BIRMINGHAM, ALA., April 14, 1947. Hon. LAURIE BATTLE, DEAR MR. BATTLE: Am taking the liberty in calling your attention to a bit of legislation that will be brought before your body. This bill is being presented by the former commander of the VFW who is now a member of the Congress, James E. Van Zandt, bill H. R. 1000. This bill deals with the impounded moneys and property of the former enemies of this Nation, Germany, Italy, and Japan, and it proposes to distribute in some manner this money to the ones who were mistreated in violation of the rules laid down by the Geneva Convention. It is my understanding there is several million dollars involved and it would be an act of profound disrespect to those who are living and dead for this money to be returned to these nations without making some provision for these nations to pay for their sins against our boys. In my case, I had a son who was taken prisoner in Java by the Japanese and was taken to Burma, where he and many others were forced without pay to build a railroad from Moulmein, Burma, to Singapore. This railroad is 240 miles long, and in building this road there were 116,000 deaths, amongst them my son. This represents a human life for every crosstie laid. This railroad is a value and it is only fair for it to be paid for. I was talking to one of the men who returned from this horrible place and he said "every man was worked to death." This man is Maj. Ike Parker, of Ozark, Ala. Mr. Battle, I strongly urge you to give this bill your earnest consideration to the end that it is passed through your House. Yours very truly. C. W. GILLIAM. The CHAIRMAN. I am indebted to Mr. Amos J. Peaslee of Clarksboro, N. J., for a copy of the Recommendation for Adjudication of War Claims and Report of Committee on Adjudication of War Claims, Section of International and Comparative Law, of the American Bar Association, adopted December 20, 1945. Mr. Peaslee is a distinguished member of the bar, having offices in New York and Washington. He is looked upon as an outstanding authority in the field of international law. I feel greatly indebted to Mr. Peaslee, chairman of the committee, for having brought to the attention of the House Interstate and Foreign Commerce Committee the important data and recommendations having a relationship to the subject matter of the bills which the committee now has under consideration. The above-mentioned report with its recommendations is of such an important character that I am of the opinion it should be made a part of these hearings. I offer the same for such purpose. (The report is as follows:) AMERICAN BAR ASSOCIATION RECOMMENDATION FOR ADJUDICATION OF WAR CLAIMS, ADOPTED DECEMBER 20, 1945-REPORT OF COMMITTEE ON ADJUDICATION OF WAR CLAIMS, SECTION OF INTERNATIONAL AND COMPARATIVE LAW Amos J. Peaslee (chairman), Mitchell B. Carroll, Ralph M. Carson, Christopher B. Garnett, John Hanna, H. H. Martin, William D. Mitchell AMERICAN BAR ASSOCIATION RECOMMENDATION ADOPTED BY THE HOUSE OF DELEGATES DECEMBER 20, 1945 RECOMMENDATION The committee recommends prompt action by the Congress of the United States to create one or more nonpolitical, judicial commissions, composed of not less than three and not more than five persons skilled in the knowledge and prac tice of international law, to consider and adjudicate all claims of American nationals against Japan, Germany, Italy, Bulgaria, Hungary, and Rumania, arising out of acts of the governments of those nations or any of them from and after the dates of the beginnings of aggressions or hostilities by them, respectively, in the Far East and Europe. A draft bill for the creation of such a commission is appended hereto. REPORT OF COMMITTEE ON THE ADJUDICATION OF WAR CLAIMS, SECTION OF I. COMMENT ON RECOMMENDATION The legislation creating such a tribunal should fix a time limit for the filing of claims and should specify the categories of claims which will be considered and allowed. The categories should include (a) damage to, or seizure of, property, rights, and interests of American nationals including any company or association in which they are interested within the territory of any of the abovementioned nations and the territory of any country which was occupied by any of them; (b) loss or damage to which the United States or its nationals have been subjected with respect to injuries to persons or to property rights and interests, including any company or association in which American nationals are interested, as a consequence of the war; and (c) debts owing to American nationals by the governments or the nationals of any of the above mentioned nations.1 Such a commission should have power to make its own rules of procedure, and members of the Commission should be permitted to sit separately to hear and decide claims, with appeals to the entire Commission to the extent permitted by its rules. The Commission and its members should have power equivalent to that of the Federal courts to compel the attendance of witnesses and the production of documents and to authorize the taking of depositions abroad, and to punish for contempt of its authority. The committee has had some hesitation in offering specific recommendations at this time because of the changing conditions in enemy countries. It seems now probable, however, that a long delay will elapse before the status of sovereignty will be restored to some of the nations which participated in the recent breach of the international peace. A long postponement of the adjudication of the amounts of international claims is always undesirable. Such delays have a tendency to result both in the exaggeration of unfounded claims and the ultimate inability to prove just claims through loss of evidence or death of important witnesses. A prompt determination of the amount of properly allowable awards to American nationals and the United States Government as a result of acts of Germany, Japan, Italy, Bulgaria, Hungary, and Rumania, during the recent war, is desirable from the standpoint of the relations (a) of the United States and the defeated powers, (b) of the United States and the Allied Powers under agreements which have been made with respect to the apportionment of resources available for the satisfaction of claims, and (c) among American claimants themselves, to determine the relative shares which they may expect in participation in such resources for payment as may be or become available. The committee believes, therefore, that for many reasons the determination of the amounts of American war claims should not be deferred to await the conclusion of treaties with the governments of the defeated powers, but should be undertaken by unilateral action on the part of the United States. There are many historical precedents for the determination by a domestic commission of the amount of claims and the apportionment of available funds among claimants (see infra, p. 17, n. 3). 1 These categories follow substantially those of the agreement of August 1922 creating the Mixed Claims Commission, United States and Germany, which dealt with both neutrality and belligerency claims. The procedure of having defeated powers "agree" by treaty to the amount of damages sustained by the victors is particularly unnecessary in this case in the light of the deliberately premediated character of the casual aggressions. Where, as here, the judgment of substantially the entire international community condemns the outlawry, the position of the defeated powers is more analogous to that of criminals and tort-feasors than that of duelists or participants in a "fair fight." II. CLAIMS OF THE LAST WAR There were three principal groups of international settlements and adjudications involving the United States after the last war, one by the War Department, another under the State Department, and a third by the Treasury Department. The amounts were large and the problems were intricate. Relatively the work-still not quite completed-has been accomplished with expedition and reasonable satisfaction to American interests. Such comment as will be made in this report upon those transactions is not intended to detract from the high caliber of the efforts and accomplishments. In retrospect, however, it is possible now to see errors which should be avoided this time. For example, there were instances after World War I where, in haste to make prompt settlement of all possible claims against one governmental department, substantial cash was paid to foreign nations which at the time were largely indebted to the United States. There was also excessive solicitude for the welfare of foreign claimants. In general enemy claimants fared better than American claimants both in percentages and in amounts of recoveries. German nationals were even paid by the United States for the loss of some property which the German Government had itself destroyed. Germans were paid for the loss of property which Germany had used in promoting depredations upon the United States and American property. Collateral which the United States held to secure the payment of awards of the Mixed Claims Commission, United States and Germany, was prematurely surrendered, delaying even yet the complete payment of those awards. For years it was a popular thesis that Germany was being "burdened" with "reparation" requirements after World War I beyond her "capacity to pay" and that the Versailles Treaty in this respect was a "mistake" which "should not be repeated." A new school of economic doctrine was born and thrived upon hypotheses which had little factual basis. It is now generally recognized that the unpaid borrowings of the German Reich, German municipalities, and German private industry from Allied Governments and citizens of Allied Nations probably equaled or exceeded the total of at least the cash sums paid by Germany, and that "reparations" were not the drain on German economy or upon exchange which many were led to believe. The War Department settlements In February 1919, about 3 months after the armistice of November 11, 1918, a United States Liquidation Commission was created under the War Department to dispose of surplus property abroad and to settle all claims and accounts between Allied Governments and their nationals on the one part and the United States War Department on the other, growing out of or connected with the war. That Commission within about 15 months did a job which received and deserved high praise for its expedition. Its settlements, however, involved cash payments by the United States to the French Government of 449,985,389.73 francs (in addition to previous cash payments by the War Department upon 38,299 claims of French nationals which had been dealt with by the Rent, Requisition, and Claims Service of the American Expeditionary Forces), cash payments to the Italian Government of 29,106,546.75 lire, cash payments to the British Government of £797,854, and in addition $8,413,984.13 to nationals of France, Great Britain, Italy, Spain, and Switzerland. While there no doubt appeared at the time to be good reasons for these cash payments, it is to be noted that France, Italy, and Great Britain were heavily indebted to the United States when those cash payments were made under loans which had been negotiated by the Treasury Department and upon which those nations later defaulted. We also sold France war goods of an estimated value of $456,000,000 for $400,000,000 and took 5 percent bonds in payment which were never paid. See Final Report U. S. Liquidation Commission, War Department, pp. 78, 79, 101, 111; and S. Doc. No. 102, 69th Cong., 1st sess. State and Treasury Department settlements The State Department, to some extent in collaboration with the Treasury Department, supervised the methods provided for adjudicating claims against former enemy governments and claims by nationals of former enemy governments against the United States. American property in enemy territory was required by treaty to be returned to its owners, and three international commissions were set up to deal with American claims, one with Germany, one with Austria and Hungary, and one with Turkey. 3 The Alien Property Custodian and a war claims arbiter were authorized to deal with the claims of nationals of former enemy countries against the United States. A summary of the approximate results of the various claims is as follows: 1 The Mixed Claims Commission, United States and Germany, entered a total of 7,025 awards representing a principal of $181,351,008.45 which, with interest to Jan. 1, 1923, amounted to $262,752,094.81 and a total including interest to date of payment, or, if unpaid, to Sept. 30, 1940, of $354,548,854.76. Of this total the amount paid and/or in process of payment on Jan. 10, 1941 was $159,385,306.21, approximately 45 percent of the total awards with interest. The total number of claims disposed of by the Commission was 20,433, representing an average of 4 claims disposed of daily (see Final Report of H. H. Martin, Acting Agent of the United States, 1941, p. 93). For figures up to 1944 with slight modifications of these, see U. S. Treasury Report 1944, pp. 833, 834. 2 About $260,000,000 including interest to Jan. 1, 1928 and about $375,000,000 including interest to date of payment. 3 Approximately $600,000,000 for sequestered property and $250,000,000 for ships, patents, and radio stations. Approximately $543,000,000 for sequestered property and $87,000,000 for ships, patents, and radio stations. Approximately $543,000,000 for sequestered property and $43,000,000 for ships, patents, and radio stations. German nationals received about 70.4 percent of the claims which they asserted as compared with awards to American nationals of about 12 percent of their claims. The Germans collected about $600,000,000 nearly four times as much as has been paid on the American claims, exclusive of such properties as may have been returned independent of formal claims. The German interests have so far received about 93 percent of the principal of the amounts allowed to them, plus full interest at 5 percent in most cases. The United States and its nationals have so far received only about $160,000,000, which is less than 50 percent of the amounts including interest which were awarded to them. The Alien Property Custodian of World War I originally sequestered and held as collateral security for American claims approximately $600,000,000 of property owned either by the German Government or by German nationals. This amount was adequate to have assured payment in full with interest of all of the awards ultimately made by the Mixed Claims Commission, United States and Germany, to the United States and American nationals. The United States Government was authorized by treaty to apply this collateral to the payment of awards to the United States Government and to American nationals, Germany agreeing to reimburse her nationals for the equivalent value of the collateral so applied. The categories of American claims specifically provided for under the agreement of August 10, 1922, between the United States and Germany were as follows: (1) Claims of American citizens, arising since July 31, 1914, in respect of damage to, or seizure of, their property, rights, and interests, including any company or association in which they are interested, within German territory as it existed on August 1, 1914; (2) Other claims for loss or damage to which the United States or its nationals have been subjected with respect to injuries to persons, or to property, rights, and interests, including any company or association in which American nationals are interested, since July 31, 1914, as a consequence of the war; (3) Debts owing to American citizens by the German Government or by German nationals. Nevertheless, upon recommendation of the Secretary of the Treasury and by action of Congress, the United States Government chose to surrender the collateral which it originally held and to accept in lieu thereof unsecured debenture obligations of the German Government in the form of German Reichsmark bonds. That action was taken under the Debt Funding Agreement of June 23, 1930, and German gold Reichsmark bonds of the face amount of Rm. 2,121,600,000 were delivered by Germany to the United States Treasury (about $505,000,000 at the par of exchange, or $848,000,000 at the current rate of exchange). Only $21,200,000 was ever paid upca these bonds and then Germany defaulted. The remaining defaulted bonds are still in the United States Treasury, no action meanwhile having been taken with respect to the unpaid balances upon the American awards. III. CLAIMS OF THIS WAR (A) Their nature and amount Our principal allies in the recent war have been Great Britain, Russia, China, and France. Forty-four other nations were also associated with us in the war upon the Axis Powers. Our enemies were Germany, Italy, Japan, Bulgaria, Hungary, and Rumania. Our entry into World War II was on December 8, 1941, about 5 years after Japanese hostilities began in the Far East, and more than 2 years after Germany began her aggressions in Europe. As in the last war, claims will rest upon action both during our neutrality and during our belligerency. Steps have already been taken by the War Department, as they were in 1919, to liquidate our "surplus property" abroad and to settle claims against our Government in connection with War Department operations. As to American claims, Hon. Green H. Hackworth, Chief Legal Adviser to the Department of State, in an address before the Thirty-first National Foreign Trade Convention in New York on October 11, 1944, made the following statement: "It is too early to prophesy as to the nature of settlements that may be made between this and other governments concerning claims resulting from the war. I think that you may be sure that settlement will be made. They might well take the form of general agreements in which responsibility is broadly acknowledged for categories of cases, as was the situation at the close of the last war; or they might take the form of simple lump-sum settlement." A letter to the chairman of this committee from Mr. Hackworth, dated August 3, 1945, says: "It is nigh impossible to estimate the amount of claims filed with the Department arising out of the present war. In fact, in the great majority of cases the statements filed consist largely of descriptions of property, with little knowledge on the part of the people filing the statements as to whether the property is still intact or whether it has been destroyed or damaged. In most instances this information can be ascertained only after the claimants are able to return to the countries where the property is located or communicate with people on the spot. Another difficulty lies in the fact, as you probably know, that by and large claimants do not bestir themselves to any great extent in these matters until real prospects for settlement seem to be imminent." In both of these statements Mr. Hackworth presumably had in mind settlements to be arranged by the Department of State. The War Department settlements are under way, and no doubt care is being taken to coordinate this time carefully the work of the War Department and the State Department to protect both the unsatisfied awards of the last war and the new claims of the present war. An estimate which relates to the probable amount of American claims against foreign enemy countries resulting from World War II was made by Ansel F. Luxford, Assistant General Counsel, Foreign Funds Control, Treasury Department, in the hearings before subcommittee No. 1 of the Committee on the Judiciary, House of Representatives, Seventy-eighth Congress, second session, on H. R. 4840, during the sessions of the committee on June 9-15, 1944, as follows (report of hearings, p. 103): "American claims against Bulgaria are $10,000,000 as against $1,000,000 dollars of Bulgarian assets here; in Germany $1,290,000,000 as against $150,000,000 of German assets here; in Hungary $65,000,000 as against $10,000,000 of Hungarian assets here; in Italy $265,000,000 as against $100,000,000 of Italian assets here; in Japan $90,000,000 as against $150,000,000 Japanese assets here; Rumania $65,000,000 as against $30,000,000 Rumanian assets here." |