About 50 or 55 percent of 1938 capacity. The standard of living contemplated would fall somewhat below that attained in Germany in 1932 at the bottom of the depression."

I am glad to say that this particular policy was never wholly put into effect and the United States did its best, when faced with the realities of a starving Germany, to prevent that starvation.

III

The previous speaker has shown you that in planning for defeated Germany, treating it as a belligerent, we forgot the elements of our Constitution that private property shall not be taken without due process of law and if taken for a public use, not without just compensation. Yet we agreed that Russia might seize anything in its own zone and we agreed to seize much in the zones occupied by ourselves and other Allies to turn over to Russia. We seized all the property outside Germany not wholly for reparations, but with a more definite purpose of destruction. In the Paris Agreement, November 1945, it was urged upon each member of the Conference by unanimous resolution:

***that the countries which remained neutral in the war against Germany should be prevailed upon by all suitable means to recognize the reasons of justice and of international security policy which motivated the Powers exercising supreme authority in Germany and the other Powers participating in this Conference in their efforts to extirpate the German holdings in the neutral countries."

Extirpation was the purpose.

Our opposition too has called this an agreement which cannot be broken. We agreed with our Allies to divide up the loot and so they say we cannot retreat from that position. Perhaps in answer to that, it will be sufficient to quote Mr. Dulles who said:

"In my opinion, the agreement, whatever its intent may have been as an executive agreement, was without authority whatever to bind the Congress of the United States in this matter. The property had been vested by action of Congress. I believe Congress has the right to decide what to do about the matter. I do not believe that the freedom of Congress in this matter has been curtailed in any way by this executive agreement. *

IV

We imposed maximum reparations and the statements in the report which we here debate, that somehow the seizure of external assets was a kindness to Germany, lightening its load of reparations, is not supported by the facts. Twenty billion dollars from German private property and all external assets was no light reparations bill. The $20 billion figure was later changed; the Allies should take what they could get. President Truman expressed the proposition thus:

"At the Crimea Conference a basis for fixing reparations had been proposed for initial discussion and study by the Reparations Commission. That basis was a total amount of reparations of $20 billion. Of this sum, one-half was to go to Russia, which had suffered more heavily in the loss of life and property than any other country.

"But at Berlin the idea of attempting to fix a dollar value on the property to be removed from Germany was dropped. To fix a dollar value on the share of each nation would be a sort of guaranty of the amount each nation would get-a guaranty which might not be fulfilled.

"Therefore it was decided to divide the property by percentages of the total amount available."

V

We denied a rule of law to Germany. Over 300 years ago, Francis Bacon observed:

"Revenge is a kind of wild justice: which the more man's nature runs to, the more ought law to weed it out. For as for the first wrong, it doth but offend the law, but the revenge of that wrong putteth the law out of office."

In this, I do not refer to the fact that there was a complete breakdown of law and order, as my colleague has stated, quoting the State Department: "We neither governed Grmany nor permitted it to govern itself." I refer rather to the seizure

of private property in Germany and private property outside Germany. By what

right or rule of law did we do this? We entered Germany either as a belligerent or as a nonbelligerent. If as a belligerent and also that is the way we entered Germany, we extended our war powers. Then we were bound by the Hague Convention and this in no equivocal terms says that private property must be respected. If necessarily it must be used by the conquring horde, it must be paid for.

If we entered Germany as a nonbelligerent-and really how could we so enter a foreign country?-but assume we came with "malice toward none and charity for all"a good American doctrine as to a conquered country laid down by President Lincoln-then our treatment of Germany must revert to the treaties in force at the commencement of hostilities or, if those were abrogated by hostilities, then we must treat Germany in accordance with the international custom and usage. Now we do not recognize in our custom and usage seizure of private property abroad. Our State Department has made many a protest and so coming as we did into Germany, we indeed put the law out of office.

VI

The destruction of Germany as a national unit was planned. If there was ever any doubt of it, that doubt has been dispelled by the publication of the Yalta papers. The fact that we don't like it now does not mean that we failed to agree to it and even some lack of definiteness of how it was to be done does not wholly absolve us.

Certainly it was definitely agreed that Stalin should have that part of Poland east of the Curzon line and Poland should be compensated by granting to it the administration of substantial accessions of territory of adjacent Germany. Mr. Stalin later decided that this decision was permanent. Now I will show you the results. Here is a map published by the State Department. Let us look at this map in the light of the arguments presented. Our opponents have said that there was no confiscation of Germany property within the United States, first, because the United States made a solemn agreement with Germany (a) that we might have these external assets; (b) that Germany would pay its own nationals for them. In the first place, as shown by the brief we have placed in your hands. Germany did hold its most severe reservations against the principles of the Paris Agreement on reparations so that it is difficult to contend successfully that there was any agreement whatever.

Next, what was the Government of Germany which made this solemn agreement? There was no Government of Germany, so the solemn agreement was made with a nonexisting government. We came as conquerors and this solemn agreement was a term or condition imposed on the conquered country. It was a truce or perhaps since heavy payments were to be made, a ransom by which Germany tried to buy its freedom from an occupying enemy. This is a truce, not a treaty. I read to you in translation from Grotius, The Freedom of the Seas: "So far as peace is concerned, it is well known that there are two kinds of peace, one made on terms of equality, the other on unequal terms. The Greeks call one a compact between equals and the latter an enjoined truce; the former is for free men and the latter is for those of servile status."

My opponents have said that there is no international law to prevent what they are doing. Certainly, there is no law to justify it.

What was the financial position of that segment of Germany with which this solemn agreement was made? They had been deprived of a large section of the area from which their compatriots came; they had been despoiled by the Allies of large parts of their industrial equipment; they were forced to care for 11 million refugees whose homes had been taken by the Allies, meaning, of course, in this case, Russia. They were deprived of the services of 18 million Germans living in the so-called "Soviet Zone"; they were struggling desperately to reimburse their own people for the private property taken by the Russians. They also had properly undertaken to pay a fair value for property which, under the Nazi regime, had been seized from non-Aryans and for payments to the State of Israel.

And so, without major financing contemplated, how valuable was this promise? If it can be called a promise! And tell me, lawyers, members of the Section of International and Comparative Law, has the doctrine of duress been abrogated? Furthermore, it was a nonenforceable agreement by any of the residents of Germany, for no agreement by any country with another country for the benefit of its own citizens can be enforced by those citizens. A nonenforceable promise

wrung by force from an impoverished, divided and conquered people with no government-is this a solemn international treaty?

Look again at this map and see one of the factors which we imposed upon Germany. Germans ejected from liberated Poland, Czechoslovakia, Hungary or fleeing from their homes whenever they got an opportunity, from East Prussia and other Soviet-occupied nations, poured into Germany and have continued to pour into Germany. We have created millions of displaced and homeless Germans. It is a happy coincidence when considering such a problem, that we meet here in Philadelphia, Pa., a city and state founded by William Penn, a man of peace, yet a man of action, an Englishman living under a government at war with the people and educated in a school that taught the doctrine of passive obedience. His lifelong dream was of popular government of a state where the people ruled. Here in the wilderness he founded such a state and welcomed the oppressed people of the earth and denied to none the freedom of speech, the freedom of religion, the freedom to exercise his prerogative concerning government. So he came from oppression to give liberty, while we come from a land of liberty to impose tyranny.

In our present desperate international situation, I wish to look to the future and I will refer to our changes of policy only to indicate how far we have repudiated what we ourselves so helped to create. First, in that part of Germany still within the orbit of the Allies, there is an autonomous government which represents the people it governs. Mr. McCloy, at an early date, stopped the further seizure of factories and other private property within Germany. Mr. Byrnes, then Secretary of State, said (Department of State Bulletin):

"Germany must be given a chance to export goods in order to import enough to make her economy self-sustaining. Germany is a part of Europe, and recovery in Europe, and particularly in the states adjoining Germany, will be slow indeed if Germany with her great resources of iron and coal is turned into a poorhouse."

And, thus, we relearned the elements of geography that the land mass denominated Germany and the inhabitants thereof denominated Germans as a necessary unit in the economy of Europe and that in 1945 and 1946 Denmark, Norway, Holland, Belgium and France, as well as Germany, faced cold and unprofitable winters because they had no German coal. We have learned that the destruction of Germany was not profitable. Surely, the man who beat his vicious horse to death no doubt had great emotional satisfaction but thereby he deprived himself of a valuable piece of property. We have now learned expediency. The economic unit which was Germany is necessary to the welfare of Europe. We cannot and do not wish to destroy it. In fact, we need it badly and this is the way our State Department phrases it:

"Thinking among Western nations on the subject of Germany in relation to European defense has changed radically since the end of World War II. In the Brussels Pact of 1948 defense of Europe still meant chiefly defense against Germany. Thereafter, the Western nations began to realize that the immediate danger against which Europe needed to assemble defenses was not defeated and disarmed Germany but their powerful wartime ally the Soviet Union." Mr. Dulles has said (Department of State Bulletin):

"This division of Germany cannot be perpetuated without grave risks.' * * * For no great people will calmly accept mutilation. The partition of Germany creates a basic source of instability. I am firmly convinced that a free and united Germany is essential to stable peace in Europe and that it is in the interest of all four occupying powers."

But there are some who tell us that we have already expended one-quarter to one-half billion for justified American war claims and, therefore, would unbalance the budget if we give back the property or its value. Gentlemen, what has it cost us to hold that property so far? Mr. Truman, returning from the Potsdam Conference, had said at one time: "We do not intend again to make the mistake of exacting reparations in money and then lending Germany the money with which to pay.”

Now, quoting from the State Department Bulletin:

"*** The Soviet authorities ignored the Potsdam decision on reparations and quoted the Yalta agreement to justify taking reparations out of current production. At the same time, they refused to give an accounting for what they had already taken. The amount was so great that the Germans were left incapable of paying for vital imports. This meant that the United States was providing those essentials, subsidizing the Germans so that they could pay reparations to the Soviet Union."

The Soviet Union also printed marks which the Allied occupations had to redeem. How much of what we paid to Germany went as German reparations to Russia we shall never know and since the war, as the New York Times has pointed out (April 9, 1954): "Russia has taken from Austria $14 billion and the United States has put a billion dollars into Austria."

To keep the German private property in an effort to hurt and interfere with the rehabilitation of Germany is contrary to our present policy and has literally cost us billions. In all, nearly $4 billion has been poured into Germany for rehabilitation and over a billion into Austria. And so, our originally wrong policies, to which Russia has so persistently clung, while we have changed, have cost us billions, but still in spite of our efforts to increase the trade of Germany, in spite of our efforts to indicate to Germany that we do represent the forces of peace and democracy, we retain the confiscated property. Let us return the property.

POSTWAR RETURN OF VESTED ENEMY PROPERTY

SUMMARY OF ARGUMENT

(By Cecil Sims, Nashville, Tenn., and Robert B. Ely III, Philadelphia, Pa.)

FOR THE NEGATIVE

As the discussion of the preceding speakers has made clear, the United States is not compelled, either by legal obligations, by equitable requirements, or by practical considerations, to return to the former owners the enemy assets (or their worth) vested by the Alien Property Custodian subsequent to Pearl Harbor. On the contrary, to take such a step would be an act of bad faith vis-a-vis our former allies, a breach of constitutional fiduciary obligations to our citizens, and, apart from these high considerations, an act of quixotic open-handedness which would lessen the respect for our Government both at home and abroad.

In the brief time left to conclude this panel, it is impossible to consider item by item and case by case the sentimental or compassionate circumstances which may have surrounded each bit of former enemy property and its handling during the last 15 years. With a half-billion dollars or more of property, and with hundreds of thousands of former owners and of American claimants involved, we can only reach in reasonable time a solution based on the general principles discussed. However, if pure sentiment is to be taken into account, it is hard to imagine that this audience of Americans would have less sympathy for their countrymen who suffered war injuries than for the individuals and corporations who at least tolerated, and in most cases actively supported, the Governments and combatants which inflicted those injuries.

The conflict in which our country became involved in December 1941 bore no resemblance whatever to the quasi-chivalric contests of olden days, begun by absolute personal sovereigns for personal reasons, fought mainly by professional soldiers on relatively limited battlegrounds according to loosely observed rules of fair play, and leaving the great mass of people on both sides largely unharmed. World War II was total in a sense which has been driven home to everyone who lived through it. In the cataclysmic efforts on both sides there disappeared all the old distinctions between governments and their peoples, between peaceful property and contraband of war. Hence there can be no doubt as to the legal and equitable propriety, or as to the practical necessity, of the action of our Government in taking over and "blocking," not confiscating, any and all forms of enemy property within reach. Its right to have done so, even under the strictest theories of national and international law and morality, is not seriously denied, even by those who propose the present return of this property or its worth. Neither is there any serious denial of the right of our Government to have used or disposed of this property while the war continued. The law of self-preservation underlies all others.

It was not until World War II ended that the former owners of enemy property could, with the slightest support of law, equity or commonsense, have raised any question of its return. Moreover, by the time hostilities had ceased there had arisen a number of other problems requiring solution in connection and simultaneously with the decisions as to the handling of former enemy property. It having been settled abundantly and beyond rebuttal at Nuremburg, at Tokyo and elsewhere, that World War II had been begun by completely unjustified

aggression, and had been conducted by our enemies in flagrant disregard of the rules of international law and the standards of civilized decency, enormous reparations could rightly have been sought by our Government and by our injured citizens. Putting aside this latter consideration, assuming contrary to fact and law that the hostilities of our former enemies had been justifiably begun and "properly" conducted according to the laws of war, and analyzing the claims of former enemy owners thus in fancy and in a vacuum, something might be said in favor of returning these assets. Such, however, is not the manner in which these claims should have been and were dealt with.

During the last 10 years, our Government and our allies have negotiated openly, carefully and at length with former enemy governments a traditional pattern for overall settlement of the numerous interrelated postwar claims between and among the various governments and their people. This pattern has been repeatedly followed in the past, and is subject to none of the criticisms leveled against it ex post facto by those who now seek to upset it.

The details of this pattern of settlement have been so well recited by preceding speakers that no useful purpose can be served by another review at this point. However, its fairness and propriety can perhaps be made more apparent if its outlines and underlying principles are restated in terms a bit more familiar to the general practitioner than the somewhat obscure technology of international law.

For simplicity's sake, let us consider the case of Germany. During the postwar negotiations the German governmental representatives, as attorneys in fact and at law for all the German people, and especially for the owners of property in this country vested by our Government, presented among other claims those of these former owners. In return our Government, acting in a similar capacity for itself and its citizens, presented their claims for national and private reparations. It goes without saying that, measured by any reasonable scale, the American national and private claims far exceeded the national and private claims of the Germans. Hence the resultant settlement, embodied in the earlier contractual agreement and in the later Treaty of Paris, both executed on either side by representatives of unquestioned authority to act, whereby our Government relinquished to Germany all American national and private claims for reparation in return for a relatively insignificant mass of former German private property taken and surrendered by the German Government, was an example of enormous American generosity. Those Germans and their agents, who now seek ex post facto to upset this magnanimous arrangement, completely overlook the principles which applied equally to all parties involved, and the reciprocal nature of the undertaking. When those principles and their operation are properly understood the cries of "confiscation" which have surrounded the debate on this subject are seen to have absolutely no significance.

Faced with enormous American claims against it, the German Government, exercising the power of eminent domain inherent in all sovereigns, took selected German private property (the assets under debate) and surrendered it to the United States for the public purpose of procuring peace. In doing so it acknowledged, in the international agreements it made with our Government, its obligation to pay just compensation for the property thus taken. This was not confiscation either by the German Government or by the United States.

Conversely, in order to further its public purpose of restoring peace with Germany, our Government took selected private American property (private claims for reparation) and surrendered these, along with similar national claims, to Germany. By so doing our Goverment became bound by the fifth amendment to our Constitution, to pay to our citizens thus affected the just compensation guaranteed by this amendment. This was not confiscation by our Government, or by Germany. The entire transaction was one of extreme advantage to Germany and the Germans, including the present claimants. It is indeed a strange form of legal or sentimental reasoning which seeks to label generosity "confiscation.” This technique and pattern of postwar settlement is one which no rule or practice of international law requires to be revised. From time beyond memory governments, as the international bargaining agents of their people, have been free and authorized to take over and surrender the external assets of a group of their citizens, in order to benefit their country as a whole in dealing with a foreign government; and in so doing neither government can be accused of confiscation. Problems of confiscation arise only when and if the taking and surrendering government (in the present example, Germany) fails to compensate its own citizens. Thus far there is no concrete or credible evidence that Germany