SECRET
C.P. (49) 213
21st October, 1949
Page 438
Printed for the Cabinet. October 1949
226
Copy No.31
CABINET
PRIVATE CLAIMS AGAINST CERTAIN FOREIGN COUNTRIES
MEMORANDUM BY THE CHANCELLOR OF THE EXCHEQUER
The Foreign Secretary and I have for some time had proposals before the Economic Policy Committee (E.P.C. (49) 95, 98 (Revise) and 100) for a Bill, to be introduced this Session, to cover three connected subjects:-
(a) The appropriation of certain Russian and Baltic assets, and their division (in whole or in part) among British claimants against Russia and the Baltic States by a special Commission to be set up under the Bill.
(b) The division by the same Commission among the various claimants of compensation for nationalised property to be paid by Czechoslovakia and Yugoslavia.
(c) The use of pre-war German assets in this country to pay a dividend on
pre-war claims by United Kingdom residents on Germany.
The first two subjects are mainly the Foreign Secretary's concern, the last one mainly mine.
2. More pressing business has so far prevented the Committee from con- sidering our papers. Meanwhile the Legislation Committee have provisionally earmarked space in this Session's programme only for a Bill on the distribution of assets nationalised abroad (H.P.C. (49) 22nd Meeting, Minute 1): the rest, subject to further consideration, stands over to the 1950 programme. All these points are of real importance, but not all of them can be dealt with during the present Parliament. I would like before it is too late to look at them afresh and pick out what is really urgent from what can stand over.
3. I understand that the Foreign Secretary thinks it most undesirable to deal with the Yugoslav compensation in one Bill and the Russian assets in another. In addition, the Bill covering Yugoslavia could not be ready in time for this Session, because there are questions to be agreed with other Commonwealth countries (Canada and others) before the Bill can be produced. The Foreign Secretary will therefore not be asking at all for legislation on either subject during this Session, but will ask that it should be agreed--
(a) that a Bill on both subjects should be introduced during next Session; and (b) that he can announce this Session that a Bill covering the division of Yugoslav compensation will be introduced next Session (nothing need be said now about the Russian and Baltic claims).
4.
There remains the problem of the German claims and assets. This is dealt with at length in my paper E.P.C. (49) 95, but can be summarised as follows. There are pre-war German assets of about £15 million in the hands of the Cus- todian of Enemy Property. Under our inter-Allied agreements, they are ours as reparation; we can do what we like with them. They could be paid into the Exchequer; but there are strong arguments for making them available to the pre-war creditors of Germany (there are contractual claims of between £100 and Page 438 of 1097
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