and Japanese assets was inconsistent with our grants and loans, exceeding billions of dollars, to the Governments of these countries. The prior subcommittee concluded that legislation should be drafted for the return of the vested properties with appropriate safeguards and amendments to the Trading With the Enemy Act, as amended. Those recommendations culminated in the introduction of S. 3423 of the 83d Congress. This bill was reported out of the committee to the Senate, and was on the Senate Calendar at the time of adjournment. During the existence of the present subcommittee the work of the previous subcommittee was continued. Several major bills were introduced and considered. Hearings were held on the major bills, with the result that S. 4205 was reported to the committee and by it thereafter to the Senate. Two bills of consequence were reported after hearings and consideration, S. 1146 and S. 2226, which became Public Law 611 and Public Law 1007, respectively. It is recommended that a comprehensive measure providing for a full return of vested assets and the payment of American war-damage claims, not otherwise provided for by law or executive agreement, be favorably considered; that the work of the examination and review of the administration of the Trading With the Enemy Act be continued and that a firm national policy be established with respect to vested assets not inconsistent with our historical and traditional policy respecting privately owned enemy alien property; and, further, that our national policy of encouraging foreign investments and the protection of our present foreign holdings be not jeopardized by a policy of even partial confiscation. It is inconceivable to the subcommittee that an office should be maintained, at a cost averaging $3 million a year, for 11 years after the termination of hostilities and more than 15 years after the declaration of war, the function and purpose of which office is so diametrically contrary to the larger, beneficent national policy of our Government. Sincerely, OLIN D. JOHNSTON, Chairman. MARCH 1 (legislative day, FEBRUARY 28), 1957.-Ordered to be printed Mr. JOHNSTON of South Carolina, from the Committee on the Judiciary, submitted the following REPORT Since March 18, 1955, under the chairmanship of Senator Olin D. Johnston, the examination and review of the administration of the Trading With the Enemy Act has continued. Executive and public hearings have been held with the result that the conclusions set out in the previous reports of prior subcommittees appear fortified and amply justified. In addition thereto, study and consideration have been given to pending bills affecting the disposition of alien property and the multiple questions raised in connection therewith. During the 84th Congress there were 63 bills introduced in the House of Representatives and the Senate which had for their purpose amendments to either the War Claims Act of 1948, or the Trading With the Enemy Act, as amended. Bills affecting the War Claims Act have a direct relationship with the administration of the Trading With the Enemy Act because section 12 of the former is identical with section 39 of the latter. PRELIMINARY The Subcommittee on Trading With the Enemy Act, pursuant to Senate Resolution 63, agreed to March 18, 1955, and Senate Resolution 171, agreed to February 17, 1956, commenced a review in accordance with their provisions and continued the investigation of the administration of the Trading With the Enemy Act begun by the Committee on the Judiciary in the 82d Congress pursuant to Senate Resolution 245. The subcommittee also studied and considered the bills referred to it, holding executive and extensive public hearings in connection with such proposed legislation. During World War I, Congress found it necessary to enact the original Trading With the Enemy Act (Public Law 91, 65th Cong., approved October 6, 1917). The primary and agreed legislative purpose and intent of this act were to immobilize commerce with enemy aliens and to prevent the use of the assets of enemy aliens in the United States to the detriment of our war effort. Confiscation, temporary or permanent, partial or total, was foreign to the original congressional intent. Since the passage of the act there have been many amendments to it including section 39 which was added by section 12 of the War Claims Act of 1948. Power of blocking and seizing of intangible assets and the consolidation of the functions. under the original act arose by virtue of Executive orders formulated under the War Powers Acts, following the commencement of World War II. Together, the foregoing constitute the legal basis and justification for the seizure, vesting and administration of enemy alien property, governmental and private, including that alleged to be enemy-tainted. Section 12 of the War Claims Act, being section 39 of the Trading With the Enemy Act, converted our national and traditional policy of custodianship or trusteeship of such properties, as contemplated by the original act, into one of confiscation. Section 39 provides that no property or interest therein of Germany, Japan, or any It further provides that the net proceeds remaining upon the completion of administra- LIMITED WAR DAMAGE CLAIMS, INTERNEES, ET CETERA The War Claims Act of 1948 created a War Claims Commission which had for its purposes the payment of limited personal wardamage claims for detention, injuries, improper subsistence allowances and war-damage claims of religious, charitable and educational organizations for damage to or the loss and destruction of their properties. The major part of these prisoner-of-war claims arose and occurred in the Pacific theater, particularly with respect to Japan and in the Philippines. To date, practically all of these major, personal war-damage claims have been paid. The time for filing claims has expired. Some are pending final adjudication. These claims have been paid from the proceeds of the $225 million transferred from the Office of Alien Property to the Treasury for deposit in the war claims fund.1 1 The Congress has never authorized the transfer of a substantial portion of that $225 million. On July 1, 1954, by virtue of Executive Reorganization Plan No. 1, the War Claims Commission was abolished and the Foreign Claims Settlement Commission was created to assume the administration of these unsettled claims, along with others. As of November 30, 1956, the expenditures from the War Claims Fund of $225 million, allocated from vested assets, are as follows: Total deposits to the war claims fund_____ Claims paid through Bureau of Employees Compensation__ Administrative expenses, Bureau of Employees Compensa- Administrative expenses, Foreign Claims Settlement Com- Reimbursement to State Department for assistance__. Bureau of Employees Compensation: Allotments----. Total gross disbursements__ Redeposits to fund (credits) ___ Total net withdrawals__-- Balance available as of Nov. 30, 1956--- $225, 000, 000. 00 23, 410, 954. 18 178, 000, 000. 00 711, 223. 52 4, 928, 029. 91 50, 550. 08 17, 500, 000. 00 69.50 224, 600, 287. 19 6, 729. 28 224, 594, 097. 91 405, 902. 00 Of the payments made by the Foreign Claims Settlement Commission, successor to the War Claims Commission, $51,776,000 have been paid to those claimants in the European theater of war; $119,886,000 for claims arising in the Pacific area; and $660,000 have been paid to claimants whose particular theater of war has not been determined, including merchant seamen and others. SEIZURES, BLOCKING, AND VESTING Certain provisions of the original Trading With the Enemy Act are still in effect; various amendments to the original act have been enacted, as has been noted in detail in prior subcommittee reports; some provisions have terminated, or have been superseded; and doubt exists as to the effectiveness of other remaining sections of the original act. Under the authority of the War Powers Acts (77th Cong.), the President was empowered to block, seize, and vest not only the property of enemy governments, but also the property of nationals thereof. The power of blocking assets was originally exercised by the Secretary of the Treasury. At the time of Pearl Harbor the Department of Justice administered the alien property still held under the Trading With the Enemy Act as a consequence of World War I. By Executive order of March 11. 1942, World War II seizure powers and related functions were granted to a newly created and independent agency-the Office of Alien Property Custodian. The functions of that office were transferred to the Department of Justice by Executive order under date of October 14, 1946, and are being administered by the Office of Alien Property in that Department. The transfer was confirmed by the provisions of Reorganization Plan No. 1 of 1947. The vesting of Japanese-owned property (governmental and private), ceased when the Treaty of Peace with Japan became effective on April 28, 1952. Property owned by individual Germans, as well as American-owned property destined to go to German nationals, continued to be vested until April 17, 1953, when the President informally directed the same to be stopped. Vast properties of American citizens earned in the United States, such as guardianship estates, decedents' estates, devises, legacies, proceeds from insurance policies, annuities, social-security benefits and the like, aggregating an amount in excess of $91 million, have been seized. Incidentally, these properties in the main were created in the United States and had borne their proportionate share of the successful American war effort. Reports of prior subcommittees detailed the businesses conducted as going concerns and operated by the Office of Alien Property. Some have been liquidated. Several major incorporated enterprises have continued to be operated for the benefit of the United States, because of pending litigation under section 9 of the Trading With the Enemy Act. Technical reasons and licensing contracts have caused other businesses to be continued in operation by the Custodian. Section 34 of the Trading With the Enemy Act provides for the payment of debt claims of American creditors against former enemy alien owners whose property was vested. Investigations revealed as of June 30, 1955, that approximately 24,000 debt claims were still pending for settlement. It is estimated that currently 18,000 claims remain unsettled. A large number of these claims are by American nationals against the Yokohama Specie Bank, Ltd., and the Sumitomo Bank, Ltd., with a fewer number of claims against former German shipping concerns. Many of these claims have been pending since 1946 with no final determination of the same by the Office of Alien Property. Other amendments to the Trading With the Enemy Act provided for the return of vested property to nonenemy aliens and to certain persecutees. Recent authorization (Public Law 626, approved August 23, 1954) was given for the filing of claims against so-called heirless properties. The subcommittee is advised that about 3,600 claims are pending in reference to Public Law 626. ANNUAL REPORT OF CUSTODIAN The Annual Report of the Office of Alien Property to the Congress should be made pursuant to the provisions of section 6 of the Trading With the Enemy Act. Section 6 provides with respect to the report as follows: That the President shall cause a detailed report to be made to Congress on the first day of January of each year of all proceedings had under this Act during the year preceding. Such report shall contain a list of all persons appointed or employed, with the salary or compensation paid to each, and a statement of the different kinds of property taken into custody and the disposition made thereof. No list of employees with their salaries has appeared in any report of the Alien Property Office since 1943. The subcommittee feels that |