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Mr. FREUDENBERGER. In my opinion, H. R. 5930 is a natural corollary to and a natural sequence of Public Law 634, 84th Congress.
Insofar as the financing aspects are concerned, I will say this: There is a bill in the Senate, as you know, S. 727, introduced by Senator Smathers—we have been in two conferences in connection with that bill, and it is somewhat similar to this one, especially as to the use of the money for educational purposes from the fund representing vested moneys seized from former enemy nationals.
I was interested in hearing what the representatives of the AMVETS and the VFW said this morning about the agreements that had been made on the subject of the fund with former enemy nations; and while we have no specific resolution about using that money from that fund for this purpose, we certainly do not have any objections.
Mr. Dorn. Thank you, Mr. Freudenberger.
In other words, the money is there; it has been there for a good while, and some of it was used to pay the veterans who were in concentration camps and were captured by the enemy; so I think it is high time, and I am sure you agree, that we make some disposition of this money for other veterans.
Mr. FREUDENBERGER. I think so.
Mr. Dorn. And that you agree that no more worthwhile cause could be advanced than this to spend the money?
Mr. FREUDENBERGER. That is correct.
Mr. Dorn. Thank you very much, Mr. Freudenberger. We are going to adjourn subject to the call of the Chair.
Mr. WHITENER. Mr. Chairman, before we adjourn, if the staff director is in any position to make a statement at this time, with reference to the recommendations of the VA as to the drafting of the bill, I think it would be helpful to the committee.
STAFF DIRECTOR. The observations of the VA was that there was an inadvertence of the term and that was correct. In fact, I believe both instances their comments as to draftsmanship were correct; but if the subcommitte favorably considers this legislation, we would take the opportunity between the time of the subcommittee meeting, and the time it was presented before the committee to correct those, with any corrections that might subsequently be considered.
Mr. Dorn. Without objection I will insert, at this point some statements and other material bearing on this question.
OFFICE OF THE CUSTODIAN,
Ottawa, Ontario, April 17, 1957. Re Belligerent enemy assets. Hon, WM. JENNINGS BRYAN Dorn, Member of Congress, House of Representatives,
Washington, D. C. DEAR SIR: Reference is made to your communication of the 8th instant relative to the disposition of alien properties belonging to the Axis Powers that were confiiscated during World War II.
The Office of the Custodian, Department of the Secretary of State, is the authority responsible for the disposition of enemy assets vested in Canada during the Second World War pursuant to the provisions of the Trading With the Enemy (Transitional Powers) Act, copy of which is enclosed.
Generally speaking, the assets formerly owned by German enemies and vested during the war are being liquidated in accordance with the provisions of the
final act of the Paris Conference on Reparations to which Canada is a signatory. Paragraph 6 (a) of the Paris agreement reads as follows:
"Each Signatory Government shall, under such procedures as it may choose, hold or dispose of German enemy assets within its jurisdiction in manners designed to preclude their return to German ownership or control and shall charge against its reparation share such assets (net of accrued taxes, liens, expenses of administration, other in rem charges against specific items and legitimate contract claims against the German former owners of such assets).”
The Custodian, however, was authoirzed to release to their former German enemy owners, assets in such cases as, in his opinion, came within the exclusion provisions of rules 5 and 6 of the Rules of Accounting for German External Assets made by the IARA Agency established under the Paris agreement.
The status of the assets formerly owned by Japanese, Hungarian, and Rumanian nationals are subject to the terms of the peace treaties with these countries and they are released only if a claimant qualifies under the exculpatory provisions of these treaties.
With respect to the payment of claims for Canadian property losses, I am enclosing herewith, for your information, a copy of the report of the Advisory Commission on War Claims dated February 25, 1952. This report was approved by the appropriate Canadian authorities with slight modifications.
There have been no amendments to the Trading With the Enemy (Transitional Powers) Act since it was passed in 1947. Parliament was dissolved last Friday and it is not expected that the Members will assemble before the fall. At the moment, there is nothing to indicate that amendments to our act will be sought at the next session of the Legislature. I trust this is the information you require. Yours very truly,
K. W. WRIGHT, Chairman of the Administration Board and Chief Counsel.
TESTIMONY OF CHARLES S. COLLIER, VICE CHAIRMAN, COMMITTEE FOR RETURN
OF CONFISCATED GERMAN AND JAPANESE PROPERTY, WASHINGTON, D. C. I would like to speak in oppostion to the bill, H. R. 5930, introduced by Mr. Dorn of South Carolina.
This bill on its face appears to be designed to accomplish 2 essentially distinct purposes, based on 2 fundamentaly distinct and different policies which will operate on 2 distinct and different levels.
The first of these purposes is to make a bold and radical attempt to crystallize and settle permanently by a single simple stroke all the complex issues as to the merits—under international law and under the principles of equity and substantial justice so frequently illustrated in our domestic system of law in the United States of all the diversely conditional claims of the former private owners of the properties that have been confiscated whether these former owners are Germans or Japanese, natural persons or corporations, irrespective of whether the claims are large or small.
This sweeping and radical denial of all the meritorious claims of the former private owners of the confiscated properties is to be accomplished by the sugarcoated phraseology “The Secretary of the Treasury shall invest and reinvest such fund in interest-bearing obligations of the United States."
But the real basic purpose of this investment process, as appears clearly from section 4 of the bill, is to foreclose the issues as to the possible restoration of these assets or some of them to the former private owners, and to foreclose all the issues as to the payment of any compensation to the former private owners by dedicating at least $100 million from the funds derived from the contiscations to a new specific project.
The purpose of the Dorn bill is to impress if possible a new trust upon these funds that will cancel out the equitable claims of the former owners by the superior magic of what may thereafter have to be regarded as an accomplished fact however unjust or unreasonable this accomplished result may appear to be in the light of long-established principles in international relations that have been hitherto consistently followed by the Government of the United States.
The first effect of Congressman Dorn's bill would thus be to produce a decisive effect in the sphere of international relations, in the sphere of the laws of war in their ultimate operation, and in the sphere of vested private legal rights of property, whenever the owners are aliens in the countries which have physical power over the properties.
For the scope of the confiscating doctrine which this bill seeks to validate can hardly be confined to this single historical instance, that is the confiscations by the United States growing out of a single great war.
The principle of confiscations, if once admitted, will be invoked by other nations after their wars, and indeed, will be freely employed to excuse peacetime confiscations. This doctrine would be bound to work out to the eventual disadvantage of the United States.
The second purpose of Congressman Dorn's bill is to operate in an entirely distinct and different sphere; namely, in the sphere of providing public funds of the United States for educational assistance to children of totally disabled American war veterans.
The worthiness of this second purpose is undoubtedly admirable. But the worthiness of a purpose, no matter how noble, cannot justify such regrettable carelessness in the selection of means.
In commenting on the Dorn bill, I desire to emphasize strongly that the purpose which I have designated as the first purpose of the bill that is, the purpose to settle finally and perhaps irrevocably the whole set of issues about the disposition of the assets of former alien enemy individuals—appears to be the dominant or essential purpose of the bill. It is the confiscation purpose that gives the bill its essential or salient characteristics. The educational or aid purpose of the bill seems to be subordinate, limited, and contingent.
Let me warn the committee at this point against the illusion that the United States is somehow getting something for nothing under the terms of the Dorn bill when it devotes $100 million from the funds in the custody of the Alien Property Office to the purchase of United States bonds.
Congressman Dorn's project cannot be compared to those projects of Alexander Hamilton which are so glowingly referred to in the inscription on the Hamilton monument in front of the main building of the United States Treasury in Washington, which states :
"He smote the rock of the national resources and abundant streams of revenue gushed forth. He touched the dead corpse of the public credit and it sprang upon its feet."
The simple fact is that the United States already owns these alien enemy funds in a formal, legal sense and does not under the existing law have to pay interest thereon to anybody. In cases where the original assets have been liquidated, the proceeds, like other liquid funds of the United States, are either held in suspense in the Treasury or deposited in some or all of the Federal Reserve banks. These deposits can be drawn upon to meet appropriations of Congress. They are funds that are presently owned by the United States and they are free funds that could be drawn upon by Congress for educational purposes by any properly worded appropriation measure.
But, if these funds are permanently invested in United States bonds, the United States will become a legal debtor on these bonds and will have to pay interest on them for a long, long period of time.
If the United States "interest-bearing obligations" referred to in the Dorn bill are to be purchased on the bond market from private owners, this would mean that these sellers of the bonds then would receive the liquid funds. They would be bank depositors in Federal Reserve banks to this extent, and the United States would have lost these bank deposits.
The United States would then have only a frozen investment in its own bonds.
If the bonds purchased were a new issue, this would involve increasing the national debt of the United States and increasing the annual debt service charges, both of which would be contrary to every canon of sound finance in our present national financial situation in 1957.
Why, then, does Congressman Dorn advocate this bond-purchase scheme? Is it not obvious that a fundamental purpose is to fix and crystallize and make everlasting the exclusion of German and Japanese aliens from any possibility of getting back their former properties or receiving just compensation?
Here we come to the crux of the discussion. If the Dorn bill is to be regarded as a bill dealing with the final disposition of the German and Japanese private assets, seized by the United States in the course of World War II and in the immediately succeeding years, then it inust be admitted that it represents a very extreme position in this controversy. It advocates no return or compensation whatever to be made by the United States with respect to these seized and sequestrated properties.
Congressman Dorn seems to make an extreme assumption that the debate on this whole matter of alien enemy property is practically closed. The comprehensive design of the various House bills for full return, with their detailed and discriminating provisions, manifesting a careful search for justice and equity in this entire controversy, seem to have escaped entirely the attention of Congressman Dorn. Full return bills have been introduced by Mr. Simpson, of Illinois; Mr. Hale, of Maine ; Mr. Preston, of Georgia; and Mr. Cunningham, of Nebraska.
The Dorn bill seeks to rush the House of Representatives down to the hasty conclusion that no return whatever of alien enemy property is the true policy for the United States.
This conclusion is directly and completely contradictory to the historic policies of the United States in this field-beneficent policies that have hitherto been pursued with substantially complete uniformity. Congressman Dorn overlooks this entirely, although it is full of significance for all of us today.
It is no exaggeration to assert that the restoration of enemy alien property was one of the basic principles on which the Government of the United States was founded. This principle was strongly emphasized in the Treaty of Peace with Great Britain, by which our national independence was acknowledged. This treaty was negotiated by John Adams, Benjamin Franklin, John Jay, and Henry Laurens on behalf of the United States.
These distinguished statesmen just named formed a constellation of the brightest minds and the highest patriotic inotives among all the Founding Fathers of our country. The history of these peace negotiations shows that the provision for the protection of the property rights of British loyalists and all British subjects, who were in truth the alien enemies of the United States of that day, was an absolutely essential element or ingredient in that treaty of 1783, without which the British Government would never have agreed to so favorable a territorial settlement.
If the British had rejected the favorable territorial settlement that was in fact agreed upon by Great Britain and the United States, they would in all probability have been fully supported in this position by our powerful and diplomatically experienced allies, France, Spain, and Holland.
The Jay Treaty of 1794, which may not unreasonably be regarded as a part of the real and underlying peace settlement as between the United States and Great Britain, was marked and distinguished by highly important and significant provisions for the protection of properties owned by British subjects and the restoration of properties confiscated by legislative action in several of the States of our Union.
This treaty of 1794 was negotiated under the personal instructions and guidance of President George Washington, who acted in this matter over the head of his Secretary of State, Edmund Randolph, and without the latter's cooperation or political support. For this purpose Washington used the services of John Jay, who had been Chief Justice of the United States, as his special personal envoy.
The Treaty of Ghent in 1815 which closed the War of 1812 and ushered in the 140 years of peace between the United States and Great Britain confirmed these principles. And the United States Supreme Court thereafter held, in the great case of Society y. New Haren (8 Wheaton 464), that the Jay Treaty of 1794 revived legally in full force after the War of 1812.
It was in the opinion in this case that Mr. Justice Bushrod Washington, speaking for a unanimous bench of the United States Supreme Court, laid down what I hold to be the true fundamental principle in this whole field of alien enemy property rights.
May I be permitted to quote a single weighty and perfect sentence from this memorable opinion of the United States Supreme Court ?
"We think, therefore, that treaties stipulating for permanent and general arrangements and professing to aim at perpetuity, and to deal with the case of war as well as of peace, do not cease on the occurrence of war but are at most only suspended while it lasts; and unless they are waived by the parties or new and repugnant stipulations are made, they revive in their operation at the return of peace."
This principle of respect for private property, including the return of alien property after war, has been maintained by the United States down through the years, guiding postwar settlements after World War I.
It is the only correct principle to apply now.
In summary: With regard to the Dorn bill, the unjust seizure of property, even when that property is used for a benevolent purpose, is still an immoral and an unwise act.
I respectfully request the subcommittee to reject the Dorn bill.
COMMITTEE FOR RETURN OF
Washington, D. C., June 19, 1957. Hon. OLIN E. TEAGUE,
Chairman, Veterans Affairs Committee, House of Representativce, Old
House Office Building, Washington, D. C. DEAR MR. TEAGUE: Here is a list of the members of the Committee for Return of Confiscated German and Japanese Property. Dr. Collier's testimony is submitted in behalf of this committee.
I hope you will be able to include this list in the record of the hearings at a point immediately following Dr. Collier's statement. Best wishes. Sincerely yours,
JAMES FINUCANE, Executire Secretary.
COMMITTEE FOR RETURN OF CONFISCATED GERMAN AND JAPANESE PROPERTY
WASHINGTON, D. C., June 19, 1957.
Yasuo William Abiko, San Francisco, Calif., editor, publisher, Nichi Bei (daily)
Times Dr. Austin J. App, Philadelphia, Pa., professor, La Salle College Col. Kurt-Conrad Arnade (retired), Long Island, N. Y., military historian Dr. Harry Elmer Barnes, Malibu, Calif., historian, author Walter Boehn, Philadelphia, Pa., staff adviser, Republican National Committee Kenneth E. Boulding, Ann Arbor, Mich., economist, author Dr. Goetz A. Briefs, Washington, D. C., labor economist, author William Bruce, Milwaukee, Wis., publisher John R. Chamberlain, Cheshire, Conn., writer Dr. Charles S. Collier, Washington, D. C., professor of law, George Washington
University Rabbi Abraham Cronbach, Cincinnati, Ohio, former professor, social studies,
Hebrew Union College Eugene A. Davidson, New Haven, Conn., editor, Yale University Press Harry J. Enk, Philadelphia, Pa., president, Federation of American Ciitzens of
German Descent in the United States Bishop Wilbur E. Hammaker, Washington, D. C., bishop, Methodist Church Hon. Learned Hand, New York, N. Y., United States Circuit Court judge,
retired William Ernest Hocking, Madison, N. II., professor emeritus, philosophy, Harvard George Inagaki, Los Angeles, Calif., former national president, Japanese
American Citizens League Louis P. Lochner, Fair Haven, N. J., author and foreign correspondent Frederick J. Libby, Washington, D. C., executive secretary, National Council
for Prevention of War (acting) Conrad J. Linke, Philadelphia, Pa., artist, member executive council, Steuben
Society Rt. Rev. Msgr. Donald A. MacLean, Coral Gables, Fla., former professor,
philosophy, Catholic University of America Mike M. Masaoka, Washington, D. C., Washington representative, Japanese
American Citizens League Gordon llunt Michler, New York, N. Y., chairman, United States-German (ham
ber of Commerce George D. Moulson, Old Lyme, Conn., former member New York Cotton Exchange,
former financial writer for American and English papers Hon. Clifton Mathews, San Francisco, Calif., United States ('ircuit Court judge,
retired Dr. Ludwig Oberndorf, New York, editor, Staats-Zeitung und Herold