Advice was received from the Bureau of the Budget under date of May 21, 1954 with respect to a report on an identical bill, S. 3305, 83d Congress, that there would be no objection to the submission of that report.

Sincerely yours,

WHITNEY GILLILLAND, Chairman.

Mr. HINSHAW. The State Department has entered a report very much along the same lines and suggests deferral until the full gamut of claims is submitted to us, and the Department of Justice makes no recommendation. We will put those statements into the record as well.

(Material referred to is as follows:)

Hon. CHARLES A. WOLVERTON,

DEPARTMENT OF STATE, Washington, September 30, 1953.

Chairman, Committee on Interstate and Foreign Commerce,

House of Representatives.

MY DEAR MR. WOLVERTON: Further reference is made to your letter of July 22, 1953, transmitting for the Department's comments a copy of H. R. 6407, a bill to authorize payment of certain war claims, including payment of certain claims arising out of the sequestration by the Imperial Japanese Government of credits of members of the military and naval forces of the United States and other United States nationals in the Philippines.

The proposed measure would amend the War Claims Act of 1948, as amended, by extending the authority of the War Claims Commission to receive, adjudicate, and provide for the payment of compensation to any member of the Armed Forces of the United States or any other national of the United States for losses arising as a result of the sequestration of bank deposits and other credits by Japanese authorities during their occupation of the Philippines, and would also provide compensation for the payment of claims filed by any bank doing business with the Philippines, regardless of its nationality, which reestablished such sequestered credits of United States nationals for reimbursements of the amounts paid by it to the United States nationals. H. R. 6407 would require that such claims be filed within 6 months from the date of its enactment.

The category of claims covered by the proposed measure is only one of a large number of categories of claims arising out of the war, with respect to which compensation has not been provided. As you are aware, Congress in directing the War Claims Commission to prepare a report on the subject of claims arising out of World War II intended to provide a framework for dealing with such claims in a comprehensive manner, rather than on a piecemeal basis. The supplementary report of that Commission, which was submitted to the Congress on January 16, 1953 (H. Doc. 67, 83d Cong., 1st sess.), contains comprehensive recommendations for the disposition of war claims not authorized to be paid under existing legislation. This report, on pages 102-105, also includes a full discussion of the claims arising out of the sequestration of bank deposits and other credits in the Philippines during the war. In these circumstances, it is recommended that Congress defer consideration of H. R. 6407 until it shall have had an opportunity to consider the supplementary report of the War Claims Commission on the subject of war claims in general. The Department has been advised by the Bureau of the Budget that while there is no objection to the submission of this report to the commitee, the Bureau believes that no action should be taken on the proposed legislation pending the completion of the current study of the supplementary report of the War Claims Commission (H. Doc. 67, 83d Cong., 1st sess.).

Sincerely yours,

THRUSTON B. MORTON,

Assistant Secretary (For the Secretary of State).

DEPARTMENT OF JUSTICE,

Hon. CHARLES A. WOLVERTON,

OFFICE OF THE DEPUTY ATTORNEY GENERAL,
Washington, December 1, 1953.

Chairman, Committee on Interstate and Foreign Commerce,

House of Representatives, Washington, D. C.

DEAR MR. CHAIRMAN: This is in response to your request for the views of the Department of Justice relative to the bill (H. R. 6407) to authorize payment of certain war claims, including payment of certain claims arising out of the sequestration by the Imperial Japanese Government of credits of members of the military and naval forces of the United States and other United States nationals in the Philippines.

The bill would amend the War Claims Act of 1948 (50 U. S. C. App. 2001 et seq.) by adding a new section 7A under which members of the United States Armed Forces and other nationals of the United States would receive compensation from the war claims fund for losses suffered during World War II as a result of the sequestration of their credits in the Philippines by the Japanese occupation authorities. In addition, those banks doing business in the Philippines which reestablished sequestered credits of American nationals after the liberation of the Philippines would receive compensation from the war claims fund for the amounts they paid these American nationals. The bill would also provide that claims thereunder should be filed with the War Claims Commission within 6 months after the enactment of the bill. The bill would further provide for the payment of claims to certain substituted individuals in the event of the legal disability or death of primary claimants.

During the Japanese occupation of the Philippines, the Japanese authorities sequestered property owned by American and other non-Filipino allied nations, including bank accounts and other credits. These bank accounts and credits were for the most part required to be paid to the Bank of Taiwan, Ltd. in the Philippines as the depository of the Japanese Government. It is understood that payments were made to the Bank of Taiwan in occupation currency which was issued by the Japanese under a directive that it circulate at par with the Philippine peso. This currency steadily depreciated in value after 1942 and finally became worthless at or about the time of the liberation. Thus the owner of a sequestered credit suffered a total loss as of that time. Subsequent to the liberation, however, some Philippine debtors voluntarily, or in accordance with lower court decisions that their payments to the Japanese had not discharged their liabilities to the American and other allied nationals acknowledged continued liability and made payments in discharge thereof. Later the Supreme Court of the Philippines held that the Japanese sequestration measures were valid and that payments by Philippine debtors to the Japanese authorities of the amounts of obligations owed by them to allied nationals served to discharge these obligations.

Many of the unpaid American creditors filed debt claims under section 34 of the Trading With the Enemy Act, as amended (50 U. S. C. App. 34), in an attempt to obtain payment from assets vested from the Bank of Taiwan, Ltd. and the Japanese Government. The Philippine Alien Property Administration held that the sequestration measures taken with respect to the claimants' property created no liability of the Bank of Taiwan or the Japanese Government which would constitute a debt eligible for payment from their vested assets under section 34 of the Trading With the Enemy Act. This Department, to which the functions of the Philippine Alien Property Administration were transferred by Executive Order 10254, dated June 15, 1951 (16 F. R. 5829), has approved this holding. It is noted, moreover, that the Japanese Peace Treaty makes no provision for the satisfaction of these losses.

From the foregoing it will be seen that those American persons and firms who did not receive payments of their sequestered credits after the liberation of the Philippines have no present means of recouping their losses. Furthermore, the Philippine debtors who reestablished and paid such credits prior to the abovementioned ruling of the Philippine Supreme Court presumably have suffered losses by virtue of their double payments.

H. R. 6407 would compensate the American nationals whose credits remain unpaid and would reimburse those Philippine banks which made payments to American nationals. Philippine debtors other than banks who may have made such payments are not covered by the bill. This Department has no information regarding the existence of such debtors. If there are any, it would seem that this bill discriminates against them. In addition, it should be noted in regard

to the relief afforded by this bill to the banks that it would compensate them for the full amount of the reimbursement they made to American nationals. As stated above, it is the understanding of this Department that the banks in question made the payments of the sequestered credits to the Japanese authorities in occupation currency at the decreed rate of par with the Philippine peso. If so, some or all of the payments may have been made at dates when the occupation currency had depreciated in actual value below the decreed rate of par. Thus it is possible that the banks' double payment did not actually entail paying full value twice, but only once-that is, only to the American nationals after the liberation. In that event, the amount payable to the banks under the bill would be in excess of their actual losses.

Whether the bill should be enacted involves a question of policy concerning which this Department prefers to make no recommendation. It may be noted, however, that the bill would require additional disbursements from the war claims fund which, pursuant to sections 12 and 13 of the War Claims Act consists of net proceeds of German and Japanese property vested under the Trading With the Enemy Act, as amended, and not subject to return under that act. This Department has transferred to the war claims fund a total of $210 million, including $60 million transferred pursuant to the directive in Public Law 211, 83d Congress, approved August 7, 1953 (67 Stat. 461). It is estimated that the transfer of the remaining $15 million authorized by Public Law 211 will leave only a relatively small balance available for ultimate transfer to the war claims fund. Any appreciable increase in payments from the fund resulting from the enactment of this bill or other pending measures to broaden or increase the benefits under the War Claims Act might require financing from sources other than vested German and Japanese assets.

The Bureau of the Budget has advised this office that there would be no objection to the submission of this report, but stated its belief to be that no action should be taken on this bill pending completion of a study of the issues raised by the recommendations contained in the "Supplementary Report of the War Claims Commission, concerning War Claims Arising out of World War II," dated January 9, 1953, which study was undertaken at your request.

Sincerely,

WILLIAM P. ROGERS, Deputy Attorney General.

Mr. HINSHAW. The Treasury Department makes a similar statement. The Treasury Department's report is a short one and I might read that. After the first paragraph identifying the bill it says:

The bill would amend the War Claims Act of 1948 to authorize the War Claims Commission to adjudicate any claim filed by (1) any member of the military or naval forces of the United States or any other national of the United States for compensation for losses in the Philippines by the Imperial Japanese Government and (2) any bank doing business in the Philippines which reestablished such sequestered credits of the United States nationals for reimbursement of the amounts paid by it to the United States nationals. The Department has no comments to make with respect to the bill.

In other words, they leave themselves in the position where they can recommend approval or disapproval when such a bill, if passed, reached the desk of the President.

Mr. MACK. I have a question, Mr. Chairman.

Mr. HINSHAW. Mr. Mack.

Mr. MACK. Mr. Rogers, I have not had a chance to study your bill in detail.

Is there any limitation on the maximum amount to be paid to the individual?

Mr. ROGERS. A limitation as to an individual?

Mr. MACK. Yes.

Mr. ROGERS. My answer would be "no."

Mr. MACK. I mean one who accumulated a sizable holding in the banks in the Philippines at that time; there is no limitation; is there? Mr. ROGERS. No.

50190-54-8

Mr. MACK. If he had accumulated a million dollars?

Mr. ROGERS. If he accumulated a million dollars and he could prove it under the claim here, he would be entitled to it.

Mr. MACK. Do you have any information as to perhaps the amount that individuals have accumulated, if any sizable amounts had been accumulated at that time?

Mr. ROGERS. No; other than the overall picture. That, of course, it is impossible to definitely determine what it may be. But I am informed that it runs in the neighborhood between 7 to 72 million dollars altogether. There are figures to indicate how much the servicemen had. I think Mr. Hinshaw read that a moment ago.

Mr. HINSHAW. That was $200,000.

Mr. ROGERS. But it would be impossible, of course, to give with any accuracy how much it would be. You could only estimate it.

Mr. MACK. I think the purpose of the bill is certainly very good. I did know that there were people that operated in the Philippines before the war that had some questionable practices. I was wondering if there is any sizable amounts involved at this time.

Mr. ROGERS. May I answer it this way: If, in the opinion of this committee, there should be individuals, or even American nationals who may have operated in questionable practices, in other words, collaborated with the enemy, I would have no objection to their being eliminated from the bill.

Mr. MACK. As I said, I have not looked into the subject in great detail, but I had reference to individuals, perhaps a limited number of them, who had accumulated sizable fortunes immediately prior to World War II.

Mr. ROGERS. No, I did not.

Mr. MACK. I am certainly not critical of the bill at all. I just raised that question for my own information.

Mr. ROGERS. I know we considered this for the best interests of everybody. The noble purpose here is indicated by you, and as I have tried to point out, which is to right a wrong as I feel it was brought about when we did not include this in the Japanese Peace Treaty. As least so far as American citizens are concerned, I believe that there is a legal obligation that could be proved in the Court of Claims.

But you could recognize the difficulty that may arise when it is submitted to the Court of Claims and litigation and proof and so forth in connection with it takes so much longer that I think it should be expedited, because, after all, this is 1954 and the Philippines were taken in 1941 or 1942, and if we went for another 8 years or so through the Court of Claims, and then in addition to that, take all of the service people who were there and who lost this $200,000, you can see the problem.

Mr. HINSHAW. I would just suggest that this committee has a great deal of sympathy with the ex-service people who had their money in the banks. And that is not the whole point. That is only a small part of it.

Mr. ROGERS. What I wanted to point out was that if each one of the servicemen, or, as far as that is concerned, every individual who would be entitled to be reimbursed because of the treaty proposition; if they had to proceed with the Court of Claims it would take an indeterminable length of time, and getting them together would, as I indicate, take a long time for us to get down and finally pay it.

I think at least that should be another consideration for the passage of this bill.

Mr. HINSHAW. If there are no further questions, we thank you, Mr. Rogers, for your presentation.

Mr. ROGERS. Thank you a million. I appreciate it.

Mr. HINSHAW. We have one member of the Armed Forces present who can testify as to his particular case, I presume. He may represent others. Is Gen. Clifford Bluemel here?

STATEMENT OF BRIG. GEN. CLIFFORD BLUEMEL, UNITED STATES ARMY (RETIRED)

General BLUEMEL. Mr. Chairman and members of the committee, I am a brigadier general of the United States Army, retired. I commanded the 31st Division of the Philippine Army throughout the Bataan campaign.

I wish to thank the members of this committee for giving me an opportunity to appear in behalf of the members of the armed services who lost their funds in the banks in the Philippines. I am referring, of course, somewhat to my case and to others.

The Philippine Trust Co. had branch banks in every Army post in order to secure the accounts of personnel stationed therein. Shortly after Pearl Harbor the Japanese invaded the Philippines, and on short notice the troops were ordered to Bataan. No one thought of their personal affairs. Their entire attention was devoted to moving troops and supplies. After reaching Bataan it was impossible to get to Manila to withdraw personal funds from Manila banks.

In September 1944, prior to the return of the Americans to the Philippines, the Japanese transferred the private accounts of American, British, and Dutch nationals to the Bank of Taiwan, Ltd. That was a Japanese bank in Formosa and that bank is not now in existence. The Philippine Trust Co. refuses to pay these accounts since they are no longer in that bank.

An officer on Bataan asked me in January 1942 if he would lose his money he had in the Philippine Trust Co. He stated he had over 1,800 pesos which was valued at $900 in American money. This officer did not return. He left a wife and two children. I asked General MacArthur, during a visit which he made to Bataan, if the deposits in the Philippine Trust Co. would be lost. He said he would get a bill through Congress to reimburse those who lost funds in the Philippine banks.

Bills similar to the one here-that is the one Mr. Rogers submitted and so ably explained-were introduced in the House and the Senate in the 81st and 82d Congresses. These bills never got out of the committees apparently due to the opposition of the State Department.

I have here a copy of a reply from the Assistant Secretary of State to Congressman Devereux of Maryland, who especially interested himself in this matter.

I might here state that Congressman Devereux was also a prisoner of war, but he was not in the Philippines. I think he commanded. Wake Island.

The Japanese Peace Treaty prohibited Americans who lost funds and property outside of Japan from making claims against the Japanese Government. The present Secretary of State is the person who drafted the Japanese Treaty.