Note 24 — Chapter II · THE OLD ECONOMY AND THE POST-WAR STATE

Since the above lines were written the following important announcement has appeared (according to The Times of October 26th., 1920.) in the Board of Trade Journal of October 21st.:—

‘H. M. Government have informed the German Government that they do not intend to exercise their rights under paragraph 18 of Annex II to Part VIII of the Treaty of Versailles, to seize the property of German nationals in this country in case of voluntary default by Germany. This applies to German property in the United Kingdom or under United Kingdom control, whether in the form of bank balances, or in that of goods in British bottoms, or of goods sent to this country for sale.

‘It has already been announced that German property, rights, and interests acquired since the publication of the General Licence permitting the resumption of trade with Germany (i.e. since July 12th., 1919), are not liable to retention under Art. 297 of the Peace Treaty, which gives the Allied and Associated Powers the right to liquidate all German property, rights, and interests within their territories at the date of the coming into force of the Treaty.’

This announcement has called forth strong protests from France and from some quarters in this country, to which the British Government has rejoined by a semi-official statement that the concession has been made solely on account of British commercial interests. The incident illustrates the difficulty of waiving even permissive powers under the Treaty, although the exercise of those powers would obviously injure British traders. Moreover, the Reparations (Recovery) Act, passed in March 1921, appears to be inconsistent with the above announcement.