RETURN OF ALIEN PROPERTY HOUSE OF REPRESENTATIVES, COMMITTEE ON WAYS AND MEANS, Monday, April 5, 1926. The subcommittees met at 10.30 o'clock a. m., Hon. Willis C. Hawley (chairman) presiding. Mr. HAWLEY. The committee will come to order. On March 29, 1926, Mr. Mills, a Member of the House, introduced H. R. 10820, a bill to provide for the payment of the awards of the Mixed Claims Commission, the payment of certain claims of German nationals against the United States, and the return to German nationals of property held by the Alien Property Custodian. This bill contains matters not subject solely to the jurisdiction of any committee of the House, but since it contains matters relating to taxation and the issuance of securities, the Speaker, after consideration, referred the bill to the Committee on Ways and Means and an arrangement was made between the Committee on Ways and Means and the Committee on Interstate and Foreign Commerce to consider the bill together, because both the committees have jurisdiction over various parts of the bill. Therefore, there were two subcommittees appointed; from the Committee on Ways and Means, Messrs. Hawley, Hadley, Mills, Garner, and Oldfield; and from the Committee on Interstate and Foreign Commerce, Messrs. Mapes, Newton, Wyant, Rayburn, and Lea, the first named in each case being the chairman of the subcommittee. The two subcommittees have arranged for a meeting, which is now in session. Before I call for the first witness, I offer for the record a letter from the Alien Property Custodian, a letter from the Mixed Claims Commission, and a letter from the Department of State. Mr. GARNER. Had we not better have those letters read? Mr. HAWLEY. The first letter is from the Department of State. Mr. MILLS. Have they representatives here? Mr. HAWLEY. The letter states why they have no representatives here. If there is no objection, the clerk will read the letters. (The clerk read the letters referred to as follows:) DEPARTMENT OF STATE, MY DEAR MR. GREEN: I have received the letter of March 30, 1926, from your committee, transmitting a copy of H. R. 10820, a bill introduced by Mr. Mills, "To provide for the payment of awards of the Mixed Claims Commission, the payment of certain claims of German nationals against the United States, and the return to German nationals of property held by the Alien Property Custodian." I note that hearings on this bill are to be held next week and that the committee would be glad to hear a representative of this department on the subject and to receive an expression of the department's views. 1 I shall, of course, be happy to furnish the committee with any information in my possession which might be of assistance in connection with the consideration of the proposed legislation, but in view of the fact that the questions involved are not strictly within the jurisdiction of the Department of State, I do not feel that it would be appropriate for me to express any opinion as to the general plan provided for therein. The bill has been prepared by the Treasury Department, and during its preparation this department furnished the Treasury Department informally with certain facts bearing on the situation, and also brought certain considerations to the attention of that department. It is assumed that the Treasury and the legislative counsel of the House, who collaborated in the drafting of the bill gave due consideration to the data submitted by the department, and that the present draft represents the considered judgment of those responsible for the preparation and introduction of the bill. In these circumstances, and since this department does not feel that it can assume any responsibility for the form of the present draft, its legal sufficiency or the policy laid down therein, I prefer to make no comment on the bill now under consideration. If, however, there are any specific questions which your committee desires answered, and which can be answered from the information at the disposal of this department, I shall be happy to furnish you with such information, either in writing or by instructing an officer of the department to attend your committee at some specified time, as you may prefer. I feel that you should be informed that the Austrian minister called at the department on April 1, 1926, and stated that by direction of his Government he would shortly present a note protesting against that provision of the bill which contemplates the utilization of all of the interest fund accumulated prior to March 4, 1923, in connection with the settlement between the United States and Germany provided for in the bill in question. Mr. Prochnik pointed out that a portion of this interest fund was earned by the property of the Austrian nationals and he expressed the view that such earnings should be excluded from the provisions of the present bill and retained intact for appropriate disposition in connection with any settlement which may be reached with respect to the Austrian claims. A copy of Mr. Prochnik's note on this subject will be forwarded to your committee as soon as it is received by the department. I am, my dear Mr. Green, very sincerely yours, Hon. WILLIAM R. GREEN, Chairman Committee on Ways and Means, FRANK B. Kellogg. House of Representatives. WASHINGTON, D. C., April 3, 1926. Mr. CLAYTON F. MOORE, Clerk Committee on Ways and Means, House of Representatives. MY DEAR SIR: In reply to your courteous letter of the 30th ultimo inviting me to express my views with respect to the bill H. R. 10820, to provide for the payment of the awards of this commission and for certain other purposes, permit me to say through you to the members of the subcommittee: The function of the Mixed Claims Commission, United States and Germany, is to adjudicate claims presented to it and determine the amount which Germany is obligated to pay under the treaty of Berlin. The commission has nothing to do with the manner or time of payment. As the bill in question deals with problems of a political nature and my position as umpire requires that I at all times scrupulously maintain a strictly judicial attitude which knows no nationality as between the parties to the treaty, I submit that my position precludes my expressing any opinion with respect to the proposed legislation. Very truly yours, EDWIN B. PARKER, Umpire. ALIEN PROPERTY CUSTODIAN, Chairman Committee on Ways and Means, Hon. WILLIAM R. GREEN, House of Representatives, Washington, D. C. MY DEAR CONGRESSMAN: I have the letter of March 30 from your committee, inclosing copy of H. R. 10820, introduced by Mr. Mills, and note that a subcom mittee, of which Mr. Hawley is chairman, has been appointed to act in conjunction with the subcommittee appointed by the Committee on Interstate and Foreign Commerce, to hold hearings and take testimony on this bill. I shall be glad to have some one present at the meetings of the subcommittee, in order that you may be promptly furnished with any witnesses or information that you may need at any time during the progress of the hearings. Mr. Skinner will be in direct communication with this office and with you, and I assure you that our cooperation in this matter will be cordial and complete. With reference to the merits of the bill H. R. 10820, I beg to say that I have studied the provisions of this bill very carefully, and have had same studied by the staff of this office, and in my opinion the bill is admirably conceived and drawn, and so far as it relates to this office, it accomplishes what it is desired to do in the simplest and most effective manner. I am glad to give my hearty approval to the bill, which, in my judgment, should be, by all means, promptly passed by both Houses of Congress, as the means of settling many open and at present troublesome questions. I shall be glad to appear in person or by representatives before the subcommittee at any time this may be desired. Very truly yours, HOWARD SUTHERLAND, Mr. HAWLEY. The Treasury Department submitted a statement in writing, but as Mr. Winston is here I will not offer that at this time for the record, but will allow him to offer it at the proper place in his remarks. Mr. MILLS. Before hearing from Mr. Winston it seems to me that the Mixed Claims Commission should send a representative here, not to advise us as to the merits of the bill or the advisability of its adoption, but so that we may have first-hand knowledge as to the outstanding claims and the amounts involved, otherwise we shall have to rely on the Treasury Department to give us those figures, and the Treasury Department, in turn, gets those from the Mixed Claims Commission. It seems to me Mr. Parker ought to send some one here to tell us the number of claims already adjudicated, the number outstanding, and the time it will take to discharge them. Mr. HAWLEY. The committee have heard Mr. Mills's suggestion; is that agreeable? Mr. GARNER. Let Mr. Parker come himself, or send some one. Mr. HAWLEY. The clerk will convey the request of the committee to the Mixed Claims Commission and ask them to send some one here to present information to us upon the various claims, those settled, those pending, and various other matters about which we shall need information. Mr. Winston, we will be glad to hear you. STATEMENT OF GARRARD B. WINSTON, THE UNDERSECRETARY OF THE TREASURY Mr. WINSTON. Mr. Chairman, when this bill was prepared the Treasury Department made a press release summarizing the bill and giving its general views upon it. That is the statement you have referred to, Mr. Chairman, and I would like to have that considered and introduced in the record. A copy of it is before you. Mr. HAWLEY. Without objection, it will be included in the record. (The statement above referred to is as follows:) WASHINGTON, April 1, 1926. DEAR MR. CHAIRMAN: I have a letter from Mr. Moore, clerk of your committee, requesting an expression of the Treasury's views on H. R. 10820, a bill to provide for the payment of awards of the Mixed Claims Commission, the payment of certain claims of German nationals against the United States, and the return to German nationals of property held by the Alien Property Custodian. The position of the Treasury with respect to this bill is stated in a press release given out by me on March 29, 1926, at the time this bill was introduced in the House, copy of which release is herewith inclosed. The release represents the Treasury's views on this legislation. The Treasury believes that the legislation is desirable and recommends its adoption. I shall be glad to be present at the hearings of the subcommittee on this bill beginning at 10.30 a. m., Monday, April 5, and give the subcommittee such information as they may desire from the Treasury. Very truly yours, Hon. WILLIAM R. GREEN, Chairman Committee on Ways and Means, GARRARD B. WINSTON, Undersecretary of the Treasury. House of Representatives. (Acting Secretary of the Treasury Winston made the following statement on behalf of the Treasury:) There have been introduced in this and the last Congress numerous bills for the return of alien property and for various amendments to the alien property act affecting particular interests, but no general plan has yet been presented for the disposition of alien property and for the final settlement of the other questions between Germany and the United States left over from the war. A mixed claims commission has been set up by the United States and Germany for the determination of American war losses. Claims have been presented to the commission and most of the awards have been made, but unless the United States Government intervenes the payment to private American claimants will be so long delayed as to make the awards of the commission illusory. There is also the liability of the United States for property of German nationals used by the United States, of which there is as yet no machinery for determination and no provision for settlement. The Treasury has found it impracticable at this time to cover in the same plan similar questions in connection with Austria and Hungary. In the case of Germany the Mixed Claims Commission has been set up, the claims filed, most of them already adjudicated, and an estimate of the amount of the awards and the probable liability thereunder can be made. In the Austrian and Hungarian cases, while a commission has been constituted and claims are being received, the period of limitation for filing claims has not run and no estimate can be made of the total amount of claims which will be presented or the probable amount of awards thereunder. In addition, the Dawes plan provides for payments by Germany to the United States on account of the awards, but there is no like arrangement for payment by Austria or Hungary. In order that the reasons which have influenced the Treasury in the preparation of a comprehensive plan for the disposition of these matters may be understood, it is desirable to review the existing situation. The Versailles treaty provided for reparation but did not fix their amount. In the schedule of payments of May 5, 1921, the total reparation payments as fixed by the reparation Commission were notified to Germany in the amount of 132,000,000,000 gold marks, plus the Belgian debt (about 5,000,000,000 gold marks), less certain negligible credits, plus interest at 5 per cent on the capital sum until paid. The obligation of Germany to pay the American mixed claims is in the same category as Germany's obligation to pay reparations. The amounts required of Germany are beyond its capacity. Unable to meet its treaty requirements, Germany in effect went into receivership and a reorganization was undertaken by the Dawes Commission. Under the plan adopted, the total which it was found that Germany can pay on all its treaty obligations arising out of the war was fixed, after a five-year recuperation period, at a maximum of 2,500,000,000 gold marks a year, subject to some adjustment under an index of prosperity. Since this is all Germany can pay, it is obvious that the United States, if it wished to receive anything from Germany, had to obtain a share in the total payments represented by the Dawes annuities. Accordingly the United States became a party to the Paris agreement dividing the Dawes payments and received a share to repay our army of occupation costs at the rate of 55,000,000 gold marks, or about $12,000,000 a year. În addition, the share of the United States on account of the Mixed Claims Commission |