Under date of March 19, 1947, I am in receipt of the following communication from Dean Acheson, Acting Secretary of State, expressing the views of the Department of State. I will read the letter: HON. C. A. WOLVERTON, DEPARTMENT OF STATE, Washington, March 19, 1947. Chairman, Committee on Interstate and Foreign Commerce, House of Representatives, Washington, D. C. MY DEAR MR. WOLVERTON: Further reference is made to your communication of February 12, 1947 concerning H. R. 1823, a bill to create an Enemy Property Commission, to provide for the disposal of certain enemy property, and for other purposes. It appears to be the purpose of the propsed legislation to establish a domestic Commission to adjudicate claims against Japan on behalf of civilians, who are citizens of the United States and who, while in Alaska, Guam, the Philippines, or Wake Island, sustained loss, damage, or injury to person or personal property "in consequence of hostilities or of any operation of war." The bill contemplates that all assets of the Japanese Government and Japanese nationals coming into the possession of agencies of this Government, shall, subject to certain exceptions, be utilized in effecting settlement of the claims mentioned above. Without undertaking at this time to comment in detail regarding all provisions of the bill, the following general observations are submitted. As you know, certain other measures have been introduced in the present Congress, and also in the preceding Congress, contemplating the liquidation of the assets in the United States of certain enemy countries, and the utilization of the proceeds in the settlement of certain claims of citizens of the United States against those countries for losses or damages sustained during the present war. In connection with such measures, the Department has reported to committees of the Congress its agreement with the basic policy involved which contemplates, insofar as Germany and Japan are concerned, that plans for the ultimate disposition of the funds realized from such liquidation should make no provision for any return or compensation, direct or indirect, by the United States to the former claims against those countries. The Department has, of course, a definite interest in measures designed to afford appropriate compensation with respect to the categories of claims falling within the scope of H. R. 1823. However, the bill encompasses only one segment of the total problem, since, in addition to claims referred to in the bill, there exist a large number of other claims against Japan, such, for example, as those based upon maltreatment of prisoners of war, and personal injury and death claims of others, including those resulting from the sinking of vessels on the high seas. Citizens of the United States have, of course, also sustained exten-. sive property losses during the war. To limit the jurisdiction of the proposed Commission as contemplated by the bill would seemingly entail an excessive expenditure of funds, since, presumably, it would be necessary to create one or more additional commissions to adjudicate other categories of claims not contemplated by the bill. With reference to provisions in the bill for payment of all awards rendered by the Commission with respect to the particular category of claims involved, it may be observed that the total amount of all classes of claims agains Japan, which may ultimately be found to be meritorious, may far exceed any amounts which may be realizable from Japanese assets in this country. It may be necessary, therefore, to scale down, within the limits of available funds, the amounts determined to be due individual claimants, unless, of course, it is intended to give preferential treatment to certain groups of claimants. It is believed that the Congress might give consideration to the enactment of legislation along the following lines: 1. Requiring that Germany and Japanese assets in the United States be liquidated and the proceeds covered into the Treasury after completion of the program of administration and allowance of claims as required by established policies and existing law. 2. An express declaration of legislative policy that plans for the ultimate disposition of such proceeds shall make no provision for any return or compensation, direct or indirect, by the United States to the former owners. 3. That a war claims tribunal be established vested with jurisdiction to adjudicate the following classes of claims on behalf of citizens of the United States arising during the war: (a) All personal injury and death claims against enemy states, including claims arising out of maltreatment of prisoners of war and civilian internees; and (b) All claims against enemy states involving loss or destruction of, or damage to, property, and with respect to which compensation is not otherwise provided under treaty stipulations or municipal war damage compensation legislation in any country. 4. Such tribunal to submit to the Congress, periodically and upon the completion of its functions, reports indicating the number, categories and amounts of claims filed against each enemy state, and the amounts awarded with respect thereto. It is suggested that in the light of the tribunal's reports, and also the information which may then be available with respect to realizable enemy assets and reparations receipts, the Congress would be in a position to enact supplementary legislation providing for the payment of awards, in whole or part, and on the basis of such priorities as it may deem just and equitable. Because of the urgency of the matter this letter has not been cleared with the Bureau of the Budget, to which a copy is being sent. Sincerely yours, DEAN ACHESON, Acting Secretary. I have also received from Joseph J. O'Connell, Jr., Acting Secretary of the Treasury, a letter dated March 19, 1947, expressing the views of the Treasury Department. It reads: Hon. CHARLES A. WOLVERTON, TREASURY DEPARTMENT, Washington, March 19, 1947. Chairman, Committee on Interstate and Foreign Commerce, House of Representatives, Washington, D. C. MY DEAR MR. CHAIRMAN: Further reference is made to your request for the views of this Department with respect to H. R. 873 and H. R. 1823, both being bills to create an Enemy Property Commission, to provide for the disposal of certain enemy property and for other purposes. Both bills are basically similar and provide, in substance, for the payment of certain types of claims by American citizens out of enemy property. The policy of payment of war damage claims of American nationals which would be partially achieved by the enactment of either of the proposed bills is one with which the Treasury Department is in full accord. It is the view of this Department that appropriate claims for war damages of the types covered by these bills should be reimbursed and that it would be appropriate for the proceeds of enemy property to be used to satisfy such claims to the extent that it is feasible to do so. There are, however, certain features of the bills which would, in my opinion, require modification for reasons which are set forth below. One modification which suggests itself is that the bills should be expanded in scope. Thus, H. R. 1823 addresses itself only to claims against Japan and omits any mention of claims against Germany. Furthermore, it is restricted to claims of civilians who suffered loss, damage or injury to their persons or to their personal property while in certain specified locations. There are a considerable number of other war-damage claims against Japan of varying degrees of urgency which will require consideration in any over-all attempt to settle the problem of war claims. One example of cases not covered by this bill would be that of American missionaries in Japan or Japanese-occupied China who suffered various types of injury. Another example would be the case of members of the American armed forces who suffered injuries or loss of life as a result of violations of the rules of warfare by our enemies. Although H. R. 873 is broader in its coverage in this respect than H. R. 1823, and deals with claims against Germany and Italy, as well as Japan, it should be noted that there are classes of claims worthy of recognition by this Government which do not come within the scope of either bill. Among such claims are those for damages to property at the hands of the enemy by persons who themselves were not subject to personal injury or loss. It is agreed that the claims of such persons may be of less urgency and of a lower priority than the claims dealt with in the proposed legislation, but they are, nonetheless, worthy of recognition in any over-all legislation to deal with the subject of claims against the enemy. The proposed bills each seem objectionable in that claims appear to be limited to amounts which can be obtained from property of the enemy presently in the hands of the United States. This seems to be a serious deficiency. Although this Department considers that it is fair and equitable that the proceeds of enemy property should be used to pay the claims of persons having just claims against the enemy for wrongdoing by it, it does not seem appropriate for the legislation to limit such claims to the proceeds which may be realized from vested property. H. R. 873, which proposes a division of enemy property into three classes, German, Japanese and Italian, carries the implication that claims against one enemy country should be reimbursed out of the assets in the United States of that country only. At the present time neither the total amount of money which will be realized from the ultimate liquidation of enemy property nor the total amount of claims which will be made against the enemy are known. There is no reason to believe that claims against one enemy country will bear any reasonable relationship to property held in the United States by that country or its nationals. If reimbursement should be made solely from enemy property, a race of diligence will have to ensue by the rightful claimants with the result that priorities in the presentation of claims may lead to ultimate inequities in their satisfaction. This Department feels that it would be more appropriate for the Congress to enact legislation establishing a policy that enemy property shall not be returned to its former owners and of dedicating enemy property for use in providing reimbursement for rightful claims may be met In so doing, Congress might well establish a schedule of priorities whereby certain classes which have suffered worst and whose claims are most urgent could have their claims satisfied sooner out of such enemy property as is immediately available for the purpose. A Commission such as is proposed in both bills could, for the present hear and adjudicate claims presented by claimants in the top priority class. It could also invite the presentation of all other types of claims including those of lower priority-not for the purpose of making immediate adjudication and awards, but in order that the extent of such lower priority claims might be made known. Indeed such a Commission might be empowered to set time limits within which all claims must be presented or fail. Such a procedure would have the advantage of centralizing claims so that subsequent Congressional action with respect to claims of lower priority classes could be dealt with on the basis of factual knowledge as to their scope. As we have pointed out, the Treasury supports the general policy that enemy property in this country should be used by the United States for the payment of claims arising from the war. However, in determining the specific claims against which these assets should be applied, this Department feels that full consideration must be given to the fact that the people of the United States as a whole have borne enormous war costs. Compensation to private claimants, we believe, should be based only on the ground that such claimants have suffered losses which it would be unjust to require them to bear in addition to their general obligations as citizens. Accordingly, it is the view of this Department that the merits of each class of claim should be judged separately and any class found worthy of redress should be carefully defined by the Congress. For example, Americans who were maltreated or have suffered physical injury as interned civilians would appear to be clearly entitled to compensation in dollars. On the other hand, in the case of damage of American-owned property in enemy countries, compensation in currency of the enemy country would appear to be adequate in that such a medium would ordinarily be used to pay the cost of rehabilitation of such property and consequently such claims could be eliminated from consideration by the Commission. In the event that there are any surpluses remaining after the payment of the private claims determined worthy of compensation such surpluses should be covered into the Treasury as miscellaneous receipts for the general benefit of the people of the United States as a whole as partial compensation for the general burden of the war. This Department also desires to point out that in view of Italy's status of co-belligerent with this country the disposition of Italian assets should not be included in the same program as that covering Germany and Japan. A further matter with reference to these two bills is worthy of mention. The enemy property which would be used in connection with the reimbursement of rightful claims is set up differently in each of the bills. Thus unlike H. R. 873, H. R. 1823 excepts patents and property which is to be returned under Public Law 822 of the Seventy-ninth Congress and such property as is to be * * *"" * ** * ** * * used for the payment of debts under the provisions of Public Law 671 of the Seventy-ninth Congress (misprinted as Public Law 677 of the 79th Cong.). This Department deems it advisable that the exceptions with respect to patents as well as the exceptions already enacted into law be maintained in order to effectuate other policies of this Government. It should be noted, moreover, that, in addition, the language of both bills may have to be somewhat modified insofar as they deal with property "under control of any officers, agents, or employees of the United States. This language would seem to include any property within either Germany or Japan which is currently in the possession of or controlled by American personnel in those areas. In addition, this language may be too broad in that it would appear to apply to property currently subject to the freezing regulations administered by the Treasury Department even though certain specific properties have been or may ultimately be released from those controls without being vested. For example, the language cited might be applicable even to the property of German citizens long resident in the United States but who have long since severed any relationship with Germany and whose property was for this reason unblocked a number of years ago. In view of the pending hearings before your Committee on H. R. 873 and H. R. 1823, and the consequent need for expedition of this report, it has not been feasible to obtain the customary clearance from the Bureau of the Budget. Very truly yours, JOSEPH J. O'CONNELL, Jr., Acting Secretary of the Treasury. I also have under date of March 20, 1947, a report from Robert P. Patterson, Secretary of War, reading as follows: Hon. CHARLES A. WOLVERTON, WAR DEPARTMENT, Washington, March 20, 1947. Chairman, Committee on Interstate and Foreign Commerce, DEAR MR. WOLVERTON: The War Department expresses no opinion as to the general purpose of H. R. 1823, 80th Congress, a bill "To create an Enemy Property Commission, to provide for the disposal of certain enemy property, and for other purposes." This Department, however, is opposed to enactment of the bill in its present form. The bill amends the Trading with the Enemy Act so as to provide in general that all property vested in the United States or any of its officers, agents, or employees, or any agency from the Japanese Government and its nationals, except patents and property subject to Public Laws 322 and 677, Seventy-ninth Congress, shall be retained by the United States for the satisfaction of all claims of United States citizens who were aggrieved by actions of the Japanese Government or its agents since December 7, 1941. The bill establishes an Enemy Property Commission to have jurisdiction, adjudicate claims, and order payment. It is recommended that the bill be amended by adding to the property excepted in section 30 (after “patents" in line 7, p. 1), the following: applications for patents, unpatented inventions, technical information, trademarks, copyrights, contract rights relating to any of the foregoing, royalties accrued or collected for the use of inventions in war production which royalties were charged directly or indirectly to the United States Government, any claim against the United States under the Royalty Adjustment Act (act of October 31, 1942). The War Department would have no objection to the disposition of any of the property mentioned above, except the royalties, if adequate provision were made (1) to exclude the giving of any cause of acting against the United States Government growing out of such property, (2) to reserve a royalty-free right and license to the United States under any such property, and (3) safeguard military security by excluding any property or technical information important to the public safety or national defense. It is impossible to estimate the fiscal effects of this legislation. Due to the limitation of time, it has been impracticable to obtain the views of the Bureau of the Budget with respect to this report. Sincerely yours, ROBERT P. PATTERSON, Secretary of War. Hon. CHARLES A. WOLVERTON, WAR DEPARTMENT, Washington, March 20, 1947. Chairman, Committee on Interstate and Foreign Commerce, House of Representatives. DEAR MR. WOLVERTON: The War Department expresses no opinion as to the general purpose of H. R. 873, Eightieth Congress, a bill "to create an Enemy Property Commission, to provide for the disposal of certain enemy property, and for other purposes." This Department, however, is opposed to enactment of the bill in its present form. The bill amends the Trading with the Enemy Act so as to provide in general that all property vested in the United States or any of its officers, agents, or employees, or any agency from the German, Japanese, and Italian Governments and their nationals, shall be retained by the United States for the satisfaction of all claims of United States citizens who were aggrieved by actions of the German, Japanese, and Italian Governments or their agents since December 7, 1941. The bill establishes an Enemy Property Commission to have jurisdiction, adjudicate claims, and order payment. It is recommended that the bill be amended by adding in section 32 after the word "property," in line 7 on page 1, the following: except patents, applications for patents, unpatented inventions, technical information, trade-marks, copyrights, contract rights, relating to any of the foregoing, royalties accrued or collected for the use of inventions in war production which royalties were charged directly or indirectly to the United States. Government, and any claim against the United States under the Royalty Adjustment Act (Act of October 31, 1942). The War Department would have no objection to the disposition of any of the property mentioned above, except the royalties, if adequate provisions were made (1) to exclude the giving of any cause of action against the United States Government growing out of such property, (2) to reserve a royalty-free right and license to the United States under any such property, and (3) safeguard military security by excluding any property or technical information important to the public safety or national defense. It is impossible to estimate the fiscal effects of this legislation. Due to the limitation of time, it has been impracticable to obtain the views of the Bureau of the Budget with respect to this report. Sincerely yours, Mr. Beckworth. ROBERT P. PATTERSON. STATEMENT OF HON. LINDLEY BECKWORTH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS Mr. BECKWORTH. Mr. Chairman and members of the committee, I introduced a similar bill last session, as did Congressman Gearhart and Representative Burch, of Virginia. They introduced bills on the question of enemy property. No hearings were held on any of these bills, although hearings were held and a bill was passed by Representative Celler. Hearings were held by the Judiciary Committee, and Representative Celler's bill was passed concerning enemy property. It occurred to me in looking into the matter that it is something that this committee should interest itself in, the question of enemy property. The original act passed this committee in 1917, and from time to time four other committees of the House have acted on certain amendments to the Enemy Property Act. The Judiciary Committee, the Ways and Means Committee, the Banking and Currency Committee, and the Appropriations Committee have interested themselves in it. Í talked to Mr. Cook this morning. He is Enemy Property Custodian. He said that we have no within our control property that approximates $500,000,000. That is a lot of enemy property. |