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not want to appoint a Commissioner here who will attempt to determine that an attorney has earned X dollars or 10 percent somewhere else. In some of these cases they have taken depositions all over the world.

Mr. FULTON. As a preliminary matter, on my own personal estimate, I would recommend against that particular provision being adopted in this legislation.

Mr. MULTER. I understand the Treasury will probably not be here today?

Mr. FULTON. No, and I don't believe Commerce will.

Mr. MULTER. I don't believe Commerce has any interest or has been invited. If Treasury is not going to be here, I think I must call your attention to the fact that although the State Department has taken no position with reference to the $1,500,000, the Treasury does recommend that they be covered into the Treasury.

Mr. FULTON. You might ask the staff if they will see that the various correspondence and letters that have been received in the history of this legislation by the committee from the Government departments be included in this hearing testimony so that we have a complete file.. (See appendix, p. 69.)

Were there any other questions, Mr. Gordon? Mr. Multer, as you are also a guest of the committee, I will ask if you have any.

Mr. MULTER. No. I think Mr. Selig would like to at least submit his very fine brief.

Mr. FULTON. May we ask if there are other witnesses who will be short in their testimony before we go into the rather detailed testimony of other witnesses.

STATEMENT OF HARRY A. GOTTLIEB, REPRESENTING CARL MARKS & CO., INC., NEW YORK CITY

Mr. GOTTLIEB. Mine will be.

Mr. FULTON. Will you state your name and address for the record? Mr. GOTTLIEB. My name is Harry A. Gottlieb. I am an attorney. I represent Carl Marks & Co., security dealers and brokers of New York.

Mr. FULTON. Where are you licensed to practice?

Mr. GOTTLIEB. I am licensed to practice in the State of New York. Mr. FULTON. Before what courts?

Mr. GOTTLIEB. The State courts, the New York Federal courts and the Supreme Court of the United States.

Mr. FULTON. Are you in partnership or operating as an individual? Mr. GOTTLIEB. I have a partnership, Wikler, Gottlieb & Wikler. Mr. FULTON. What is your address?

Mr. GOTTLIEB. 50 Broad Street.

Mr. FULTON. Whom do you represent for clients otherwise?

Mr. GOTTLIEB. I didn't quite get the question. You mean, in this matter?

Mr. FULTON. Yes.

Mr. GOTTLIEB. Just Carl Marks & Co.

Mr. FULTON. Is it a representation by Carl Marks & Co. of certain clients or do you represent them individually as claimants?

Mr. GOTTLIEB. I represent them individually as claimants.

Mr. FULTON. Do they represent other people who might have claims against the Russian Government or Russian corporations?

Mr. GOTTLIEB. I would say they do not officially represent other claimants. They are friendly with other claimants, and some of them are in this room now.

Mr. FULTON. But you are not officially representing them?

Mr. GOTTLIEB. I am not officially representing them, except what I may say may apply to their claims as well.

Mr. FULTON. You are not representing a class of creditors before this committee?

Mr. GOTTLIEB. In a way I think I am. I am not here on any specific claim. What I have to say does apply to all claimants who have Imperial Government dollar bonds. But I am not making this a specific claim but rather a general statement in connection with these bonds.

Mr. FULTON. My ruling as chairman is that with the committee's consent there are no specific claims to be made here at this hearing? Mr. GOTTLIEB. That is right.

Mr. FULTON. What interest as a witness might you have in appearing before this subcommittee?

Mr. GOTTLIEB. Purely as an attorney for Carl Marks & Co.

Mr. FULTON. Who in this room are you speaking for? You said you had certain individuals here that you

Mr. GOTTLIEB. There is a representative from Carl Marks & Co., Mr. Zeeman. There is Mr. Emanuel Lerman.

Mr. FULTON. Would you state your name and address for the record?

STATEMENT OF EMANUEL LERMAN, REYNOLDS & CO., NEW YORK

Mr. LERMAN. My name is Emanuel Lerman.

Mr. FULTON. With whom are you connected?

Mr. LERMAN. Reynolds & Co., members of the New York Stock Exchange.

Mr. FULTON. Are you likewise a broker?

Mr. LERMAN. Yes. Their main office is 120 Broadway, New York. Mr. FULTON. Are you representing or interested in any class of claimants such as bondholders?

Mr. LERMAN. The bondholders. I would say among my clients there are probably $8 million or $9 million in par value outstanding. Mr. FULTON. Do you own any assignments yourself for bonds? Mr. LERMAN. My wife owns bonds personally, sir.

Mr. FULTON. That would be your own personal interest in this legislation?

Mr. LERMAN. Yes.

Mr. FULTON. Are there others?

Mr. LERMAN. There is Mr. Lowell, who is here. I don't know what position he has.

Mr. FULTON. Is that Mr. Edgar Lowell, of New York?

STATEMENT OF EDGAR LOWELL, REPRESENTING THE RUSSIAN DOLLAR BOND HOLDERS COMMITTEE

Mr. LOWELL. Yes; that is right.

Mr. FULTON. Whom do you represent?

Mr. LOWELL. The Russian Bond Holders Committee. It is a committee of which I am chairman.

Mr. FULTON. What is the address of that committee?

Mr. LOWELL. 200 West 57th Street, New York.

Mr. FULTON. Are you an attorney or broker?

Mr. LOWELL. No, neither.

Mr. FULTON. Are you personally interested in this legislation as a bondholder?

Mr. LOWELL. No.

Mr. FULTON. How is that committee constituted?

Mr. LOWELL. It is constituted to represent a group of bondholders. Mr. FULTON. How many people does it represent?

Mr. LOWELL. We represent, I would say, about half the bond issue, which is about $75 million, I am told.

Mr. FULTON. Of which government and what date?
Mr. LOWELL. Both the issues, 1919 and 1921.

Mr. FULTON. Which government were they?

Mr. LERMAN. The Imperial Russian Government.

Mr. LOWELL. This may be of interest to the committee. My contact with this whole picture goes back long before I was personally responsible for bringing this to the attention of President Roosevelt. I can almost claim personal responsibility for the existence of this $9 million.

Mr. FULTON. When this subcommittee tried to reach the Russian Dollar Bond Holders Committee at 200 West 57th Street, New York, room 1404, we were unable to reach them or find any trace of them.

Mr. LOWELL. Unfortunately it was a new office and we hadn't really listed that address, because I am a businessman representing several corporations. That was moved from 44 Wall Street at the time of the death of Mr. Edgar Harding who was counsel for the committee at that time.

Mr. FULTON. When did you take this office?

Mr. LOWELL. About a year ago.

Mr. FULTON. This call was only on February 25, 1954.

Mr. LOWELL. That is right. I never listed it because it was inactive, as it has been until today. I never bothered to list that.

Mr. FULTON. Are you listed with any market organization?

Mr. LOWELL. No.

Mr. FULTON. Are you listed with any New York agency or Government agency to deal in bonds?

Mr. LOWELL. No, not as the Russian Dollar Bond Holders Committee. We have another counsel who is not here, Mr. Emil Ellis. His address is not on there either.

Mr. FULTON. Do you represent the original bondholders or assignees of original bondholders?

Mr. LOWELL. That I wouldn't know. They are currently holders. Mr. FULTON. The point of my question is, is this a committee which has been set up to purchase Russian bonds at discounts?

Mr. LOWELL. No.

Mr. FULTON. Or representing original bondholders who have individually purchased Russian bonds?

Mr. LOWELL. They are individual holders. I thought you meant when they purchased them. If they are by assignment, I don't know. They are currently holders.

Mr. FULTON. I am asking really, are you representing an organization trading in defaulted Russian bonds?

Mr. LOWELL. No; we could not buy or sell. We have no interest except as a committee to represent them in a claim against this fund. Mr. FULTON. Of your own knowledge, you are representing a group of people who have held Russian bonds not in default that later became in default?

Mr. LOWELL. That is correct.

Mr. FULTON. You are not representing a group that has bought Russian defaulted bonds at tremendous discounts in large bulk discount deals?

Mr. LOWELL. I wouldn't know how they come into possession of them.

Mr. FULTON. May I ask the other gentlemen along those lines? Mr. Zeeman, you are dealing with them in a representative and professional capacity rather than as an owner?

STATEMENT OF HARRY L. ZEEMAN, REPRESENTING CARL MARKS & CO., INC., NEW YORK CITY

Mr. ZEEMAN. That is right.

Mr. FULTON. Do you represent any group that may have acquired the bonds after they were defaulted?

Mr. ZEEMAN. Yes. I should imagine most of the bonds that my organization is interested in were acquired after the default.

Mr. GOTTLIEB. There is one other gentleman, Mr. Nelson Bengston. Mr. FULTON. Will you state your name and address for the record?

STATEMENT OF NELSON BENGSTON, PRESIDENT, BENGSTON & CO., NEW YORK CITY

Mr. BENGSTON. My name is Nelson Bengston.

Mr. FULTON. With whom are you connected?

Mr. BENGSTON. I am the president of Bengston & Co., 55 West 55th Street.

Mr. FULTON. Are they brokers?

Mr. BENGSTON. We are dealers; yes.

Mr. FULTON. In investment securities?

Mr. BENGSTON. Yes.

Mr. FULTON. Are you registered as such?

Mr. BENGSTON. Yes, with the SEC. We are members of the National Association of Security Dealers.

Mr. FULTON. Are you here in a representative capacity or as representing the ownership yourselves of the bonds?

Mr. BENGSTON. Both.

Mr. FULTON. Are you interested in any other types of claims?
Mr. BENGSTON. No, just the claims of the bondholders.

Mr. FULTON. My question is on the default. Are you interested in people who have obtained bonds after default or before default? Mr. BENGSTON. After default. May I ask what the point is in answering that question? Is that a reasonable thing?

Mr. FULTON. No. It isn't possible to characterize a question because it is one of those things that the committee is interested in, the

background of persons appearing here as to their personal interest or relationship to the legislation. So it is for the committee's judgment in making up its mind as to the qualification of witnesses and the weight to be given to the testimony. It has no bearing on the legislation itself. We are in no way receiving claims or proving claims.

We are certainly trying to get advice and judgment as to the method and the procedures to set up a commission. As to the persons who are interested, that is a matter of relevancy to the individual committee members as to the personal interests. It is solely on that basis, and it is up to each committee member as to the reason why he asks the question and, in addition, what he gets out of the answer.. Mr. BENGSTON. I just wanted to know.

Mr. FULTON. As you realize in a matter of this kind, it has been very complicated over a long period of time. The people interested and the groups interested help frame the area of reference that thecommittee acts in. We are interested in who the claimants are,. how these things have been handled over a period of years in order to try to get a reasonable and just approach to this Commission.

Mr. GOTTLIEB. I have a prepared statement that I think would save a lot of time if I submitted

Mr. FULTON. You may do that for the record, with the committee's.

consent.

(The material referred to is as follows:)

STATEMENT BY CARL MARKS & CO., INC., IN CRITICISM OF HOUSE JOINT RESOLUTION 130 AND HOUSE JOINT RESOLUTION 49, AMENDING THE JOINT RESOLUTION ENTITLED "JOINT RESOLUTION TO PROVIDE FOR THE ADJUDICATION BY A COMMISSIONER OF CLAIMS OF AMERICAN NATIONALS AGAINST THE GOVERNMENT OF THE UNION OF SOVIET SOLIALIST REPUBLICS," APPROVED AUGUST 4, 1939

Insofar as the resolution under consideration proposes to create machinery which will enable a partial liquidation of the pre-Soviet Russian debt owed to American nationals, we favor its active support. However, section 11 (c),. which limits the claims of bonds of the Soviet Government or prior governments of Russia or the nationals thereof if they were acquired by claimants for less than face value, is completely untenable and has no justification on either legal or economic grounds, or in the customary business dealings. The limitation of the transfer of assets and rights is a limitation of free trade and a renunciation of an important principle in our capitalistic system. In the matter of House Joint Resolution 130 and House Joint Resolution 49 there is: even less justification for limiting the claims of Czarist bondholders against those of other claimants as can be seen by briefly examining the history of the bonded debt itself.

In the question before us a brief background history is essential to a fair appraisal of the significance of these resolutions and the relationship of the pre-Soviet or Czarist bonds to the total claims of American nationals against. Russia.

Between 1914 and 1917, $75 million of Imperial Russian Government bonds were sold directly to American investors through J. P. Morgan & Co. and the National City Bank of New York. The proceeds were credited directly to the Russian Government. During the Czarist regime and for some time after the fall of the successor provisional government, interest payments on these bonds were continued. In June 1919 the payment of both interest and principal was defaulted. Russia assumed an external obligation to pay the bondholders in the United States of America. This was not an investment made internally in Russian industry, and no business risks were involved. The lenders did not subject themselves to Russian laws or regulations, or place themselves in a position where they would be subject to Russian internal political or economic conditions.

Between 1919 and 1933 there were numerous negotiations for the settlement of the Russian debt to American nationals. In these discussions of the claims.

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