rence E. Walsh, Deputy Attorney General, expressing the views of the Department of Justice on S. 1103. These views also apply to H.R. 404 and H.R. 1345 which are identical with S. 1103. These bills constitute the pending legislation referred to above."

In closing, I wish to reiterate the Department's support of S. 2005, the administration's war damage claims bill, which was submitted to Congress by the Foreign Claims Settlement Commission. This bill would use vested assets to provide compensation to Americans who have war damage claims against Germany. Consistent with this administration position, the Department of Justice is opposed to the enactment of S. 672, as amended, which would provide for full return of vested assets or the proceeds of liquidation thereof, and is also opposed to the enactment of other bills providing for the partial return of any such assets or proceeds. In connection with S. 672, I refer you to my testimony before your subcommittee on April 15, 1957, on a similar bill, S. 600, 85th Congress (see p. 341 et seq. of the printed hearings).

Senator JOHNSTON. Congressman Betts and Congressman Van Zandt have notified us that they cannot be here today. We will now hear from Bradford S. Magill.

STATEMENT OF BRADFORD S. MAGILL, SPECIAL COUNSEL FOR THE ESTATE OF C. J. HARRAH

Mr. MAGILL. Mr. Chairman and gentlemen of the committee, my name is Bradford S. Magill of the law firm of Naylon, Foster, Dean & Aronson of New York City. I appear here as special counsel for the trustees of the trusts under the will of the late C. J. Harrah of Philadelphia, Pa., an American, native-born citizen who left two granddaughters who happen to be German nationals and who are beneficiaries in part of these trusts.

Senator JOHNSTON. Did he leave it to them in the will?

Mr. MAGILL. Yes, this was under his will under which he left the property in trust for the benefit of his four children and if they died, of their children, and in turn the will provides that at the death of the last child to survive the then remaining or living grandchildren will take it, so that the interest of these grandchildren is now contingent and indeterminate.

Senator JOHNSTON. Are they all German?

Mr. MAGILL. One of his daughters married a German and became a German citizen. She subsequently died and two of his grandchildren are German and the rest are American.

Senator JOHNSTON. The Government reached in and got what is going to two of the grandchildren?

Mr. MAGILL. Yes.

Mr. Wood. The Government has been getting their share.
Senator JOHNSTON. Not the others.

Mr. MAGILL. No. The Americans continue to get their share of the income, and the income of the two Germans continues to go into the U.S. Government.

Senator JOHNSTON. Has there been any contest of the will that if the Germans did not get it, it would go back to the other grandchildren?

Mr. MAGILL. No, there is no contingency provision in the will to withhold the money. There has been no reason, no legal reason under the will why the Alien Property Custodian could not get it and he has got it and he has continued to get it.

Senator JOHNSTON. You may proceed.

Mr. MAGILL. I would ask that Mr. C. Martin Wood, Jr.'s written statement be printed in the record immediately following my

statement.

Senator JOHNSTON. That shall be granted. We will make a note of it.

Mr. MAGILL. I do not want to burden the subcommittee at this time with reading Mr. Wood's statement, but to indicate this one particular bill, S. 2012, enjoys substantial if not universal support.

Certainly the situation of the estates and trusts has been commented upon by your subcommittee in its report of January 9, 1958. It has also been commented on by the Department of State in the identical letters which they wrote to the chairmen of the Senate Judicary Committee and the House Interstate and Foreign Commerce Committee.

It would appear to me that none of the other bills pending before this subcommittee is inconsistent or in conflict with S. 2012 which merely deals with property arising in the future. As I said before, these are indeterminate interests. We are not asking and this bill does not ask for one penny of appropriation and one penny of money or a penny's worth of tangible property that is now on hand in the U.S. Government.

All we are asking for and all this bill asks for is that the Congress of the United States tell these American trustees of American property that they in the future may be permitted in accordance with the terms of their State laws and their governing instrumentalities to pay the current income to the beneficiaries named in these instruments. None of the arguments against return of the property already confiscated applies to S. 2012. As I said before, these interests cannot be counted on-I don't see how they can be counted on to pay war damage claims. These interests may be cut off at any time.

So far as the argument which I have read for a number of years and have heard a good deal about this morning concerning the treaties or intergovernmental agreements, I would hesitate to express my opinion on that argument because I don't think it is printable. It is an attempt to create a situation, a situation without the consent of the creditor. It is completely foreign to American and international law.

However, irrespective of the validity or invalidity of that act, I don't see how anybody can say that the Federal Government of Germany wrote a blank check of indefinite duration or agreed to take care of the Americans or American trusts for the benefit of German nationals. They just could not do it and I don't think you could do it. So much for Mr. Wood's statement.

I guess it is fairly obvious that I also appear in support of S. 2012. I might add that I have been authorized to state that the Old Colony Trust Co. of Boston, the Mercantile Trust Co. and Robert Pommer of St. Louis, the Fidelity-Philadelphia Trust Co. of Philadelphia, and others, acting as trustees for some 15 trusts of American property for the partial benefit of over 50 German nationals, join in my support of this bill.

At the outset, let me say that I am sure all trustees similarly situated favor full return to them, for the benefit of the intended objects of the bounty of their donors, of all property heretofore seized by the U.S.

Government, and if only partial return can be made, firmly believe that these trusts should have a definite priority and preference. It is my sincere hope that the return problem can be equitably solved in the near future.

But the battle for return has been going on for many years. In the meantime, the power to vest has been terminated, and only the future funds of estates and trust are being seized.

I might state parenthetically that if these estates and trusts, interests, were all German, in other words, that the Germans would get the income and interest, we would not have the problem because the Alien Property Custodian would have seized them right off the bat. This says it will go to American citizens and therefore it cannot be seized. Yet this process continues, American fiduciaries are being deprived of their right and duty to administer their trusts in accordance with the laws of their respective States and the purposes of their governing instruments. The beneficiaries continue to suffer, severely in many cases, even though they may not have been alive during World War II. The concept of mass guilt is certainly repugnant to me. How much more opprobrious is a concept that extends mass guilt to unborn generations.

Let us remember that this property is American, not German, invested largely if not wholly in American, not German, securities. I might add that, in the specific trust that I represent, a substantial portion of the principal is invested in the bonds of the U.S. Government, and in the governments of various States and municipalities. Before vesting, this income, derived from U.S. sources, bore its share of our taxes. In the specific case of the Harrah trust, I estimate that between 1932, when Mr. Harrah died, and the seizure of the alien interests, approximately 10 percent of the income of the then German beneficiary (one quarter of the total trust income) or about $16,000, was paid in United States income taxes. If the trust is now released, 30 percent of all income, or almost $5,000 a year, will be paid in taxes for the benefit of all taxpayers, not merely a few special interests. Is this not of equal or even greater advantage to the American people as whole than the continued taking of all of the income for purposes not yet determined?

This is but one specific example. The financial statement of the Office of Alien Property at December 31, 1956, listed vested but unliquidated interests in estates and trusts, as valued by the Office at time of vesting, at $20 million. I think it may be assumed that any increase in value has been more than offset by the value of terminated trusts whose principal has now been liquidated and reduced to possession. Thus, if we take an average return of 4 percent per year, some $800,000 is now being seized by the Government, a rather minor amount compared to the estimated total of over $500 million already seized under the act; and, if these trusts were now released, some $240,000 a year would still be paid to the Government, as income taxes. The difference seems a small price to pay for justice, equity, the sanctity of our State trust laws, and the gratitude of thousands of individuals whose rights derive not from their German citizenship but from their American blood.

I care not for the industrial interests, the cartels and other controversial Germans, and I want to make this distinction as clear as I

can, that I do care for these thousands of part American-German nationals whom we purport to call friends and whom we right now are asking to support us and if necessary to fight with us in the defense of freedom. Is it not possible to stop taking their money today?

Suppose no foreign interests were involved, and the question was whether one of our States could permanently take over the income of a trust, located within its borders, for the benefit of citizens of another State, and tell that other State to make restitution. It sounds, and is, incredible. Justice would be swift and the judicial remedy sure. There would be no dispute as to the application of the Constitution of the United States to the situation. Yet by its very inaction the United States is condoning just such a violation of the principles of the Constitution and of national and international morality. It is successful only because foreign nationals have the beneficial interests, and the Constitution has been held to give neither them nor their American trustees any protection whatever. In effect, we Americans are saying "might makes right-we have control of the property— we will continue to seize its fruits-no one can stop us." Let democracy not stay in this position for another day.

Senator JOHNSTON. Are you aware of the fact that some of this is blood money?

Mr. MAGILL. I certainly am, sir.

Senator JOHNSTON. For the simple reason that the soldier boys in the Army took out the insurance in the Government and with the agreement that it was to be paid to the various relatives?

Mr. MAGILL. Yes.

Senator JOHNSTON. And social security death benefits?

Mr. MAGILL. Yes sir.

Senator JOHNSTON. Insurance benefits.

Mr. MAGILL. Yes sir.

Senator JOHNSTON. Blood money.

Mr. MAGILL. I could not agree with you more, sir, and I fully agree with the provisions of your bill, sir. I am only saying if we cannot return it all, let us stop taking any more.

Senator JOHNSTON. Thank you, sir.

Mr. MAGILL. Thank you, Mr. Chairman.

Senator JOHNSTON. At this point we will insert Mr. Wood's state

ment.

(Statement of C. Martin Wood, Jr., follows:)

STATEMENT OF C. MARTIN WOOD, JR., ONE OF THE TRUSTEES UNDER THE WILL OF THE LATE C. J. HARRAH OF PHILADELPHIA, BEFORE THE SUBCOMMITTEE ON TRADING WITH THE ENEMY ACT OF THE COMMITTEE ON THE JUDICIARY, U.S. SENATE, JUNE 18, 1959

Chairman Johnston and members of the subcommittee, I appreciate greatly this opportunity to supplement the statement I submitted at the April 1957 hearings held by the subcommittee.

First, I refer to my previous testimony and statement, printed at pages 405 to 410 of the record of the 1957 hearings, and respectfully request that the same be incorporated by reference in the record of this hearing.

Second, I respectfully request that you consider specifically, and apart from the other nine bills now pending before you, S. 2012, introduced May 20, 1959, by Hon. Prescott Bush, Senator from Connecticut, and Hon. Leverett Saltonstall, Senator from Massachusetts. This bill in no way relates to the issues of return or payments to special categories of claimants, of alien property pre

viously seized. It would merely terminate now the continued and to my mind unconscionable seizure of future payments of trust and estate interest and principal payable by the terms of the governing instrument to alien beneficiaries, and thus accomplish the main objective which I urged 2 years ago.

Third, I would call to your attention the facts which have come to my notice indicating that the purposes of S. 2012 enjoy substantial if not universal support.

On January 9, 1958, your subcommittee transmitted to the Committee on the Judiciary a report on the Trading with the Enemy Act, which was ordered to be printed as a report of the committee on March 6, 1958. At pages 3 and 4, the trust and estate problem is dealt with, including a specific reference to the estate of my grandfather, as one of the "harsh applications of the provisions of the Trading With the Enemy Act."

On March 28, 1958, the Department of State transmitted to the respective chairmen of the Senate Committee on the Judiciary and the House Interstate and Foreign Commerce Committee a proposal dealing with partial return of confiscated property, which stated, in part:

"In addition, provision should be made for the divesting of unliquidated interests which the United States still holds in estates and trusts so that there can be terminated the continuing participation of the United States for an indefinite period in the administration of these estates and trusts."

None of the other bills now before the subcommittee is in any way inconsistent or in conflict with the present termination of these continuing seizures. They deal solely with money or property already seized, not with wholly intangible future rights whose value cannot now be determined and which can have no bearing on the disposition of funds and property now on hand.

None of the arguments against return of property already confiscated applies to S. 2012. These indeterminate future interests in many cases (including the trust of which I am a trustee) may be cut off at any time and revert to American citizens. These interests cannot be counted upon to pay war damage claims. The Government of the Federal Republic of Germany did not undertake to step into the shoes of American trustees and satisfy their unknown obligations to their German beneficiaries. It did not write a blank check of indefinite duration.

In short, while I strongly oppose confiscation as un-American and morally indefensible, I believe just as firmly that this limited measure of simple justice, long overdue, should be considered separately and not confused with the myriad problems of return.

Many years have passed since hostilities ceased-6 years have passed since the power to vest was terminated. My cousins still suffer for lack of what rightfully belongs to them, and through no fault of their own. Many beneficiaries of other trusts have died without the benefits which their American benefactors intended them to have. I, and other trustees, are unable even now to fulfill our trusts. I respectfully ask you to remedy this inequitable situation now, by giving immediate and favorable consideration to S. 2012.

Senator JOHNSTON. We have two more gentlemen from out of town whom we might accommodate by hearing now. They are Mr. Daniel Wilkes and Dr. Edward T. Wilkes from New York City. Would you two gentlemen please come up to the table.

STATEMENT OF DR. EDWARD T. WILKES, SURVIVOR OF SINKING OF SS "ATHENIA"

Dr. WILKES. I am Dr. Edward T. Wilkes of New York City. I am a survivor of the sinking by a German U-boat of the S.S. Athenia on September 3, 1939. I am here on behalf of myself as a claimant with regard to the sections of war claims bills pending before this committee drafted for Athenia victims.

On September 1, 1939, my wife, my two children and I embarked on the Athenia at Glasgow, Scotland for North America. Two days later at 7:40 p.m. we were torpedoed without warning. My wife was trapped with my older son, Daniel, age 9, in the cabin below