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we had 1,198 employees exclusive of those on military leave and leave without pay. As of December 31, 1944, when we were here before you, we had approximately 800 employees. We estimate for 1946 that we will require 745 man-years, so we have reduced the personnel from December 31, 1944, from 800 to an estimate for 1946 of 745. We are employing as of this date 765 people.

GENERAL STATEMENT

Mr. CANNoN. Will you also give us a statement by categories as to the property which is now in your custody? Mr. McNAMARA. I may say first, Mr. Chairman, that Mr. Markham, the Alien Property Custodian, had intended to be here, but he is unavoidably out of town and he asked me to express his regrets at not being able to be here, but said he would be glad to be here Monday or any other day to answer any questions or give you any information you desire. In answer to your question, Mr. Chairman, the Alien Property Custodian has been given certain functions under an Executive order which authorized him to take any action he deems necessary in the national interest, to direct, manage, control, or vest certain §o of property, first, any business enterprise in the United States which is a national of a designated enemy country and any property under the control of any such enterprise or any interest in it held by an enemy country or a national of an enemy country; any business enterprise in the United States which is a national of a foreign country and any property under the control of such an enterprise, or any interest in it held by a foreign country or foreign national, when it is determined by the Custodian that such action is in the national interest; any other property in the United States owned or controlled by an enemy country or national of an enemy country, not including cash, deposits, foreign exchange, and securities unless necessary for the maintenance or safeguarding of other properties, subject to vesting; any patent, copyright, trade-mark, or related rights, and any property payable or held with respect thereto in which a foreign country or foreign national has an interest; o or vessels in which any foreign country, or foreign national has an interest; any property whatsoever which is being administered under judicial supervision or which is in partition, libel, condemnation, or other proceedings, and which is payable to an enemy country or a national of an enemy country. In the latter category we also are authorized to represent persons who are in the enemy country or in the occupied territory when there is litigation or court proceedings in this country to which those persons are parties and no one is here to represent them.

helative value or ProPErrties held
(See p. 100)

If you would like to have the relative values of the properties, I have here a statement showing the break-down of the types of property which we have vested, and the relative value as of June 30, 1944.

Mr. CANNoN. That will be put in the record at this point.

(The statement referred to is as follows:)

Net equity vested in World War II, classified by type of property, as of dates of vesting and as of June 30, 1944

[In thousands of dollars)

As of dates As of June Type of property of vesting 30, 1944 Cash:1 Income ------------------------------------------------------------------------------- 4,721 Principal------------------------------------------------------------------------------ 21,928 Total.------------------------------------------------------------------------------- 26,649 Cash in process of collection: ? Income------------------------------------------------------------------ ------------- 4×3 Principal------------------------------------------------------------------------------ 114 Total------------------------------------------------------------------ ---------- 597 Interests in vested business enterprises: tock ------------------------------------------------------------------- 92,650 go,964 Equity in enterprises whose assets or excess assets have been vested.-- 47,324 39,485 Partnership interests--------------------------------------------- - 83.3 832 Bonds.---------------------- - 487 489 Notes and accounts receivable------------------------------------------- 8,317 7,000 Total.---------- ------ -------------------------------------------------- 149,611 145,779 Roll. on patents, copyrights and trade-marks (accrued prior to dates of vesting): Patents, patent applications and patent contracts----------------------- 4,431 Copyrights and copyright contracts... ------------ 231 Trade-Inarks and trade-mark contracts---------------------------------- 85 Total.--------------------- -------------------------------------------- 4,747 Real property: Real estate------------------------------------------------------------- 3,425 3,175 Mineral and oil rights-- - 2 2 Ground rents------------------------------------------------------------|-------------- 10 Mortgages------------------------------------ ------- --- 826 871 Total.----------------------------------------------------------------- 4, 253 4,058 Personal property: Tangible personal property 977 6% Chattel mortgages.-------- 2 2 Stocks---------- 260 Bonds--------------- 63 3,752 Mortgage participatio 170 Bank balances-------- 243 43 Nonbanking claims--------------- 2,762 2,325 Life insurance and annuity policies. 32 31 Miscellaneous contractual interests - 11 -------------Total---------------------------------------------------------------- 4,520 7,998 Interests in estates and trusts: Decedents estates------------------------------------------------------. 11,065 7,106 Trusts under wills. 18, 238 14,657 Trusts inter vivos-- 3,948 3,646 Guardianship estates---------------------------------------------------- 631 499 Total.------ 33,882 | 25,908 Grand total--------------------------------------- -------------------- 197,013 * 212,426

1 These figures are net of direct expenses immediately borne by the vested property but not of cash transferred to the administrative expense fund to defray the administrative expenses of the Office. They are subject to upward adjustments of not in excess of $2,000,000 arising from the lack of adequate information at this time to classify certain cash transactions as to income and principal. Cash assets of vested business enterprises are exc uded inasmuch as they are reflected in the valuation of “interests in vested business enterprises. : # item represents amounts known to have been transmitted to the Custodian prior to the close of business on June 30, 1944, which either have not been received or have not been allocated to individual alien accounts by the Custodian as of that date.

* Values stated include only royalties actually collected and royalties on which estimates are available. Additional royalties of indeterminate amounts are known to be payable.

* This figure is before deduction of $5,100,000 in cash transferred to the administrative expense fund for defraying the administrative expenses of the Office.

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PAYMENT OF EXPENSES OUT OF PROPERTIES HELD

Mr. CANNoN. Have you any further statement? Have you concluded your general statement? Mr. R.R AMARA. This agency operates under the Trading with the Enemy Act, as amended. Commencing with 1923, Congress authorized the Alien Property Custodian to pay expenses of operation out of the properties which were seized, and that has continued up until the present time. - We appeared before this committee last \". on a supplemental appropriation bill as the result of the Russell amendment, so-called, and presented for the first time our budget for the balance of the fiscal year and received an authorization from Congress to pay our enses out of the properties vested. *. we appeared before this committee last year we had, under a provision in the Trading With the Enemy Act, an authorization to deduct necessary expenses, and under an Executive order of the President, No. 9325, the expenditure of any moneys was subject to the approval of the Director of the Bureau of the Budget. This is the first estimate we have submitted to the committee for an entire fiscal year. We have the justifications for our request for an authorization, and I shall be id to submit them for the record, giving information which I think may help the committee. Mr. CANNoN. If you will submit them for the use of the committee it will not be necessary to include that in the record, unless there is some particular part that you think is especially desirable. Mr. McNAMARA. No, sir. In general it covers any information which we thought might be helpful to the committee.

REDUCTION IN ESTIMATES FOR 1946

Mr. WIGGLEsworth. You are asking for $3,370,000, as I understand it, compared with $4,000,000 for the present fiscal year? Mr. McNAMARA. Yes, sir. Mr. W1GGLEsworth. When you take out of the $4,000,000 the amount of the overtime, $400,000, that means that on a comparable basis, it is perhaps $220,000 less than what you have spent in the present fiscal year? Mr. McNAMARA. Yes, sir. Mr. W1GGLEsworth. When did you submit your estimates to the Budget? Mr. MooRE. They were prepared as of December 15 and presented to the Budget in February, 1945. Mr. W1GGLEsworth. Is that the first time they asked you to appear in respect to these estimates? Did you not appear before them previous to that? Mr. McNAMARA. As I understand it, the first time we appeared was in respect to the hearings on the war agencies. Mr. WIGGLEsworth. That is the first time you were asked to appear before the Budget as far as these estimates are concerned? Mr. McNAMARA. Yes, sir.

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EXPENDITURES FOR PENALTY MAIL

Mr. WIGGLEsworth. Will you put in the record a statement showing the expenditures for penalty mail for the last two fiscal years and the current fiscal year, and also what you may have spent for publicity work, if o I do not o: you spend much in publicity work; you do not have anything of that kind, do you? Mr. McNAMARA. No. * * * Mr. WIGGLEsworth. Will you give us a statement in reference to expenditures for penalty mail? r. MooRE. I have an estimate here of penalty mail for fiscal years 1945 and 1946. We will be glad to submit that for the record. Mr. WIGGLEsworth. That will be satisfactory. (The statement referred to is as follows:)

Penalty mail estimate

Number of items Rate Total cost Item per 1945 1946 1,000 || 1945 1945 Envelopes ---------------------------------------- 393, 166 425,000 $15 $5,897 $5.375 Labels'------------------------------------------- 15,000 15,666 15 225 235 Tags"--------------------------------------------- 1, 500 1,000 15 23 15 Total---------------------------------------- 409, 666 441,666 15 6, 145 6,625

o for general correspondence purposes; bid invitations on sales, some of which run to 7,000

items per individual sale; estimate of sales for 1945 is approximately 400, with a similar estimate for 1945.

patent program calls for extensive use of penalty mail to make material relating to patents, copyrights,

and trade-marks ayailable to American business. The 1946 program includes an increase in this activity. * Mailing of mechanical abstracts, chemical abstracts, and electrical abstracts. Class lists to purchasers,

for mailing *. forms, supplies, and files between Alien Property Custodian unit offices. * Tags used for light bulky mail as required.

VALUE OF PROPERTY Now HELD
(See p. 97)

Mr. Wigglesworth. What is the value of the property which is now subject to your control? Mr. McNAMARA. Approximately $450,000,000. The net equity in vested property was approximately $223,000,000. Mr. WIGGLEsworth. How does that compare with a year ago? Mr. McNAMARA. $223,000,000 is on the basis of our valuation as of December 31, 1944. As of June 30, 1944, the estimated value of the equity in vested property was $212,000,000. Mr. WIGGLEsworth. Do you estimate an increase in the coming fiscal year? Mr. McNAMARA. We do. I may say that we are about to embark upon a program in the Philippines now that that area has been liberated by our forces; and in cooperation with the Department of the

Interior, the Secretary of the Interior being the Acting High Com

missioner, we are preparing our program now for taking some action in regard to property in the Philippines, and we expect that we will acquire additional property in that area.

Mr. WIGGLEsworth. Is the amount of $223,000,000 gross or net, 50 to speak? In other words, have you disposed of any property in the last fiscal year?

Mr. McNAMARA. That includes any property which we have acquired. We have sold properties and converted them into cash, and the cash was deposited in the Treasury of the United States. It includes the properties that have not yet been sold, plus the cash in the Treasury to our account. Mr. W1GGLEsworth. How much does that cash amount to? Mr. McNAMARA. As of June 30, 1944, the amount of our cash actually in the Treasury derived from completed liquidations and income from vested property was $26,649,000. There was also cash in the process of collection amounting to $597,000, and the remainder is our interest in business enterprises and other items. Mr. WIGGLEsworth. Does the increase from $212,000,000 to $223,000,000 result from the vesting of additional properties, or is it due to additions through estates and other different operations? Mr. McNAMARA. It includes both of those categories. In addition, there is some increase in cash value because of the sale of the property, because we have maintained our sales program in such a way that we get practically the appraised value of our properties, and in some cases we receive more than the valuation in our books. Then we have a decrease in the value of some of our properties.

LICENSING OF FOREIGN PATENTS

M; WIGGLEsworth. Have you licensed any foreign patents taken OVer? Mr. McNAMARA. Yes; we have. ... Mr. WIGGLEsworth. Does that appear anywhere in the justifications you have furnished us? Mr. McNAMARA. As to the number of licenses issued? Mr. WIGGLEsworth. Yes. I would like to have in some detail a statement about the number you have taken over, the number you have licensed, and the license fees. Mr. MooRE. That is on page 29 of the justifications, with the number of licenses granted between July 1, 1944, and December 31, 1944, a total of 371. (Supplemental information:) Prior to December 31, 1944, a total of 45,858 patents and patent applications had been vested, 1,339 licenses issued involving 8,469 patents, and $125,625 collected in license application fees. Mr. WIGGLEsworth. What is the general legal picture in regard to those Fo When you seize a patent are you in the clear to dis}. of the patent, or is there any danger of a come-back after the war m the original holder? Mr. McNAMARA. There is no danger of any come-back. Where the Alien Property Custodian seizes any property, including a patent, the former owner is divested of any legal right or title in the property. The policy of the agency in reference to these licenses is to issue, upon application, to any person qualified as an American citizen, a nonexclusive, royalty free license, for the life of the patent, if it is a patent which was formerly owned by an enemy it." Mr. WIGGLEsworth. You have given us an over-all statement of everything you have taken in and everything you have disposed of or licensed, in the justification which you have presented?

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