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and liquidation, and the legal problems in that stage are for the present and immediate future fully as substantial as they were in the earlier stage. But it is a new stage, which will in turn give place to a further one later on.
Mr. SNYDER. One would think that, like in the other war, as the war closed and in the months following, when these popped up everywhere, the same thing would happen here.
Mr. CUTLER. The litigation volume will, I think, increase very definitely, and other things connected with that. Certain aspects will increase, while others will decrease. So you cannot anticipate a very striking net decrease from now on for some time to come.
OPERATION OF BUSINESSES HELD
Mr. TABER. This problem you have at the moment, your business enterprises—the number of people who are operating in them, are not included in these estimates?
Mr. McNAMARA. That is correct, sir.
Mr. TABER. They are not. You do not run the businesses; that is, you have business managers in these different set-ups that run them? Mr. McNAMARA. That is correct, sir.
Mr. TABER. They are mostly the ones that were in charge of the businesses beforehand, maybe not altogether.
Mr. McNAMARA. I would not say altogether, but there may be still some men connected with the business before the war who are still with the business. They have all been very carefully checked and investigated.
Mr. Taber. That is, the only changes have been in cases where you were afraid of the loyalty of some of the people involved?
Mr. McNAMARA. That is correct. We have tried to eliminate any influence which might be adverse to our interests.
Mr. Taber. Has that eliminated practically all of them?
Mr. TABER. In the over-all picture, has it eliminated practically all of themı? Or are most of the businesses being run by the same people who were running them before?
Mr. McNAMARA. I would say there has been a change in the management in most of the companies. At least, we have elected our own directors as we were able to do so through our acquisition of the stock in the company,
Mr. TABER. Generally, are the people who are working in these companies changed, or are they mostly the same ones that were there before?
Mr. McNamara. Down the line, those who were there and were loyal and competent people, were maintained in their positions. Mr. Taber. Does that cover most of them? Mr. McNAMARA. I would say so, except for the management.
Mr. Taber. In what percentage of those four-hundred-odd busiDesses that you have taken over has the management been changed?
Mr. McNAMARA. Well, I would say the management has been changed to some degree in all of them.
Mr. MOORE. Many of the companies included in those 472 were essentially orphans after the war started, such as the Japanese banking company, Mitsui, because of the fact that most of their management left on the last boat or were immediately interned. That is true of a number of them.
Mr. TABER. Did you not have a lot of things that belonged to the Dutch and the French that you had to take over, or was that entirely another operation?
Mr. McNAMARA. Except as to patents, trade-marks, and copyrights, we took over very few properties of anyone other than the six enemy countries—Germany, Italy, Japan, Bulgaria, Hungary, and Rumania.
Mr. TABER. You did not take over much of the Dutch and French properties?
Mr. McNAMARA. Very little except patents; and where we did, it was only to conserve the property where it was abandoned, with nobody here to manage it.
Mr. TABER. Are you rid of all those now?
Mr. McNAMARA. We have only six vestings, I think it is, in which we are active at the present time.
Mr. Tabor. Why do you have them? Is it simply a preservation proposition?
Mr. McNAMARA. Yes. In those cases in which we supervise and direct the management, we will return supervision to the French or other nationals at such time as they are ready to receive it.
LIQUIDATION OF REAL ESTATE
Mr. TABER. About this real estate. How does that stand? Is that practically all enemy-owned?
Mr. McNAMARA. It is all enemy-owned, as far as I recall.
Mr. TABER. It seems to me that the market is better right now than it may ever be again.
Mr. McNAMARA. We have found it so and are getting good prices.
Mr. TABER. You have in here as of the 1st of January, 611 parcels. How many do you have now?
Mr. MOORE. We have 368. I might say that many of those are partial interests--one twelfth interest in property, and things of that sort.
Mr. TABER. Which makes it more difficult to sell?
Mr. MOORE. Yes. Those are now reaching the stage where the log jams should break on them.
DISPOSAL OF PERSONAL PROPERTY
Mr. TABER. On these lots of personal property, are they pretty well liquidated?
Mr. McNamara. Yes; we are working those down and having sales as fast as we can.
Mr. TABER. How far down are you on that?
Mr. Moore. I should say almost nothing remains. There are a few being added as the weeks go by, but very few.
Mr. TABER. That is, you are finding out some that you did not know about before? ,
Mr. MOORE. There are one or two sticky pieces in there, if I may mention that to you. Mitsui had a billet mill which was designed for use in Japan. We have advertised that and tried to sell it but have not been able to do so to date. There are a few sticky ones of that character, but very few.
Mr. TABER. You do not have to spend a lot of money on it? Mr. MOORE. No. Mr. TABER. Mortgages. Have you liquidated them? It seems to me that you ought to be able to turn them into money. Mr. McNAMARA. We are liquidating them as fast as we can. Mr. TABER. How many do you have left?
Mr. McNAMARA. One hundred and forty-five. We are selling every day. Mr. TABER. You are moving them along? Mr. McNAMARA. Oh, yes; we are moving them as fast as we can.
TREATMENT OF PATENTS AND INVENTIONS
Mr. TABER. Patents and inventions. What are you doing about them?
Mr. McNAMARA. Patents we do not sell; we hold them and license them-nonexclusive licenses, royalty free-to any person who will file an application and show he is competent and qualified to use the patent in production. He must be an Åmerican citizen and reputable.
Mr. TABER. Do you let people have patents free?
Mr. McNAMARA. That is correct, sir—with respect to the enemy countries.
Mr. TABER. That is, there is no restriction, then, if a man is competent here to use these patents, if he is using them, and you let him use them?
Mr. McNAMARA. He applies for a license, pays $15 for a license fee, and gets a license issued by the Alien Property Custodian, nonexclusive, royalty free, for the life of the patent. We also have a clause whereby we can revoke the license at any time.
Mr. CUTLER. That also is subject to the fact that we preserve existing rights of Americans in any of the patents.
METHOD OF HANDLING ESTATES AND TRUSTS
Mr. TABER. What has happened to the estates and trusts?
Mr. McNAMARA. Property which comes in through estates and trusts may be cash or property in kind. Cash is deposited in the Treasury and the property then is turned over to the liquidation division for sale, the same as all other properties are.
Vír. TABER. Perhaps there might be a lot of it that was unliquidated sterest in estates, I presume, but what has happened to it? There might be fractional interests, and all that sort of thing. You could 306 help having that?
Mr. McNAMARA. Fractional interests in real estate, as Mr. Moore mentioned a few minutes ago, are frequently acquired through estates.
· Mr. TABER. What are you doing about them? Are they being liquidated too? Mr. McNAMARA. Yes.
Mr. TABER. What percentage of those estates and trusts-practically 2,500 as of the 1st of January-are being liquidated?
Mr. McNAMARA. Those figures represent interests in estates and trusts that have been, vested by the Alien Property Custodian and the matters were pending in the courts at the time of vesting.
Mr. TABER. How many of those have you cleaned up since the first of January?
Mr. McNAMARA. I have not the figures at hand as of this time, but I can get them and shall be glad to insert them in the record. From January 1, 1945, to date, 177 cases have been closed. Prior to January 1, 1945, 1,083 of those cases were pending in the courts, and as the courts allow final accountings and order distribution to the heirs or beneficiaries, the Alien Property Custodian, having succeeded to the interests of the heirs or beneficiaries, acquires that interest, and the executor or administrator turns over the property to the Alien Property Custodian pursuant to a decree of the court, either in kind or in cash. If it comes in as property in kind, such as real estate or mortgages and securities, then it is turned over to the Liquidation Division for sale. If cash, it is deposited in the Treasury.
Mr. TABER. What do you do with copyrights?
Mr. McNAMARA. We license copyrights, generally on a royaltybearing basis.
Mr. TABER. The disposition of what you have disposed of-these set-ups—has reduced your activities and responsibilities, has it not?
Mr. McNAMARA. I would say it has.
Mr. McNAMARA. There has been a change in the program from that of acquiring property to that of management, operation, and liquidation.
Mr. TABER. There has been no action taken as to whether or not these funds and what they represent would be confiscated or should be allowed to continue?
Mr. McNAMARA. Nothing has been done except to liquidate, convert into cash, and put the cash in the Treasury.
QUESTION AS TO CONTROL OF PROPERTY OF RESIDENT ALIENS
Mr. TABER. As to cash in the Treasury I suppose you have applications from alien residents in this country for the use of funds, and that sort of thing? Do you or do you not? 'Mr. McNAMARA. I do not understand what you mean.
Mr. TABER. Suppose an alien resident here has had property taken over by the Government. You have applications from such people and make allowances to many of those people to enable them to live, do you not, to a certain extent?
Mr. McNAMARA. No. These properties become the property of the United States and we have no authority to pay it out to anybody except under claim of ownership or debt.
Mr. MOORE. This property all belongs to nonresidents.
Mr. TABER. You do not take hold of anything that just belongs to a resident alien? Mr. McNAMARA. We do not, with a few exceptions. Mr. TABER. Who does that? Mr. McNAMARA. It is blocked and frozen by the Treasury. Mr. TABER. That is in the Foreign Funds Control? Mr. McNAMARA. Yes. Mr. LUDLOW. May I ask a question right at that point? Mr. CANNON. Does the gentleman yield? Mr. TABER. Yes.
Mr. Ludlow. Suppose a resident alien owns a business here. He would not come under foreign funds?
Mr. McNAMARA. Ordinarily he would not be blocked.
Mr. MOORE. Three hundred and forty. That is as of the end of February.
Mr. Taber. Now, you are asking for 612 next year. Why are you asking for so many?
Mr. Moore. The figure I gave you is for the District of Cojumbia. We have a part of our general departmental offices located in New York and in that location-348.
Mr. TABER. You have 348 there and 340 here?
Mr. MOORE (continuing). And 43 in Chicago and 30 in San Francisco.
Mr. Taber. Well, how do you keep all those people busy, especially he 340 in the District of Columbia? What is there for them to do hat would keep them busy? They cannot be running a business over here or doing a great deal about it. It seems to me there would not ne anything for that number to do.
Mr. McNAMARA. In our justification we have explained the funccons and activities of our various divisions. Commencing with the Office of Custodian, Deputy Custodian, and our Vested Property Claims Committee, which deals with the claims filed against these properties by those persons who claim that they were the owners rather than the enemies; the Office of the Secretary, in charge of our records and various other matters; the Office of General Counsel; and then we have our Comptroller's Division, which is located in New York.
Mr. TABER. The Comptroller's Division is in New York?
Mr. McNAMARA. That is right. Then, in Washington we have our Division of Investigation and Research, dealing with the investigations.
Mr. TABER. What page does that appear on?