1 April, 1924.]

Chairman.

166. Mr. Payne, there was one point left over from last time on which you may be able to help the Committee. The point was this: What are the figures for, say, the last three years from the time when you began to be a profit earning Department, that is to say, when you began returning money to the Treasury. You said you would put in those figures to-day?-(Mr. Payne.) I am afraid I have not those figures this morning. I did enquire. I rather understood they had been sent in.

167. You have not got them? No. I will see if I can get them during the morning.

168. Mr. Grey, I think you are Controller of Enemy Debts Department?— (Mr. Grey.) Yes.

169. For how long have you been Controller? I opened the doors of the Department on the 10th January 1920, the day the Treaty was ratified.

170. There was no previous Controller, was there? There was no previous organisation. I organised the office and opened it on that day.

171. You started the organisation of the office and you have been in control of it ever since?—Yes.

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Sir John Pennefather.

172. In the Memorandum prepared by the Board of Trade, Paper No. 2, there is a short explanation of the Clearing Office, and it explains that the Clearing Office was set up in accordance with the provisions of Articles 296 and 297 of the Treaty of Peace; it also refers to the Treaty of Peace with Austria, Hungary and Bulgaria; and it points out that the object of the Clearing Office was for the settlement of debts between British and Ex-Enemy Nationals and of claims by British Nationals for the restitution of and compensation for damage to British property rights and interests in ex-enemy territory. That is the basis of the Clearing Office?-That is the object of it.

to now? I think I must give you a little explanation before giving you the figures in order that you may appreciate them. There are four Administrations, the German, Hungarian, Austrian and Bulgarian Administrations. All expenses are charged up to the German Administration, and every year, at the end of the year, a contribution of such an amount as is agreed with the Treasury is debited to the different Administrations and credited to the German Administration, thus reducing the cost of the German Administration. The total up to 31st March of all Departments, that is to say, the total expense, was £1,203,568, but the subsidiary Administrations contributed £261,142, so that the net cost was £942,000, leaving out the hundreds.

176. How many cases have been lodged with the Clearing Office since it was set up? The total number of claims that have been lodged with the Clearing Office is 417,944, that is both ways, ex-Enemy and English claims.

177. Roughly speaking, 418,000?-Yes.

178. What is the total amount?-The total amount in value is £232,922,262, say, £233,000,000.

179. Is that both ways?-Both ways.

Article 296, Debts, not property claims. I can give the property claims if you wish.

186. Let us get the figures quite clear. The cases lodged on both sides, that is, for and against, are 418,000?—Yes. That includes claims under Articles 296 and 297, Debts and Property and relevant articles of the other Peace Treaties.

187. You mean claims under the provisions of Articles 296 and 297?-The claims under Article 296 are debt claims, ordinary debts. Under Article 297 there are claims for compensation and proceeds of liquidation.

Mr. Samuel.

188. For the benefit of the Committee, will you tell us what you mean by liquidation and compensation? There is a great difference I know in priority of payment between liquidation and compensation, and I think the Committee would like to know what the difference is?-Claims under Article 297 come roughly into two categories. There is a

man

third with which I will deal in a moment. Where a British National's property has been liquidated in Germany under Gerexceptional war measures he is entitled to the proceeds of the liquidation, and that has to be credited by the German Clearing Office to the British Clearing Office. He is also entitled on top of that to compensation for any damage that he has sustained over and above the actual proceeds of the liquidation. For instance, supposing his property was sold for less than its value, and he could prove that it was of greater value than the amount of the proceeds of liquidation, he would be entitled to compensation. He would also be entitled to compensation for loss of use of the money during the period it remained in the hands of the Germans. A compensation claim is only a one-way claim. The Germans cannot claim against us for compensation; they can claim for proceeds of liquidation. It refers to the Allies right to compensation under Article 297. Those are the two classes of claims. You said something about priorities.

189. Sir John Pennefather asked a question about Articles 296 and 297. I am not clear whether in the answer you gave you referred to claims under liquidation receiving priority over claims under compensation?-The gross figure I gave you of 418,000 includes all claims, every description of claim.

1 April, 1924.]

Sir John Pennefather.

190. Following upon what Mr. Samuel put, is it not the case that you have security in hand which is not realised yet to pay these compensation cases?-No.

191. Is that not so?-No. To appreciate my reply you want to understand what the process is. As regards Germany, I am not responsible for the liquidation of enemy prpoerty; that is in the hands of the Custodian of Enemy Property, the Public Trustee. He liquidates German property and he accounts to me for the proceeds of the liquidation which I credit through to Germany. I am not, in fact, the organisation for the actual realisation of German property; that is the Public Trustee, the Trading with the Enemy Branch.

Sir Fredric Wise.

192. Do you include securities as property?--Yes, every description of property, securities, chattels, or whatever it is.

Sir William Mitchell-Thomson.

193. You are merely the Accounting Officer? He is the Accounting Officer; he acounts to me for the proceeds.

194. He carries through the realisation? -Yes, that is, as regards Germany. As regards the other three Administrations, I fill the dual position.

Chairman.

the

195. Will you repeat that?-My answer referred to Germany, which is important party, but as regards Austria, Hungary and Bulgaria, I am the Custodian as well as the Controller, and, therefore, I am responsible for the liquidation of the ex-enemy assets which are subject to charge under those three Treaties.

Sir John Pennefather. 196. In your third annual report, page 4, you say "Claimants for compensation are not, however, so favourably situated, as they are not entitled to participate in the proceeds of sale of such property until the claims of the prior encumbrancers have been satisfied. The funds made available to this Department by the British Custodian of Enemy Property have hitherto only enabled the Clearing Office to pay dividends amounting to 25 per cent. upon claims of this

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The

197. That is correct, is it?—Yes. 198. May I go back a little. British cases lodged with the Clearing Office amounted, I think you said, to, roughly speaking, 108,000?—Yes, under Article 296, Debt.

199. You are now speaking of Debt?-Yes.

200. What is the number of cases of Debt and Compensation together?-I have given you the figures for Debt. As regards proceeds of liquidation and compensation, all claims under Article 297, I had 12,658 claims in the case of Germany amounting to £65,000,000.

Mr. Samuel.

201. Those are compensation cases?Yes, they are not distinguished. A claim when it is put in to me is the whole claim under Article 297, and then we have to disentangle that portion of it which represents proceeds of liquidation, and get a credit through from Germany, and the balance representing compensation pay to go to the Mixed Arbitral Tribunal for adjudication.

202. Supposing they are agreed between the parties where do they go?The original claim put in by the claimant is the whole claim under Article 297, and then information is obtained either by the claimant or through the Office that as regards that claim which is in respect of the sale of his property in Germany the property produced when sold by the Germans so many pounds, that is the proceeds of liquidation, and the balance of the claim is for compensation which must necessarily go before the tribunal. The proceeds of liquidation does not go before the tribunal or need not go before the tribunal.

203. You say it must go before the Mixed Arbitral Tribunal?-Every claim for compensation, yes.

1 April, 1924.]

207. Will you split them up?-As regards Germany the British claims against Germans under Article 296 number 100,805, a total of £74,000,000.

208. Could you split up that figure first and give us the values afterwards?—If you please. British claims 100,805, German claims 263,300.

209. That is German claims against us? -Yes, under Article 296, Debt claims. I will give you the figures under Article 297 in a moment which go to the gross figure I gave you originally. Austria 16,505 British claims; 10,043 Austrian claims. Hungary: 11,698 British claims; 767 Hungarian claims. Bulgaria British claims 1,774. I have nothing to do with Bulgarian claims against us; I do not deal with those.

210. Do those make up the total of 418,000? No, those are only claims under Article 296. Now I will give you the claims under Article 297. These are all British claims. Germany, 12,658; Austria, 326; Hungary, 49; Bulgaria, 19. 211. Those altogether make up the 418,000, do they?-Yes.

212. Now will you in the same way give us the component figures to make up the value of £233,000,000 ?-If you please. Germany: British claims £74,681,454, German claims £60,296,552; Austria:

British claims £14,009,292, Austrian claims £3,317,462; Hungary: British claims £6,150,425, Hungarian claims £291,626; Bulgaria: British claims £672,949.

213. And contra none?-No, because there is no Clearing Office.

214. Those figures do not get to anything like £233,000,000?-I have not given you the property claims values. Germany, British property claims (Article 297), £64,953,498; Austria, £7,034,992; Hungary, £1,018,538; Bulgaria, £495,474.

215. Those altogether make up £233,000,000?-Yes. It might perhaps be useful to give you the figure of the amount actually paid in respect of British claims to British Nationals.

Sir Fredric Wise.] Would it be possible to have a paper on this? It is quite impossible to follow these figures.

Chairman.

216. The figures will appear in the evidence. Have you got a paper?-I have only got my notes I am reading from.

[Continued.

217. No doubt you could put in a paper? I could prepare a paper for you, certainly.

Sir John Pennefather.

218. The important point is, how many cases still remain to be settled? You have given us the number of cases lodged with the Clearing Office, roughly 418,000 both ways. I now ask you how many cases have been disposed of ?-I can give you the money value, the exact amount. But

it is a little difficult for me to give the other. I have not got the actual figures because the claim is very often split up, partly admitted, and one would be apt to duplicate it.

219. I will leave it for the moment. Could we have the figure, or some approximate figure put in of the number of cases disposed of and still to be disposed of in order to arrive at what I consider the real point, that is, how many cases have still to be dealt with ?-If you will take this fraction from me, I have disposed of two-thirds of the total claims; there is one-third still to be dealt with. That is a fairly accurate fraction.

220. One-third of 418,000 cases still to be dealt with? No, that is in money.

Sir Philip Pilditch.

221. It would be about the same proportion, would it?-Not necessarily.

Chairman.

222. It is two-thirds value, not number?-I am dealing with value.

Mr. Samuel.

223. When you say "still to be dealt with," are they in dispute?—The majority of them as regards Germany are contested claims. As regards other countries,

no.

Sir John Pennefather.

224. Is the number which remains to be settled a larger number or a smaller number than a year ago?-A very much maller number than a year ago.

225. But you have received during the year a large number of claims and you have settled during the year a large number of claims?-Yes, but the claims disposed of considerably exceed the new claims coming in; and as regards three of the countries, the last date for lodging claims arrived some time ago. As regards

Germany, nearly all the claims have been in some considerable time ago; new claims to come in are very insignificant as regards Germany.

226. In any case there are still a very large number of cases which remain to be settled by the Clearing Office?—Yes.

227. But I understand you are not in a position to give us the exact number? -No. I could work it out for you.

228. And put it in a paper?—Yes. Will you allow me to give you approximate figures. To give actual figures would be a very laborious task.

Chairman.] Yes, approximate figures, certainly.

Sir John Pennefather.

229. In your third report you definitely say that you have been disappointed with the progress which has been made by the Clearing Office?-I do not think I say that quite.

230. On page 3 you say, "The progress of the work of this Department since the date of my last report has been disappointing." From that I take it you would agree that the progress has been much more slow than is desirable?-Yes.

231. At the present rate of progress, how long would it take before the Clearing Office could be wound up?-At the present rate of progress?

232. Or the recent rate of progress?It is difficult for me to answer that question, because it depends upon circumstances entirely outside the control of the Clearing Office. For instance, it depends on the German Clearing Office, and it depends on the Mixed Arbitral Tribunal. As regards the majority of claims, all compensation claims, until an Award is made by the tribunal, do not rank for payment, and, therefore, the work of the Clearing Office as regards compensation claims is entirely dependent on the progress with which the Mixed Arbitral Tribunal deals with the claims that come before it. It is difficult for me to express an opinion.

233. It might be a matter of years before the Clearing Office completed its work? It might be, but matters have improved very considerably in recent months since the appointment of the Second Division of the Mixed Arbitral Tribunal.

234. The Clearing Office revenue comes from fees or commissions which you charge upon British claims?-In the main, yes.

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235. You do not derive any particular fees or revenues from the settlement of claims put in by Germans. Those, I presume, go to some office in Germany?I have nothing to do with that.

236. You do not get anything?—No. 237. Therefore your total revenue for the Clearing Office is practically derived from commission which you charge upon the claims of British nationals against ex-enemy subjects?—Yes, in the main.

238. I presume those claims have ceased to come in they are not still coming in, are they? They have almost ceased.

239. Therefore when you arrive at your total claims and calculate your fees or commissions on that total, you know pretty well what is the maximum revenue at the disposal of the Clearing Office?Yes.

240. Can you give that figure?—Yes, certainly. I will give my answer with reference only to the German Administration, because the fees are not charged in the same way as in the case of the other Administrations.

241. Germany is the principal item?— Yes, the principal item, but there is a very considerable amount from the other Administrations too. The total amount which I expect to earn in the future is £564,000.

242. That is what you expect to earn in the future?-Yes.

243. Can you say how much you have earned in the past? Yes. I can give you this figure to wed with the other. There is at present a surplus of fees in my hands in excess of expenditure of £450,000. Therefore the income that I have in hand and which I expect to earn in the future is £1,015,000.

244. Your expenses for this year, that is, the net total for salaries-I am not going to overlap into P. 2 (b)—you estimate at £239,300 ?-Yes.

245. So that if your expenditure continues at about that you would exhaust your money in four to five years. I understood you to say that you had earned in the shape of fees up to date a certain sum, and that you expected to earn in the future another £564,000?-I gave you the figure of surplus fees over and above my expenditure which I have in hand. I have in hand £450,000, and I expect to get another £564,000.