That may very well be. I have admitted two things. The first is that property has been returned and now does not form part of the assets to be distributed. In a sense, it is quite immaterial at this juncture of our proceedings under what provision the property was returned, or what is the exact status of the individual to whom it was returned, or even, perhaps, where he happens now to be living. In some cases—there are not many—a man has been naturalised. In others provision has been made, and the property has been returned. I should like to say at this juncture that this is a very technical Measure, and I do not for one moment pretend to know the answers to all the questions that might be put to me. Perhaps, then, I may proceed.
There are three ways of handling these assets. The first is that proposed in this Bill—to apply them, as far as they will go, to meet the claims of United Kingdom pre-war creditors against German debtors in respect of obligations outstanding on 3rd September, 1939. The second is to allow those creditors who can point to the assets here of their particular German debtor to claim against those assets and then for us to take the balance remaining, if any, into the Exchequer. The third would be to pay all these assets into the Exchequer as some small offset to the burden of war costs.
Now the Government are satisfied that there are good reasons for following the first alternative, with modifications which go some way towards meeting the special case of the claims mentioned in the second. Apart from the fact, for what it is worth, that this was the method followed after the 1914–18 war, it was also the method followed in the Peace Treaties with the satellite States, Italy, Roumania, Bulgaria and Hungary, where it is provided that the assets of those countries in Allied territories can be seized and applied to meeting certain claims, which are almost entirely those of pre-war creditors.
In addition, there is also the special position of some of the pre-war creditors to consider. Among those are the holders of the Dawes and Young Loans and what are known as the standstill creditors. The Dawes and Young Loans were issued with the full support of His Majesty's
Government and the prospectus of the Young Loan said:
This issue is made with the approval of His Majesty's Government under the Hague Agreement of 20th January, 1930.
The claims of the standstill creditors arose well before Hitler began to rise to power.
Between the years 1924 and 1930 there was a considerable volume of long-term and short-term investment in Germany. The depression in 1930 and 1931, and its effects on American banks, together with the lack of confidence in Germany's budgetary position and external balance of payments at that particular time, caused a steady withdrawal of capital, mostly short-term, from Germany. Many of us have lively recollections of those days, and of how daily this drain went on. In June, 1931, the financial crisis in Germany reached such a pitch that a moratorium was declared on reparation payments—I refer, of course, to the Hoover Moratorium—and the Seven-Power Conference in London the following month recommended that steps be taken to maintain the volume of credits already extended to Germany.
In support of those recommendations, with which His Majesty's Government of the day were closely associated, the Treasury requested the Governor of the Bank of England to do what was possible to secure the co-operation of the banks and others concerned. This was done, and the result was that an agreement was reached known as the Standstill Agreement, which secured that those German credits, so far as United Kingdom creditors were concerned, were thus maintained when, but for the Government's intervention, they might have been withdrawn. I mention these facts to show that there is an obligation to those creditors.
The great bulk of the claims, therefore, either date back to contractual obligations entered into with Germans or the German State prior to the rise of Hitler to power in Germany—mainly at the time of the Weimar Republic—or relate to normal trading transactions cut short by the outbreak of the war. This being the position, the most equitable course to follow in dealing with those assets was, it seemed to us, for us to use them, so far as they will go, to meet claims of the pre-war creditors, which, incidentally, will include claims in respect of His Majesty's Government's guarantees of certain Austrian Loans—and I have no doubt that that point will arise, but I will not elaborate upon it now—for the reason that we do feel that those loans should come into the picture.
The dividend will be small; but how small cannot yet be indicated because an exact figure is not yet available of the total of the claims. There were voluntary registrations of claims during the war, and in January last there were further registrations of claims against particular assets. On the basis of this and other information in the possession of the Government the present estimate of them is £120 million. It may, of course, be only £100 million or even less. We cannot say. I want to emphasise that even £120 million may not cover the claims that may be put in. However, so far as we can estimate what the claims may amount to, we put it at something between £100 million and £120 million.