Mr. RAYBURN. Mr. Miller, many Members and other people have asked me why it is that we continue to hold all this foreign property when we are not at war with anybody? We have not been at war with anybody for four years. Why is not this thing wound up?

Mr. MILLER. Mr. Rayburn, all I can say to that is that it is a general question. It is absolutely up to the United States Government, represented by the legislative branch down here and the executive departments up at the other end of the Avenue. Mr. RAYBURN. Absolutely, but you are here as an expert witness. You are the custodian of this property. Why do you put it at $10,000 instead of the limit? Mr. MILLER. Because, as I said in my preliminary statement

Mr. RAYBURN. This bill is your recommendation, as I understand it?

Mr. MILLER. Yes; the portions that I have referred to are my recommendations, worked out by Mr. Winslow.

Mr. RAYBURN. Yes. Well, why not all of it?

Mr. MILLER. That is absolutely, Mr. Rayburn, a matter of policy to be determined by Congress and higher authority. I would not attempt, as the custodian and administrator

Mr. RAYBURN. Well, why didn't you say $25,000 instead of $10,000? Why didn't you say $100,000?

Mr. MILLER. Because, Mr. Rayburn, I understand that that would depreciate the fund to such an extent that other governmental departments that are interested in other phases of this question probably would not be favorably inclined to it.

Mr. RAYBURN. What other governmental department is interested in holding this property? What value is it to the United States to hold this property?

Mr. MILLER. Just to answer the first part of your question, the Department of State is charged with the negotiation of these American claims. The Mixed Claims Commission is directly under the Secretary of State.

Mr. RAYBURN. I understand, but this is a matter for the Government, is it not? It is not a matter that individuals are responsible for, is it?

Mr. MILLER. The whole subject matter of the question is a matter of determination of policy.

You

Mr. RAYBURN. Yes: and I want to get the objection to it, if there is any. have recommended that this money be paid, to the amount of $10,000. I do not understand why it can not all be paid to them so that we can get out of this business. The CHAIRMAN. I would suggest, Mr. Rayburn, that you let the witness answer the questions as you go along. You have piled up half a dozen of them.

Mr. RAYBURN. I have not been to get the witness to give me an anwer to any question yet.

The CHAIRMAN. Well, he has not had time to do so. If you will ask him one question at a time

Mr. RAYBURN. Well, I will do my own questioning in my own way.
The CHAIRMAN. You will have to give the witness a chance to answer.

Mr. MILLER. Mr. Rayburn, I am not appearing here from the standpoint of an objector to any policy that this Congress wants to enact into law with reference to this alien property: I am merely here to-day in a positive way to recommend something that I think will go through quickly so that we can at least begin to make a preliminary step in the right direction. I have tried to show you that, both personally and officially— and I am not the only Government officer to be considered that I do not favor the confiscation of private property to pay debts. I have endeavored to answer your question.

Mr. RAYBURN. Well, Mr. Miller, you have not answered me. I want your opinion as to why this property should not all be returned in the immediate future.

Mr. MILLER. My personal opinion is that the Government does not at this time favor the immediate return of all of it, because of the very provisions that your Congress put in the Knox-Porter peace resolution, to which I have referred. That contains the last official instructions that any of us have had from Congress and Congress makes the laws-namely, that this shall be retained by the Government until such time as the former enemy governments shall respectively have nade suitable provision for the satisfaction of all claims against these governments. That is the last instruction we have in any law on the subject.

Mr. LEA. Mr. Miller, suppose that Congress should now definitely determine that it will not take private property for the satisfaction of claims. Would you then know of any reason why Congress should any longer hold this property?

Mr. MILLER. No; if that policy is arrived at there would not be any further reason why we should.

Mr. LEA. Do you think the fact that you were holding this property would help in any way toward securing an early settlement of the claims of American citizens?

Mr. MILLER. I know unofficially, Mr. Lea, that the German Government authorities are intensely interested in the settlement of these American claims against Germany, because they realize that until these things are cleared up the United States and Germany can not get back into their old stride of friendly commercial and economic relations, and it was largely as a step in the direction of reestablishing friendly commercial and economic relations that we thought out this $10,000 return proposition. Mr. LEA. What has been done toward the satisfaction of the claims of American citizens for property held by the German alien property custodian?

Mr. MILLER. The German custodian operates a little differently than we do. They do not have to wait for laws to be passed by their Reichstag or legislative assembly; they can be released upon orders in council by the President, and they have returned a good part of the property they seized. But there is a class of property that they can not return, and that is American amounts figured in gold dollars that were taken over at the time the war started. The only way they can return that is in the depreciated value of the mark. That represents an important part of the claims that the mixed claims commission is considering. Do you catch the point?

Mr. LEA. Yes. Has any agreement been made between the United States and Germany as to what shall be considered the value of the mark in the settlement of these American claims?

Mr. MILLER. I was told informally the other night that they had not, but in my negotiations in the matter I have to make the best deal that I can. Court decisions are along the line that the value of the mark is as of the time the suit is filed, and if suits have been filed in the last year or so I am sure the value is well under 1 cent a mark. I have made settlements myself since I have been in office at the rate of 7

cents.

Mr. LEA. I have gathered from statements in the newspapers that an agreement was made between the United States and Germany by which American citizens were to be paid the full value of the mark as of the day the United States entered the war. Do you know whether or not there is any such agreement?

Mr. MILLER. I was informed by an attorney of the mixed claims commission that they had either arrived at such a decision or were about to arrive at a decision which would settle the value of the mark at the average cable value 30 days preceding our entry into the war. That was 18 cents, as I understand it, Mr. Lea.

Mr. LEA. Do you know about the total value of the claims of American citizens for property in the hands of the German alien property custodian?

Mr. MILLER. I do not. This is merely a guess, Mr. Lea, but I understand that at no time did the German custodian have over $100,000,000 of property over there; and the Austria-Hungarian Government, as I am informed, never had an alien property custodian, and did not seize property belonging to American citizens.

Mr. LEA. I want to ask one question about those assignments that Mr. Denison inquired about a moment ago. At the present time do you recognize the legal right of one of these claimants to assign his claim against the Government?

Mr. MILLER. No, sir; we are not permitted to do that under the law, Mr. Lea. The only right that we give them now is when the question of a sale comes up. I have always endeavored to obtain their unofficial assent, and have so done in all sales that have been consummated. It is not binding, it is not mandatory, but I usually have their assent.

Mr. LEA. Referring to the provision on page 11, exempting property from attachment and execution, as I understand it, do you know whether or not any right of American creditors against the German claims is involved under that section? Have you notice of any claims against this property that is in the hands of the custodian that would be affected by this exemption?

Mr. MILLER. No, sir. That is, as you say, the old law, and in my opinion it would not be affected.

Mr. HUDDLESTON. Mr. Miller, I understood you to say that you thought this matter should be dealt with according to a consistent policy of our Government. That is correct, isn't it?

Mr. MILLER. Yes, sir; generally speaking.

Mr. HUDDLESTON. Then I assume that this bill represents, as far as it goes, the present policy of our Government?

Mr. MILLER. I should say it represents the desire of the present administration, surrounded as they are by the provisions in the peace resolution.

Mr. HUDDLESTON. In other words, you are not pressing this bill merely upon your own responsibility, but it meets the approval of the present administration? Mr. MILLER. You are correct, Mr. Huddleston.

Mr. HUDDLESTON. What part of this property remains in specie, or in the form in which it was when seized?

1

Mr. MILLER. I can best illustrate by stating that to-day in the Treasury there is a total of $174,000,000 invested in Liberty bonds or in cash. That represents either property that has been liquidated or cash seized or stocks, bonds, and securities that have been seized and then liquidated.

Mr. HUDDLESTON. What part of it is cash seized?

Mr. MILLER. I regret, sir, it is impossible for me to answer that in detail. It would take a detailed audit, Mr. Huddleston, for me to give you that. I do not know whether I catch your question, but to-day

Mr. HUDDLESTON. What I want to know is, what part of this property remains in the same form in which it was taken over? Of course, cash does not change its form. Mr. MILLER. I should say, roughly speaking, only a half of it. because when I answer your question I have in mind a number of sales of industrial plants that were disposed of under my predecessor's tenure of office. To-day I am operating very few industrial plants.

Mr. HUDDLESTON. Would the cash credit to the Alien Property administration be sufficient, in your opinion, to discharge claims that might be properly made against the German Government.

Mr. MILLER. Oh, yes. As I have said informally before to-day, that amount of money, $174,000,000, would eventually guarantee all American claims. But that is my personal opinion.

Mr. HUDDLESTON. What would you think of returning all the property which may be held that remains in specie?

Mr. MILLER. That would be perfectly proper, sir; but there are a whole lot of people who would come in under the terms of this $10,000 return bill whose property is not represented in cash in the Treasury.

Mr. HUDDLESTON. But there is no expense connected with administering that property-the cash?

Mr. MILLER. No, sir.

Mr. HUDDLESTON. And the other is expensive: in some instances it is pretty evident that the expense of administering it will consume it, and in every case it depreciates? Mr. MILLER. Let me say, Mr. Huddleston, that I do not see how you can pass discriminatory legislation, because if you say that the property that the Alien Property Custodian holds to-day intact in some form-stocks, bonds, real estate. and industrial plants shall go back, you still hold property that has been turned into cash.

Mr. HUDDLESTON. I was ing to ask why you think Congress may not discriminate among the claimants?

Mr. MILLER. Oh, it is up to the Congress, sir, to pass any legislation that you want. Mr. HUDDLESTON. Have you in mind any constitutional provision that would prevent Congress from returning all of it, except, for instance, a single specific item? Mr. MILLER. No, sir; the Congress could pass legislation of that character if they wanted to, and I can not conceive that it would be unconstitutional.

Mr. HUDDLESTON. So that there is not any question of legality raised in a discrimination by Congress among the claimants?

Mr. MILLER. No, sir; merely I would submit, Mr. Huddleston, it is largely a matter of fairness.

Mr. HUDDLESTON. Of policy and fairness?

Mr. MILLER. Yes.

Mr. HUDDLESTON. I understood you to say, in reply to Mr. Denison, that there was some question of legality in it.

Mr. MILLER. It was more as a matter of fairness that the bill was drawn to include claims above $10,000; although I have been told-I have not had a chance to examine into it-that they might attack the law if the parties above $10,000 were barred. Mr. HUDDLESTON. On what ground might they attack it?

Mr. MILLER. Mr. Huddleston, I am not discussing this from a constitutional lawyer's point of view.

Mr. HUDDLESTON. Well, I had in mind that you probably had taken legal advice. Mr. MILLER. I really am not prepared, nor am I equipped here to-day, to discuss the legal situation.

Mr. HUDDLESTON. The retention of this property in excess of the proposed $10,000 limit is in itself a discrimination, even if it were implied that it would at some future time be returned. But the implication in the retention is that we intend to do something with this property in the future; the implication is that we expect to confiscate it and apply it to the payment of claims, and I can not think of anything more discriminatory than to take the property of one man to discharge a claim against his Government and to release the property of another man.

Mr. MILLER. That may be the implication, Mr. Huddleston, in the laws which the Congress has heretofore passed, but I know it is not the desire nor the policy of this

administration to resort to confiscation of this private property to pay American claims. It is merely held as a guaranty.

Mr. HUDDLESTON. Well, what is a guaranty worth if you do not intend to enforce it? If the administration has decided definitely upon a policy of not applying in any event this property to the payment of claims, it has no effect as a guaranty and has no effect of any kind. Are you able to advise us that that is the policy of the administration?

Mr. MILLER. Not to resort to confiscation?

Mr. HUDDLESTON. Yes.

Mr. MILLER. Yes; I am safe in making that statement here to-day.

Mr. HUDDLESTON. Then, if that is correct, there would seem to be no reason for not returning all the property?

Mr. MILLER. That is absolutely so; but as I told Mr. Rayburn, the last instruction we have from the Congress is in this peace resolution that I referred to.

Mr. HUDDLESTON. Well, we are now changing that, so if we have definitely decided not to use any of this property for that purpose of applying it to the payment of claims we had better get rid of it and get it back to the people who own it?

Mr. MILLER. I want to say, Mr. Huddleston, that I brought up this claim situation, because you can not discuss this alien property situation without it. If I had adopted the attitude of simply limiting my discussion to my own office, I would not have mentioned it. I want to say here that I do not want the Mixed Claims Commission or the Department of State to think that I am encroaching on their prerogatives. Any remarks that I have made on that are merely personal.

Mr. HUDDLESTON. You have used the expression that it was proper and "righteous," I think that was the word you used, to return this property of $10,000 and less. I did not misunderstand you in that?

Mr. MILLER. You did not.

Mr. HUDDLESTON. Well, it is just as proper and righteous to return all the other property, is it not?

Mr. MILLER. In theory it is absolutely just as right and proper to return it, but unfortunately we are dealing here to-day with practical present-day matters and the legislation that I have referred to.

Mr. HUDDLESTON. I was wondering just what practical present-day matter it is that would prevent us from doing a thing which we have already decided that we are going to do.

Mr. MILLER. The most practical present-day situation-and I do not want to wear it threadbare—is that provision in the peace resolution which a number of you gentlemen voted on last year.

Mr. HUDDLESTON. Legislators as well as executives are timid and very fearful of public opinion. I am wondering whether there is any feeling of that kind that causes you to be hesitant about going full length with regard to this property, or a lack of courage on the part of Congress or the administration which leads us to deal with this matter in a way which is not according to traditional American policy and not according to a way that is just and righteous. I have that thought in my mind, and I was anxious to have you explain anything to the contrary.

Mr. MILLER. It is my personal opinion, Mr. Huddleston, that the great majority of the American people and a great majority of their Representatives here in Congress favor a return of all this property right now. On the other hand, as long as you have brought the subject up, it is quite proper that an active minority are talking about the Lusitania and other claims, and they have the right to talk about it, because the peace resolution specifically recognizes that state of affairs.

Mr. HUDDLESTON. There is one more question I want to ask: You think it is proper to recognize transfers and assignments of this property and of claims for the property, and that such recognition be provided for in a section of this amendment? Mr. MILLER. I think it is really necessary, Mr. Huddleston, for the proper administration of the act, when it comes to carrying out the provisions of this bill, if it is enacted into law.

Mr. HUDDLESTON. Do you think that transfers made to speculators or which have been made upon an unconscionable basis ought to be recognized?

Mr. MILLER. Absolutely not. I do not know whether I have said so here to-day, but you can rest assured that if we are called upon to administer those provisions we will establish rules and regulations that will absolutely prevent any of that. You can not draw any statute but what somebody will try to get around it; you have got to trust to the honesty of your Government officials to see that it is done right.

Mr. HUDDLESTON. You think we should not attempt, in writing the statute, to guard against claims made by transferees who have taken advantage of the necessities of the true owners to acquire their rights upon extortionate terms?

Mr. MILLER. I would welcome any addition to that section (dd) that would stamp that policy more plainly on the legislation, because you and I are both aware of a lot of people that have overrun Europe since the armistice-they were not over there when there was any fighting, but have gone there since then and are trying to collect a lot of claims. I understand that if this goes through we are going to have the active and earnest cooperation of the legations and embassies here in seeing to it that no frauds of that kind are put over.

Mr. HUDDLESTON. With reference to the ships, are they held by the Shipping Board?

Mr. MILLER. One hundred and five of them are held by the Shipping Board, and are so noted on this memorandum; 21 of them are still held by the Navy, and are so noted on this memorandum that I have put in the record.

Mr. HUDDLESTON. What part of those ships, if any, are in the class of "lawful war prizes?"

Mr. MILLER. That is very difficult to say. Those ships that were seized at Hoboken were all German auxiliary cruisers, and as you know, were all used to transport our men to France. I do not think that any of these are prizes of war taken on the high

seas.

Mr. HUDDLESTON. Have we none such?

Mr. MILLER. I do not think so, sir; I do not think that any of these vessels were captured on the high seas as prizes of war. They were at their docks in American ports all over the world.

Mr. HUDDLESTON. Would legislation be required in order to deal with that aspect of the situation?

Mr. MILLER. I only brought up the ship situation because I conceived that, from the German standpoint, they would certainly remind us of these ships when it came to settle our final accounts on all these matters. They are certainly property taken from the enemy or subjects of the enemy, and might be in the same category as this alien property when we are considering all that property as a whole.

Mr. HUDDLESTON. You think they should be dealt with by Congress in any legislation?

Mr. MILLER. Well, I would not want to venture even a personal opinion there, Mr. Huddleston, because these ships were never in my possession; they are in the possession of the Navy Department and the Shipping Board. I certainly hope that the Leviathan-which represents more to the average American doughboy than any other ship on the water-stays under the American flag as long as it is afloat.

Mr. HUDDLESTON. Well, we are about to sell that ship now for less than it is costing us to recondition it, are we not?

Mr. MILLER. NO; I understand the Shipping Board is conditioning that vessel, and the chairman told me a day or so ago that they expected to put it in the Southampton service, commencing this spring.

Mr. HUDDLESTON. Of course those ships were all taken over under this resolution that you referred to, of

Mr. MILLER. May 12, 1917.

Mr. HUDDLESTON. And there was considerable discussion over the propriety of that act, in view of our treaty with Germany which was in effect at the time the war began.

Mr. MILLER. You mean the seizing of these ships?

Mr. HUDDLESTON. Yes. You have not heard that question raised?

Mr. MILLER. No, sir: I have not, Mr. Huddleston. I merely brought the ship situation up here to-day to endeavor to lay every possible card on the table in discussing this subject.

Mr. HAWES. Mr. Miller, I understand it is your official view that all of this property should be returned as quickly as possible?

Mr. MILLER. My official view?

Mr. HAWES. Yes.

Mr. MILLER. As I told Mr. Rayburn a while ago, Mr. Hawes, that is a determination of policy that is absolutely up to Congress and the President or the State Department. I am the administrative officer and custodian. Personally I have not hesitated to say here to-day that the sooner we are divorced from this alien-property business and it is cleaned up and out of the way the better it will be. Nobody will be better satisfied than I, but it will take longer than the time I can spare to do it.

Mr. HAWES. Then am I correct in the assumption that your personal view is that this property should be returned as quickly as possible?

Mr. MILLER. Yes, sir.

Mr. HAWES. And that you would pursue that policy excepting for the belief that some action of Congress is necessary to authorize you so to proceed?