Some very interesting things took place after the last World War, and incidentally it was interesting to me to note that some of the people who interested themselves in enemy property legislation after the conclusion of the World War interested themselves at least indirectly in the bill that passed the Judiciary Committee. What I mean by "interesting" is this, that the Alien Property Custodian took over certain enemy property during the first World War, controlled by certain companies, and some of the companies it so happened were likewise taken over this time by the Enemy Property Custodian.

In other words, between the two world wars they got the property back. The enemies got it back right after the World War or soon after it, and we have pages of hearings which concern the question. Frankly, if there should be another war, and I surely hope that there will not be, I trust that the same companies will not have the property again, but it took place once, and I submit that it is something that this committee ought to look into and see that it never occurs again.

We hear a lot about the expenses over in Germany today. We read about General McNarney's need for food to feed people in Europe. I think that we might perhaps look to this source for some money. We all know that literally hundreds of people were mistreated, kicked around and injured, and some of them killed by the Japs. It occurs to me that some of that near-half billion dollars that we have control of, that our Alien Property Custodian has control of, could be used to satisfy some claims of our own people, who were mistreated by our enemies.

Since the act did originate in this committee, and since three bills last session were referred to this committee, and since we have one before this committee this time, I certainly hope that the matter will be looked into very, very carefully by this committee.

The CHAIRMAN. Mr. Hinshaw, we will now hear your statement. STATEMENT OF HON. CARL HINSHAW, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA

Mr. HINSHAW. This bill is similar to a bill introduced by our colleague, Mr. Beckworth. The difference between my bill and his is that mine concerns Japan and the citizens of the United States, who in the proper course of their duty, found themselves in territories or territorial lands that belonged to the United States at the time of the Japanese attack and were either captured, or temporarily occupied.

These persons were there on their lawful business. I am speaking particularly of those who were in the Philippines at the time, that having been a Territory of the United States, and they were in nowise urged to leave the island. In fact, they were encouraged to stay even though war appeared to be imminent. They were encouraged to stay at a time that the families of the officers of the United States Army and Navy and so forth were notified that it was time to leave.

In due course, the Japanese occupied these islands, and contrary to customs in international law, they took the inhabitants of these islands who happened to be full native-born Americans or citizens of the United States in the full sense and incarcerated them in various places, such as the one we know best, Santo Tomas.

Many of them were mistreated, and some were horribly mistreated. Some of them died as a result of their suffering. That is particularly true, of course, of those citizens who were found in the island of Guam. They are not in the same category as military personnel, because they, of course, may have had no employment by the United States as such, but were there on lawful business of the people of the United States.

This bill proposes that the property of Japan which is under the full control and jurisdiction of the United States shall be held for the payment of all lawful claims of these citizens of the United States who were deprived of their liberty, suffered cruelty, violence, maltreatment or impairment of earning capacity as a consequence of their capture or imprisonment or internment or evacuation, also for those citizens who are the surviving dependents of those who suffered such damages. I understand that the Trading with the Enemy Act originally came from this committee, and hence this bill, which is an amendment to the Trading with the Enemy Act, has been referred to the committee.

I believe that it is a subject that should be given early consideration by this committee and report to the House of the proper bill, if this one is not the proper one, so that the property may be retained, the property of Japan, for their benefit and in some measure make up to them for the horrible treatment which they received.

It is my understanding that if any other country had made this attack, that the citizens who were rightfully there would not have been interned or suffered capture and imprisonment and so forth, unless it was believed by the invading army that they were actually carrying on operations which were violations of the Hague treaties and so forth. I commend it for your early consideration and the consideration of the committee.

The CHAIRMAN. Thank you very much.

Mr. BECKWORTH. May I say one word in connection with that legislation?

The CHAIRMAN. Certainly.

Mr. Beckworth, as Mr. Hinshaw has already mentioned, I have likewise introduced legislation on this subject.

Mr. BECKWORTH. I simply want to say this: For about 2 years, at least, I have been interested in this subject, as have several other Members of Congress. I know that Congressman Gearhart of California is interested. I sincerely believe that it is important that the proper committee of the Congress look into the question of enemy property. It seems that it has never received the attention that probably the subject warrants.

I was talking to the Enemy Property Custodian a short time ago. He actually has under his control about half a billion dollars worth of property taken over from enemy governments. About $300,000,000 he actually has, but under his control his control extends over considerably more than that.

If the committee is going to do anything, it certainly ought to take action. That means that whatever we do in the way of policy making, should be done in a reasonable time. I do hope that Mr. Hinshaw's bill will be considered just as quickly as possible, so that a policy with regard to this great amount of property, at a time when dollars are rather scarce, might serve the purpose that is most fair and right with reference to the citizens of this Nation.

Mr. HINSHAW. I might add to the remarks of Mr. Beckworth, that many of these persons who have been now returned to the United States are here not only sick but destitute.

Mr. BECKWITH. That is exactly right. Another thing that is important, many of them, if they are going to receive any good, must receive it soon. Otherwise, it will be too late. Many of these people in my opinion need money for immediate medical attention.

Mr. HINSHAW. I am sure that they do.

The CHAIRMAN. We thank our colleagues for the explanation that they have given.

STATEMENT OF JOHN WARD CUTLER, ACTING GENERAL COUNSEL, OFFICE OF ALIEN PROPERTY, DEPARTMENT OF JUSTICE

Mr. CUTLER. Mr. Chairman.

The CHAIRMAN. What is your name, please?

Mr. CUTLER. John Ward Cutler, Acting General Counsel, Office of Alien Property, Department of Justice.

The letter which the Attorney General intended to submit to your committee did not receive final clearance from the Bureau of the Budget in time for this morning's hearing. However I am prepared at the present time, if the committee wishes, to make a statement on behalf of the Department of Justice which will embody the substance of the letter to be sent and the letter itself will be forthcoming.

The CHAIRMAN. We will be pleased to hear you at this time, Mr. Cutler, with the understanding that you may supplement your remarks when the report of the Department as approved by the Bureau of the Budget is received.

You may have noted that these other Departments submitted their reports with the statement that they had not yet been cleared by the Bureau of the Budget.

Mr. CUTLER. I did so note, sir. I was advised by the Office of the Assistant to the Attorney General that he would prefer that I make the statement to your committee.

The CHAIRMAN. You may proceed to do so.

Mr. CUTLER. Although he was aware of the fact that the proposed letter could have been changed to omit the usual reference to approval by the Bureau of the Budget, he wanted the Attorney General's letter to carry an indication of approval by the Bureau of the Budget, which, I understand, it will do.

The CHAIRMAN. Under the conditions under which the statement is made, I would assume that it is not a statement that is subject to questioning by the committee at this time and that it will be considered merely as an expression of the views of the Department preliminary to receiving the more formal reply after clearance by the Bureau of the Budget.

Mr. CUTLER. Nevertheless, Mr. Chairman, I would be happy to answer any questions you may desire to ask.

The CHAIRMAN. Very well, sir. I was trying to protect you.

Mr. CUTLER. I appreciate that, but I will be glad to try to answer any question you have.

The Department of Justice is in agreement with the principle that those who have suffered at the hands of the enemy should be com

pensated for their injuries to the extent that Congress may determine to be appropriate. The present bills, however, appear to assume a direct relationship between war-damage claims and enemy property vested in the United States Government which I believe may be confusing. It is our recommendation that vested German and Japanese property should not be returned to its former owners and that there should be no provision for compensation of such owners by this Government, although it may be appropriate that the German and Japanese Governments be required eventually to compensate their own nationals.

Title to vested enemy property is now in the United States and return cannot in any event be made without congressional action. The Congress may accordingly wish to declare itself at the present time against return with respect to Germany and Japan. Property formerly owned by nationals of Italy raises certain special problems upon which I believe representatives of the Department of State are best qualified to speak.

The net proceeds of German and Japanese property remaining after its administration, liquidation, and disposition is completed in accordance with present law, should in our judgment be covered into the Treasury in line with the policy of nonreturn. There will thus eventually be a fund which would constitute a partial reimbursement to the United States for the cost of the war, including the cost of compensating American nationals for war damages. To that fund could be added amounts received from Germany and Japan by way of reparations upon final settlement with those countries.

But to make the compensation of American war damage claimants dependent upon Germany and Japanese property vested in this Government would mean that the claimants might receive only relatively small pro rata payments. The bills under consideration, in other words, do not take into account the probable disparity between war damage claims and available enemy property.

The Office of Alien Property is proceeding as rapidly as possible with the liquidation of vested property. Some of it, however, cannot be liquidated until law suits filed by persons who assert that they are not enemies are finally determined. The Trading with the Enemy Act, in the present state of the law, requires that property involved in such suits must be held intact while the suits are pending. Further, vesting is still in progress and substantial amounts will be added to the total before the vesting program is completed.

A further difficulty which we find in H. R. 873 and H. R. 1823 is that the bills do not cover the entire range of possibly meritorious war damage claims, but only a limited segment. That segment affects persons deserving of the greatest sympathy, but the bills make no provision, for example, for the claims of United States nationals who suffered damages as a result of the attack on Pearl Harbor or injuries inflicted by the enemy on the high seas. There are also persons who have suffered damage to property which may have affected their very livelihood.

I believe a prompt survey of the entire problem is required in order that the Congress may decide on a concerted program with respect to compensation. With this in mind, we concur in the suggestion in the bills for the creation of a War Damage Commission, but we propose

that it be required to receive, within a limited period, all claims of United States nationals for damage to person or property from enemy action and that it furnish the Congress within a specified time-not longer than a year-with a statement classifying the claims, estimating the probable total of each type, and recommending which categories should be given priority consideration.

By that means, the Congress will know the general scope of the problem with which it is dealing and will be able to proceed accordingly. It can then give the Commission immediate power of adjudication with respect to categories of claims deserving of priority, and it can authorize amounts to be appropriated to meet the awards for the priority categories and any later classes of claimants which it may decide to compensate. Against such appropriations and authorizations will be set off the final net balance of enemy property vested in the United States plus that received by way of reparations, but relief to those who have suffered so cruelly at the hands of the enemy will not have been made dependent upon the uncertainties of amount and time surrounding that total.

These comments are consistent with statements which the Department has been advised are in accordance with the program of the President. If the Committee should decide to consider legislation along the lines discussed, we would of course be happy to be of assistance.

The CHAIRMAN. Mr. Cutler, we appreciate your presence this morning and your giving us these views of the Department preliminarily to the receipt of the formal reply to our request. I think under the circumstances that it will probably be better if we would withhold any questioning of you at this time until we have heard the sponsors of the legislation.

The reports that have been submitted indicate that each of the departments from whom we have heard, including your own, have given the matter serious and careful consideration. They have made worth-while suggestions as to what form the legislation should take. I am inclined to believe that it will be necessary for the committee to confer further with the departments after we have heard the testimony which is to be presented by the witnesses in behalf of these two bills.

We appreciate your offer of assistance and will ask that you, as well as the other departments, hold yourselves in readiness for further hearing at which the department will be heard specifically with respect to their suggestions.

Mr. CUTLER. I shall be at your service and happy to answer such questions as you may have at any time you choose.

The CHAIRMAN. Will it be agreeable to the sponsors of the legislation, Mr. Beckworth and Mr. Hinshaw, if I should call Mr. Lewis Arthur McGowan, as the first witness?

Mr. HINSHAW. Mr. Chairman, in view of the fact there are 27 witnesses, as I understand it, who are here as individuals and representatives of groups, I think it would be very appropriate to start with the counsel for the American Internees Committee.