CO129-417 - Public Offices - 1914 — Page 238

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trade, because a German is unlikely to enter into a contract if he knows that he cannot enforce it in the British Consular Court. On the other hand we do not know what view the German Consular Court will take;

it is probable that it would adopt the principle of nationality and exclude all English plaintiffs. There is thus a question of policy involved, and it will be noted that Sir E.Fraser

seems to think that most transactions with German

firms in Shanghai are transactions with firms whose

head office is in Germany. Such transactions we

presumably do not want to encourage, but it would de-

pend on the circumstances of each case whether

the German would be regarded as resident, for

this purpose, in Germany or at Shanghai,

Sir E.Davidson.

H.W.M.

(1)

17/9/14

The general rule is that in time of war the question whether a person is or is not to be considered for the purposes of trade and commerce an alien enemy is to be determined by reference not to his rationality or allegiance but to his trading residence, or as it is called, his "commercial domicil". Speaking generally then a German resident and trading in a neutral state is to be regarded as for commercial purposes a neutral, even though Germany be at war with England.

Does the fact that the particular neutral

state involved is an oriental state in which both

Germany

j

i

: