authorize the Attorney General to dispose of the remaining assets seized under the Trading With the Enemy Act prior to December 18, 1941. H. R. 6909 would authorize the Attorney General "notwithstanding any provisions to the contrary in the Trading With the Enemy Act, as amended, or the Settlement of War Claims Act of 1928, as amended," to transfer to the Treasury Department cash credits and other assets of certain accounts derived from World War I seizures of enemy property and interests under the Trading With the Enemy Act prior to December 18, 1941. This bill would facilitate the termination of the administration by the Office of Alien Property, Department of Justice, of assets derived from enemy property and interests seized during World War I which cannot be disposed of under present law. The bill makes no reference to the Foreign Claims Settlement Commission or to the war claims fund, the assets of which are derived from the administration, liquidation, and distribution of vested assets of Germany and Japan and their nationals pursuant to section 39 of the Trading With the Enemy Act, as amended, and section 13 (a) of the War Claims Act of 1948. Section 39 prohibits the return of any German or Japanese assets by the Office of Alien Property vested after December 17, 1941, and requires the proceeds thereof to be covered into the Treasury of the United States. Section 13 of the War Claims Act of 1948, as amended, created the war claims fund in the Treasury to consist of the funds covered into the Treasury under section 39 of the Trading With the Enemy Act. The interest of the Foreign Claims Settlement Commission in measures relative to the Trading With the Enemy Act extends only to legislative proposals that would affect the war claims fund or other funds pertaining to the payment of claims within the jurisdiction of the Commission or the functions of the Commission. Inasmuch as the bill, H. R. 6909, relates solely to the administration and transfer of assets derived from World War I enemy property and interests within the jurisdiction of the Department of Justice, and have no bearing on World War II assets, the Foreign Claims Settlement Commission refrains from making any comment on the merits of the proposal. For the foregoing reasons, the Foreign Claims Settlement Commission does not render any advice as to the action of the committee upon the bill. Informal advice has been received from the Bureau of the Budget that there would be no objection to the presentation of this report to your committee. Sincerely yours, WHITNEY GILLILLAND, Chairman. EXECUTIVE OFFICE OF THE PRESIDENT, BUREAU OF THE BUDGET, Washington, D. C., July 6, 1955. Hon. J. PERCY PRIEST, Chairman, Committee on Interstate and Foreign Commerce, House Office Building, Washington, D. C. MY DEAR MR. CHAIRMAN: This is in reply to your request for comments of this office with regard to H. R. 6909, a bill to authorize the Attorney General to dispose of the remaining assets seized under the Trading With the Enemy Act prior to December 18, 1941. The purpose of this bill is indicated by its title. It is the introduced version of draft legislation submitted to the Congress by the Department of Justice with the concurrence of this Office. The accompanying letter of transmittal from that Department explained the justification for enactment of the bill. For the reasons given in the above-mentioned letter of transmittal, the Bureau of the Budget recommends that your committee give favorable consideration to H. R. 6909. Sincerely yours, Hon. J. PERCY PRIEST, Chairman, Committee on Interstate and Foreign Commerce, DEAR MR. CHAIRMAN: This is in response to your request for the views of the Department of Justice concerning the bill H. R. 6909, to authorize the Attorney General to dispose of the remaining assets seized under the Trading With the Enemy Act prior to December 18, 1941. This legislation was introduced at the request of the Attorney General. The reasons in support of its enactment are fully stated in the Attorney General's letter to the Speaker of the House of Representatives, dated June 7, 1955, which letter, together with attachments, are presently in the committee files. For the reasons discussed at length in the above-mentioned correspondence early and favorable committee consideration of this legislation would be appreciated. The Bureau of the Budget has advised that there is no objection to the submission of this report. Sincerely, Hon. J. PERCY PRIEST, WILLIAM P. ROGERS, Deputy Attorney General. DEPARTMENT OF STATE, Washington, D. C., July 13, 1955. Chairman, Committee on Interstate and Foreign Commerce, House of Representatives. DEAR MR. PRIEST: Further reference is made to your letter of June 25, 1955, requesting a report on H. R. 6909, a bill to authorize the Attorney General to dispose of the remaining assets seized under the Trading With the Enemy Act prior to December 18, 1941. The Department of State considers the proposed legislation is essentially of a technical nature lying within the special knowledge of the Department of Justice. However, insofar as the legislation provides for the disposition of certain World War I claims of foreign nationals, the Department favors its enactment from a foreign relations standpoint. The disposition envisaged appears to be an appropriate one taking into account the smallness of the claims, their presumed abandonment, and the administrative practicality of any other solution. The Department has been informed by the Bureau of the Budget that there is no objection to the submission of this report. Sincerely yours, Hon. J. PERCY PRIEST, THRUSTON B. MORTON, Assistant Secretary (For the Secretary of State). TREASURY DEPARTMENT, Washington, D. C., July 28, 1955. Chairman, Committee on Interstate and Foreign Commerce, MY DEAR MR. CHAIRMAN: Reference is made to your request for the views of this Department on H. R. 6909, entitled "To authorize the Attorney General to dispose of the remaining assets seized under the Trading With the Enemy Act prior to December 18, 1941." The bill would provide for closing out the administration of World War I assets by the Office of Alien Property. It would transfer (1) unclaimed funds to miscellaneous receipts; (2) unliquidated property to the Treasury for liquidation; (3) accounts held for Iron Curtain countries and their nationals to the Treasury for administration subject to regulations administered by the Department of Justice; and (4) certain participating certificates representing the proceeds of withheld German property to the Treasury pending further disposition. The Treasury recommends favorable consideration for this bill. The Department has been advised by the Bureau of the Budget that there is no objection to the submission of this report to your committee. Very truly yours, Hon. J. PERCY PRIEST, W. RANDOLPH BURGESS, Acting Secretary of the Treasury. TREASURY DEPARTMENT, Washington, D. C., April 3, 1956. Chairman, Committee on Interstate and Foreign Commerce, House of Representatives, Washington, D. C. MY DEAR MR. CHAIRMAN: Reference is made to your letter of February 9, 1956, enclosing a copy of H. R. 6970, a bill to amend the Trading With the Enemy Act, as amended, and the War Claims Act of 1948, as amended, and requesting the views of this Department on the proposed legislation. The first part of the proposed bill is designed to effect: (1) The return in general, as a matter of grace, of vested assets other than patent interests to natural persons not behind the Iron Curtain up to a limit of $10,000, and (2) the return of trademark and copyright interests to business enterprises as well as to natural persons without regard to the $10,000 limitation on value and, insofar as copyright interests are concerned, without regard to the limitation on return to persons behind the Iron Curtain. The second part of the proposed bill is to provide for the settlement of five categories of American war claims against Germany. Payments on claims are to be made from a proposed fund which is to consist of $100 million to be set aside from repayments by the Federal Republic of Germany under the agreement settling the United States claim for postwar economic assistance to Germany. The general types of claims authorized are: (1) Physical damage to or physical loss or destruction of property located in Germany and certain other countries in the period beginning September 1, 1939, and ending May 8, 1945. Such losses must have occurred as a direct consequence of military operations of war or of special measures directed against such property because of the enemy character of the owner; (2) damage to or the loss or destruction of ships or ship cargoes owned by the claimant at the time of such damage, loss or destruction, which must have occurred as a direct consequence of military action by Germany in the period beginning September 1, 1939, and ending May 8, 1945; (3) net losses by insurance companies incurred in the settlement of claims for insured losses, including reinsured losses, of American-owned ships or ship cargoes as a direct consequence of military action by Germany in the period beginning September 1, 1939, and ending May 8, 1945; (4) loss or damage on account of the death or injury of any civilian national of the United States who was a passenger on any vessel if such death or injury was a result of military action by Germany during the period beginning September 1, 1939, and ending December 11, 1941, and claims for the loss or damage to the property of any such passenger; (5) losses resulting from the removal of industrial or other capital equipment in Germany which was owned by the claimant on May 8, 1945, and removed for the purpose of reparation. The bill is identical to H. R. 6730, a proposal sponsored by the administration. The Department recommends the enactment of the proposed legislation. The Department has been advised by the Bureau of the Budget that there is no objection to the submission of this report to your committee. Very truly yours, W. RANDOLPH BURGESS, Acting Secretary of the Treasury. EXCUTIVE OFFICE OF THE PRESIDENT, Hon. J. PERCY PRIEST, BUREAU OF THE BUDGET, Washington, D. C., March 14, 1956. Chairman, Committee on Interstate and Foreign Commerce, MY DEAR MR. CHAIRMAN: This is in reply to your request of February 9, 1956, for the views of the Bureau of the Budget regarding H. R. 6970, to amend the Trading With the Enemy Act, as amended, and the War Claims Act of 1948, as amended. This bill would provide for a limited return of vested German and Japanese assets to individual former owners and for the settlement of certain unsatisfied claims of American nationals against Germany arising out of World War II. H. R. 6970 is identical with a bill which was submitted to the Congress by the Department of State and introduced as H. R. 6730 (S. 2227). As stated on previous occasions, enactment of this legislation would be in accord with the program of the President. The Bureau of the Budget, the Departments of Treasury and Justice, and the Foreign Claims Settlement Commission, all of which cooperated with the State Department in the preparation of H. R. 6730, have submitted reports to your committee in support of the bill. The position of the Bureau of the Budget on this legislation has also been presented by Dr. Ralph W. E. Reid, Assistant Director of the Bureau, in testimony on November 29, 1955, before the Senate Judiciary Subcommittee on Alien Property. A copy of Dr. Reid's testimony is enclosed. Sincerely yours, ROWLAND HUGHES, Director. STATEMENT OF DR. RALPH W. E. REID, ASSISTANT DIRECTOR OF THE BUREAU OF THE BUDGET Mr. Chairman, I am pleased to appear before this subcommittee to present the position of the Bureau of the Budget with regard to S. 2227 and other measures providing for the return of vested assets to their former owners. For some time the executive branch has been aware of the need for legislation in this area which would further the achievement of certain humanitarian and foreign policy objectives and be within the limitations imposed by the availability of funds and sound budgetary policy. After careful deliberations among the various agencies concerned, including the Bureau of the Budget, and after discussions with representatives of the German and Japanese Governments, a draft bill was drawn up by the executive branch and transmitted to the Congress by the Secretary of State on June 6, 1955. This bill, S. 2227, would provide for the return of vested German and Japanese assets to individual former owners up to a maximum of $10,000 per individual and for the settlement of certain unsatisfied claims of American nationals against Germany arising out of the war. I am authorized to advise you that enactment of this legislation would be in accord with the program of the President. In the view of the Bureau of the Budget, the enactment of S. 2227 would be highly desirable because this measure effectively meets the need for a limited return of vested assets without necessitating new appropriations or the diversion of funds for that purpose, aside from those available in the accounts of the Office of Alien Property. Unlike proposals involving the full return of vested assets, such as S. 3423 of the 83d Congress or the substantially identical S. 995 of the 84th Congress, the limited program for the return of vested assets envisaged in S. 2227 can be accomplished within the financial limitations imposed by the available balances in the vested assets account currently held by the Attorney General. In order to appreciate the reasons underlying the provisions of S. 2227, a brief review of some of the important landmarks in the postwar treatment of vested assets is necessary. Aware of the serious difficulties which arose in connection with the German reparations program following World War I, the United States approached the problem of post World War II settlements with Germany with the idea of limiting reparations primarily to Germany's external assets, thereby relieving her of reparations payments from current production and avoiding the indirect financing of reparations by American aid. This approach was embodied in the Paris Reparation Agreement, signed by the United States and 17 Allied nations (not including the Soviet Union and Poland) in January 1946. This agreement provided for the retention of German external assets by the Allied nations and for their disposition in such a way as to preclude their return to German ownership and control. The principle underlying the Paris Reparation Agreement was reaffirmed in the Bonn Convention of 1952 for the Settlement of Matters Arising out of the War and the Occupation, between the Federal Republic of Germany, the United States, the United Kingdom, and France. Included in the provisions of the Bonn Convention is an agreement on the part of the West German Government to compensate its own nationals for their loss of external assets by the vesting and other action of the Allied Powers. The provisions of the Bonn Convention were restated in the Paris Protocol of 1954, which was approved by the Senate on April 1, 1955, and came into force on May 5, 1955. It may also be noted that the Japanese Peace Treaty of 1952 contains similar provisions for the retention by the Allies of vested assets in return for the waiver of certain war claims against Japan. Accepting the principle of the retention of vested assets, which was an integral part of our postwar settlement approach and was embodied in the international agreements to which I have just referred, the Congress, in 1948, passed the War Claims Act. According to sections 12 and 13 of that act, no assets vested by this Government were to be returned to their former owners, and proceeds derived from the liquidation of these assets were made available for the payment of certain war claims of American nationals for losses suffered at the hands of the Germans and Japanese. Under the terms of the War Claims Act of 1948, the Attorney General has covered into the war claims fund created by the act a total of $225 million from the proceeds of the sales of vested assets for the settlement of such claims. From an examination of the developments which I have just outlined, three conclusions emerge: First, that there is no obligation that the United States return vested assets; second, that the adoption of a policy of the full return of such assets would constitute a reversal of the policy underlying postwar international settlements and embodied in international agreements and domestic legislation; and, third, that because $225 million from the proceeds of the sale of vested assets has been authorized for use pursuant to the War Claims Act of 1948, the adoption at this time of a policy of full return would necessitate either substantial additional appropriations or the diversion of public funds for that purpose from repayments ultimately to be made by the German Government. It must also be noted, however, that in recent years the desirability of a limited return of vested assets to individual German and Japanese claimants has become increasingly evident, particularly in light of the communication of Chancellor Adenauer to the President of July 17, 1954, and of talks between the President and Chancellor Adenauer in October 1954 and between the President and Prime Minister Yoshida in November 1954. On the basis of these consultations, it has become clear that an important humanitarian service for individuals suffering hardships could be performed and that our ties of friendship with the Federal Republic of Germany and with Japan could be greatly strengthened through a program providing for the limited return of vested assets to individual former owners. It was with these purposes in view that, with the cooperation of the several agencies concerned with such a program, the bill transmitted to the Congress by the Secretary of State, S. 2227, was drafted. Under the provisions of S. 2227, authorizing the return of assets up to a $10,000 maximum per individual, full return would be provided for approximately 90 percent of the former owners. Cases involving substantial individual hardships would be effectively dealt with and the major foreign policy objectives of legislation in this area would be accomplished. It is estimated that the cost of the limited return program contemplated under the provisions of S. 2227 would be approximately $57.5 million-$50 million for West German assets and $7.5 million for Japanese assets. It is also currently estimated that after payments which have been made into the war claims fund and after due allowances for litigation and outstanding claims there will be available in the accounts of the Office of Alien Property approximately $60 million. It thus appears that the limited return program contemplated in S. 2227 could be accomplished without the use of funds aside from those currently available in the accounts of the Office of Alien Property. By contrast, a full return program, such as that envisaged in S. 995, would involve an estimated additional cost to the taxpayer-in the form of additional appropriations or the diversion of other public funds-of as much as $200 million. In addition to there being no obligation for the full return of vested assets, the budgetary consequences of such a program constitute important grounds for rejecting the full return approach. S. 2227 also contains provisions for the limited settlement of the as yet unsatisfied claims of certain American nationals arising from German wartime activity. For these purposes it is proposed that a fund of $100 million be earmarked out of the sums to be paid to the United States by the Federal Republic of Germany in settlement of its indebtedness for postwar economic assistance from the United States. This fund would approximately equal in magnitude the amount of the proceeds of German vested assets which have been employed, through the war claims fund, in settling claims attributable to countries other than Germanyprimarily Japan. It is estimated that this fund may permit payments to valid American claimants up to $10,000 each. Such action would be entirely appropriate in light of the other provisions of this bill. In a letter to this subcommittee dated June 30, 1954, when commenting on the program for the return of vested assets proposed in S. 3423 of the 83d Congress, the Director of the Bureau of the Budget stated that "the Bureau of the Budget is opposed to the use of appropriated funds to finance such a return and is of the view that it should be wholly financed from the liquidated proceeds of former |