I might say that this is a typical American family and I cannot think of a more representative one. Their mother and father are both reaching the twilight of their lives and it seems completely inequitable and unfair that this property should not be returned to them.

I would like to mention that this is a comparatively small part of the corpus of property held by the Alien Property Custodian. The total amount available under this section is some $9 million. The Alien Property Custodian advised me about half, or $42 million has been paid out and as your own committee report of last year very correctly points out, there is no appropriation whatever involved in bringing this particular legislation to a successful conclusion.

There is one matter that I would like to mention that also makes a strong impression with me, and that is that at the time of the vesting of this property in January 1943, seven-tenths of the money seized by the Alien Property Custodian was invested in U.S. Treasury bonds.

Here we have the executive branch of the U.S. Government taking bonds and confiscating their obligation to repay pursuant to the terms of the bonds.

It seems to me that it is a good deal, Mr. Chairman, like my borrowing money from you on a promissory note and then filching the

note away.

Senator JOHNSTON. I would also like to say along that same line that the people bought bonds with money that today is worth about 50 cents on the dollar. So when they talk about assets increasing 100 percent they must take that into consideration also, all along the line. Senator BIBLE. That certainly is a true observation, Mr. Chairman. Now, actually, this committee has decided this case. I think you did so in reporting it out on August 12 last year in the very fine report that was written concerning the return of the vested assets to U.S. citizens.

You said three things that I would like to highlight. You said that

The committee feels that our own American citizens affected by the harsh provisions of the Trading With the Enemy Act should not be required to wait until such time as the Congress is prepared to resolve the entire question of the disposition of vested alien assets.

This was the finding of the Judiciary Committee last year and the subcommittee is composed of five of the same members, although it has been enlarged to a membership of seven at this time.

So this, I would think, does speak the mind of this committee.
You also said, and I quote from page 13 of your report:

The enactment of this amendment will, the committee believes, afford these new U.S. citizens the most advantageous, expeditious method of securing their rightful property.

You concluded that the property should be returned to them.

You said, in commenting on the only objection the Department of Justice has made to the return of this property, and that objection was in my opinion an untenable one, in saying that this would in effect give preferential treatment to U.S. citizens. You disposed of that particular contention very well, very effectively, very briefly. You

said:

The committee believes that there is ample basis for the preferential treatt for the persons who acquire U.S. citizenship.

You then went on to say:

It seems inconsistent so far as the committee is concerned to make a grant of citizenship to an alien and then to deny that person full rights of citizenship including the return of property taken from him or the payment of just compensation for such taking. By denying a return to such citizens, means the imposition of an inferior status upon such individual. In effect, it would constitute second-class citizenship.

This is the conclusion reached by your committee last year.

I have only one other point that I would like to make, Mr. Chairman. I think this legislation should stand on its own. It is vital legislation. It is needed now by this family, not 4 years or 5 years or 3 years or even 1 year from now. It is needed now.

In the past this legislation has become encumbered and trapped in the ramifications of many other allied problems in the restoration of the property seized by the Alien Property Custodian.

I would hope that this committee would see fit to immediately report out S. 531.

Mr. Chairman, thank you.

Senator JOHNSTON. I would also like to state to the Senator that about one-fourth of all vested assets consists of the decedents' estates and in guardianship cases. These are, in other words, strictly American earned and owned properties. One-fourth amounts to approximately $87 million of $300 million valuations of the vested assets at the time of vesting. That is a situation which we are facing.

A lot of people do not understand the full facts which confront us. Another thing, it leaves us in this predicament: We continue to hold private property which belongs to individual Germans-the German people, not the Government of Germany.

I certainly thank you for coming before us, Senator Bible. I hope there is something we can do along these lines to settle these problems forever.

Senator BIBLE. Thank you very much. I appreciate your comments, Mr. Chairman.

(The formal statement of Senator Bible follows:)

STATEMENT OF HON. ALAN BIBLE, U.S. SENATOR FROM THE STATE OF NEVADA, IN SUPPORT OF S. 531

Mr. Chairman, Senators, I am before you today for the third time to ask you to send to the Senate floor a bill to which there is or can be no real opposition, and which rectifies, to my mind, a very considerable wrong.

I speak of S. 531, a simple amendment to the Trading With the Enemy Act which would permit the return of U.S. property to U.S. citizens.

When I first appeared before this subcommittee I spoke at length of the Reno family which this measure would benefit. That family, lineal descendants of U.S. Senators Sharon and Newlands from my own battle-born State, are still in Reno. And even though they have waited several years, they are still hopeful that the U.S. Senate will return to them, as U.S. citizens, that property which is rightfully theirs.

Moreover, when I first appeared before this subcommittee one son of that family, and a principal beneficiary of S. 531, had just entered the U.S. Naval Academy at Annapolis. This month he graduated from that Academy and now is an ensign in our naval service. I am confident that he will spend his life in the service of our flag. How, Senators, can we, who love and serve that same flag, deprive that young man of his American property?

Let me just mention the other children of the Strachwitz family. One daughter teaches school in Nevada. Two daughters are attending school in Reno. Another daughter works for the Atomic Energy Committee. The other child, a young

man, is now working for his master's degree in education at the University of California.

It is these children who will benefit from S. 531, for Mr. and Mrs. Strachwitz are nearing the twilight of their lives. Can you, Mr. Chairman, can anyone, call to mind a family of youngsters more representative of young America?

Since the vesting by the custodian of this American property, the trustee of it has paid to the Government the sum of $543,000. The corpus of the trust, however, remains with the trustee, which is the Union Trust Co., of the District. of Columbia. The Government has never had possession of the property.

The Alien Property Officer tells me that he has approximately $42 million left from the $9 million previously appropriated to pay claims under section 32, thus S. 531 costs the Government very little indeed, and calls for no appropriation whatsoever.

There is one curious aspect to this matter which should be mentioned: When this property was vested in January of 1943 more than seven-tenths of it was in U.S. Treasury bonds. Thus the executive branch is in the anomalous position of borrowing money from Mrs. Strachwitz and then confiscating its obligation to repay her pursuant to the terms of the bonds. It is as though, Mr. Chairman, I borrowed money from you on a promissory note and then filched the note.

Aside from one or two highly technical and minor objections, the executive departments object to S. 531 only because it would "prefer" American citizens over individuals who have not migrated to the United States. As your subcommittee observed last session in favorably reporting out my bill, S. 411, which was identical to S. 531, "There is ample basis for the preferential treatment of persons who acquire U.S. citizenship." I heartily endorse this sentiment. After all is said and done, Mr. Chairman, the beneficiaries of S. 531 are our people, our friends, and we should prefer our own citizens over the citizens of other countries, for it is our citizens for whom we legislate, and it is our citizens who have entrusted us with this legislative power.

Mr. Chairman, S. 531 is good legislation. It is necessary legislation. Since it was needed several years ago, it is vitally needed now, not 5 or 4 or 3 years, or even 1 year from now. Moreover, the issue posed by S. 531 is clean cut, and that is the way, in my judgment, the bill should be reported to the floor. In the past, legislation for the return of American property to American citizens has become entrapped in the ramifications of other and actually unrelated issues. There seems no need for that, Mr. Chairman, and I accordingly ask you to report soon and favorably on S. 531, and to bring it before the Senateon its own merits, alone and unencumbered by extraneous matters.

Senator JOHNSTON. Senator Styles Bridges? We are taking witnesses in alphabetical order.

Mr. WOOD. The Senator is working on his statement. He stated he could not be here. But he would have his representative here. Is there a representative from Senator Bridges' office here?

(No response.)

Senator JOHNSTON. Senator Bush.

Mr. WOOD. Senator Bush has sent me a statement and has requested that I read it. I will first read his letter to you, dated today. Senator JOHNSTON. Proceed.

Mr. Wood (reading) :

An unavoidable conflict will make it impossible for me to appear before your subcommittee today on S. 2012, which I have introduced for myself and Senator Saltonstall. I will appreciate it if the enclosed statement I had prepared on the bill is included in the record of the hearings. I hope the subcommittee will act favorably on the bill which is intended to correct a most inequitable situation.

With kindest personal regards, I am,
Sincerely yours,

PRESCOTT BUSH,
U.S. Senator.

As a part of his statement Senator Bush attaches a letter from Mr. Bernard M. Baruch, 597 Madison Avenue, New York, dated June 16, 1959. I shall read it now.

MY DEAR SENATOR BUSH: I have just read the copy of your bill to amend the Trading With the Enemy Act to provide for the divesting of certain interests in estates and trust, and for other purposes.

I am glad to see this. Injustice has been perpetrated in the case of the widow of an old friend of mine, the late Herman Sielcken. She remarried and is now Mrs. Clara Sielcken-Schwarz.

Herman Sielcken was an American citizen. So was Mrs. Sielcken-Schwarz when she set up a trust fund of $100,000. The daughter for whom the trust was set up was named Ingeborg von Gemingen, now Mrs. C. F. de Steiger, and she was an American citizen at that time. Later on she married a German and lost her American citizenship. She received the income from this trust until World War II when it was seized and she has had nothing from it since.

Your bill covers this situation exactly except for this difference that the recipient of the trust was an American citizen for a time and lost it only because she married a German.

I am leaving for Europe this Wednesday, but I should be glad to do what I can to see that this bill is passed because it is a proper and just bill. With warmest personal regards, I am,

Sincerely yours,

The statement of Senator Bush is as follows:

BERNARD M. BARUCH.

STATEMENT OF HON. PRESCOTT BUSH, A U.S. SENATOR FROM THE STATE OF CONNECTICUT, AS READ BY MR. WOOD

Mr. Chairman and members of the subcommittee, I request favorable action upon S. 2012 which I have introduced on behalf of myself and the senior Senator from Massachusetts, Mr. Saltonstall.

This bill, if enacted, would eliminate an inequity arising from the Trading With the Enemy Act.

Briefly, the object of this bill is to amend the act to permit trustees to pay future income and principal to the lawful beneficiaries thereof and not to pay such income to the Office of Alien Property.

Thirteen years after the end of World War II, the Government of the United States continues to seize the income from, and presumably will claim the principal of, trusts created by American citizens, notwithstanding the fact that at the present time there is no possible connection between any action inimical to the United States and the receipt by the beneficiaries of this income, and their ultimate receipt of principal when the trust terminates.

A case which illustrates very well the injustice to which I refer is related in a report of this subcommittee in the 85th Congress, dated March 6, 1958. From page 4 of this report, I quote the following:

"Illustrative of such cases is that of the estate of the grandfather of Martin Wood, of Greenwich, Conn. His grandfather, a native-born American citizen, who died in 1932, created a trust by his will, leaving life interests in his trust estate to his four children and upon the death of the last child the remainder in fee to be divided among his grandchildren. One of the decedent's daughters in the early 1900's married a German. She died leaving two children in Germany. They are the beneficiaries of their parent's share in the dividends from the trust estate. The corpus of the trust consists of American stocks, securities, and American bonds, the earnings from which vary, depending upon the dividends received from the stocks and securities. Though the amount of the corpus is known, the earnings are consequently unknown. However, the long arm of the vesting power of the Office of Alien Property has reached and reaches into the future so far as the two grandchildren of the decedent are concerned. Not only is the will of the testator being thwarted today and in the future, but the provisions of the Trading With the Enemy Act are penalizing this American because two of his grandchildren merely happen to be half German in blood." The injustice illustrated by this example is repeated over and over again in a number of similar cases.

The Trading With the Enemy Act was intended to prevent the use of American property in such a way as to aid Nazi Germany during World War II.

Today, there can be no such possible purpose justifying the continued seizure of income from property located in this country which is lawfully payable to children, grandchildren, and other beneficiaries of American citizens.

The bill which I have introduced is a very simple one. It provides only that income and principal becoming due in the future may be paid by these American trustees directly to the lawful beneficiaries even though they be German nationals.

It has no effect on property already seized, nor on issues relating to the large industrial concerns.

The Federal Republic of Germany is now an important friend and ally of the United States. The bill which I have introduced, if enacted, would eliminate a very unfair discrimination which our country is presently making against the citizens of the Federal Republic of Germany who are descendants of U.S. citizens.

Thus, there is every justification from the standpoint of fairness and equity to descendants of American citizens and the best interests of the United States in the conduct of our foreign affairs for the enactment of this bill.

I urge this subcommittee to report favorably upon this bill so that the Senate may act upon it in the current session of Congress.

Senator JOHNSTON. We will now hear Senator Capehart.

Mr. WOOD. Senator Capehart's administrative assistant called me a few minutes ago. The Senator will be here later in the morning with a statement which he desires to present personally.

Senator JOHNSON. As I stated once before, we stayed up late last night, therefore some of my colleagues are getting into their offices later than usual.

By the way, I notice you mentioned Senator Saltonstall. I notice his name is No. 11 on the list. Will that be along the same line? might put both of them in the record at the same time.

We

Do you have a statement from Senator Saltonstall? If his representative is here, he may come around.

Identify yourself for the record, please.

STATEMENT OF HON. LEVERETT SALTONSTALL, A U.S. SENATOR FROM THE STATE OF MASSACHUSETTS, AS READ BY DAVID B. MARTIN, LEGISLATIVE ASSISTANT TO SENATOR SALTONSTALL Mr. MARTIN. I am David B. H. Martin, Senator Saltonstall's legislative assistant.

The Senator regrets he cannot be here personally as he is attending a Defense Appropriations Subcommittee meeting downstairs.

I have here a statement which he asked me to read; a very brief

statement.

Senator JOHNSTON. Proceed.

Mr. MARTIN (for Mr. Saltonstall): Mr. Chairman and members of the subcommittee, I am very pleased to appear in support of S. 2012. Shortly after the beginning of World War II, the Congress very properly amended the Trading With the Enemy Act of 1917 to provide for the seizure of all assets in the United States owned by enemy governments or their nationals. This was a legitimate war measure to prevent the use by the enemy of these assets or their proceeds in the prosecution of their war against our country.

In this process it was only natural that thousands of estates and trusts, created by American citizens, including many future interests, such as life estates, remainder and residual interests owned by enemy aliens, would be vested in the United States under administration of, first, the Alien Property Custodian, and more recently of the Office of Alien Property in the Department of Justice.