a record of such property, and checks up the work of the depositaries, pertaining to this class of property. Where it is necessary to obtain information regarding real estate, inquiries are, as a rule, sent to the Real Estate Board nearest the actual location of the property, and they are asked to supply this information or to suggest some reliable party who can. In the case of mortgages, an inquiry blank is sent to the depositary who sees that the information requested is obtained, and returned to this department, where it is cross-indexed and filed. The real estate taken into custody involves properties located in 42 States, belonging approximately to 1,200 enemies. Most of the properties are located in cities and industrial centers, and only a small portion is located in rural and farming districts. In the main, the properties were acquired by inheritance, and only a small amount appears to have been held by enemies for investment purposes. The aggregate value of real estate demanded and inventoried amounts to approximately $7,500,000, and it is fair to assume that when all reports have been returned to this department, the value will exceed $12,000,000. It has been the general policy of the Custodian not to sell real estate unless it is necessary to prevent waste and protect the interests of the Government. The management of all real estate taken into custody is placed with depositaries with instructions to keep the improved property in good repair, that the property shall be leased and rents collected by them, insurance maintained to the full protection of the property, and interest upon outstanding mortgages and taxes paid. All expenditures, however, must be made from funds derived from the trusts. DEPOSITARY AND INVENTORY DEPARTMENT. The work of this department is under two sections. That of the depositary section is to designate depositaries for all enemy property demanded, except money or other cash items. That of the inventory section is to secure inventories of such property. Wherever a depositary is designated, an inventory of the property demanded is to be received from it, except in continuing trusts, in which the corpus remains in the hands of the fiduciary, and the depositary receives only money or other property if and when distributed by the fiduciary. The steps taken by this department are, successively: Designating depositaries under the supervision of the managing director; checking recommendations of the Bureau of Trusts for Depositaries to see if a depositary has already been designated for other property of the same enemy; in cases of new depositaries designated, sending general designation and a qualifying bond for execution, together with a copy of the Trading with the Enemy Act, and of the Manual of Instructions to Depositaries; execution of a specific designation to the depositary in each trust; correspondence with depositaries relating to designation, qualification, resignation, transfer of trusts from one to another, cancellation of trusts, and compensation of depositaries if not according to schedule of the manual; checking compensation of depositaries whenever charges are not in accordance with the schedule of the manual; entering on the records of the department inventories, upon receipt of them from Mails and Files, and the controlling of the inventory until finally checked and entered in the Division of Accounts and filed in the appropriate division; advising all divisions and departments affected by cancellation of trusts, transfer of trusts; and giving information to all divisions and departments whenever required. The depositary section has compiled and issued, for the use of depositaries, a Manual of Instructions to Depositaries, which is supplemented from time to time, as various rulings are made, by loose-leaf sheets which are to be appropriately inserted in the manual. The purpose of the manual is to answer the many questions that arise in connection with the duties of a depositary. The various steps are taken up in logical order, from the time a depositary is appointed, showing what is necessary to be done to comply with the requirements of the office of the Alien Property Custodian, and how this work can be handled most efficiently. In general, by carefully following the manual no further instructions will be needed by a depositary. If special problems, however, arise, they are handled by correspondence between this department and the depositary. The manual covers questions of appointment of depositaries; service of demands by them; their inventory and appraisal; matters relating to stocks, bonds, mortgages, and real estate; matters relating to taxes and assessments; the quarterly reports of depositaries, and their compensation. Under the provisions of the trading-with-the-enemy act, all money and cash items demanded and received by the Alien Property Custodian must be deposited forthwith in the Treasury of the United States. All other property taken possession of by the Custodian is deposited in banks and trust companies throughout the United States and in its insular possessions. Wherever a responsible bank or trust company reports enemy-owned property other than money, such bank or trust company is designated a depositary for such property and transfers such property from the account of the enemy to the account of the Alien Property Custodian. Where property is reported by others than banks and trust companies, a strong depositary is designated in the locality most convenient for the handling of such property. In selecting depositaries for property reported by individuals, preference is given to those institutions which are members of the Federal Reserve System. In cases of continuing trusts where a bank or trust company is the fiduciary, the same bank or trust company is designated depositary, and as fiduciary accounts to itself as depositary. For purposes of convenience, depositaries are required to make quarterly reports, accounting for all receipts and disbursements during the quarter and remitting the net balance, after deducting a reasonable commission, to the office of the Alien Property Custodian at Washington, where such funds are deposited in the Treasury of the United States. The cooperation and assistance of over 500 banks and trust companies throughout this country and in its insular possessions has made possible the quick and accurate handling of nearly $500,000,000 of property during the first year of the activities of the Custodian. If it had not been for such cooperation, it would have been necessary for the Custodian to maintain an enormous office, with a clerical force running into the thousands, and storage vaults of great magnitude. Under the conditions which have existed in Washington for a year it would have been impracticable, if not impossible, to have taken actual custody of the vast enemy properties which are now being administered by the Custodian. The depositaries are virtually branch offices and perform duties which are essential for the proper administration of nearly 25,000 active trusts which are already opened on the books of the Custodian. The services of the depositaries, which have been freely offered and loyally performed, have been especially valuable because of the knowledge and experience of their officers in the various parts of the country and in its insular possessions. A list of the designated depositaries on February 15, 1919, is contained in the appendix. Summary of work of the Bureau of Trusts at the close of business Feb. 15, 1919. 1. Number of reports filed with the bureau up to and including Feb. 15, 1919..... 2. Number of accepted trusts reported.. 3. Number of accounts opened... 29, 114 32, 296 27,274 The following shows, under appropriate headings, the amount of property taken over to date by the Alien Property Custodian through this bureau: Amount of property of German subjects, in 17,479 trusts.. Total, 25,059 trusts...... Amount of property of Americans in Germany and Austria, in 648 trusts..... $330, 312, 988.56 39, 555, 557.34 369, 868, 545. 90 91, 866, 053. 40 Other property taken over (enemies in Bulgaria, Turkey, etc.), in 1,567 trusts..... Total, 27,274 trusts...... Net income from Treasury investments.... Property returned to claimants under section 9... Grand total..... $40, 371, 354. 63 502, 105, 953. 93 839, 770.82 502, 945, 724. 75 1, 353, 024. 87 Summary. Cash deposited with the Secretary of the Treasury: Uninvested...... 504, 298, 749. 62 FEBRUARY 15, 1919. $71, 426, 001. 92 8, 015, 135. 70 Cash with depositaries... Stocks.... Bonds, other than investments made by the Secretary of the Treas ury..... Mortgages.... Notes receivable... Accounts receivable. General business, etc.. Total..... $79, 441, 137. 62 915, 381. 21 166, 969, 392. 47 60, 862, 354. 18 12, 705, 542. 42 5,811, 933. 79 48, 727, 291. 57 10, 393, 505. 23 82, 925, 496. 26 34, 193, 690.00 502, 945, 724. 75 CHAPTER XIII. BUREAU OF SALES. JOSEPH F. GUFFEY, Director. With the broadening of the power of sale granted to the Alien Property Custodian through amendments by Congress to the trading with the enemy act and through Executive orders of the President, it became necessary to create a separate bureau to handle all sales so authorized. A plan of sales organization was announced by the Alien Property Custodian on June 6, 1918 (which is hereinafter set forth in full), and which has been strictly followed in the operations of this bureau. In view of the fact that at least 85 per cent of the enemy-owned businesses are located in and about New York, the Bureau of Sales was established in the New York office at 110 West Forty-second Street, where all of its divisions are located except the Corporation Management Division, which for convenience of administration was. kept at the home office in Washington. Upon the establishment of the Bureau of Sales, the general business department was transferred thereto from the Bureau of Trusts, in order to accomplish a complete unification of method of sale and liquidation of all enemy properties authorized and directed to be sold or liquidated by the Custodian. A section of the Law Bureau was organized in the New York office, charged with the particular duty of giving necessary legal service to the Bureau of Sales, with Ralph J. Baker, assistant general counsel, in charge. Under the general sales plan, the director of this bureau carries out the decisions of the Washington sales committee, composed of members of the organization, located in the home office. In a general way all of his acts are subject to review by the advisory sales committee, located in New York, by whom all sales must be passed upon before final approval by the custodian. The bureau consists of four divisions and six departments, as follows: (1) Corporation Management Division. (2) Supervision and Liquidation Division. (4) Bookkeeping Division. (5) Corporations and Firms Department. |