June 13, 1923 (14th Parliament, 2nd Session)


Lomer Gouin (Minister of Justice and Attorney General of Canada)


Sir LOMER GOUIN (Minister of Justice) :

If the House wishes that I should
state the object of our visit and the result, I will do so. The object of the visit to Washington was to press the settlement of a claim that our government has against the government of the United States in reference to the seizure of certain properties seized by the Custodian of Alien Enemy Property of the United States. In 1918 and 1919 the Custodian of Alien Enemy Property of the United States government proceeded to seize certain certificates of shares and bonds of Canadian companies which were owned by enemies residing in Germany, which certificates' and bonds were then deposited with different institutions in the United States. Our own custodian, proceeding under our war measures act. had also seized some, if not all, of the same securities. Some of the companies which had been ordered by the American courts to pay their dividend to the Alien Property Custodian paid some of the dividends and then ceased to pay, on account of the vesting orders which had been issued by our
own courts. We tried to arrive at a settlement "a l'amiable." The Alien Property Custodian of the United States government came to Canada. The hon. ex-Minister of Finance (Sir Henry Drayton) was then our custodian. I understand that he had some conferences with the representatives of the American government, and Mr. Mulvey was a party to the conferences. The question under discussion was whether we had any right in those securities, or whether they were to be left in possession of the American government. It was important that the dividends should be paid or deposited in the hands of one of the two governments. It was agreed that, pending the discussion, the dividends should be paid to the American government, and that the question of law should be decided by an arbitrator or by a judge of Canada or of the United States. Some of the Canadian companies continued to pay the dividends to the Alien Property Custodian of the United States. After a certain time that very question which was in doubt and discussed between the two governments was decided by the American court, at the request of the American officer, in reference to certain certificates of American companies which had been sequestered by the Alien Property Custodian of the Imperial government, and which certificates were deposited in England. The question was debated and decided in favour of the American government. Taking advantage of that decision, our attorneys tried to induce the American government to turn over to the Canadian government those certificates and bonds. Proceedings have been going on for gome years-since 1920. After consultation with our attorneys we were advised that it would be preferable that we should try and arrive at a settlement with the American government without litigation, and we were advised that if we had the opportunity of meeting the President of the United States, the Secretary of State and the Attorney General of that country, perhaps, after those three decisions-there were three decisions on that very same point'-the American gov -rnment would consent, without arbitration and without litigation, to hand over thos'e securities to our government. Accordingly our custodian, the hon. Secretary of State (Mr. Copp), Mr. Newcombe, Mr. Mulvey, and myself decided to go to Washington. Hon. Mr. Pugsley was not one of our party. We met the Secretary of State of the United States, who declared that he was perfectly willing to turn over to Canada th securities mentioned but thought the

Alien Enemy Property
President would be governed in the matter by the advice of the Attorney General, and that the only trouble in the way was the fact that after the orders had been rendered by the American courts, vesting those securities in the Alien Property Custodian of the United States, they did not see how that officer could take it upon himself to turn those properties over to Canada. We answered that we should invoke the three judgments which were rendered by the American courts at the request of the American authorities, and we did not see that there was any necessity of litigation any more, since the case had been decided in favour of the American government and, consequently, in our favour. The same objection was repeated that there was a distinction also, because registration had been made of those same stocks in favour of the American officer, and they were of opinion that it was necessary that a judgment should be rendered by some tribunal. We had the advantage of meeting the President and repeating the same argument. We were told that the American government were heartily disposed to liquidate the situation as promptly as possible, and that they would be willing to expedite any case that might be instituted by our government before any of the courts of the United States. We suggested that we would prefer to proceed before one of our courts as the American government did in proceeding before one of their judges. Later on, after those two interviews, a conference took place between the Assistant Attorney General and our representative, Mr. Conboy, and it was then agreed that to expedite matters, if we were to institute one or two cases in Canada, assigning one or two companies to appear before such court to be instructed to deliver to the Canadian government certificates for those same stocks, the American government would appear, so that the judgment would be binding upon the American government and upon the companies. This we found most, satisfactory.
As to the bonds, there may be some distinction to be made. Certificates of stocks are only evidence of property, while a bond is something by itself. We contended all the same that no distinction should be made. There is also the question of dividends which were paid to the American government. Our intention is to proceed, as I said, in one or two cases, to have the principle decided of the property in the stocks. If the judgment goes in our favour, necessarily we shall be entitled to dividends paid to the American government. As to the bonds, something

has to be done. We are now considering what is to be done, and when and how it should be done. On the whole we consider that we have accomplished something, and we hope that after a comparatively short delay, we shall get the securities to which we are entitled.

The House in Committee of Supply, Mr. Gordon in the chair.

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