contract disappears. Regarding his interest as a piece of property, any share in the assets to which he might otherwise be entitled will be handed over to the Custodian to await the decision embodied in the Treaty of Peace.

Debentures. It would seem that the principles discussed above with regard to shareholders should also apply to debentureholders, and the emergency legislation appears to embody

this view.

Directors. Dr Pitt Cobbett1 expresses the view that upon the outbreak of war 'enemy directors would ipso facto vacate their seats, although retaining otherwise such rights as belong to enemy shareholders.' So far as the writer is aware, there is no express decision upon the position of directors, but the Daimler Co.'s case in the House of Lords contains a number of passages which bear witness to the suspension of the directors' rights during the war. What happens upon the conclusion of peace, supposing the company still to exist, is not stated, but in essence the relation of a director to his company is a contract of agency, and the general principles of the effect of war upon contracts which we discussed in Chapter IV point towards the abrogation and not the mere suspension of this contract, so that their re-election would be necessary if it is desired that they should resume their office. The foregoing remarks apply to directors resident in enemy territory as happened in the Daimler Co.'s case.

Thus it comes about that the emergency provisions for the vesting of enemy property including shares in the Custodian with power to sell and exercise the other rights of shareholders, and for the compulsory winding up of companies having enemy associations or constituents, have combined, although eminently practical, to deprive the common law of the opportunity of working out many interesting problems which would otherwise have clamoured for a decision-a result which a lover and student of the common law may be permitted to regret.

1 Leading Cases and Opinions on International Law (3rd ed.), Vol. 11. p. 89. 2 See Lord Atkinson [1916] 2 A. C. at pp. 325-6; Lord Shaw at p. 330; Lord Parmoor at p. 352.

APPENDIX TO CHAPTER VI

STATUTORY RULES AND ORDERS, 1914
No. 1376

DEFENCE OF THE REALM

Trading with the Enemy

The Trading with the Enemy Proclamation, No. 2,
dated September 9, 1914

BY THE KING.

A Proclamation relating to Trading with the Enemy. George R.I.

Whereas a state of War has existed between Us and the German Empire as from II P.M. on August 4th, 1914, and a state of War has existed between Us and the Dual Monarchy of Austria-Hungary as from midnight on August 12th, 1914:

And whereas it is contrary to law for any person resident, carrying on business or being in Our Dominions, to trade or have any commercial or financial transactions with any person resident or carrying on business in the German Empire or Austria-Hungary without Our permission:

And whereas by Our Proclamation of the 5th August, 1914, relating to trading with the Enemy, certain classes of transactions with the German Empire were prohibited:

And whereas by paragraph 2 of Our Proclamation of the 12th August, 1914, the said Proclamation of the 5th August, 1914, was declared to be applicable to Austria-Hungary:

And whereas it is desirable to restate and extend the prohibitions contained in the former Proclamations, and for that purpose to revoke the Proclamation of the 5th August, 1914, and paragraph 2 of the Proclamation of the 12th August, 1914 and to substitute this Proclamation therefor:

And whereas it is expedient and necessary to warn all persons resident, carrying on business or being in Our Dominions, of

their duties and obligations towards Us, Our Crown, and Government:

Now, therefore, We have thought fit, by and with the advice of Our Privy Council, to issue this Our Royal Proclamation declaring and it is hereby declared as follows:

1. The aforesaid Proclamation of the 5th August, 1914, relating to trading with the Enemy, and paragraph 2 of the aforesaid Proclamation of the 12th August, 1914, together with any public announcement officially issued in explanation thereof, are hereby, as from the date hereof, revoked, and from and after the date hereof, this present Proclamation is substituted therefor.

2. The expression 'enemy country' in this Proclamation means the territories of the German Empire and of the Dual Monarchy of Austria-Hungary, together with all the colonies and dependencies thereof.

3. The expression 'enemy' in this Proclamation means any person or body of persons of whatever nationality resident or carrying on business in the enemy country, but does not include persons of enemy nationality who are neither resident nor carrying on business in the enemy country. In the case of incorporated bodies, enemy character attaches only to those incorporated in an enemy country.

4. The expression 'outbreak of war' in this Proclamation means II P.M. on the 4th August, 1914, in relation to the German Empire, its colonies and dependencies, and midnight on the 12th August, 1914, in relation to Austria-Hungary, its colonies and dependencies.

5. From and after the date of this Proclamation the following prohibitions shall have effect, (save so far as licences may be issued as hereinafter provided), and We do hereby accordingly warn all persons resident, carrying on business or being in Our Dominions

(1) Not to pay any sum of money to or for the benefit of an enemy.

(2) Not to compromise or give security for the payment of any debt or other sum of money with or for the benefit of an enemy.

(3) Not to act on behalf of an enemy in drawing, accepting, paying, presenting for acceptance or payment, negotiating or otherwise dealing with any negotiable instrument.

(4) Not to accept, pay, or otherwise deal with any negotiable instrument which is held by or on behalf of an enemy, provided that this prohibition shall not be deemed to be infringed by any person who has no reasonable ground for believing that the instrument is held by or on behalf of an enemy.

(5) Not to enter into any new transaction, or complete any transaction already entered into with an enemy in any stocks, shares, or other securities.

(6) Not to make or enter into any new marine, life, fire, or other policy or contract of insurance with or for the benefit of an enemy; nor to accept, or give effect to any insurance of, any risk arising under any policy or contract of insurance (including reinsurance) made or entered into with or for the benefit of an enemy before the outbreak of War. (7) Not directly or indirectly to supply to or for the use or benefit of, or obtain from, an enemy country or an enemy, any goods, wares or merchandise, nor directly or indirectly to supply to or for the use or benefit of, or obtain from any person any goods, wares or merchandise, for or by way of transmission to or from an enemy country or an enemy, nor directly or indirectly to trade in or carry any goods, wares or merchandise destined for or coming from an enemy country or an enemy.

(8) Not to permit any British ship to leave for, enter or communicate with, any port or place in an enemy

country.

(9) Not to enter into any commercial, financial or other contract or obligation with or for the benefit of an enemy.

(10) Not to enter into any transactions with an enemy if and when they are prohibited by an Order of Council made and published on the recommendation of a Secretary of State, even though they would otherwise be permitted by law or by this or any other Proclamation.

And we do hereby further warn all persons that whoever in contravention of the law shall commit, aid, or abet any of the aforesaid acts, is guilty of a crime and will be liable to punishment and penalties accordingly.

6. Provided always that where an enemy has a branch locally situated in British, allied, or neutral territory, not being neutral territory in Europe, transactions by or with such branch shall not be treated as transactions by or with an enemy.

7. Nothing in this Proclamation shall be deemed to prohibit payments by or on account of enemies to persons resident, carrying on business or being in Our Dominions, if such payments arise out of transactions entered into before the outbreak of War or otherwise permitted.

8. Nothing in this Proclamation shall be taken to prohibit anything which shall be expressly permitted by Our licence, or by the licence given on Our behalf by a Secretary of State, or the Board of Trade, whether such licences be especially granted to individuals or be announced as applying to classes of persons. 9. This Proclamation shall be called the Trading with the Enemy Proclamation, No. 2.

Given at Our Court at Buckingham Palace, this Ninth day of September, in the year of our Lord one thousand nine hundred and fourteen, and in the Fifth year of Our Reign.

God Save the King.