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regarded as purely of an emergency character, or whether, with or without further enactment perpetuating some or all of it, we must treat it as a permanent part of our statute law. The legislation falls mainly into two groups, the object of the earlier group, the Trading with the Enemy Act, 1914, and the Amendment Acts of 1914 and 1915, being broadly to prevent intercourse with the enemy across the line of war, and that of the later group, the Trading with the Enemy (Extension of Powers) Act, 1915, and the Amendment Acts of 1916 and 1918, being broadly to stamp out enemy commercial influence and operations in this country and elsewhere. The line of distinction between the two groups is not hard and fast, and it is with the earlier one that we are now concerned.

Firstly, as to its duration. The statutes do not contain the clause commonly found in the emergency statutes limiting their duration to a period expiring six months after the termination of the war? or at some similar period. The first and principal Act? by its first and main operative clause imposes penalties upon any person who 'during the present war' trades or has traded with the enemy. Again, several clauses of the Amendment Act, 19143 are limited to 'the present war,' but there seems to be no reason why the appointment of the Public Trustee as Custodian of enemy property, as distinct from his functions in respect of property vested in him during the recent war, should not survive the period of the war and the ensuing tidying up. With regard to the Trading with the Enemy Proclamations, there can hardly be any doubt of their evanescent character. However that may be, it is worth our while now to spend a few minutes in glancing at the principal provisions of these statutes and Proclamations which bear upon the offence of 'trading with the enemy,' while later on in dealing with Companies we shall have something to say upon the provisions in these statutes which relate to state supervision and control of enemy businesses.

1 Which, as the Termination of the Present War (Definition) Act, 1918, shows, is a very movable feast. 2 4 & 5 Geo. V, ch. 87.

3 5 Geo. V, ch. 12.

How far it is open to the Executive, without statutory powers, to extend the category of prohibited trading operations or of enemies for that purpose beyond the scope recognized by our municipal law, is happily academic; for the Trading with the Enemy Act, 1914, s. 1 (2) gives statutory force, both retrospectively and prospectively, to any Proclamation dealing with trading with the enemy, and recognizes three classes of acts as constituting trading with the enemy, namely, any transaction or act

(1) which was, at the time of such transaction or act, prohibited by or under any proclamation... dealing with trading with the enemy for the time being in force, or (2) which at common law or (3) by statute constitutes an offence of trading with the enemy.

The numerous proclamations will be found in the general Manual of Emergency Legislation with Supplements and the specialized Manuals into which in the course of the war it was subdivided. The principal proclamation, that known as Trading with the Enemy Proclamation No. 2, of the 9th September, 1914, is printed as an Appendix to this chapter, Many of its particular provisions prohibiting this or that transaction are referred to in the following pages, and we may refer here to its more general contents.

(a) The definition of enemy' is naturally territorial rather than personal, though the personal aspect develops later. After undergoing constant modification in successive proclamations it may perhaps fairly be summarized as follows: any person or body of persons of whatever nationality (even British), (and, if incorporated, wherever incorporated) resident or carrying on business in the enemy country or in territory in hostile occupation?, and person or body of persons of enemy nationality resident or carrying on business (and, if incorporated, wherever incorporated) in China, Siam, Persia, Morocco, Liberia, or Portuguese East Africa, but not if resident or carrying on business elsewhere including enemy territory in friendly occupation”.

1 'Territory in hostile occupation' and 'territory in friendly occupation' are defined by the Proclamation (No. 140) of 16th February, 1915. See also Soc. An. Belge des Mines v. Anglo-Belgian Agency (1915] 2 Ch. 409 (C. A.), and Central India Mining Co. Limited v. Société Coloniale Anversoise (1919) 35 T. L: R. 587.

(6) The complement to the definition of enemy is that the Proclamation of gth September, 1914, professes to warn ‘all persons resident, carrying on business, or being in Our Dominions' (again a territorial scope) not to trade with the enemy, so that, for instance, an alien enemy resident here or a neutral subject temporarily visiting this country is 'within the mischief' of the proclamation.

(c) In addition to the special provisions dealing with insurance, sale of goods, negotiable instruments, shipping, etc., there are one or two omnibus provisions to be noted. We are forbidden 'to pay any sum of money to or for the benefit of an enemy,' which revokes the Treasury announcement of the 21st August, 1914o, permitting such payments in respect of certain pre-war transactions, but, per contra, ‘payments by or on account of enemies to persons resident, carrying on business or being in Our Dominions' in respect of pre-war transactions are for a very obvious reason not prohibited 3. (This is a case where it is more blessed to receive than to give.)

(d) Again, we are forbidden 'to enter into any commercial, financial, or other contract or obligation with or for the benefit of an enemy.'

(e) The right of the Crown to revive the old practice of issuing Licences to Trade is preserved by a provision excluding from the scope of the prohibition any licensed transactions, ‘whether such licences be especially granted to individuals or be announced as applying to classes of persons.

Punishment for the offence of 'trading with the enemy'may take the form of penal servitude for three to seven years, imprisonment for any period not exceeding two years with or without hard labour, and (or) a fine, and the Court may order the forfeiture of any goods or money involved in the commission of the offence. No prosecutions may be instituted for the principal offence of 'trading with the enemy' without the Attorney-General's consent, but an arrest can take place without such consent. Search warrants may be granted by justices of the peace or, in urgent cases, by a Secretary of State or the Board of Trade, and the inspection of the books and documents of persons, firms and companies with alien enemy connexions or constituents or of any persons, firms or companies suspected of the offence may be granted by the Board of Trade. The offence includes attempting or directly or indirectly offering or proposing or agreeing to 'trade with the enemy,' and of course aiding and abetting.

1 See note on p. 104 of this book. See also a footnote on p. 401 of the Fourth (red) Supplement to the (red) Manual, and also the Trading with the Enemy (Enemy Subjects interned in Neutral Countries) Proclamation of November 27, 1917, and the Statutory Lists issued under the Trading with the Enemy (Extension of Powers) Act, 1915.

2 Times Newspaper, 22nd August, 1914. 3 Halsey v. Löwenfeld (1916] 2 K. B. 707 (C. A.) affords a good illustration. 1 [1917] 2 Ch. at p. 170.

No useful purpose within the scope of this book would be served by an attempt to estimate the decisions upon prosecutions under these statutes and proclamations.


AFFREIGHTMENT. Scrutton L.J. has reminded us that 'trading with the enemy was at first committed principally in relation to ships, their cargoes, and the insurances thereon,' and in the remaining pages of this book we shall have a good deal to say upon these matters.

(1) If one party to a contract of affreightment becomes an enemy by the outbreak of war, the contract becomes illegal and is dissolved, whether it takes the form of a bill of lading? or voyage charter-party, or of a time charter-party the natural duration of which might outlast the war. It is clear from the Rio Tinto Co.'s cases discussed in Chapter IV that it would be contrary to public policy for the law merely to hold the contractual relation created by a time charter in suspense during the war and so ensure to the enemy on the declaration

2 Arnhold Karberg & Co. v. Blythe, Green, Jourdain & Co. (1916) 1 K. B. at pp. 505 and 506.

of peace either the services of a British vessel or employment for his own shipping.

Again, when neither party becomes an enemy, there are cases of charter-parties in existence at the outbreak of war under which it becomes either illegal for the cargo-owner to load or deliver cargo at the specified port because qua him it has become an enemy port, or illegal for the shipowner to allow his vessel to call at the specified port because qua him it has become an enemy port; in either case, at any rate if the illegality arises from English law, it is submitted that the contract is at once dissolved and that either party if sued can plead the outbreak of war. It is not necessary that it should be illegal for both parties to carry out the contract. An instance is found in a case already referred to more than once, Esposito v. Bowden?, where the shipowner was a neutral and the charterer a British subject, and the charter-party, involving loading at Odessa (which became illegal for the latter), was dissolved by the outbreak of war. An English Court will not give judgment against a man who refuses to do an act which the law of England condemns as illegal.

The shipowner who is under a pre-war contract to deliver cargo at a port which becomes an enemy port upon the outbreak of war, and then diverts his vessel to a port which is not in enemy territory will probably find, apart from any special provisions in his charter-party or bill of lading, that he is entitled neither to full freight or freight pro rata itineris and can be compelled to hand over the cargo to the owners without compensation for his services. It has been argued, and indeed held by the Court of Appeal, that the same result will occur if the master and crew have through stress of enemy violence, for instance, by submarine attack, abandoned the ship and cargo; that this amounts to an abandonment by the shipowner of the further performance of the contract of affreightment, and the indorsee of the bill of lading is entitled to the cargo free from freight. But the House of Lords (Lord Sumner

i Supra. 2 St Enoch Shipping Co. v. Phosphate Mining Co. [1916] 2 K. B. 624.

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