an American port. There is no provision permitting censorship of domestic communications. Quare, whether the right would extend to ordinary postal communications on a vessel not bound for but sent into an American port for examination by the naval authorities. As to censorship over international correspondence, see 7 Moore, International Law Digest, section 1142; also the diplomatic correspondence of the United States during the present war.

Local branches and agencies of enemy firms. Conditions of licenses.

SEC. 4. (a) Every enemy or ally of enemy insurance or reinsurance company, and every enemy or ally of enemy, doing business within the United States through an agency or branch office, or otherwise, may, within thirty days after the passage of this Act, apply to the President for a license to continue to do business; and, within thirty days after such application, the President may enter an order either granting or refusing to grant such license. The license, if granted, may be temporary or otherwise, and for such period of time, and may contain such provisions and conditions regulating the business, agencies, managers and trustees and the control and disposition of the funds of the company, or of such enemy or ally of enemy, as the President shall deem necessary for the safety of the United States; and any license granted hereunder may be revoked or regranted or renewed in such manner and at such times as the President shall determine: Provided, however, That reasonable notice of his intent to refuse to grant a license or to revoke a license granted to any reinsurance company shall be given by him. to all insurance companies incorporated within the United States and known to the President to be doing business with such reinsurance company.

"Every enemy or ally of enemy insurance or reinsurance company, etc."

The subsection applies only to enemy or ally of enemy persons "doing business" within the United States through an "agency or branch office,

or otherwise." For definition of "enemy" and "ally of enemy" see section 2. It is to be noted that under this definition persons domiciled in, and corporations organized under the laws of neutral and even belligerent states at war with the Central Powers doing business in hostile territory may come within the operation of this section.

The words "or otherwise" mean, under the ejusdem generis rule, doing business by means similar to those of an agency or branch office. There must be a "doing business" and this is used in the sense of the rules regarding foreign corporations; a mere personal agency is not enough.

The President may prohibit any foreign (including non-enemy) insurance company from doing business within the United States. Section 4 (b).

The question arises as to the status of branches or agencies of enemy firms that were doing business within the United States at the outbreak of the war. It is to be noted that the proclamations of the President apply only to agencies and branches of German insurance companies. Foreign corporations licensed to do business within a State acquire a special local character analogous to the privileged traders of the common law. The same rule applies to agencies or branches of enemy concerns not in the nature of a corporation. The question has come up before the English courts during the present war. In Ingle v. Mannheim Insurance Co. [1915] 1 K. B. 227, in a case affecting the English branch of a German insurance company, it was held that except in so far as the Proclamation of October 8, 1914, altered the situation, this branch was not an alien enemy in respect of its English business. The court said (per Bailhache, J.,): "In the case of individuals and at common law the question whether a man is to be treated as an alien enemy for the purpose of his contracts, rights of suit, and the like, does not depend upon his nationality or even upon his true domicile, but upon whether he carries on business in this country or not. If he does, it is not illegal, even during war, to have business dealings with him in respect of the business which he carries on here. He is not in respect of that business divided by the war line, but has what is sometimes called a commercial domicile here. The same thing is true of companies, whose head-office is in Germany, but which have a branch office here, in respect of business transactions with such branch office. The matter is discussed by Lord Lindley in Janson v. Driefontein Consolidated Mines [1902] A. C. at pp. 505, 506, and in the cases cited by him. In my judgment the defendant company did, upon the facts stated, so far carry on business through their underwriters here, as to prevent the application of the rules applicable to alien enemies from applying to business transacted with those underwriters, as this business in fact was."

In a "Memorandum concerning Aliens" issued by the British Treasury in August, 1914, appears the following clause: "If a firm with headquarters in hostile territory has a branch in neutral or British territory, trade with the branch is (apart from prohibitions in special cases) permissible, as long as the trade is bona fide with the branch, and no transaction with the head office is involved." And the English Trading with the Enemy Proclamation of September 9, 1914, expressly legalizes transactions with branches of enemy firms locally situated in British territory.

This doctrine applies with special force to foreign insurance corporations which are placed under special supervision in various States and which are required to deposit funds with trustees for the general benefit and security of policy holders and creditors in the United States or of a particular State. Regarding the status of a British corporation, admitted to do business in New York, it was said in Martine v. International Life Insurance Co. (1873), 53 N. Y. 339, per Church, C. J.: "It is true that the residence of a corporation is in the State of its creation, and it is well established that such residence cannot be changed, and if it was a question of domicile merely, the point would be too clear for argument. . . . The defendant sought and obtained the privilege of establishing and carrying on its business here under the regulations fixed by the statutes of this State. It established a permanent general agency, and conducted its business here as a distinct organization, and was permitted by law to do this in the same manner as domestic institutions. The business thus established and carried on in New York was designed to be confined to the United States, and necessarily partook of the national character as a privileged business. Chancellor Kent, in his Commentaries, says: 'The position is a clear one, that if a person goes into a foreign country and engages in trade there, he is by the law of nations to be considered a merchant of that country, and a subject for all civil purposes, whether that country be hostile or neutral.' (1 Kent Com., 84.) Nor is it invariably necessary that the residence be personal. While the general rule is that a principal transacting business in the ordinary way, through an agent, will not contract the character of a domiciled person, yet if the principal be trading not on the ordinary footing of a foreign trader, but as a privileged trader, such a privileged trade puts him on the same ground with their own subjects, and he would be considered as sufficiently invested with the national character by the residence of his agent. (Id.)" The Chief Justice was of opinion that such branch would retain its American character even in the event of a war between the United States and the country of its incorporation. "It was essentially an independent American busi

ness, and would be treated as such, I have no doubt, if war existed between this country and England."

The whole question was reëxamined in Morgan v. Mutual Benefit Life Insurance Company (1907), 189 N. Y. 447, where it was said per Chase, J.: "The presence of the insurance company in this State is not temporary, but continuous. It is legally and actually here, not only because process has been served upon it and it has appeared in the action, but it is here pursuant to the provisions of our statutes by authority of which it is doing business and maintaining offices in this State. The contract of insurance was made by it with a resident of this State through its agents so located and doing business here. Every transaction relating to the contract, its assignment and the payment of premiums thereon has occurred here. The policy of insurance and the claim against the insurance company for the amount payable on the policy of insurance are in the control of our court and any judgment that may be rendered in the action can be enforced and made effectual in this State. As to such a claim the insurance company should be treated as a domestic insurance company and as domiciled in this State." See also Statham v. New York Life Insurance Co. (1871), 45 Miss. 581, 7 Am. Rep. 737; New England Mutual Life Insurance Company v. Woodworth (1883), 111 U. S. 138, 28 L. ed. 379; Sulz v. Mutual R. F. L. Association (1895), 145 N. Y. 563; Matter of Gordon (1906), 186 N. Y. 471; Matter of Wilcox (1908), 123 App. Div. (N. Y.) 86.

On this question Professor John Bassett Moore says: "It is evident that the branch establishments now in question have an American character far more precise and more permanent than that which is derived from an ordinary commercial domicil; that their local character and control are more definite and more substantial than that of the often shadowy 'legal entity' which results, in the case or a foreign corporation, from registration under the English Companies Act; and that they are to all intents and purposes domestic concerns. This results from the legal requirements under which they are formed, supervised, and conducted, including the deposit of funds with trustees (citizens of the United States, approved by the Superintendent of Insurance) for the general benefit and security of policy holders and creditors in the United States, and the additional deposit with State authorities of prescribed funds also for the benefit of policy holders and (or) creditors in the particular State or in the United States, which funds cannot be released until all liabilities have been discharged." Opinion by Mr. John Bassett Moore on the Legal Position of the United States Branches of Foreign Insurance Companies, March 22, 1917. (Privately printed.)

As regards the German insurance companies doing business in the

$4 (a)] PROCLAMATIONS REGARDING ENEMY INSURNACE 159

United States the President on April 6, 1917, issued a Proclamation as follows:

"Whereas, certain insurance companies incorporated under the laws of the German Empire, have been admitted to transact the business of insurance in various States of the United States by means of separate United States branches, established pursuant to the laws of such States, and are now engaged in business under the supervision of the insurance departments thereof, with assets in the United States deposited with insurance departments, or in the hands of resident trustees, citizens of the United States, for the protection of all policyholders within the United States, and,

"Whereas, the interests of the citizens of the United States in the protection afforded by such insurance are of great magnitude, so that it is deemed to be important that the agencies of such companies in the United States be permitted to continue in business.

"Now, therefore, I, Woodrow Wilson, President of the United States of America, by virtue of the powers vested in me as such, hereby declare and proclaim that such branch establishments of German insurance companies, now engaged in the transaction of business in the United States pursuant to the laws of the several States, are hereby authorized and permitted to continue the transaction of their business in accordance with the laws of such State in the same manner and to the same extent as though a state of war did not now exist;

"Provided, however, that all funds of such establishments, now in the possession of their managers or agents, or which shall hereafter come into their possession, shall be subject to such rules and regulations concerning the payment and disposition thereof as shall be prescribed by the insurance supervising officials of the State in which the principal office of such establishment in the United States is located, but in no event shall any funds belonging to or held for the benefit of such companies be transmitted outside of the United States nor be used as the basis for the establishment, directly or indirectly, of any credit within or outside of the United States, to or for the benefit or use of the enemy or any of his allies without the permission of this Government."

This was subsequently modified by the Proclamation of July 13, 1917, the material portion of which is as follows: "Now, therefore, I, Woodrow Wilson, President of the United States of America, by virtue of the powers vested in me as such, hereby declare and proclaim that such branch establishments of German insurance companies now engaged in the transaction of business in the United States pursuant to the laws of the several States are hereby prohibited from continuing the transaction of the business