And Switzerland was a financial and personal haven for many thousands of European persecutees and refugees. Indeed, the very banking secrecy which is at the root of Interhandel's troubles with the American courts afforded those poor souls an impregnable barrier against the relentless search of the Nazis for the hidden properties of their victims.

Yet, Swiss neutrality is viewed in a dual light in this country. Where it works to our advantage, we gladly accept it, but where we wish to ignore it in favor of a special result, we do not hesitate to do so. I shall explain what I mean, but, first, let me point out that the charge that Interhandel was a cloak for German interests has, in our opinion, been exploded. As shown by witnesses who preceded me, the processes of the Washington Accord established the opposite; the Swiss Government has itself steadfastly perservered in behalf of the rights of its national, Interhandel; and official West German spokesmen have announced that their country has no right or claim to General Aniline & Film Corp. because it belongs to the Swiss. This leaves the United States Government only with an attack against the Swiss on the basis that they had no business dealings with the Germans during the war.

Thus, I come back to the phase of Swiss neutrality which the Americans, so far, have tried to reject, namely the freedom of a neutral to have business dealings with our enemy. Mind you, I do not refer to active collaboration with our enemy in its war effort, since, of course, such a thing means that the collaborator is not a neutral. I refer to ordinary business transactions, such as preservation or disposal of a stock investment interest, and the like.

It is not fair, I submit, Mr. Chairman, for our country to seize upon such transactions of a neutral as a means of disqualifying him from recovering his own property-a theory which is sought to be put forth by the Alien Property Custodian to justify its confiscation by the United States Government.

That is the tragic dilemma in which our client is placed. Let us see how we Americans would feel if American property were at stake. Suppose Great Britain has been defeated by Germany before we entered the war. Theoretically, we were then a neutral; at least, a nonbelligerent. Assume Germany had the same concept of alien property that is being urged upon the courts by the American Custodian. Up to Pearl Harbor, we surely carried on ordinary business transactions with the British. If Dunkirk had been the end of World War II, what would have become of American nationals' property in Germany? Is there an American alive who would be willing to accept the idea that Germany could have confiscated that property? Obviously, the answer is "No."

Yet, that is the Interhandel situation today. It is a pretty high penalty that a citizen of a neutral Switzerland must suffer. The only safe course in the eyes of the Alien Property Custodian-would have been an inconsistent and contradictory one: That is, for Switzerland to be neutral in the sense of a nonbelligerent, but not neutral in an economic or business way. That is hardly a feasible course of action for one who wishes not to take sides in a fight between others, and yet is dependent, by reason of proximity and lack of natural resources, upon surrounding nations for foodstuffs and other urgent necessities.

We say to you today, Mr. Chairman and Senator Langer, please help us to find a way to return Interhandel's vested property to the Swiss. The Kilgore-Dirksen bill-S. 995-would do it because of its broad language, yet that bill is generally referred to as providing for the return of German and Japanese property. The Swiss do not wish to "ride in" on the coattails of a statute designed to ameliorate American relationships with the Germans and Japanese. While I personally feel that S. 995 should become the law in the United States, our position here today on behalf of our client, the Swiss company, Interhandel, is that its property should be returned to it because it is Swissthe property of a neutral; the property of a national of a friendly democracy older than our own; the property of an owner who is entitled to get it back.

Obviously, S. 2227, providing for the payment of up to $10,000 to individuals, does not solve the fundamental problems raised by our

case.

And as to section 4 of S. 2227, which has its twin in Senator Clement's bill, S. 1405, such legislation is patently unconstitutional. Former Senator Hendrickson offered a similar bill, S. 2171, in the last Congress, and the subcommittee has the benefit of our brief filed at that time to that effect. Members of the Senate Judiciary Committee have expressed doubt about the validity of such legislation, and the committee, itself, steadfastly declined to report it out favorably to the Senate.

Thank you very much for this opportunity to make this statement. I think I closed in 7 minutes, did I not?

Senator JOHNSTON. You were pretty close to it.

Any questions?

Senator LANGER. As I understand it, Mr. Chairman, he wants this committee to help him.

Senator JOHNSTON. What is that?

Senator LANGER. As I understand Mr. Wilson, here, he wants this committee to help him. He offered some suggestions, is that right? Mr. WILSON. Yes, sir. Give us back our property, Senator, we say. Senator LANGER. You want some help?

Mr. WILSON. Yes. We would like help.

Senator JOHNSTON. Any questions by anyone?

Mr. WILSON. I started to say, your honor-Mr. Chairman. I started to address you as your honor. Excuse me.

I started to say I finished in 7 minutes because I recall last year. when Mr. Derby testified, he made some very caustic and critical remarks of my client. If that develops here again, sir, may I have the privilege at least of asking the committee to give me the opportunity to rebut?

Senator JOHNSTON. We will pass on that when we get to it.
The next is Dr. Herman A. Gray.

STATEMENT OF DR. HERMAN A. GRAY, AMERICAN JEWISH

COMMITTEE

My name is Herman A. Gray. I am appearing today on behalf of the American Jewish Committee, in my capacity as a member of the executive board and of the foreign affairs committee of the American Jewish Committee.

I believe that the nature and objects of the American Jewish Committee are too well known to require any extensive statement here. It is sufficient to point out that the American Jewish Committee was founded some 48 years ago, with the object of preventing the infraction of the civil and religious rights of Jews in any part of the world. It has from the date of its founding endeavored, in accordance with the statement in its charter, "to alleviate the consequence of persecution." It has been ever mindful of both the duties and the privileges of American citizens, and it has cooperated with the United States Government in many ways which have jointly advanced the purposes of the Government of the United States and of the committee.

The matter to which I wish to address myself today arises specifically in connection with certain of the provisions of title II of S. 2227, the so-called administration bill, which is one of the bills before this sub-committee. Although I shall propose an amendment directed to the provision of S. 2227, the substance of my amendment would apply as well to any legislation which may be enacted by the Congress of the United States which would deal with the claims of American nationals arising out of or in relation to the war. In essence, what I wish to propose on behalf of the American Jewish Committee is that persons who have recently acquired American citizenship, and who were persecuted during or before the period of the war, should be treated on a basis of equality with other American citizens, insofar as claims comprehended by the legislation in question may be concerned.

The proposal which I urge upon the subcommittee is incorporated in the following language:

Amend title II, section 201, of S. 2227, as follows:

"Sec. 201. As used in this title, the term or terms * * (c) the term 'national of the United States' includes (1) persons who are citizens of the United States [and] (2) persons, citizens of the United States as of the effective date of this Act, who, if they were nationals of an enemy country, would be qualified for return under the provisions of section 32. (a) of this Act, and (3) persons who, though not citizens of the United States, owe permanent allegiance to the United States. It does not include aliens."

The purpose of this proposed amendment is, I think, plain. It would make eligible to file claims under the legislation in question. persons who have been regarded and treated as enemy by Germany or Japan during the war and who are citizens of the United States at the effective date of the legislation.

By way of introduction, I might say that the American Jewish Committee would be happy to see a simpler amendment introduced, which would merely make the condition of eligibility be that the claimant is a citizen at the effective date of the act. We see, in fact, no substantial reason for discriminating against persons who have acquired their citizenship recently, when the question at issue is claims which arose out of persecution and out of wartime acts of our enemies. Nor do we know of any principles of international law which would prevent the United States, in enacting American legislation, from compensating all persons equally who are eligible claimants as of the effective date of the relevant legislation, without regard to the time when they acquired their American citizenship.

We recognize, however, that such an amendment would broaden the category of eligibility very substantially and that the funds which the United States proposes to appropriate for such claims-the amount under S. 2227 is $100 million-might well be inadequate, were the category so greatly enlarged. In proposing the amendment which I have described above, we have been mindful of this possibility and have attempted to draft language which is based upon principles already embodied in legislation enacted by the Congress and approved by the President of the United States. That legislation has established that person who were treated as enemy by the enemies of the United States are to be accorded substantially the same rights as citizens of the United States. That principle is embodied in such legislative enactments as the Trading With the Enemy Act, which in 1946 was amended to provide for return of property to persons who, while technically enemy nationals, were in fact treated as enemies by Germany and Japan and by their satellites

Senator LANGER. Are you referring to Yugoslavia?

Dr. GRAY. Not Yugoslavia. I am referring to the genuine satellites of Germany.

Senator LANGER. Which one?

Dr. GRAY. It would hold true for Rumania and Czechoslovakia. Senator LANGER. You are eliminating Yugoslavia?

Dr. GRAY. Yugoslavia is not covered by this proposal, as I understand it.

And in various international acts and agreements, among them the treaties of peace with Italy, Bulgaria, Hungary and Rumania, all of which were ratified by the Senate of the United States.

Prior to 1946, the Trading With the Enemy Act did not provide for return of property other than to nationals of the United States, or to other nonenemy nationals. The Congress decided, however, in amending the Trade With the Enemy Act in that year, that persecutees— persons who were persecuted and deprived of their rights for political, racial or religious reasons-were to be entitled to return of properties vested by the Alien Property Custodian. That program has been in effect since 1946 and it has enabled many people, among them a large number of present citizens of the United States, to obtain return of their properties from the Alien Property Custodian.

Similarly, when the treaties with the Axis satellites were negotiated, the United States insisted on the insertion of clauses which would guarantee that persecutees had the same rights as United Nations nationals-that is, nationals of any one of the United Nations. This was made particularly applicable to all claims with respect to damage to property. Thus, article 78 of the treaty of peace with Italy, which is substantially identical with similar provisions in the other satellite treaties, provides for restoration of legal rights and interests in Italy of the United Nations and their nationals, for the nullification of measures of seizure and sequestration, for invalidation of transfers resulting from force or duress, and for the restoration to good order of the property returned. Paragraph 4 (a) of article 78 states that where property cannot be returned or

Where, as a result of the war, a United Nations national has suffered a loss by reason of damage to property in Italy, he shall receive from the Italian Government compensation in lira to the extent of two-thirds of the sum

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necessary, at the date of payment, to purchase similar property or to make good the loss suffered.

Paragraph 9 of article 78 provides that

the term "United Nations nationals" *** includes all individuals, corporations or associations which, under the laws in force in Italy during the war, have been treated as enemy.

A similar provision is also contained in article 25 of the state treaty with Austria. It will be noted that this provision is contained, therefore, in a treaty with a liberated country, as well as in the treaties with the former enemy countries.

Thus the United States has given direct rights with respect to property claims arising out of the war under the treaties of peace with Italy and the Balkan satellites to persons who were not United States nationals as of the time of the injury suffered by them or their property. This principle is clearly applicable to the claims which are here under discussion, particularly since it is suggested that eligibility be conditioned upon the possession of American citizenship as of the effective date of the legislation. A persecutee who was "treated as enemy" by our enemies during the war is regarded under the treaties which we have so far negotiated as a "United Nations. national." If he is also an American national as of the present timeor as of the effective date of the proposed legislation-he should be given similar equality of treatment with other American nationals. There is no reason why the United States should have, as it did, guaranteed his treatment as a United Nations national under the treaties, only to withdraw such favorable treatment from him when the issue is remedial legislation in the United States.

There are in fact reasons why such persons should be allowed to file claims under the proposed legislation in addition to those which motivated a decision in favor of their eligibility under the treaties. In one way or another the funds which will be made available for the claims which are contemplated in title II of S. 2227 (or under similar legislation) are funds which come directly or indirectly from the Treasury of the United States. S. 2227, for example, provides that $100 million will be paid into the German claims fund out of any payments received by the United States, through the ExportImport Bank or otherwise, from the Federal Republic of Germany under article 1 of the agreement between the United States and the Federal Republic of Germany regarding the settlement of the claim of the United States for postwar assistance to Germany. (This is the London agreement dated February 27, 1953.) Regardless of the earmarking of funds in this manner, it is clear that what is being done is to take funds which would otherwise go into the Treasury of the United States and to make them available for the special German claims fund. This means, in effect, that the present taxpayers of the United States are bearing the cost of this claims program. One hundred million dollars, which would otherwise be available generally for governmental purposes, upon congressional authorization will become available for the claims described in the legislation. Clearly, the burden is being met by present taxpayers in the United States. Among those taxpayers, of course, are the persons who would, if the amendment which the American Jewish Committee recommends were adopted, become eligible claimants.