AMENDING TRADING WITH THE ENEMY ACT

(Transfer of Funds)

WEDNESDAY, JUNE 10, 1953

HOUSE OF REPRESENTATIVES,

COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE,

Washington, D. C. The committee met, pursuant to notice, at 10 a. m., in room 1334, New House Office Building, Hon. Charles A. Wolverton (chairman) presiding.

The CHAIRMAN. The committee will come to order.

This morning the committee is holding hearings on H. R. 4873, introduced by Mr. Dempsey, of New Mexico. The bill is designed to amend section 39 of the Trading With the Enemy Act. (H. R. 4873 is as follows:)

[H. R. 4873, 83d Cong., 1st sess.]

A BILL To amend section 39 of the Trading With the Enemy Act of October 6, 1917, as amended

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 39 of the Trading With the Enemy Act of October 6, 1917, as amended, be amended by striking the period at thereof, substituting a colon, and adding the following: "Provided, That, notwithstanding anything contained herein, the Department of Justice, acting through the Custodian of Alien Property, is authorized and directed to cover into the Treasury of the United States for deposit into the war claims fund, created by section 13 (a) of the War Claims Act of 1948, immediately upon enactment of this amendment a sum not in excess of $60,000,000, which sum shall be in addition to the sum of $150,000,000 heretofore covered into the Treasury of the United States pursuant to this section by the Alien Property Custodian."

The CHAIRMAN. The purpose of this legislation is to cure an exceedingly serious situation which has arisen because of the exhaustion of the war claims fund out of which are paid, among others, claims of American prisoners of war and civilian internees.

The war claims fund is derived from German and Japanese assets located in this country which were vested by the Alien Property Custodian. The liquidation of these assets has been a slow process for a number of reasons, and therefore the transfer of funds from the Office of Alien Property into the war claims fund has not kept pace with the need for funds to pay claims arising under the War Claims Act.

This morning we will first hear from the author of the bill, Congressman Dempsey, who will be followed by members of the War Claims Commission.

The committee has received reports on this legislation from the War Claims Commission and the Department of Justice. It is my understanding that the Department of Justice is urging amendments to the

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pending bill. Therefore, following the War Claims Commission, or maybe preceding it, we shall hear from a representative of the Department of Justice, who will explain the amendments deemed necessary by the Department.

I am in receipt of a communication from our colleague, Gen. James P. S. Devereux, who has submitted a letter and amendment to the Dempsey bill.

This letter and the proposed amendment will be made a part of the record in the case.

(The documents are as follows:)

CONGRESS OF THE UNITED STATES, HOUSE OF REPRESENTATIVES,
Washington, D. C., June 9, 1953.

Hon. CHARLES A. WOLVERTON,

Chairman, Committee on Interstate and Foreign Commerce,

House of Representatives, Washington 25, D. C.

DEAR MR. WOLVERTON: I am wholly in accord with Mr. Dempsey's bill (H. R. 4873) providing for the transfer of $60 million from alien property assets to the war-claims fund, in order to provide moneys to pay the claims already authorized by the War Claims Act.

I should also like to commend, for the consideration of the committee, the attached proposed amendment to that bill providing that the residue be available to compensate members of the United States military forces and other American nationals for losses arising out of Japanese sequestration of credits in the Philippines.

This proposal will not cost the American taxpayers anything, since it is limited to the residue of the moneys now being transferred to the war-claims fund. 1 believe that this will suffice to pay these Philippine claims or at least a high pro rata percentage. But in any event, this proposal does not go beyond such residue.

The attached requires that such claims be filed within 6 months, and further provides that this law shall not extend the life of the War Claims Commission. The supplemental report of the War Claims Commission tells the story of how the Japanese occupation forces, through orders in 1942 and 1943, sequestered and wiped out bank accounts and other credits of American military and naval personnel, their families, and American businessmen resident in the Philippines. This is the only property claim recommended by the Commission for payment as a claim of "first property" (p. 182). I can add little to its report which points out the two critical facts: (a) American nationals established these credits on American soil under the protection of the American flag. (b) By the Japanese Peace Treaty the United States Government waived the right of these American nationals to file claims against Japan for the value of their property seized (art. 14 (b)). The only property claims provided for in the treaty and thus saved from the waiver are those based upon property in Japan.

The Commission concludes that under such circumstances the United States is under obligation to compensate its nationals for property taken by the enemy, and should also pay those banks which paid the occupation authorities and later made a second payment to American nationals, thus discharging a primary obligation to the Government.

I wrote to the State Department and on January 23, 1952, I testified before the Senate Committee on Foreign Relations. General Bluemel supplemented my remarks with specific case histories, including his own, of men whose Philippine bank accounts were wiped out.

The hearings and the debate show that the only reason why this was not provided as a claim against Japan was because of the overall interest of the United States to avoid too large a burden on Japan. But the American Government should not take away just claims of its nationals without providing compensation. Senator Wiley noted that American citizens were "well taken care of" since those who had had property in Japan were protected by the treaty, and those who had had deposits in the Philippine banks could be satisfied through alien enemy assets in the United States (98 Congressional Record No. 46, March 20, 1952, p. 2634).

Accordingly, I earnestly refer the enclose proposal to the committee for consideration.

Yours most sincerely,

JAMES P. S. DEVEREUX.

A BILL For the transfer of moneys to the war claims fund and to compensate United States military personnel and other American nationals for losses arising out of Japanese sequestration of credits in the Philippines

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 39 of the Trading With the Enemy Act of October 6, 1917, as amended, be amended by striking the period at the end thereof, substituting a colon, and adding the following: "Provided, That, notwithstanding anything contained herein, the Department of Justice, acting through the Custodian of Alien Property, is authorized and directed to cover into the Treasury of the United States for deposit into the war claims fund, created by section 13 (a) of the War Claims Act of 1948, immediately upon enactment of this amendment a sum not in excess of $60,000,000, which sum shall be in addition to the sum of $150,000,000 heretofore covered into the Treasury by the United States pursuant to this section by the Alien Property Custodian, to satisfy awards on claims now authorized under the War Claims Act, and further to satisfy, to the extent available out of such sums after provision for payment fo such claims, awards by the War Claims Commission to compensate members of the military and naval forces of the United States and other American nationals for losses arising out of Japanese sequestration of credits in the Philippines, and to reimburse any bank doing business in the Philippines, which reestablished such credits and has not been repaid, payments in case of death of any individual entitled to such claim to be payable only to or for the benefit of the widow, dependent husband, children, or parents, in the same manner as provided for prisoner of war claims filed under section 6 (d) of the War Claims Act: Provided further, That the War Claims Commission shall have jurisdiction to receive, adjudicate according to law, and provide for the payment of any such claims only if filed within six months after the date of enactment of this law, and that nothing in this Act shall operate to extend the life of the War Claims Commission for any period of time.

The CHAIRMAN. Preliminary to hearing the witnesses that I have enumerated, I would be glad to hear from General Devereux.

STATEMENT OF HON. JAMES P. S. DEVEREUX, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MARYLAND

Mr. DEVEREUX. Mr. Chairman and gentlemen of the committee, I am wholeheartedly in favor of the bill that has been presented by my colleague, Mr. Dempsey. I suggested an amendment in my communication to the various members of the committee that would take care of a certain situation which I think needs rectifying. However, in view of the fact that that amendment may jeopardize Mr. Dempsey's bill, which I think has higher priority than the group that I wish to take care of, I would like to recommend to the committee that they do not take any action on that amendment.

The CHAIRMAN. You mean at this time in connection with Governor Dempsey's bill?

Mr. DEVEREUX. Yes, sir. I feel that Governor Dempsey is well qualified to support his bill, which has all the merit in the world. might say that I personally received compensation under this act which is now being extended, having been a prisoner of war, because I was able to get my claim in before some of the unfortunate and more remotely situated former prisoners of war. In all justice to those people who are unable to get their claims in in time or before the funds ran out, I urge this committee to take favorable action. It means no money out of the pockets of the taxpayers; it simply provides for turning over money from the Alien Property Custodian to the War Claims. Commission, so that they can meet the obligations which were undertaken by the action of the Congress last year.

I might say in this connection with my amendment, just so it will be a matter of record, I appeared before the Senate Foreign Relations Committee prior to the enactment of the Japanese Peace Treaty. The Japanese Peace Treaty provided that they would be relieved of any claims that originated outside-that is the Japanese Government would be relieved of any claims-of Japanese property. That is the reason for my suggested amendment, which I will present in a different form and in a different bill with Governor Dempsey to take care of that situation.

The CHAIRMAN. In other words, the property of those in whom you are interested was in the Philippines.

Mr. DEVEREUX. Yes, sir; it amounted to money that was on deposit by service men and women and American nationals in Manila that was taken over by the Japanese when they occupied the islands.

I might also interpose, if I may, that I was not in the Philippines, and I had no personal interest in it in any way whatsoever.

The CHAIRMAN. We appreciate the position that you have taken, General, and wish to leave no doubt as to your support of the legislation offered by Governor Dempsey, and make it plain that in your opinion the class to which it refers does have a priority in your opinion over those in whom you are interested in this amendment, and that you will introduce legislation that will care for that situation, so that it, together with the other bills of a similar character, can be considered together.

Mr. DEVEREUX. Yes, sir. Thank you very much.

Mr. HINSHAW. Mr. Chairman, I would like to ask, if I may, whether this money is in the Office of Alien Property Custodian as a result of the liquidation of German and Japanese assets?

Mr. DEVEREUX. I am not in a position to say whether they actually have the cash, but I am informed that they do have the assets which could be converted into cash in order to meet these obligations.

Mr. HINSHAW. Unless they have the cash to transfer, they cannot transfer it, can they?

Mr. DEVEREUX. They could dispose of the assets, as I understand it, in order to raise the cash, if they do not have it. I am not aware of whether they actually have the cash or not, Mr. Hinshaw.

Mr. HINSHAW. Liquidation is a slightly different thing. That has to be an orderly liquidation. If they do not have the cash, they can not transfer the cash, can they?

Mr. DEVEREUX. No, sir, but in talking informally about the situation, I believe that the Treasury Department would advance the cash to meet these obligations, with the assurance that they would be reimbursed from the Alien Property Custodian. I do not know whether that is correct or not.

Mr. HINSHAW. That is not what the bill calls for. The bills calls for the transfer of $60 million in adidtion to the $150 million that has already been covered into the Treasury.

The CHAIRMAN. I assume we can obtain that information from the Alien Property Custodian.

Mr. HINSHAW. I just bring that up to indicate that there may be some considerable complications to this bill. That is all.

Mr. O'HARA. Mr. Chairman, might I for the record say that I introduced a bill which was at the suggestion of former Senator Scott Lucas, which certainly involves this thing. Mr. Lucas called me this

morning and told me that this is the first time he noticed that this bill was up for hearing. He was very disturbed about it. I asked that Mr. Lucas be permitted to appear and testify in connection with this

matter.

Mr. Chairman, I do not question the merits with respect to the people that General Devereux represents, and Mr. Dempsey represents, but I think also involved in these funds are funds of American citizens involved in the German situation which is all intermingled in this picture. I think if this committee is going to act upon this problem, we ought to have hearings on the other bills which would be seriously affected by transfer of these funds. If we are going into this picture, I think the committee ought to have the entire picture.

Mr. DEVEREUX. Mr. Chairman, may I say something in that connection. Here is the situation, Mr. O'Hara. We passed a bill last year, authorizing the payment of a dollar and a half per day for each and every war prisoner regardless of where they may have been, if they were under forced labor or under inhuman circumstances. That did not make any difference whether they were in the Far East or ETO or where they might have been. Therefore, the obligation is upon all of our enemies. I do not see how you could divide it up as to whether it was forced labor in the German camps and pay so much of that, or forced labor in the Japanese camps.

Mr. O'HARA. Also involved General-and we have had many of these bills before us and never done very much about them-is a picture of a lot of things involved here which go beyond what you speak of. But they are all in these funds, General. The serious question is whether morally or legally the United States Government is entitled to those funds, or some American citizen may be entitled to them. I am not trying to confuse the situation but I am merely illustrating in my own mind the problem that is before us in this entire picture. We cannot transfer funds until we know what we are doing. I have been through this whole picture.

The CHAIRMAN. If the general will permit me to make a statement, I think the committee will have a more connected understanding of the circumstances that enter into this if we go through with a hearing of the witnesses who will testify from the Commission, and also the Alien Property Custodian. This bill that has been introduced by Governor Dempsey, as I understand it, has been introduced with the idea of taking care of those cases that Congress has already provided, and acknowledged that we have an obligation toward. Some of them have received their money under that act of Congress, but all have not received it for the reason that there was not sufficient money on hand to pay those claims.

Now, as I understand it-certainly Governor Dempsey will speak for himself the purpose of this transfer is to take care of that portion of those whom the Congress has already approved as entitled to compensation, and who have not received the money.

When it comes to these other classes, and it would seem that the more this question is open, the more classes we have demanding some part of these funds, that will be taken up in order.

Our first obligation is toward those whom Congress has already definitely stated are entitled to this money. Some of them have received it, and some have not, and this transfer is for the purpose

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