vol. 33, p. 43), all Germans who are dedicated to the development of friendly relations with your country were very much delighted. We believe that GermanAmerican friendship is not only a matter of common destiny but also a matter of inclination. But if it is true that Germany is the partner of the United States, we cannot quite understand why the property of private citizens of one of the partners still suffers from confiscation. In this respect many people in Germany do not see the difference between the eastern methods and the measures taken by countries which, in fact, are our partners"

Doesn't this now establish beyond a question of a doubt that we are only going to get back to basic principles if we take the Office of the Alien Property out of the hands of the Department of Justice and put it in the hands of the Secretary of State where it belongs? I believe you will all agree with me that that must be done. So I am now introducing a bill to transfer the entire operations of the Office of the Alien Property Custodian from the Department of Justice to the Department of State. In the meantime, I think we owe it to our West German partners to tell them that this Senate will forthwith bring onto the Senate floor the Kilgore-Dirksen bill S. 995, which provides for full return of all these properties and does equity to our American citizens who were virtually blackjacked by the Harry Dexter White Treasury crowd to dispose of their interests and that we will pass it, and that all the rest of the problems will be worked out in negotiations and, if necessary, through an Executive agreement which the Secretary of State can present before Congress for approval. I respectfully request the distinguished and able chairman of the Subcommittee on the Trading With the Enemy Act, Senator Johnston of South Carolina, to see that this bill is reported by the subcommittee without further delay.

Also in the meantime, I urgently request the Republican policy committee to personally call on the President to present to him firsthand the seriousness of these problems and to explain to him how necessary it is to remove the Office of the Alien Property Custodian from the Department of Justice and get it under the Department of State.

In closing, let me state once more that the basic difference between governments of the free world and Communist-controlled governments lies principally in one thing. In the free world the governments are dedicated to the principle of the inviolability of private property rights as the foundation stone of personal freedom, and their governments are designed to create and protect equality of opportunity and a better life for all under the free enterprise system. Communist governments are dedicated to the destruction of all private property rights and consequently all freedom.

Let's show Khrushchev he is wrong when he recently said: "The days of capitalism in the world are approaching their end. * * * Our system will win." I appeal to the President and to the Secretary of State to take this matter into their hands and give it their serious consideration, and while they are doing that, I ask them to please tell the American people, those who have relatives behind the Iron Curtain, those who have relatives in Latvia, Estonia, Lithuania, Czechoslovakia, Poland, Hungary, Rumania, and Russia and East Germany, that if Khrushchev does start a war with the free world we won't confiscate the property of American citizens which they might want to have their relatives behind the Iron Curtain have when they are free, as we did with the Germans. Again, I ask the Republican policy committee to immediately take up this matter with the President and the Secretary of State.

I thank you.

CONFISCATION OF GERMAN PROPERTY

Mr. LANGER. Mr. President, on February 1, in a speech on the Senate floor dealing with confiscation of German property, I said I had written a letter to Mr. John J. McCloy, and that as soon as I received his reply I would put it in the Record. I ask unanimous consent to have printed in the body of the Record the letter I received from Mr. McCloy, the letter written to Mr. Finucane by Mr. McCloy, and an article which appeared in the Chicago Tribune, dealing with the same subject.

There being no objection, the letters and article were ordered to be printed in the Record, as follows:

NEW YORK, N. Y., March 27, 1956.

Hon. WILLIAM LANGER,

United States Senate,

Washington, D. C.

MY DEAR SENATOR LANGER: I have just had an opportunity to read your letter to me dated February 13. The letter came after I had left for a somewhat extended tour of the Middle East, from which I have very recently returned. I have also read with interest your references to me contained in the speech that you made to the Senate on February 1, which references are contained on page 1546 of the Congressional Record which you were good enough to send to me.

Unfortunately, I do not have ready access to many of the records which were made at the time of the meeting to which you refer. My personal records are scattered about and so I would have to reply to you at the present time purely from memory. My recollection of the meeting in Mr. Hull's office to which you refer is, however, very vivid. I also recall very well the paper which was initialed by Mr. Roosevelt and Mr. Churchill and the manner in which it was presented to the group by Mr. Morgenthau.

This paper set out the general principles under which Germany was to be administered after the expected victory was accomplished. There had been considerable discussion regarding the principles of our policy respecting defeated Germany. The discussions took place in the War Department, the State Department and, to some extent, in the Treasury Department. If my recollection serves me right, the War Department was the first one to initiate any draft directives on this subject as it was presumably their responsibility to administer defeated Germany. However, the State Department proceeded to draw up some principles under which Germany was to be governed and the Treasury Department did likewise. Both of these proposals shocked Mr. Stimson, the proposal of Mr. Hull only a little less than that of Mr. Morgenthau. For Mr. Stimson's reaction to the Hull and the Morgenthau proposals and my part in it all I would refer you to Mr. Stimson's book entitled "On Active Service in Peace and War." If you will refer to page 568 of this book you will there find a discussion of the socalled Morgenthau plan. It is an entirely accurate account so far as I can now recall.

Mr. Morgenthau had apparently pressed upon Mr. Roosevelt and Mr. Churchill at Quebec an endorsement of his views as to how conquered Germany should be administered. On his return to Washington he brought with him the initialed memorandum which you referred to in your speech. He laid it before Mr. Hull and Mr. Stimson in the former's office in the State Department. I was present in Mr. Hull's office when the document was presented. I have no record to confirm it but I believe I recall that Mr. White was also present at this meeting. I say this because Mr. White was usually present at meetings which Mr. Morgenthau attended dealing with the administration of Germany. The initialed agreement between Mr. Roosevelt and Mr. Churchill is set forth in full at the bottom of page 576 and the top of page 577 of Mr. Stimson's book. I saw the original and it conformed to the copy in the Stimson book.

I took part in the drafting of all the memorandums which Mr. Stimson submitted to his colleagues in protest to the so-called Morgenthau plan, as well as to the original Hull plan.

As you will see from the initialed agreement as it is set forth on pages 576 and 577 of Mr. Stimson's book, there is no reference made to the confiscation of German assets throughout the world. Though I think the original initialed memorandum has disappeared, there is no doubt that the reproduction of it in Mr. Stimson's book is complete and accurate. I believe that a number of photostatic copies still remain in existence.

I believe the foregoing gives you the essential data that you are seeking in regard to the initialed agreement and to Mr. Stimson's and my connection with it. The record, I think, is quite clear that Mr. Stimson and I, from the beginning, were in strong disagreement with the so-called Morgenthau plan, particularly as it was reflected in the agreement between Mr. Roosevelt and Mr. Churchill which was initialed in Quebec; but it contained no reference to German assets throughout the world. If there is any further information that you seek and I am in a position to supply it, I shall be glad to do so.

Sincerely,

JOHN J. MCCLOY.

Mr. JAMES FINUCANE,

NEW YORK, N. Y., March 27, 1956.

Executive Secretary, Committee for the Return of Confiscated German and Japanese Property, Washington, D. C.

DEAR MR. FINUCANE: I have your letters of February 6 and 24 in regard to the statements made by Senator Langer on the floor of the Senate in regard to the initialed agreement of Mr. Roosevelt and Mr. Churchill respecting the policies to be applied to Germany in the postwar period. I received a letter from Senator Langer asking me to state what I know of this memorandum and I have replied in the form attached.

As you will see from my reply to Senator Langer, the initialed document which was presented to the meeting in Mr. Hull's office was as set out in Mr. Stimson's book. I think Mr. Morgenthau had the original copy with him and displayed it to us. He also had some photostatic copies. The agreement, as he presented it to us, had nothing to say about the consfiscation of German assets throughout the world, nor did I ever hear it suggested that Mr. Roosevelt or Mr. Churchill advocated such a policy. Subsequently, I heard that some attempt was made to find the original initialed copy but it could not be located. I always had a feeling that someone in the White House-not Mr. Roosevelt-had destroyed it after all the criticism of the policy had appeared in the newspapers. I am certain the original was initialed in the handwriting of Mr. Roosevelt and Mr. Churchill, both of whose handwriting I was familiar with. There were also several photostatic copies about. The text of the initialed statement was just as it appeared in Mr. Stimson's book--no more, no less.

Sincerely,

JOHN J. MCCLOY.

[From the Chicago Tribune]

LANGER SEEKS FACTS BEHIND HARSH POLICY-AGREEMENT DRAWN AT QUEBEC By Walter Trohan

WASHINGTON, March 30.-The original Quebec memorandum, initialed by President Roosevelt and Prime Minister Churchill, of Britain, which defined postwar policy toward Germany, has disappeared.

The disappearance of the document was reported today in letters to Senator Langer, Republican, of North Dakota, and James Finucane, executive secretary of the Committee for Return of Confiscated German and Japanese Property, from John J. McCloy, former Assistant Secretary and former High Commissioner to Germany. The Quebec Conference was held in September 1944.

Langer had demanded the original initialed document to determine whether the harsh peace policy against Germany had originated at the Churchill-Roosevelt level. The strong peace policy against postwar Germany has been attributed in large measure to the late Harry Dexter White, Treasury aid, who died mysteriously while his Communist associations were under investigation.

FBI WARNINGS IGNORED

The Federal Bureau of Investigation had warned the White House on White's Communist associations. Former President Truman ignored the warnings and named him United States executive director of the International Monetary Fund. White is credited with having given American occupation money printing plates to Russia. Use of the plates by the Russians to turn out money in occupied Germany cost American taxpayers an estimated $250 million.

McCloy denied that the original document contained any reference to confiscation of German property throughout the world. He intimated that the document was destroyed in the White House by persons apparently anxious to hide the fact that Roosevelt had not called for confiscation and other harsh measures imposed on Germany.

Langer interpreted McCloy's letter as fixing responsibility for confiscation of German property at Federal echelons lower than Roosevelt or his successor, Harry S. Truman. McCloy said he was certain that White was aware of the exact language of the Quebec memorandum, which embraced only part of the Morgenthau harsh peace plan.

SUSPECTED DESTRUCTION

"I heard that some attempt was made to find the original initialed copy, but it could not be located," McCloy wrote the committee on return of confiscated property. "I always had a feeling that someone in the White House, not Mr. Roosevelt, had destroyed it after all the criticisms of the policy [the Morgenthau plan] had appeared in the newspapers."

Proponents and defenders of the confiscation policy insisted that it originated with Roosevelt and Churchill. Critics of the policy insisted that the policy originated at middle- or upper-level bureaucracy without Presidential knowledge or approval. In a speech read to the Senate last February 1, Langer demanded that the original document be produced to settle the clouded question.

"The [Quebec] agreement as he [Treasury Secretary Morgenthau] presented it to us had nothing to say about the confiscation of German assets throughout the world, nor did I ever hear it suggested that Mr. Roosevelt or Mr. Churchill advocated such a policy," McCloy wrote the committee.

SAYS HE RECALLS MEMO

In his letter to Langer, McCloy reiterated his insistence the original document, which he said he recalled very well, included the initials of Roosevelt and Churchill.

"The paper set out the general principles under which Germany was to be administered after the expected victory was accomplished. There had been considerable discussion regarding the principles of our policy respecting defeated Germany.

"The discussions took place in the War Department, the State Department and, to some extent, in the Treasury Department. If my recollection serves me right, the War Department was the first one to initiate any draft directives on the subject as it was presumably their responsibility to administer defeated Germany.

"WHITE USUALLY PRESENT

"However, the State Department proceeded to draw up some principles under which Germany was to be governed and the Treasury Department did likewise. Both of these principles shocked Mr. Stimson (War Secretary Henry Stimson), the proposal of Mr. Hull (State Secretary Cordell Hull) only a little less than that of Mr. Morgenthau."

McCloy recalled that Roosevelt brought the original Quebec document to Washington and laid it before Hull and Stimson. McCloy said:

"I have no record to confirm it, but I believe I recall Mr. White was also present at this meeting. I say this because Mr. White was usually present at meetings which Mr. Morgenthau attended dealing with the administration in Germany."

McCloy said he and Stimson were in strong disagreement with the Morganthau plan particularly as it was reflected in the Quebec agreement. But he insisted the agreement did not authorize confiscation of German property.

(Whereupon, at 12 noon, the committee was recessed subject to call.)

WAR CLAIMS AND RETURN OF ENEMY ASSETS

WEDNESDAY, JUNE 6, 1956

HOUSE OF REPRESENTATIVES,

COMMERCE AND FINANCE SUECOMMITTEE OF THE COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, Washington, D. C. The subcommittee met at 10 a. m., pursuant to notice, in room 414 of the House Office Building, Hon. Arthur G. Klein (chairman of the subcommittee) presiding.

Mr. KLEIN. The subcommittee will be in order.

I have a short statement to make at this time. With the hearings this morning, the Subcommittee on Commerce and Finance begins a series of hearings on two related subjects: payment of war claims and return of enemy property.

These two subjects are tied to each other because-rightly or wrongly-the War Claims Act of 1948 provides that German and Japanese property shall not be returned to former owners, but the proceeds of such property shall be used to pay certain specified categories of war claims.

The subcommittee proposes to conduct these hearings in such a way that both subjects are given proper attention. The subcommittee intends, first, to hear witnesses on the subject of war claims. Next, the subcommittee expects to hear witnesses on the subject of return of enemy property.

This morning, however, the subcommittee will take up two bills out of order. These bills have already passed the Senate and they are, so we have been assured, relatively noncontroversial.

Tomorrow, we expect to begin to hear witnesses in the regular order on the subject of war claims. At that time, Mr. Gillilland, the Chairman of the Foreign Claims Settlement Commission, will testify on two bills, H. R. 9584, introduced by Mr. Ashley from Ohio, and H. R. 9749, introduced by Mr. Quigley from Pennsylvania. These two bills are identical bills which would change in certain respects the present procedures of the Foreign Claims Settlement Commission.

After the subcommittee has completed hearing testimony on these two bills, we expect to hear further from Chairman Gilliland with regard to war claims. Specifically, the subcommittee would like to be brought up to date with respect to the legislative recommendations of this administration on the subject of war claims. In this connection, it might be well for Chairman Gillilland to summarize briefly earlier legislative recommendations transmitted to the Congress on January 16, 1953, by President Truman, and to point out the differences between these earlier recommendations and the recommendations submitted by the present administration.

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