions in question to any properties but those of the special character already mentioned, the proposed legislation should direct that these restrictions shall only apply to properties which the Governor may declare to be subject to them, and the necessary declaration should only be issued in cases of this special character.

6. I would also invite your attention to the clauses of the Nigerian draft The form of these clauses is due to the which deal with the question of title. peculiar circumstances of Nigeria. The enemy firms in that territory are, without exception, mere agencies of head offices in European Germany or Austria, and the title deeds of the various properties belonging to, or occupied by, the firms were Although, therefore, there was in for the most part kept at the head offices. general little doubt as to the extent of the interests vested in the enemy firms, exact particulars of the titles acquired by them and of the subsequent dealings with the properties were difficult, and in many cases impossible, to obtain. More- over, some of the titles which had been acquired from the natives were of a kind not known in English law. In these circumstances it was thought desirable to schedule to the draft ordinance a list defining the titles vested in, and transferable

* 29709.

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by, the liquidator, and to abolish all inconsistent interests, throwing the owner of any such interest upon the purchase money or other assets of the firm for com- pensation. Although I realize that the difficulties which arose in connexion with the Nigeria sales may not exist in the territory under your administration, your advisers may find these provisions of the draft of some use in dealing with the various questions which may arise in connexion with the sales of local enemy properties.

7. The preceding paragraphs have been written on the assumption that all sales will be by public auction, and this method of sale will no doubt be the one generally adopted. If, however, you decide in any case to sell by tender or private contract, the instructions given above as to the form of conditions of sale in the case of public auction will be a sufficient guide as to the form in which invitations to tender and contracts should be drawn up.

8. You will no doubt already have considered the desirability of advertising any intended sales in this country and elsewhere in the Empire, but I think it best to call express attention to this point, since I regard it as of importance, for inter- national reasons, that all enemy properties sold should, if possible, realize reasonable prices.

9. I am addressing you in a separate despatch regarding the sale of trade- marks, in respect of which the practical experience gained in connexion with the Nigerian sales has disclosed certain new difficulties.

I have, &c.,

Enclosure 1 in No. 75. NIGERIA.

WALTER H. LONG.

DRAFT NIGERIAN ORDINANCE ENTITLED AN ORDINANCE TO MAKE FURTHER PROVISION WITH REGARD TO THE DISPOSAL OF ENEMY PROPERTY.

Be it enacted, etc. (Colony and Protectorate.)

1. Short Title.-This Ordinance may be cited as the Enemy Property (Disposal) Ordinance 1916.

2. Definitions.—“ Firm means any person company or association or body of persons corporate or unincorporate. the business of whom or which has been or ahall on or after the commencement of this Ordinance be the subject of an appoint- ment of a receiver or a receiver and manager under the provisions of Section 3 of the Aliens Restriction Ordinance 1914. (No. 13 of 1914.)

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Immovable property "includes any right whether legal or equitable in or arising out of immovable property.

Receiver" means a receiver or receiver and manager appointed under Section 3 of the Aliens Restriction Ordinance 1914. (No. 13 of 1914.)

Corporation under enemy control" includes:-

"

(a) A corporation of which any of the Directors or persons occupying the position of Directors by whatever name called is an enemy or enemy subject.

(b) A corporation shareholders in which holding shares or stock representing. ten per cent. or more of the paid up capital of the corporation are enemies or enemy subjects or persons who hold such shares or stock directly or indirectly for or at the disposal of enemies or enemy subjects. (c) A corporation which is by any other means whether of a like or a different character in fact under the control directly or indirectly of enemies or enemy subjects or corporations under enemy control.

(d) A corporation the executive whereof is a corporation within (a) (b) or (c). Enemy" means any person who is or is treated as an enemy under any Act of Parliament Order in or of Council or Royal Proclamation for the time being in force.

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Enemy subject" means a subject of a State for the time being at war with His Majesty.

3. Immovable property of firms to vest in Receiver. (1) The immovable properties specified in the second column of the first schedule* hereto shall vest in *The schedule must contain descriptions of existing leases not of any leases which have been surrendered and must be altered accordingly.

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