CO129-444 - Governor Sir May & Acting Governor Claud Severn - 1917 [10-12] — Page 192

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created among the Chinese that German trade had again begun

to flourish. I hesitate to express an opinion on this point,

but it must not be forgotten that large quantities of goods

with German marks and names have been distributed by the

liquidators of the German firms in Hongkong.

5.

It appears to me, however, that I could not properly direct the Custodian to assign the goodwill and marks to Messrs. Arnhold without full proof that the property has vested in them, subject to the Custodian's formal rights, and I would therefore suggest that the Arnholda should be informed that before any assignment can be made they must obtain from the Courts, either here or in England, a declara- -tion which will place their rights beyond dispute. It may be that they can obtain such a declaration under the Legal Proceedings against Enemies Ordinmce, 1917, or the Legal Proceedings against Enemies Act, 1915. If they were success- -ful in obtaining such a declaration the assignment would probably excite less public feeling.

6.

A further question is whether the assignment if made should be without consideration or not. It would be difficult to fix any definite money considera- -tion, and payment does not seem appropriate if the goodwill and marks are really the property of Messrs. Arnhold. It has been suggested that the consideration might take the form of some undertaking to discharge the unsatisfied claims against the Hongkong branch of Messrs. Arnhold Karberg & Co. This would involve the difficult question of defining the liability which they would be undertaking. Mr. H. E. Arnhold has never, so far as I know, denied the liability of himself and his brother to meet the pre-war claims against the Hongkong branch of the old firm if the firm assets are in-

-sufficient