excise, estate and employment tax, import duty, and special assessment; and also any interest, penalty, additional amount, or addition thereto not arising from any act, omission, neglect, failure, or delay on the part of the Custodian. (a) Any tax exemption accorded to the Alien Property Custodian by specific provision of existing law shall not be affected by this section. "SEC. 38. The Alien Property Custodian may procure insurance in such amounts, and from such insurers, as he believes will adequately protect him against loss in connection with property or interest or proceeds held by him.'" SEC. 2. Subdivision (C) and (D) of section 32 (a) (2) of the Trading With the Enemy Act are hereby amended to read as follows: "(C) an individual voluntarily resident at any time since December 7, 1941, within the territory of such nation, other than a citizen of the United States or a diplomatic or consular officer of a nation with which the United States has not at any time since December 7, 1941, been at war: Provided, That an individual who, while in the territory of a nation with which the United States has at any time since December 7, 1941, been at war, was deprived of life or substantially deprived of liberty pursuant to any law, decree or regulation of such nation discriminating against political, racial or religious groups, shall not be deemed to have voluntarily resided in such territory; or "(D) an individual who was at any time after December 7, 1941, a citizen or subject of a nation with which the United States has at any time since December 7, 1941, been at war, and who on or after December 7, 1941, and prior to the date of the enactment of this section, was present (other than in the service of the United States) in the territory of such nation or in any territory occupied by the military or naval forces thereof or engaged in any business in any such territory: Provided, That notwithstaning the provisions of this subdivision (D), return may be made to an individual who, as a consequence of any law, decree or regulation of the nation of which he was then a citizen or subject, discriminating against political, racial or religious groups, has at no time between December 7, 1941, and the time when such law, decree or regulation was abrogated, enjoyed full rights of citizenship under the law of such nation; or". SEC. 3. The section added to The Trading With the Enemy Act by Public Law 382, Seventy-ninth Congress, is hereby amended by inserting "39" after "SEC.". Senator HUFFMAN. What witnesses do we have here? STATEMENT OF JOHN WARD CUTLER, ASSOCIATE GENERAL COUNSEL, OFFICE OF ALIEN PROPERTY CUSTODIAN Mr. CUTLER. I am the associate general counsel of the Office of Alien Property Custodian, and we have filed a report with you concerning the subject at hand. I have with me representatives of the State, Justice, and Treasury Departments who are also in favor of the legislation and are prepared to testify briefly. Senator HUFFMAN. We have on file in the committee two letters, both dated June 28, 1946, from the Office of Alien Property Custodian, one addressed to Hon. Pat McCarran and one addressed to Hon. James W. Huffman. These letters will be included in the record. at this point. (The letters are as follows:) Hon. JAMES W. HUFFMAN, OFFICE OF ALIEN PROPERTY CUSTODIAN, United States Senate, Washington, D. C. MY DEAR SENATOR: I beg to invite your attention to S. 2378, a bill to amend the First War Powers Act, 1941, recently introduced by Senator McCarran and referred to the Committee on the Judiciary. This bill is identical with H. R. 6890, as favorably reported by the House Judiciary Committee (H. Rept. 2398). A copy of that report, explaining the bill in detail, is enclosed for your convenient reference. Hearings were held on a predecessor bill, H. R. 5089, before a House subcommittee, and these hearings have been printed. The bill as revised (H. R. 6890) has the strong endorsement of myself, the Attorney General, the Department of State, and the Treasury Department. The bill is designed to clarify administrative powers of the Office of Alien Property Custodian, particularly in order that the work of the Agency cau be brought to an early conclusion. The bill has five major objectives, which are: (1) To facilitate the speedy sale of alien properties vested in the Alien Property Custodian under the Trading With the Enemy Act, while at the same time providing an express judicial remedy for the payment of compensation to the former owner in appropriate cases; (2) to provide machinery for paying claims of creditors against the former owners of vested properties on an equitable basis to the extent that the assets vested from each debtor permit; (3) to make certain and to define the authority of the Alien Property Custodian to pay taxes; (4) to clarify the Custodian's power to carry insurance on vested properties, and (5) to authorize the return of vested property to innocent victims of Axis aggression who may have been nationals or residents of enemy countries. In addition, the bill deals with certain matters of procedural detail. The matter has been before the Congress in slightly varying forms for 2 years. Examples of earlier drafts are S. 1940 and H. R. 4840 (on which House committee hearings were also held) of the Seventy-eighth Congress. The bill is coordinated with and in a sense supplemental to Public Law 322, Seventy-ninth Congress, approved March 8, 1946, which authorized the return of vested property to certain persons who were never hostile to the United States, and upon which the Judiciary Committee issued a favorable report. It is expected that the House will shortly consider H. R. 6890. In view of the imminent end of the session, however, it is my thought that final action might be materially expedited if the Senate Committee on the Judiciary were now to take favorable action on the companion bill, S. 2378, so that the legislation may reach the floor of both Houses with some hope of enactment before the recess. I am deeply concerned with the possibility that the present Congress may close without favorable action on this legislation. If that should occur, the work of sale of vested properties and payment of creditors' claims would be further delayed to a most serious extent. Any steps which you can take to aid in enactment of the legislation (which I believe to be noncontroversial) during the present session will help to avoid any repetition of the long delays in concluding the administration of alien property which occurred after the last war. I am bending every effort to preventing such delays, but I am in urgent need of the machinery which this legislation would supply. Yours very sincerely, JAMES E. MARKHAM, OFFICE OF ALIEN PROPERTY CUSTODIAN, Hon. PAT MCCARRAN, Chairman, Committee on the Judiciary, United States Senate, Washington, D. C. DEAR SENATOR MCCARRAN: I desire to express my endorsement of S. 2378, a bill to amend the First War Powers Act, 1941. This bill is identical with H. R. 6890 as recently reported favorably by the House Judiciary Committee (H. Rept. No. 2398, 79th Cong., 2d sess.). Hearings were held on a predecessor bill, H. R. 5089, before a House subcommittee and these hearings have been printed. The modifications of H. R. 5089 which are contained in H. R. 6890 and S. 2378 meet with the approval of the Departments of State, Treasury, and Justice, as well as of the Office of Alien Property Custodian. This legislation has been before the Congress in slightly varying forms for 2 years. Prior bills are S. 1928, S. 1940, H. R. 4840 (on which hearings were held) and H. R. 5031 of the Seventy-eighth Congress; and H. R. 1530 and S. 526 of the Seventy-ninth Congress. The present bill represents long study and careful consideration resulting in what we believe to be improvements over the prior bills. Part of the subject matter of the earlier bills, i. e., the problem of the return of vested property to certain persons who were never hostile to the United States, was separately enacted by the Congress as Public Law 322, approved March 8, 1946. The present legislation is coordinated with that act. I wish to reiterate my deep concern as to the results which will unavoidably follow if this legislation fails of enactment at the present session. The work of sale of vested alien property and payment of creditors' claims and post-vesting taxes, are among the matters which would continue to be delayed, thus hindering the expeditious closing out of the work of my office. We are bending every effort to expedite the conclusion of this work and to avoid a repetition of the long delays in this respect which occurred after the last war. There is much, however, that cannot be done without the machinery which this legislation would supply. The bill has five major objectives, which are: (1) to facilitate the speedy sale of alien properties, vested in the Alien Property Custodian under the Trading With the Enemy Act and not returned pursuant to Public Law 322; and at the same time to clarify the availability of judicial remedies by expressly providing for the payment of compensation to the former owner in appropriate cases; (2) to provide machinery for paying claims of creditors against the former owners of vested properties on an equitable basis to the extent that the assets vested from each debtor permit; (3) to make certain and to define the authority of the Alien Property Custodian to pay taxes; (4) to clarify the Custodian's power to carry insurance on vested properties, and (5) to authorize the return of vested property to innocent victims of Axis persecution who may have been nationals or residents of enemy countries. In addition, the bill supplies a statute of limitations upon the filing of claims and suits with respect to property vested in or transferred to the Alien Property Custodian, and confirms and clarifies the authority for the promulgation of rules and regulations in connection with the filing and prosecution of claims with regard to such property. The House report on H. R. 6890 (which, as noted above, is identical with this bill) embodies the results of extensive hearings. During those hearings, painstaking and comprehensive consideration was given to all phases of the bill in the light of testimony of witnesses representing the public and all the interested executive agencies. The House report explains the bill in detail and fully states the urgency which makes its early enactment a matter of high importance. Together with the other departments, I am of the view that enactment of this bill cannot be postponed without gravely impairing the general administration of alien property and without serious prejudice to the just claims of American creditors, taxing authorities, and victims of Axis oppression. Sincerely yours, JAMES E. MARKHAM, Senator HUFFMAN. Are there any witnesses appearing against either of these proposals? (No answer.) Mr. POLIER. I represent the American Jewish Congress, which is basically interested in this issue. I would not say I am opposed. I hope that certain explanatory language can be included in the report of your committee which I think would remedy some of the ambiguities in the bill as reported by the House. Senator HUFFMAN. We will hear what you have to say, Mr. Polier. You may proceed, Mr. Cutler. Mr. CUTLER. My name is John Ward Cutler, associate general counsel, Office of Alien Property Custodian. The Custodian would very much have liked to be here personally this morning, but he is out of town and could not return because of the shortness of time. However, I greatly appreciate the opportunity to give you our views on these two bills. S. 2039 is a proposed amendment to section 32 of the Trading With the Enemy Act as added to that act by Public Law 322, Seventyninth Congress, approved March 8, 1946. Public Law 322 conferred upon the President and now, by delegation, the Custodian-the power to make returns to certain persons who were never hostile to the United States, of property vested by the Custodian during this war for protective purposes, or in certain cases where a mistake was made as to true origin. The major categories covered by that legislation were citizens and residents of enemy occupied countries, whose patents particularly were vested, that is, taken over by the United States in order to prevent their being used indirectly by the Germans in their war effort. It was a protective vesting and it was understood that return would be made after the need for protection had been ended. The other motive was to put those patents to work in the American war effort. Congress has conferred the authority, if the claimants meet certain specified conditions, to return those properties. That is now being done. However, at the time Public Law 322 was passed, it was not thought that the time was ripe to authorize returns to any persons who might have been both citizens and residents of Germany during the war. You will recall that under the original Trading With the Enemy Act of 1917, to which all this legislation constitutes amendments, the authority to seize property was largely in terms of the property of residents of enemy territory. Enemies were so defined, with other provisions also, but this was the basic fact. A person in enemy territory was an enemy by definition. Many persons who we believe, and everybody believes, opposed the Nazi cause, for instance, and were in fact persecuted by the Germans, were nevertheless enemies by that definition, Since they were also German citizens, or at least German nationals, it was thought that until communications and other factors connected with the obtaining of evidence had settled down somewhat, it was premature to permit returns of vested property to any German nationals resident in Germany. However, it is now our belief and that of the House Judiciary Committee, who favorably reported H. R. 6890, that the time has arrived when a cautious program of returns to real victims of Nazi oppression can be undertaken. That was the purpose of Senator Mead, I know, in introducing his bill, S. 2039, and of the other bills of similar import that have been introduced. Congressman Lynch introduced one. In H. R. 6890, the House Judiciary Committee, working with my agency and all the other interested departments, worked out a provision which we believe will accomplish the result of giving the Alien Property Custodian the power to return vested property to genuine victims of acts of oppression in German, without throwing the doors open too wide-we must remember that the tests must still be very cautiously and carefully applied, so there will be no return to anybody who was in fact in favor of the Nazi cause. Before I come, as I will now, to the details and language of that provision, I should say this: That all returns under Public Law 322 must meet the qualification that they be in the interest of the United States, in addition to all other specific standards laid down; that thread runs through all the returns, including this amendment, and is a final safeguard. The Custodian must make that affirmative determination before any return may be made. The Mead bill would amend part of Public Law 322, by adding certain language to subdivisions (C) and (D) of subsection (a) (2) thereof. I have a copy of Public Law 322 here, and you may find it convenient to follow it. I have checked the places where those amendments would go in. It is our belief that the Mead bill, while we concur thoroughly in its_objective, is not as to the language entirely a safe bill. Under Public Law 322, the President, and now the Custodian by delegation, must make the determination, among others, that the claimant was not an individual voluntarily resident at any time since December 7, 1941, within the territory of such nation, other than a citizen of the United States or a diplomatic or consular officer of a nation with which the United States has not at any time or since December 7, 1941, been at war; and to that would be added by the Mead bill, "or a person who was a victim of religious or racial persecution in the country of his origin or residence." No time is stated for that qualification. The language, “victim of religious or racial persecution" does not tie it to any statute, rule, or regulation of the enemy country, so that any person who was beaten up on the street without authority might get a return. Well, all kinds of people suffered those things in the last 10 years abroad. We feel that that language is so broad that it would throw the door open in a really dangerous way. Our objection is the same with respect to the next proposal which would add to the next subdivision-namely subdivision (D)—the language, "(other than a person who was a victim of religious or racial persecution in the country of his origin or residence)." That would be added to subdivision (D) of Public Law 322, subsection (a) (2). In lieu of that, we strongly suggest that the same objective will be accomplished by the language on page 21 of S. 2378, beginning at line 15. Now, the same approach is suggested in S. 2378, namely, amendments to those two subdivisions. However, instead of the general language of the Mead bill, the House committee, after hearings and lengthy detailed discussions and trying all kinds of language, suggested (in H. R. 6890 as reported-which is the same as S.2378) that the language of the proviso which appears at line 23 on page 21, be added to subdivision (C) as it now stands, and the language of the proviso at line 15 on page 22 be added to the present wording of subdivision (D), as it now stands. If you care to have me do so, I will read those two provisos. Senator HUFFMAN. You may read them for the record, please. Provided, That an individual who, while in the territory of a nation with which the United States has at any time since December 7, 1941, been at war, was deprived of life or substantially deprived of liberty pursuant to any law, decree, or regulation of such nation discriminating against political, racial, or religious groups shall not be deemed to have voluntarily resided in such territory. In other words, it is an explanation of the term "voluntary residence" as it now stands in (c), so that a person will be found to have resided involuntarily, and therefore be eligible for return, as long as he meets other qualifications, if he can show that he was deprived of life or substantially deprived of liberty pursuant to any law, decree, or regulation discriminating against political, racial, or religious groups. The next proviso, added to subdivision (d) as it now stands, is: Provided, That notwithstanding the provisions of this subdivision (d), return may be made to an individual who, as a consequence of any law, decree, or regulation of the nation of which he was then a citizen or subject, discriminating against political, racial, or religious groups, has at no time between December 7, 1941, and the time of such law, decree, or regulation was abrogated, enjoyed full rights of citizenship under the law of such nation. |