The New York herald., 1921-11-26
Peace and Pre-War Contracts.

AS between the United States and
Germany there is complete peace of
arms, the terms of which have been
definitely fixed and signed, while
there still remain thousands Of un.
settled cases having to do with the
status OF commercial contracts en-
tered into before the struggle but
rendered nugatory when the state OF
war began.
In the recent war new standards
had to be set up and new precedents
established because the carrying on
Of prohibited commerce among bel
ligerents is no longer matter OF the
simple exchange of contraband CON-
modities where the problem is one OF
blockade running.
Prohibited commerce may be car
ried on through international part
nerships. through neutrals, through
transfer OF money by cable or by
wireless and by branches OF enemy
firms, all of which agencies and
facilities are founded on agreements
and contracts made in time OF peace.
Thus the fulfiment Of peace time
obligation may become q crime in
time OF war. All such obligations
among enemies must lapse either per-
manentIy or temporarily, and once
peace is restored the problem is to
determine whether the lapse was per
manent or temporary.
Mere laws are not always adequate
to smooth out the complications, the
more so since modern practice has
put an end to the old principle that
war automatically confiscated enemy
property. Under our trading with
the enemy act, approved in October.
1917, German property was taken
over and used, but 1t Is to be returned
In cash or in kind to its original
owners. The duty of the courts now
ls to determine what rights the alien
now possesses.
1t is in full recognition Of the un.
precedented difficulties involved in
adjusting pre-war contracts that the
Department of Commerce, through its
division of commercial laws, Of which
A. ]. WOLFE Is chief, has published
in the weekly commerce reports an
explanatory review Of the subject.
The basic problem is TO determine
what contracts were not only legally
but rightfully and honorably terml
mated by the war. The legal part OF
It is simple go far as the American
courts are concerned.
But German law differs from ours
in that 1t does not automatically
cancel contracts with an enemy coun-
try when war occurs. A case settled
here legally might not be legally set
tied in Germany, and vice versa.
Until both sides were agreed it
would be unsafe for either party to
resume business or to own property
In the former enemy country for
fear of attachment.
The possibilities of long drawn out
litigation are exemplified In the report
of the enemy debt clearing houses
established in England and Germany.
which have been in operation for a
year and half. Out of total claims
on both sides amounting to $500, 0,000.-
900 in round numbers, about $215,.
000, 900. something less than half, has
been liquidated. For the rest the ma
iority Of the cases will be contested.
That such a large number of
cases should be thrown into dispute
does nothing to promote the sanctity
of contracts but rather guarantees
their sanctity only where no legal
loophole of escape can be found
Both the British Board Of Trade and
our own Department of Commerce
make the sensible recommendation
that IL would be better to settle the
disputes in spirit of give and take.
II Is simply but wisely pointed out
that the present circumstances call
for the tempering of hard legal bar
gains with a little of honesty and
common sense. No right minded in.
dividual could quarrel with this rea.
soma hle suppeetfon