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for in the treaty of peace with Germany. I assume you gentlemen know what that was. [Reading:]

1. Great Britain.—The State Department notified us on January 26, 1920, that Great Britain had adopted the clearing office system as provided for in the treaty of peace with Germany.

In this regard it is of interest to note the treaty of peace order 1919, issued August 18, 1919, and published in the London Gazette for Friday, October 24, 1919. This order states that it is to come into operation on the date when the treaty of peace comes into force. Paragraph 16 of this order states as follows:

“All property, rights, and interests within His Majesty's dominions or protectorates belonging to German nationals at the date when the treaty comes into force (not being property rights or interests acquired under any general license issued by or on behalf of His Majestiy), and the net proceeds of their sale, liquidation, or other dealings therewith, are hereby charged

(a) In the first place, with payment of the amounts due in respect of claims by British nationals with regard to their property, rights, and interests, including companies and associations in which they are interested in German territory, oi debts owing to them by German nationals, and with payment of any compensation awarded by the mixed arbitral tribunal, or by an arbitrator appointed by that tribunal in pursuance of paragraph (e) of article 297, and with payment of claims growing out of acts committed by the German Government or by German authori. ties since the 31st day of July and before the 4th day of August, 1914; and

(6) Secondly, with payment of the amounts due in respect of claims by Brit. ish nationals with regard to their property, rights, and interests in the territories of Austria-Hungary, Bulgaria, and Turkey, in so far as

Provided, That any particular property, rights, or interests so charged may at any time, if His Majesty thinks fit, be released from the charge so created, those claims are not otherwise satisfied.”

It would appear from the above that Great Britain intended to take the full benefits offered by the treaty of peace.

Of possible information are the following statistics taken fro the Board of Trade Journal of November 20, 1919, which statements were made by Sir A. Geddes, of the Board of Trade:

Total amount of property held by the English custodian belonging to per-
sons resident in-

£98, 766, 018 Austria-Hungary

17, 693, 807 Bulgaria

780, 863 Turkey

4, 258, 504 Debts due by persons in England to residents ofGermany

£11, 884, 803 Austria-Hungary

2, 194, 358

156, 391 Turkey

897, 049

Bulgaria ---


(No. 004488-F.)

MARCH 30, 1920. To: Mr. Boggs. From: Mr. Stellwagen. Total amount of property belonging to persons residing in the United Kingdom held by the custodian of the enemy country-Germany

£42, 692, 626 Austra-Hungary

17, 554, 678 Bulgaria

377, 593 Turkey

4, 189, 283 Debts due to persons in the United Kingdom by residents of Germany

£54, 906, 238 Austria-Hungary

15, 115, 163 Bulgaria

1, 205, 481 Turkey

4, 781, 516

A note was made to the above statement relative to the amount of property belonging to persons residing in the United Kingdom held by the custodian of the enemy country, to the effect that the amount cited does not include the proceeds of the sale of property which has been liquidated.

2. France. The State Department advised us on February 27, 1920, that France had adopted the clearing-office system. We are advised informally that France would take advantage of all benefits offered under the treaty.

3. British South Africa.—The State Department advised us on February 27 as to the disposition of German property in South Africa. The inclosure was an excerpt from a local newspaper—the Cape Times, of January 15, 1920—and contained the Governor General's proclamation. It provides for the return of all property held by the local custodian belonging to any German national resident or domiciled in the Union at the outbreak of the war. It then provides for the return of property belonging to persons who at any time during the war were resident in enemy territory but who are solely subjects of a power not at war with His Majesty at any time during 1918. It then provides that the custodian may pay out of the property, rights, and interests of other German nationals vested in him certain debts as enunierated ; and further provides for the retention of power to dispose of or to take possession of the property of any German national other than a German national resident or domiciled within the Union at the date of the outbreak of war.


[From Journal des Debats du Samedi, Sept. 20, 1919 (p. 3).)


The Senate then adopted the act pertaining to the liquidation of property, making its object a measure of war confiscation.

M. Guillaume Poulle, reporter, revealed the economy of the act.

It is concerned with permitting the liquidation of enemy property which has been confiscated since the close of hostilities. The confiscation can not be indefinitely prolonged. Some solution must be found which will serve both international and national purposes.

From the international viewpoint there are the peace treaties now under consideration. Germany has found out, by the treaty of the 28th of June, that the property of her citizens in France has become the property of our country; an analogous provision has been or will be included in the other treaties. The proceeds of the liquidation of German property will be credited to the assets of Germany in the chapter on the reparation of damages.

But from the international viewpoint the liquidation will be effected conformably [ormamant] to the legislation of our nation. It is to create this legislation that the present act has been submitted to Parliament.

Only property which has been definitely confiscated will be liquidated. The liquidation will be directed by the president of the tribunal in the place where the confiscated property is located, who will proceed by voluntary jurisdiction, without appeal.

When the value of confiscated property exceeds 100,000 francs, a deliberative commission ” established by the act will discuss the conditions of the liquidation and will offer advice on the matter.

The sales of confiscated property will be made at public auction.

M. Herriot did not conceal the fact that he was disturbed at the idea of allowing neutrals participate in the auctions. He fears that the enemy often lurks behind neutrals (enemies are often disguised as neutrals).

It is highly desirable, said M. Kail, keeper of the seals, that they turn from the ratification of the treaty of peace with Germany to the liquidation of confiscated German property. Of confiscated property, 15,820 in number have been declared in France, representing an approximate value of a millard and a half.

On the other hand, 165,823 declarations of enemy property and papers in the possession of our nationals have been effected. This all represents an important security for the reparation of the damages caused by Germany.

This credit must be recovered with the briefest possible delay. Efficacious precautions will be taken in the national interest in case of the need of limiting the categores of the candidates for admission to particpate in the auctions.

To-day we have victorious peace, but the liquidation of German property is becoming more and more urgent.

The CHAIRMAN. There is another bill pending before this committee, H. R. 10107, introduced by Congressman Kahn, which seeks to amend section 9 of the alien property custodian act, but we will not have time to take that up this morning, but I call your attention to it so that later we may call you before us and get your views thereon. There are other parties interested, and some of them are present here this morning, and I did not know but what we might have time to start consideration of it.

Mr. GARVAN. I have not seen that bill.

If there is anything further that any of the members of the committee would like to know informally about the property or anything in the office, Mr. Stellwagen is at your disposal at any time. He knows all of the details and has charge of all the foreign correspondence and everything of that kind, and he holds himself in readiness to go to the office of any individual or of the committee at any time.

The CHAIRMAN. The committee appreciates your coming before us and giving us the information and we may avail ourselves of the services of Mr. Stellwagen later on in considering these bills.

Mr. GARVAN. I might say, Mr. Chairman, that I have had the historical part of the treatment of enemy property very thoroughly looked up and digested, and I would be very glad to leave with your committee, not for the consideration of this bill necessarily, but for the future, a copy of that brief, which would save you possibly a great deal of labor in the future.

The CHAIRMAN. Is it very elaborate?

Mr. GARVAN. Yes, sir; it is quite extensive, but I give it to you and you can take it up at your convenience.

The CHAIRMAN. You may leave it here and it will be referred to whatever subcommittee is designated to consider these bills.

Mr. GARVAN. I had a man work on it for three or four weeks and it will save you a great deal of labor.

The CHAIRMAN. We will be glad to have it.

Mr. GARVAN. It is all the history of what we have done in other wars since the beginning of the Republic. (A letter submitted by Mr. Garvan is as follows:)


Washington, D. C., April 2, 1920. Hon. JOHN J. Esch, Chairman Committee on Interstate and Foreign Commerce,

House of Representatives, Washington, D. C. DEAR SIR: Replying to your recent communication relative to H. R. 12651 and H. R. 12884, I wish to state that I do not know of any papers or documents in my possession which would be of special interest or value to your committee in the consideration of these bills, but beg leave to furnish the following information and comments for your consideration :

In the first place, the cmmittee's attention is directed to that portion of section 12 of the trading-with-the-enemy act which reads as follows:

“After the end of the war any claim of an enemy or of an ally of enemy to any money or other property received and held by the Alien Property Custodian, or deposited in the United States Treasury, shall be settled as Congress shall direct."

It would appear from the above that Congress originally intended that all property that would be returned prior to the end of the war would be that released to persons who are not enemies or allies of enemies, as provided in section 9 of the act, and that the disposition of all other property would be adjusted subsequent to peace.

Further, the hearings and debates on the trading-with-the-enemy act in Congress clearly show that Congress wished to reserve to itself, after the end of the war, the determination whether or not the sequestrated property was to be returned to the original owner thereof or was to be used in the adjustment of equities and indemnities that might arise between the United States and the enemy nations. The provisions of the proposed treaty of peace with Germany (articles 297, 298, and the annex thereto) contain no limitation upon whatever action Congress may deem advisable, and hence it is evident that the United States delegates to the peace conference insisted upon appropriate provisions being made in the treaty which would, in effect, preserve the problem as a whole for the consideration of the legislative branch of the Government.

In view of the above, I am doubtful if Çongress will find it practical or expedient to legislate from time to time with reference to the portion of property belonging to particular classes of persons heretofore determined to have enemy or ally-of-enemy status, for it probably will be necessary to first of all determine the general basis upon which Congress intends to dispose of all such property so held.

Under the trading-with-the-enemy act and the proclamations made pursuant thereto there are no less than 11 distinct classes of enemies," and it is apparent that return of property to each class could be considered piecemeal only at a considerable sacrifice of the time of the legislative branches, as well as of the harmony of the general plan. The aforementioned two bills may be taken by way of example: H. R. 12651, applicable to limited cases, has been succeeded by H. R. 12884, greatly enlarging the class of property to be returned.

And these bills in no way exhaust the cases which are entitled to the most serious consideration of the Congress. Under the trading-with-the-enemy act all persons, regardless of nationality, resident within the territory of Germany and Austria-Hungary as such territory existed prior to the outbeak of the European war, are defined as enemies. (Trading-with-the-enemy act, sec. 2 (a).) This definition is so sweeping as to include even citizens of the United States who are still resident within such territory. Hence it has been necessary for the Attorney General, exercising the powers of the President to pass on claims for the return of property under section 9 of the act, to hold that the Alien Property Custodian can not release to such citizens property belonging to them which was sequestrated during the active period of the war. Of course, citizens and subjects of nations which remained neutral or were associated with the United States in the conduct of the war, likewise so resident, are subject to the foregoing rulings.

Further, it should be noted that extensive changes have been wrought in the territory of the two enemy powers as a result of the war and that many former subjects of the German or Austria-Hungarian Empires, enemies" under the trading-with-the-enemy act, have now acquired or may acquire the nationality of newly created nations, or of nations associated with the United States in the conduct of the war or neutral during the war, By way of illustration, and not of enumeration, may be cited the cases of Alsace-Lorraine, Poland, Czechoslovakia, Jugo-Slavia, and the portion of Schleswig-Holstein recently annexed to Denmark by plebiscite. Such territorial changes and the corresponding change of citizenship, or privilege to change citizenship, have been recognized by the principal European powers which were associated with this country in the conduct of the war and are there regarded as established facts. The legal status of persons within the territories thus affected as claimants for the return of their property in the hands of the Alien Property Custodian has, however, undergone no change, and the Attorney General's Office in passing upon such claims has, in conformity with the provisions of the trading-with-the-enemy act, ruled that the residents of such segregated portions of enemy territory are still “ enemies whose property Congress has reserved to itself the right to dispose of after the end of the war.

To summarize the foregoing, I suggest that your committee consider the advisability of legislating concerning the disposition of all property held by the custodian at one time; however, if it is deemed advisable to legislate at an earlier date with reference to the persons contemplated in H. R. 12651 and H. R. 12884, your committee may desire to consider an extension of its terms to some of the foregoing-mentioned classes.

A consideration of H. R. 12651 shows that the proposed bill contemplates a special remedy for the class of women referred to by way of application to


the custodian, or such other person as the President may appoint, for the return of the property, the remedial sections of the bill-sections 3 and 4 being worded quite differently from section 9 of the trading-with-the-enemy act as amended in the deficiency appropriation act approved July 11, 1919. Section 9 affords a clear and simple remedy to persons entitled to the return of their property by the filing of a notice of claim with the Alien Property Custodian “in such form and containing such particulars as the said custodian shall require.” Having so filed his claim, the claimant may pursue his remedy, either by way of nonlitigated claim to be decided by the Attorney General exercising the authority conferred upon the President under section 9, or may file his suit in equity therefor in the Supreme Court of the District of Columbia or in the district court of the United States for the district in which such claimant resides.

The procedure under section 9 has now been thoroughly regulated and established, and forms have been prepared and distributed to interested parties, by means of which more than 2,800 claims have been filed. Hundreds of these section 9 claims have been allowed by the Attorney General, and his rulings in that regard have established a set of precedents of considerable value in the speedy adjudication of the claims and in the furnishing of friendly advice to claimants, which is the policy consistently followed by this office.

The limitation imposed by section 9 is that the claimant shall be " not an enemy or ally of enemy.” It would, therefore, appear that the object sought to be attained by the proposed legislation could be readily accomplished by a very brief amendment to section 2 or section 9 of the act, to the effect that after the passage of such amendment no person of the class indicated in the bill shall be deemed to be an enemy or ally of enemy within the purview of the tradingwith-the-enemy act. Such an amendment would at once make available to the persons designated the remedies and the procedure now afforded by section 9, and I believe that such a method would greatly expedite the return of the property in question. On the other hand, the variation between the terms of the remedial parts of the proposed bill and the terms of section 9 of the trading. with-the-enemy act will require a careful scrutiny by this office and the officer charged by the President with the duty of passing on such claims, and possibly the construction of a new set of forms, all of which would tend to delay the speedy return of the property.

The above suggestions made as to H. R. 12651 as an entirety would likewise apply to H. R. 12884.

Should the above comments addressed to the bills as an entirety commend themselves to the judgment of your committee, any other comments which I might make upon the wording of specific portions thereof would obviously be of no value. If, however, the bills are retained in their present form, I would be pleased to be given an opportunity for further comment on their verbiage.

In conclusion, permit me to thank you sincerely for the opportunity so courteously afforded me of expressing my views on the proposed legislation. Very respectfully,

Alien Property Custodian.


D. C.

Mr. BUTLER. Mr. Chairman, I simply want to say one word about this bill that is under consideration. I am practicing law in Washington. My firm is Charles Henry Butler-John A. Kratz, with offices at 1537 I Street NW. We attend to many matters in connection with the office of the Alien Property Custodian, which are sent to us by attorneys from other cities, so we have had the opportunity of dealing with many different phases of the situation. My partner, Mr. Kratz, has had more to do with these matters than I have had. Unfortunately, he is sick to-day, so I will present the case as best I can.

It strikes me that the property in the hands of the custodian can be easily divided into two classes—one class comprising that which is

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