The Secretary to the Treasury forwards for advice the following letter from the Governor of the Commonwealth Bank:

I have the honour to request that you will be good enough to ask the Honourable the Attorney-General to favour me with an opinion as to the proper course to be adopted in dealing with the accounts of German and Austrian subjects in both the General Banking Department and the Savings Bank Department of the Commonwealth Bank of Australia.

Pending receipt of his opinion, the following is a copy of a circular that was sent to all our branches on the 11th instant: Accounts of German Subjects

Will you please note that during the continuance of hostilities between Britain and Germany, no fresh accounts are to be opened for German subjects.

With regard to any accounts we may already have on our books, it may be mentioned that the Bank would be safe in refusing to pay cheques drawn by German subjects, and branches may adopt this course if the circumstances warrant it, but must first satisfy themselves that the customer is an actual German subject and not a naturalized British subject. We do not wish, however, to adopt extreme measures, and small drawings by Germans for personal requirements, may at the Manager's discretion, be allowed, but if amounts drawn for are larger than circumstances would appear to warrant, a declaration should be taken setting out the purpose for which the money is required, and that it will not be used to assist the German Empire in any way.

By way of answer to the questions asked, I direct attention to a public announcement made by the Attorney-General in the following terms:

As doubts are entertained by the Banks as to the legality of their dealings with German customers since the outbreak of war and having regard to the Proclamation against trade and intercourse with the enemy, the Attorney-General makes the following statement:

1. Where accounts have been opened by persons of German nationality present in Australia, the Banks will not commit any offence by paying cheques drawn by such customers in the ordinary course.

2. It is an offence for a Bank to remit money directly or indirectly to any part of the enemy's country.

3. Where before the outbreak of war money was standing to the credit of any person (including firm or company) resident in, carrying on business in or being in the German Empire with authority to some person here to operate on the account or with authority to the Bank to make payments on the customer's account, it is not an offence to pay here cheques drawn by the person authorised or for the Bank to make payments here under such authority and debit the customer's account. Such payments do not come within the prohibition against entering into any new commercial financial or other contract or obligation within the meaning of the Proclamation of August 5th 1914. In this class of case, questions may arise as between the Banks and their customers as to the effect of war on the authority of the agents, as to which the Attorney-General is not called on to express an opinion.

4. The making of any new advances or the establishing of any new credits in favour of the persons mentioned in (3) is prohibited.

5. Where a Bank before the outbreak of war was authorised to collect money for a customer resident, carrying on business or being in the German Empire, it commits no offence by continuing to collect money during the war. It may not of course transmit to the customer the money so collected until the restoration of peace.

6. Where a Bank holds money collected during the war for a customer resident, carrying on business or being in the German Empire, it may not make payments on the customer's account against such money.

The above statement is applicable to accounts of German and Austrian subjects in the Commonwealth Bank, both in the General Banking Department and the Savings Bank Department.

[Vol.13,p. 16]