"FOREIGN POLICY" CLAIMS ARE SPURIOUS

There are those who argue that we hurt our diplomatic relations with foreign countries by insisting that Germany and Japan make payment for the vast amount of mischief they caused the United States and its citizens during the war. I cannot agree for one moment with that premise for the following reasons:

1. In the Paris reparations agreement, each allied signatory, including the United States, was "to hold or dispose of German enemy assets within its jurisdiction in a manner designed to preclude their return to German ownership or control ***" Thus, in effect, a return of the vested assets to Germany at this time would embarrass some of our closest allies in NATO, and would constitute a breach of a solemn undertaking on the part of this Government.

2. The German and Japanese Governments themselves were fully satisfied with the very light penalties they were compelled to pay in lieu of war reparations at the end of World War II, and they both undertook to compensate their own nationals for any losses they might sustain by reason of these agreements.

I do not believe that the United States will benefit itself in the community of nations by consistently inheriting the title of a “soft touch" or "easy mark." Lack of firmness in the enforcement of international settlements often leads to further conflict.

After all, what deterrent to aggression remains if the aggressor knows it can take life, destroy property, and bankrupt resources when the only punishment in utter defeat is total forgiveness of any responsibility or liability for the mortal losses inflicted.

A good example of what I am speaking of can be found in the Czechoslovakian claims fund situation which was settled by the Congress last year.

In the late 1940's, the Communist Government of Czechoslovakia confiscated certain American properties within its borders and refused to provide any compensation to the American citizens involved.

Simultaneously, the Czechoslovakian Communists, through a Czechoslovakian corporation, sought to purchase a steel mill in this country. The Treasury Department blocked this transaction and seized the equipment purchased here. The equipment was sold to Argentina and the sales proceeds, amounting to $9 million, were held in the Treasury just as the German and Japanese assets are being held by this Government.

Year after year went by and the Czechoslovakian Government failed to provide any payment for American losses. My distinguished colleague from Louisiana, Senator Long, introduced a bill last year which provided a full and final settlement to a problem theretofore considered insoluble. That bill, S. 3557, was unanimously passed by the Congress and provided as follows:

1. The $9 million belonging to Czechoslovakian nationals in this country is to be paid into a Czechoslovakian claims fund in August 1959, 1 year after the President signed into law the legislation which originated in the Senate;

2. Czechoslovakia is afforded 1 year within which to negotiate and settle the outstanding American claims, or forever waive any right to the $9 million fund;

3. If Czechoslovakia provides funds for the payment of American claims, the $9 million would be disposed of in accordance with the agreement covering that settlement; if not, the $9 million would be used to pay the American claims in whole or in part.

When S. 3557 was before the Senate last year, I do not recall anyone urging that this country's retention of the $9 million belonging to Czechoslovakia as a fund for the payment of American claims constituted a violation of any private property rights.

Nor do I recall anyone saying that our foreign policy would be adversely affected by this show of firmness and determination insofar as the rights of our citizens were concerned.

S. 3557 became law on August 9, 1958, and in the brief period since that time, Czechoslovakia apparently has gained a new respect for the United States. I am informed by the State Department that a final agreement with Czechoslovakia is expected prior to August of this year whereby (1) trade and commercial relationships between the United States and Czechoslovakia will be broadened and strengthened and (2) Czechoslovakia will voluntarily increase the claims fund for the payment of American claims from $9 million to $11 million.

I submit that the very same fundamental reasoning should apply in the solution of this matter before your committee. Fourteen years have expired since the end of the war and Congress has failed to provide any machinery for the final adjudication and payment of the American claims against Germany and Japan.

Germany and Japan are not responsible for this delay because approximately 13 years ago they told us to keep their vested assets in this country as a fund for the settlement of war claims and war reparations.

Why then should not the Congress of the United States, with head high and conscience clear, proceed immediately with the business of settling this one source of alleged friction between Germany, Japan, and the United States by enacting legislation to settle the matter in our own best interest.

My proposed solution would provide for the payment of the American war claimants who have waited so long for relief. The claims would be paid without expenditure of one cent of American tax

money.

The vested assets would necessarily be liquidated and this would, I hope, lead to the early elimination of the vast governmental machinery presently required to administer vested alien assets.

Finally, the adoption of this legislation would announce to the German industrialists and their agents in this country, who have been resisting this result, our country's final determination to keep these assets, as we are lawfully authorized to do, for the payment of the American claims. These industrialists, in turn, would finally realize that the correct forum of relief for them is the German Government itself, which undertook to compensate them in the post-World War II agreements.

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NO CONFISCATION OR SANCTITY OF PRIVATE PROPERTY INVOLVED IN THIS ISSUE

As I previously pointed out when I appeared before this subcommittee in 1957, there is no "confiscation" or violation of the principle of "sanctity of private property" involved.

The postwar German Government asserted the right to deal with and dispose of property of its nationals in the postwar agreements. It exercised that right and the United States recognized its right legally to do so in good faith. The German Government, in connection with the agreements reached, agreed to compensate its own nationals.

There is no confiscation involved because the property thus conveyed to the United States and its citizens was the consideration for our forgiveness of a staggering war debt against Germany and Japan.

There was no violation of the "sanctity of private property" because the action of the German Government had the effect of removing the property from the classification of private property by the promise to compensate its own nationals who, by the way, benefited materially from the beneficent treatment accorded to Germany by the United States and its allies.

S. 105 AN EFFECTIVE MEASURE AGAINST COMMUNISM

Not only will the enactment of my proposed bill bring the very desirable results outlined in this statement with respect to the "alien property issue," but it will provide a dividend for the American people in their continuing struggle against the hordes of communism.

As indicated at the beginning of this statement, I propose that these assets of the last war be invested pending the full and final adjudication of the American claims against Germany and Japan. Any increment on these funds would be used to the extent possible to prevent a future war by educating worthy young men and women of the United States in the more advanced fields of science.

All of us have witnessed an initial difficulty on the part of the United States to keep abreast of the Soviets in scientific endeavors. It was my opinion, many months prior to the launching of Sputnik No. 1, that this country should use every possible means to develop all of our potentials and to recapture the lead we enjoyed during World War II in almost every field of science.

Consequently, Mr. Chairman, I ask your committee to report favorably on my bill, not only because it will settle the so-called "alien property issue" but because it will be of lasting benefit to the United States in its efforts to maintain its worldwide leadership and superiority in all of the essential fields of technology.

Senator JOHNSTON. Senator Javits.

STATEMENT OF HON. JACOB K. JAVITS, A U.S. SENATOR FROM THE STATE OF NEW YORK

Senator JAVITS. I am Jacob K. Javits, Senator from New York. I wish to testify, Mr. Chairman, and I am very grateful to the chairman for facilitating this. I have another committee meeting downstairs.

I direct your attention to section 12 of the amended version of S. 672 of May 28, 1959, as intended to be proposed by Senator Johnston. Section 12 appears at page 26 and page 27.

Mr. Chairman, it relates to such a specialized question that I hope the Chair will allow me to testify to it as a particular aspect of legislation.

This section authorizes a settlement in the amount of $500,000 in full satisfaction of all claims for returns made under section 32 (h) of the Trading With the Enemy Act.

Section 32(h) is a provision which deals with the subject of socalled heirless assets, a very tragic thing which has been before the Congress before and which I had the honor to participate in, and I believe Senator Keating did as well, and probably the Senators here did.

We had it in the House and it came over without question. The chairman participated in it, too.

These are assets in the United States which originally belonged to persons in Germany who were persecuted on religious, racial, or political grounds, and who have died without leaving any heirs to claim this property which belonged to them.

The overwhelming proportion of these people were of the Jewish faith.

Under section 32 of the Trading With the Enemy Act, persecutees have, ever since the end of the war, been entitled to obtain return of their property in the United States which was vested by the Alien Property Custodian. This has been American law for over 10 years.

In many cases, however, the persecution in Germany was so extreme that such persons died in concentration camps together with their entire families. Thus, substantial amounts of property in the United States remained vested in the Custodian, which would have been returned to their lawful owners, former persecutees, had such owners or their heirs been alive to claim this property.

The United States had no desire to retain this property or its proceeds. Thus, on Augst 23, 1954, as a result of bills which had strong bipartisan support, and in connection with which Senator Dirksen was particularly active, the Trading With the Enemy Act was amended to add section 32 (h). That section recognized that there was a substantial amount of heirless property in the United States and provided for the designation by the President of a successor organization which could file claims to such property.

The successor organization was required to use the proceeds for the relief and rehabilitation of needy persecutees, and only for those who were in the United States.

It was prohibited from spending any of the proceeds for legal and similar fees, and was required to give periodic accounts to the Congress. A ceiling of $3 million was set on returns under section 32(h). In 1955, President Eisenhower designated the Jewish Restitution Successor Organization as the successor organization under section 32(h).

I might insert parenthetically, Mr. Chairman, that is the same organization which worked closely with the problem in Germany as well, and had great experience and was much trusted as to the allocation of the proceeds which it would obtain so that they would devote

it to the purpose of help and rehabilitation for other persecutees who had survived the Hitler scourge.

I wish to point out that the original legislation provided for filing and proof of claim and set a ceiling.

From the outset of its designation, the Jewish Restitution Successor Organization, which is a New York membership organization, set up for the sole purpose of dealing with heirless asset problems, and which had been similarly designated in the American Zone of Germany, worked closely with the Office of Alien Property. Thousands of claims were filed. These have now been reduced, through a mutual process of examination, to a number much fewer than was originally filed, but which still is in the thousands.

It has become obvious to all concerned with this problem that only a bulk settlement of these claims can effecutate the intent of the Congress in enacting section 32 (h). The problems of proof are enormous, given the situation in which the individual owner and all of his family have died and are not available to produce documents or other evidence.

Production of proof in individual cases requires searching through records of all sorts, including records of those interned in the Nazi concentration camps.

There are hundreds of claims, moreover, involving substantial assets where proof is not available, but where circumstances make it evident that heirless property is involved; for example, almost a million dollars in cash was picked up by the American military authorities in Germany immediately after the war, under circumstances which make it clear that this was looted currency; but the detailed records as to the persons from whom this cash was stripped were destroyed during the war.

That is just one sum which is in the possession of the United States. Senator KEATING. Would the distinguished Senator repeat that sum?

Senator JAVITS. One million dollars in cash picked up by our occupation people in Germany under such circumstances as would lead to the conclusion that it was American cash stripped from those who were in the Nazi concentration camps before their extermination.

Senator KEATING. That $1 million is now in possession of the United States?

Senator JAVITS. That is correct. It is part of the Alien Property Custodian assets.

Thus, to proceed with individual proof for each of these thousands of claims—many involving only a few hundred dollars, would impose an intolerable burden on both the designated successor organization and on the Office of Alien Property, which would have to maintain a substantial staff of hearing examiners and other officials merely to deal with these claims.

Thus, both JRSO and the administration have concluded that a bulk settlement, based upon a reasonable estimate of the amount which would be returnable if these claims were individually processed,. is the best, if not the only, alternative.

In the 85th Congress, Senator Dirksen introduced a bill, S. 1981 calling for such a settlement in the amount of $1 million.