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COUNCIL MEETING them. I refer to the proclamation con- cerning trading with the enemy. I feel convinced, gentlemen, that when you have heard the Attorney-General's explanation of the Bill it will be sufficiently clear to you, and I have not the slightest doubt that after consideration of the Bill you will come to the conclusion that it is a reasonable and proper measure to be passed, always remembering that it is the embodiment of the policy approved in detail by His Majesty's Government.
Hon. Mr. POLLOCK-I would ask, Sir, that you put to the meeting the question as to whether the Standing Orders be suspended.
A division was then taken, and resulted as follows:-
AYES: Captain Superintendent of Police, The Secretary for Chinese Affairs, The Director of Public Works, The Colonial Treasurer, The Attorney-General, The Colonial Secretary.
Nozsion. Mr. Lau Chu Pak, Hon. Mr. Wei Yuk, Hon. Mr. Landale, Hon. Mr. Hewett, Hon. Mr. Pollock,
HIS EXCELLENCY-The General did not vote.
The motion was declared lost.
The ATTORNEY-GENERAL then moved the second reading of the Bill. Is doing 30 he said-The object of this Bill, Sir, which has been, as your Excellency has said, introduced under the authority of the Secretary of State, is to provide for the prevention and punishment of the offence of trading with the enemy. It seems convenient and desirable to explain what has been done by the Colonial Government in this matter since the outbreak of war, and to state what the policy of the Government will be after this Bill becomes law. But before doing so, Sir, I would like to try to clear away a misapprehension which seems to exist widely as to what constitutes enemy character in connection with the offence of trading with the enemy. Enemy character in this connec-ion does ndi depend in any way on nationality or national sympathies, but on commercial domicile. A German subject established in trade in Hongkong on his own account and re ident here is, in the eyes of the law, a friend. A British subject ostab- lisher in Germany and resident there is, in the eyes of the law, an purposes of trade. The form for the is looked upon as part of the commercial avstemn and assets of the British Empire, and the latter as part of the commercial system and assets of the German Empire. With this principle in view, the policy of His Majesty's Government, which is the policy of this Government throughout, is, while using every possible endeavour to prevent money or the equivalent of money reach- ing enemy territory so as to assist the enemy during the war, not to crush local traders and not to stifle fair competition. This policy is not, Sir, as I just stated. a purely local one; it is part of the policy of the commercial life of the Empire. The firms which are managed by enemy subjects fall naturally into two classes: (1) firms which are branches of firms in Germany, or which have partners Germany; and (2) firms which are purely local and have no connection with German territory except, of course, as they might deal with German goods. With regard to firtas which have branches in Germany, or have partners in Germany, the position taken up by us is that any dealing with the branch he e mast, under the conditiona of modera commerce and local commerce, amount to dealing with the enemy. Any contracts entered into would be contracts for the benefit of the whole firm, including the partners in Germany Accordingly such firms were told they could not con- tinue to trade here without permission. It was found, however, that very large British interests were involved in their trading, and in view of those interests, and to avoid dislocation of local trade and British trade in other parts of the Empire, certain limited perinission was given them to continue transactions embarked upon before the war. These fall into three classes. Firstly, they were allowed to dispose of stocks in the Colony and any goods due to arrive which were shipped before the war. As hon. members know, in any goods of that kind British banke were largely interested, and to prevent the disposal of those stocks might cause serious lose and even embarrassment to
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British institutions. They were also given permission to export from the Colony, so far as the jurisdiction of this Colony extends, any goods contracted to be brought into Hongkong before the out- break of war. The permission given, of course, does not extend beyond the terri torial limits of the Colony, but so far as We were concerned they were allowed to export such goods. To refuse that permis- sion would have caused great embarrass- ment to sellers here, and British interesta again would have been very seriously afected. We have also given permission in the third class to import into the Colony, again so far as the local juris- diction of the Government is concerned, any goods ordered from British firms in England before the outbreak of war. many cases these goods were ordered a long time before they were wanted and stocked by local manufacturers. If these goods were not stocked by the firms bere the manufacturers at home might find it very difficult to arrange for exportation to other p. The other class of Ger- man firms here, as I stated, are those in which all the partners are resident here. and which have no partners in German territory. Those German and Austrian enemy subjects who form any such firms appear to be entitled, so long as they are allowed permission to remain here, and o' course be on their good behaviour, to carry on trade very much in the same way as any friendly alien. But in order to bear in mind the great object of prohibi tion of trading with the enemy, which is to prevent money or goods going into Enemy territory during the war, those enemy subjects who are allowed to remain here and to carry on trade in their own names-purely local firms-were told they must pay all moneys received by them into certain approved banke. That, Sir, shortly, is the position taken up and acted upon by this Government since the out- break of war up to the present time; and S stated before, Sir, under this Ordinance when the Bill becomes law, it is your intention to continue the same policy with the same objects in view. The Bill refers in more than one clause to a proclamation which has not yet been published in the Colony, but will be published in the same Gazette that will contain the Ordinance now to be rassed. It is a proclamation issued by His Majesty on the 9th September, and repeals former proclamation issued on the 5th August. It defines what constitutes an enemy character. It lays down in genera! terms under various beads what transac tions may or may not carried out and also contains certain other provisions. The Bill, Sir, provides that the offence of trading with the eremy shall consist of any act against any proclamation issued by his Majesty or any act which may at common law law or by Statute law or by Ordinance be an offence of trading with the enemy. It provides a specific penalty for this offence, which is, on summary conviction, imprisonment for twelve months and a fine not exceeding $5,000: and, on indictment, the penalty is im prisonment for any term not exceeding seven years and a ne not exording $5,000. That penalty is retrospective, and applicable to any person who has, sines the 1th August, been trading with the enemy. It also provides that in addition
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