Furthermore, the continued seizure of income and principal of such trusts by the Office of Alien Property presents a serious problem for both individual and corporate trustees. A number of member banks of this association, which are serving in this capacity under wills or trust instruments of American citizens, are being prevented from carrying out the wishes of the person establishing the trust, in conformity with the laws of the State where the trust is being administered, solely by reason of the fact that the income and the principal continue to be seized because the beneficiary is a German national. For these reasons, there appears to be no justification for continuing such seizure many years after the termination of World War II and 6 years after the vesting of property rights was terminated by Executive order in 1953. We, therefore, support the enactment of S. 2012.

Very truly yours,

J. OLNEY BROTT.

STATEMENT OF AMERICAN JEWISH COMMITTEE RE HEARINGS TO BE HELD BY THE SENATE COMMITTEE ON THE JUDICIARY SUBCOMMITTEE ON THE TRADING WITH THE ENEMY ACT ON JUNE 18, 1959

The American Jewish Committee has received notice of the hearings to be held on June 18, 1959.

The hearings will involve, inter alia, the question of claims of American nationals for war damages. As between several of the bills scheduled for hearing, substantial differences exist in one respect which is of deep concern to the American Jewish Committee. I allude to the question of eligibility of American claimants.

It is the view of the American Jewish Committee that the funds which are to be used for compensation of American claimants come, directly or indirectly, from the American Treasury; that these funds are contributed by all American citizens, or at least by those who have had their residence in the United States for a substantial period of time and who have thus been, as residents here, subject to American taxation; and that therefore the benefits of the claims remedy ought to be extended to all persons who are American citizens as of the date of enactment of any claims legislation.

Only in this way is it possible for persons who have emigrated to this country, and who have thus lost the protection of the country of emigration, to have the protection to which they ought to be entitled as persons who came here for permanent residence, and have proved it by becoming citizens.

S. 744 provides for such treatment. The American Jewish Committee therefore endorses that feature of S. 744, introduced by Senator Young, and urges that the eligibility provisions of that bill be incorporated into any legislation which may be recommended by the subcommittee.

On April 4, 1957, before this same subcommittee, then dealing with S. 600 and S. 1302, 85th Congress, the American Jewish Committee, the American Jewish Congress, and the B'nai B'rith presented a joint statement of views on those bills. That statement dealt in some detail with precisely this point of eligibility. For the convenience of the subcommittee, that statement, as it applies to this point, is appended hereto and made a part of this statement. It is understood that a similar statement is being addressed to the committee by the American Jewish Congress.

It is requested that this statement, together with the excerpt from the joint statement of 1957 appended hereto, be accepted as the statement of the American Jewish Committee, and made a part of the June 18 record.

C. CITIZENSHIP AS AN ELEMENT OF ELIGIBILITY

As indicated above, S. 600 makes U.S. citizenship as of the date of loss a prerequisite to recovery. It is the view of the three organizations that the provision on citizenship as a factor of eligibility contained in S. 1302, which would extend the benefits of the law to persons who are citizens at the date of the enactment of the bill, is, in every respect, a more just rule.

The requirement that a person must be a citizen of the date of loss is generally considered a sine quo non in the case of the claim of an individual against a foreign government; i.e., in the case of international claims. Because an individual cannot prosecute a claim against a foreign government, he must turn to a state to espouse his claim. By the application of a legal fiction, the injury to a

person is deemed to be an injury to the state of which he is a citizen and his state prosecutes the claim on his behalf. As a result of this legal fiction the rule in international claims has grown up that a state will not espouse a claim unless the person asserting it was a citizen of that state at the time of the loss-otherwise the theory that the state had been injured when the person sustained the loss would have no validity.

This rule has no application in the war-damage claims-essentially domestic claims-compensable under S. 600. The claims are not claims against a foreign government. In fact, they are against no government. They are claims which the United States, in the exercise of its sovereign powers, decides to honor. In these circumstances, the Congress, in fixing eligibility, is not fettered by the rule that it must restrict recovery to persons who were citizens of the United States at the time of loss. Honoring claims which the Congress, in its sole discretion, chooses to honor, and appropriating taxpayers' money to pay the claims, it can permit itself to be as just as it wants to be.

That is precisely what Great Britain did in the disposition of moneys which it received from Czechoslovakia in settlement of British nationalization claims. On September 28, 1949, Great Britain entered into an agreement with Czechoslovakia pursuant to which Czechoslovakia paid Great Britain 8 million pounds sterling "in final settlement *** of claims with respect to British property, rights, and interests affected by various Czechoslovak measures of nationalization***" Article 1 of the agreement defined "British property" as property owned by British nationals on the date of the agreement and "at the date of the relevant Czechoslovak measures" (in other word, at the date of loss). Despite this clear-cut provision in the agreement, the foreign compensation bill of 1950 enacted by the British Parliament and the order in council promulgated pursuant to that bill provided that persons who were British citizens either on the date of the official decree of confiscation, the date of the physical dispossession, or on the date of the agreement were eligible to participate in the fund. Referring to the disparity between the provisions in the foreign compensation bill of 1950 and the agreement with Czechoslovakia, the Secretary of State for Foreign Affairs reported to Parliament as follows: "These provisions follow in general those of the agreements (the plural was used because the reference is to an agreement with Yugoslavia as well), but it is not practicable to follow the agreements entirely because they were drafted for the purpose of making settlements with foreign governments and not for the purpose of application as municipal legislation." In other words, in settling the nationalization claims with Czechoslovakia, Great Britain could assert the claims only of its citizens at the time of loss, but in distributing the bulk amount under its domestic law it felt free to distribute the money as it choose, and, finding it equitable to do so, made the fund available to persons who were citizens at the time of agreement—a much later date than the date of the loss.

American precedent for the provision on citizenship in S. 1302 is found in the legislative history of the International Claims Settlemnt Act of 1949, the act which implemented the agreement with Yugoslavia under which the United States received $17 million in settlement of nationalization claims of U.S. citizens arising out of nationalization of their property in Yugoslavia. The act as passed by the Senate provided that persons who were citizens of the United States at the time of the enactment of the law should be eligible to participate in the Yugoslav fund. It was only in conference that the Senate yielded to the House version, which limited recovery to persons who were citizens at the time of taking. This example is cited only to show (1) that there are no legal obstacles against the broadening of the rule of eligibility to include persons who were citizens at the time of the enactment of the law, and (2) that even where a fund was received from a foreign power there was the disposition to admit the participation of persons who were citizens at the time of the enactment of the law. A fortiori, where the funds are supplied by the American taxpayer the reasons for extending eligibility to persons who are citizens on the date of the enactment of the law are even more compelling.

Since there are no legal obstacles to the rule of eligibility proposed by S. 1302, considerations of justice demand that persons who were citizens of the United States at the date of the enactment of the law should be eligible to compensation for the war losses they sustained. By adopting this recommendation the Congress would be honoring the claims of persons who had contributed to the war effort, whose sons had served in the Armed Forces of the United States, who, as taxpayers, had contributed to the fund which is used as the source for

the payment of the claims, and who, by virtue of having relinquished their former citizenship, have no government other than the United States to turn to for compensation.

It is important to bear in mind that some of the persons whom S. 600 would exclude are persons to whom the United States offered a haven when they were fleeing from persecution by Nazi Germany and her allies. The moral claim of persons in this category was recognized by the Allied Powers, including the United States, when they insisted that persons who were treated as enemy nationals by the enemy (victims of persecution) should be assimilated to that of United Nations nationals and, as such, entitled to recover for the war losses they sustained in the countries where persecution was practiced. Thus, the United States helped in exacting provisions from Hungary, Rumania, and Italy that such persons who sustained war losses in these countries be given the same rights that American citizens enjoy under the treaties. It would be strange if the United States were not as solicitous of the rights of these people in laws which it enacts as it was in the postwar treaties which it negotiated. Moreover, both S. 600 and S. 1302 contemplate the return of enemy assets sequestered pursuant to the Trading With the Enemy Act. Unless the rule of eligibility contained in S. 1302 prevails, the consequence of it would be that persons who were avowed enemies of the United States would have restored to them their property rights, while persons who suffered from the ravages of a war which was preceded by an assault against them, and of which they were the principal victims, would be given no relief for their war damages.

Finally, it should be pointed out that, under both S. 600 and S. 1302, legal entities may recover war damage compensation if 50 percent of the stock of the legal entity is owned by persons who, as natural persons, could qualify as claimants. It is thus possible that 50 percent of stockholders who at no time were residents of the United States may indirectly recover for the war losses sustained by the corporations in which they hold stock, while persons who have integrated into American life, who contributed to the American war effort, and who, as taxpayers, provided part of the funds which will be used to pay the war damage claims, will be denied any measure of recovery. It is not conceivable that the Congress would dignify this bit of irony by incorporating it into law.

HERBERT G. EHRMANN, President.

Hon. OLIN D. JOHNSTON,

AMERICAN JEWISH CONGRESS,
New York, N.Y., June 17, 1959.

Chairman, Trading With the Enemy Subcommittee, Senate Committee on the Judiciary, Senate Office Building, Washington, D.C.

DEAR SENATOR JOHNSTON: The American Jewish Congress has received notice of the hearings to commence on June 18, 1959, which will consider inter alia the question of claims of American nationals for war damages. Among the several bills scheduled for hearing there exist substantial differences with respect to the question of eligibility of American claimants, a matter of deep concern to our organization and to others. We understand that a letter similar to ours is being submitted by the American Jewish Committee.

It is our view that the funds to be used for the compensation of American claimants derive, directly or indirectly, from the American Treasury. These funds are contributed by all American citizens, certainly by all those who have resided in the United States for a substantial period and have thereby been subjected to American taxation. To do equity, therefore, we believe that the benefits of the claims remedy ought to be extended to all persons who are American citizens as of the date of enactment of any claims legislation.

By adopting this rule of eligibility, the Congress would be honoring the claims of persons who had contributed to the war effort, whose sons had served in the Armed Forces of the United States, and who, by virtue of having relinquished their former citizenship, have no government other than the United States to turn to for compensation. Exclusion of this group would constitute grave discrimination against Americans who suffered from the ravages of a war of which they were the principal victims.

S. 744 embodies this criterion of eligibility. We therefore endorse that feature of S. 744, as introduced by Senator Young, and we urge the incorporation

of the eligibility provisions of that proposal into any legislation which may be recommended by your subcommittee.

On April 4, 1957, before this same subcommittee, then dealing with S. 600 and S. 1302, introduced in the 85th Congress, the American Jewish Congress joined with others in a statement of views on those bills. That statement dealt in some detail specifically with this question of claims eligibility. For the convenience of the subcommittee, we are appending the pertinent parts of that statement, and making it a part of this letter.

We request that this letter, together wih the excerpt from the joint statement of 1957 appended hereto, be accepted as the statement of the American Jewish Congress and made a part of the June 18 record.

Sincerely yours,

IRA GUILDEN, Chairman.

EXCERPT OF TESTIMONY SUBMITTED TO THE TRADING WITH THE ENEMY SUBCOMMITTEE ON APRIL 4, 1957

As indicated above, S. 600 makes U.S. citizenship as of the date of loss a prerequisite to recovery. It is the view of the three organizations that the provision on citizenship as a factor of eligibility contained in S. 1302, which would extend the benefits of the law to persons who are citizens at the date of the enactment of the bill, is, in every respect, a more just rule.

The requirement that a person must be a citizen of the date of loss is generally considered a sine quo non in the case of the claim of an individual against a foreign government; i.e., in the case of international claims. Because an individual cannot prosecute a claim against a foreign government, he must turn to a state to espouse his claim. By the application of a legal fiction, the injury to a person is deemed to be an injury to the state of which he is a citizen and his state prosecutes the claim on his behalf. As a result of this legal fiction the rule in international claims has grown up that a state will not espouse a claim unless the person asserting it was a citizen of that state at the time of the lossotherwise the theory that the state had been injured when the person sustained the loss would have no validity.

This rule has no application in the war damage claims-essentially domestic claims-compensable under S. 600. The claims are not claims against a foreign government. In fact, they are against no government. They are claims which the United States, in the exercise of its sovereign powers, decides to honor. In these circumstances, the Congress, in fixing eligibility, is not fettered by the rule that it must restrict recovery to persons who were citizens of the United States at the time of loss. Honoring claims which the Congress, in its sole discretion, chooses to honor, and appropriating taxpayers' money to pay the claims, it can permit itself to be as just as it wants to be.

That is precisely what Great Britain did in the disposition of moneys which it received from Czechoslovakia in settlement of British nationalization claims. On September 28, 1949, Great Britain entered into an agreement with Czechoslovakia pursuant to which Czechoslovakia paid Great Britain 8 million pounds sterling “in final settlement *** of claims with respect to British property, rights, and interests affected by various Czechoslovak measures of nationaliza

tion * * Article 1 of the agreement defined "British property" as property

owned by British nationals on the date of the agreement and "at the date of the relevant Czechoslovak measures" (in other words, at the date of loss). Despite this clear-cut provision in the agreement, the foreign compensation bill of 1950, enacted by the British Parliament and the order in council promulgated pursuant to that bill provided that persons who were British citizens either on the date of the official decree of confiscation, the date of the physical dispossession, or on the date of the agreement were eligible to participate in the fund. Referring to the disparity between the provisions in the foreign compensation bill of 1950 and the agreement with Czechoslovakia, the Secretary of State for Foreign Affairs reported to Parliament as follows: "These provisions follow in general those of the agreements (the plural was used because the reference is to an agreement with Yugoslavia as well), but it is not practicable to follow the agreements entirely because they were drafted for the purpose of making settlements with foreign governments and not for the purpose of application as

municipal legislation." In other words, in settling the nationalization claims with Czechoslovakia, Great Britain could assert the claims only of its citizens at the time of loss, but in distributing the bulk amount under its domestic law it felt free to distribute the money as it chose, and, finding it equitable to do so, made the fund available to persons who were citizens at the time of agreementa much later date than the date of the loss.

American precedent for the provision on citizenship in S. 1302 is found in the legislative history of the International Claims Settlement Act of 1949, the act which implemented the agreement with Yugoslavia under which the United States received $17 million in settlement of nationalization claims of U.S. citizens arising out of nationalization of their property in Yugoslavia. The act as passed by the Senate provided that persons who were citizens of the United States at the time of the enactment of the law should be eligible to participate in the Yugoslav fund. It was only in conference that the Senate yielded to the House version, which limited recovery to persons who were citizens at the time of taking. This example is cited only to show (1) that there are no legal obstacles against the broadening of the rule of eligibility to include persons who were citizens at the time of the enactment of the law, and (2) that even where a fund was received from a foreign power there was the disposition to admit the participation of persons who were citizens at the time of the enactment of the law. A fortiori, where the funds are supplied by the American taxpayer the reasons for extending eligibility to persons who are citizens on the date of the enactment of the law are even more compelling.

Since there are no legal obstacles to the rule of eligibility proposed by S. 1302, considerations of justice demand that persons who were citizens of the United States at the date of the enactment of the law should be eligible to compensation for the war losses they sustained. By adopting this recommendation the Congress would be honoring the claims of persons who had contributed to the war effort, whose sons had served in the Armed Forces of the United States, who, as taxpayers, had contributed to the fund which is used as the source for the payment of the claims, and who, by virtue of having relinquished their former citizenship, have no government other than the United States to turn to for compensation.

It is important to bear in mind that some of the persons whom S. 600 would exclude are persons to whom the United States offered a haven when they were fleeing from persecution by Nazi Germany and her allies. The moral claim of persons in this category was recognized by the Allied Powers, including the United States, when they insisted that persons who were treated as enemy nationals by the enemy (victims of persecution) should be assimilated to that of United Nations nationals and, as such, entitled to recover for the war losses they sustained in the countries where persecution was practiced. Thus, the United States helped in exacting provisions from Hungary, Rumania, and Italy that such persons who sustained war losses in these countries be given the same rights that American citizens enjoy under the treaties. It would be strange if the United States were not as solicitous of the rights of these people in laws which it enacts as it was in the postwar treaties which it negotiated. Moreover, both S. 600 and S. 1302 contemplate the return of enemy assets sequestered pursuant to the Trading With the Enemy Act. Unless the rule of eligibility contained in S. 1302 prevails, the consequence of it would be that persons who were avowed enemies of the United States would have restored to them their property rights, while persons who suffered from the ravages of a war which was preceded by an assault against them, and of which they were the principal victims, would be given no relief for their war damages.

Finally, it should be pointed out that, under both S. 600 and S. 1302, legal entities may recover war damage compensation if 50 percent of the stock of the legal entity is owned by persons who, as natural persons, could qualify as claimants. It is, thus, possible that 50 percent of stockholders who at no time were residents of the United States may indirectly recover for the war losses sustained by the corporations in which they hold stock, while persons who have integrated into American life, who contributed to the American war effort, and who, as taxpayers, provided part of the funds which will be used to pay the war damage claims, will be denied any measure of recovery. It is not conceivable that the Congress would dignify this bit of irony by incorporating it into law.