The Secretary, Prime Minister's Department:

The Secretary to the Prime Minister's Department has submitted for advice the question whether the Treaty of Peace Regulations in their present form contain sufficient authority to enable the Custodian of Enemy Property to retain and liquidate property which is the changed form of German property which existed as at 10 January 1920, and which as at that date was subject to the terms of Article 297 of the Treaty of Peace between the Allied and Associated Powers and Germany.

The machinery whereby the vesting of ex-enemy property in New Guinea is effected is provided in the Expropriation Ordinances⁽¹⁾ of that Territory, and it is considered that if any provision to meet the case of converted property is decided upon, such provision should be made by an amendment of those Ordinances.

The property which may be retained and liquidated is the property rights and interests as at 10 January 1920 of German nationals.

Where property which was subject to retention has been converted into other property or rights as in the case of the conversion of cash into a motor car the right of the Custodian as to the property in its new form is not the absolute right to retain derived from the Treaty but such right as a creditor would have for the satisfaction of a debt; the debt in the case under consideration being the value of the original property which was subject to retention.

It is suggested that provision be made in the Expropriation Ordinance providing means whereby converted property may be attached to satisfy the Custodian's claim in respect of the original property.

The necessary amendment is included in a draft Ordinance⁽²⁾ forwarded to you under cover of a minute of even date.

[Vol. 17, p. 405]

(1)The Expropriation Ordinance 1920, as amanded by various amending Ordinances.

(2)Draft Ordinance not with opinion.