relating to trading with the enemy. Thus Great Britain, in September 1914, passed the Trading with the Enemy Act, 1914,1 forbidding (except under licence) all transactions during the war which were prohibited by Common Law, statute, or proclamation, and among them were all that would improve the financial or commercial position of a person trading or residing in an enemy country: e.g. paying debts to him, dealing in securities in which he was interested, handling goods destined for him or coming from him,2 or contracting with him.3 By a decree of September 27, 1914,4 France, after a preamble reciting that war of itself prohibited all commerce with the enemy, expressly forbade all trade with enemy subjects or persons residing in an enemy country, all contracts (tout acte ou contrat) with such persons, and the discharge for their benefit of obligations, pecuniary or otherwise, resulting from tout acte ou contrat passé.' 5 5 Germany, by an ordinance of September 30, 1914, prohibited all payments to persons resident in the British Empire, and the ban was extended later to persons resident in other enemy countries. But German law admits trading with the enemy which is not expressly forbidden, and legislation in Germany against such trading seems to have been less rigorous 14 & 5 Geo. v. c. 87. See M'Nair, Legal Effects of War (1920), pp. 99-106. Trading with the enemy does not become legal by the fact that goods coming from the enemy country to Great Britain, or going from Great Britain to the enemy country, are sent to their destination through a neutral country (Moss v. Donohoe, (1916) 32 T.L. R. 343: The Jonge Pieter, (1801) 4 C. Rob. 79). But if the goods have been bought by the subject of a neutral State bona fide by himself and are afterwards shipped through neutral country to the enemy, it is not a case of trading with the enemy; see The Samuel, (1802) 4 C. Rob. 284 n. 2 It had long been the British rule that all contracts entered into during a war with alien enemies without a special licence are illegal, invalid, and can never be enforced; but prior to the Trading with the Enemy Act, 1914, and the proclamation thereunder, two exceptions to it had been recognised: (1) where the contract was entered into in a case of necessity (Antoine v. Morshead, (1815) 6 Taunt. 237); (2) where it was in order to supply an invading English army or the English fleet (The Madonna delle Gracie, (1802) 4 C. Rob. 195). 4 Text in Journal du Droit international (Clunet), xlii. (1915), p. 103. See Garner, i. §§ 162-163. than in Great Britain or France.1 The United States, by the Trading with the Enemy Act of October 6, 1917,2 prohibited all trading or contracting with persons resident or doing business in an enemy country, all payments to such persons, and all business or commercial communication with them. It has been by the application of their trading with the enemy doctrine that the courts have determined the effect of war in English law upon contracts concluded before its outbreak. For all such contracts are regarded as abrogated by outbreak of war if for their further performance they require intercourse with the enemy. Thus partnerships with alien enemies are dissolved; 5 a contract of affreightment must not be fulfilled; and therefore English ships must not load or unload goods in an enemy port. Moreover, even if the further performance of the contract would not appear necessarily to involve intercourse with the enemy (as where the contract contains an express provision that its execution should be suspended during war), it is still liable to be treated as abrogated if its continued existence is against public policy as laid down in the decided cases. On the other hand, contracts belonging to certain classes, particularly those which are really the concomitants of rights of property' (a contract of tenancy, for instance), are not abrogated, but suspended.9 the British partner. Esposito v. Bowden, (1857) 7 E. and B. 763. See also Arnhold Karberg and Co. v. Blythe, Green, Jourdain and Co., [1916] 1 K.B. 495, at p. 505. 7 Ertel Bieber and Co. v. Rio Tinto Co., [1918] A.C. at p. 269. But rights which had accrued prior to the outbreak of war are not abrogated, but suspended. 8 Halsey v. Lowenfeld, [1916] 2 K.B. 707. 9 Ertel Bieber and Co. v. Rio Tinto Co., [1918] A.C., at p. 269. The Treaties of Peace have laid down certain rules which are to be applied by all the belligerents in the World War1 to determine the position of pre-war contracts, and these rules generally follow British practice. The governing principle is that such contracts were abrogated as from the date when trading between the parties became unlawful; 2 but this principle does not apply to leases, mortgages, and other important classes of contracts mentioned in the treaties. of Belli in the § 102. In former times belligerents could confiscate Position all private and public enemy property, immoveable or gerents' moveable, on each other's territory at the outbreak of Property war, and also enemy debts; and the treaties 3 concluded Enemy between many States for the withdrawal of their subjects State. at the outbreak of war provided likewise for the unrestrained withdrawal of the private property of their subjects. Through the influence of such treaties, and of Municipal Laws and decrees enacting the same, an international usage and practice grew up that belligerents should neither confiscate private enemy property on their territory nor annul enemy debts. The last case of confiscation of private property was that of 1793, at the outbreak of war between France and Great Britain. No case occurred during the nineteenth century, and although several writers maintain that, according to strict law, the old rule, in contradistinction to the usage which they do not deny, is still valid, it may safely be maintained that it is obsolete,4 1 Except the United Japan, and Brazil. States, Except in respect of any debt or other pecuniary obligation arising out of any act done or money paid thereunder.' See Article 299 of the Treaty of Peace with Germany. * See above, § 100; Moore, vii. § 1196; Scott, Conferences, pp. 559563. The position in English law of private enemy property on land was scrutinised in Re Ferdinand, Ex- and that there is now a customary rule of International Law in existence prohibiting the confiscation of private enemy property and the annulment of enemy debts on the territory of a belligerent. This rule, however, does not prevent a belligerent from seizing public enemy property on his territory, such as funds, ammunition, provisions, rolling stock of enemy state railways, and other valuables; from preventing the withdrawal of private enemy property which may be made use of by the enemy for military operations, such as arms and munitions; from seizing and using rolling stock belonging to private enemy railway companies, and other means of transporting persons or goods and appliances for the transmission of news, although they are private enemy property, provided all these articles are restored, and indemnities are paid for them, after the conclusion of peace; 2 or from suspending the payment of enemy debts till after the conclusion of peace in order to prevent the increase of the resources of the enemy. The rule that private property on land is not liable to confiscation guided the policy of the belligerents in the early stages of the World War. Thus the British Trading with the Enemy (Amendment) Act, 1914,3 created a custodian of enemy property whose general duty it was to receive dividends and other sums which became payable to enemies, invest them, and hold Hugh Stevenson and Sons v. A.-G. für Cartonnagen Industrie, [1917] 1 K.B. 842, at p. 848, [1918] A.C. 239, at p. 244; and Porter v. Freudenberg, [1915] 1 K.B. 857, at p. 870. to 1 The indulgence granted enemy merchantmen in Russian and Japanese ports at the outbreak of the war in 1904, to leave unmolested within a certain time, was conditional upon there being no contraband in the cargoes. See Lawrence, War, p. 52. 2 As the seizure of all these articles is, according to Article 53 of the Hague Regulations, permissible in occupied enemy country, provided they are restored and indemnities paid after the conclusion of peace, seizure must likewise-under the same conditions-be permissible in case these articles are on the territory of a belligerent. As regards rolling stock belonging to private enemy railway companies, see Nowacki, Die Eisenbahnen im Kriege (1906), $ 15. 35 Geo. v. c. 12. them (subject to the payment of debts in certain cases) But the desire to eliminate until the end of the war. The readjustment of rights of private property on land was provided for by the Treaties of Peace. The general principles underlying their complicated arrangements were that the validity of all completed war measures was reciprocally confirmed, but that while uncompleted liquidations on the territories of the Central Powers were to be discontinued, and the subjects of the victorious Powers were to receive compensation for the loss or damage inflicted on their property by the emergency war measures, the property of subjects of the vanquished Powers on the territories of the Allied and Associated Powers might be retained and liquidated, and the owner was to look for compensation to his own State. The proceeds of the realisation of such property were not to be handed over to him, or to his State, but were to be credited to his State as a payment on account of the sums payable by it under the treaties.2 Between some States, Great Britain and Germany for example, clearing offices were established for the collection and payment of pre-war debts.3 1 For details, see Garner, i. §§ 62-79. See, for example, Treaty of Peace with Germany, Articles 297- 3 See Treaty of Peace with |