Mr. DOWNER. No, I think not the same right as United States citizens. I think American citizens are entitled to prior consideration, absolutely. But if there are assets remaining after satisfying the claims of the American citizens, then I think it is another problem to consider the payment of the others.

Mr. HINSHAW. You see, I might point out something to you which we considered when the original bill was passed, which carried my

name.

That was in 1948. By then these funds and these properties and this personal property and property of all the United States citizens who were in the Philippines, Wake, Guam, and Cavite, and every place else in the Far East that came under the control of the Japanese, had been sequestered by the Japanese, had been taken, just as these deposits were, including all the silver plate and the personal property of individuals who were in the Philippines and on these various islands, and closed into whatever Japanese account that the Japanese could think of. I do not know what they were.

So in 1948 we said in this committee and in the Congress, that, certainly that being the case, we would take all the Japanese assets we could find and reserve them for the payment of American citizens who were in distress as a result of the war action.

We took first, I may say, those who were practically destitute, who had suffered as civilians and were not supposed to suffer, certainly; being starved, beaten, and all the things that the prisoners of war had happen to them, although perhaps not so severe, because that treatment was ferocious to the utmost; and we paid them.

We paid them detention benefits and then made provision for their medical care because a great many of them, most of them, were entirely destitute, having had all of their properties and their income and everything else in the Philippines taken from them. They were there by virtue of its being a possession of the United States. They were legally there, they were not warned to go home. In fact, the warning was deliberately withheld even though the Government knew otherwise, and admittedly so by the officials of the Government.

Mr. DOWNER. They were encouraged to remain.

Mr. HINSHAW. Yes. The families of the armed services were sent home, not by encouragement of the Government, but because the heads of the Armed Forces encouraged the men to send their families home; the Navy particularly, the Army not so much.

Under those circumstances, we were relieving suffering, and we decided at that time that following this relief that we gave those who suffered we would consider such things as property claims.

The War Claims Commission was charged with making up the categories of those claims and the priorities that should be established. The War Claims Commission has done that in the report issued in January 1953, and we are now getting around to it, although the report is not complete. But is was done just as fast as we could do it, considering that Congres ordinarily is a slow-moving body. I want you to get that picture because that is just about it.

I think that is about correct, is it not, gentlemen?

Mr. MACK. Yes.

Mr. BEAMER. Yes, Mr. Chairman.

Mr. DOWNER. They recognize, Mr. Chairman, that the wheels of justice do grind slowly.

Mr. HINSHAW. I say that as a member of the VFW.

We thank you very much, indeed, for your contribution to the hearing, and assure you that we have every sympathy with the citizens of the United States who were members of the Armed Forces found in enemy-captured territory under the United States flag and elsewhere. Mr. DOWNER. Thank you very much.

Mr. HINSHAW. I believe Mr. Joseph B. Friedman desires to testify. He is representing the China Banking Corp. of Manila. Mr. Friedman, we will be glad to hear you.

STATEMENT OF JOSEPH B. FRIEDMAN, WASHINGTON, D. C., REPRESENTING CHINA BANKING CORP. OF MANILA

Mr. FRIEDMAN. Thank you, Mr. Chairman. I appreciate the opportunity to appear.

I represent the China Banking Corp. of Manila. In order to save the time of the subcommittee, Mr. Matthew E. McCarthy, who represents the Philippine National Bank, and Mr. Finley Gibbs, of San Francisco, who represents certain old-time business interests in the Philippines, have asked me to speak for them likewise.

Mr. HINSHAW. Would you name the interests they represent? Mr. FRIEDMAN. Yes. Mr. Matthew E. McCarthy represents the Philippine National Bank. Mr. Finley Gibbs represents his own family interests, and certain others who are identified in a statement he has given me, and which I will give you, if I may, for the record. Mr. Gibbs comes from an old family, an early American family in the Philippines, and knows the subject in great detail. He has indicated to me that he would be most happy to fly to Washington, if you care, to furnish further information after this session.

At the outset, Mr. Chairman, I would like to make clear that there is not now, to my knowledge, and never has been, any attempt to confer upon the claims of these banks or the business interests any additional merit by reason of the fact that they are associated in the same bill with the claims of the veterans of Bataan and Corregidor. The claims are joined together in one bill for a very simple reason. The War Claims Commission, which was set up pursuant to the War Claims Act of 1948 and which, at the request of the Congress, made a report on this whole subject, treated the claims as one, without any distinction.

I am sure that no one in this room, and especially after hearing General Bluemel this morning, would suggest or think that the veterans of Bataan and Corregidor and their survivors are not entitled to the greatest consideration from this Nation. I think there can be no question of it. And I, for one, am certainly in favor not only of their getting their bank deposits back but of everything else the Government will be willing to give them.

I simply want to make the point at this juncture that the merits of these claims here are the same. The people are different and perhaps the veterans of Bataan and Corregidor, as American citizens, deserve greater consideration. But as far as the merits of these claims, they are the same, and the War Claims Commission so treated them. That is the reason they are in one bill.

I feel that the claims of these reputable civilian individual and business interests are supported by the strongest considerations, both of

equity and law. And I would like, if I may, to explain why I feel

that way.

I think, on the side of equity, it is most important to look at the Philippines as they were when all these things happened 12 or more years ago. Now the Philippines are a foreign country. We talk about American citizens and Philippine citizens. But at the time that we are really concerned with in this bill, the Philippines were a part of the United States and a very special part of the United States. Mr. HINSHAW. Just a moment, Mr. Friedman.

Mr. FRIEDMAN. Yes, sir.

Mr. HINSHAW. There was a time, I believe in January of 1942, in which the President asked and the Congress gave independence to the Philippines. I know that the Philippine government, being not constituted at the time, did not request that so-called independence, but they had been urging it for a long time. And it was given to them, according to representations made to me as a Member of Congress, because it was felt that by giving them independence at that time it would stimulate them to greater resistance to the Japanese invasion.

Whether it was in effect then or about to be in effect I cannot remember, but I do remember that we voted independence around about that time.

Mr. FRIEDMAN. That is correct. I think it is one of the most laudable things this country has done.

I am painting the background to show its relation to these claims. Mr. HINSHAW. I mean technically, the question of whether it was American property or an American possession at the time.

Mr. FRIEDMAN. I am not arguing a legal question now, Mr. Chairman. I am arguing the question of whether these claims should be treated differently. And I want to indicate that they should not.

Our administration of the Philippines was a very special act on the part of the United States. I think it is one of the greatest things this country has done. I had not been in the Philippines before the war, but I have been there several times since. Of all the countries I have visited, it is the one country that really likes us. The thing that impressed me over and over again is that beginning with the old-maid school teachers in 1902, the Government servants we sent out there, from William Howard Taft on down to the lowliest civil servant, as well as the American businessmen out there, all did a magnificient job over the years, and at great sacrifice to themselves. They all did a great job for the country.

The point I am making is that we not only sent our bravest soldiers to the Philippines but we also sent some of our other ablest citizens in all fields, including business. It was not an easy life. I am sure General Bluemel can be much more accurate on what the life was like, but I want to say that all parts of America were represented out there. It was not merely a military enterprise, call it colonial, if you like I do not mind that word-but I think we did a remarkable job and it was climaxed by giving them independence.

When you talk about an interest as a business interest, it somehow takes on a less heartwarming appeal. But I would like at this juncture, if I may, to read a statement of Mr. Finley Gibbs whom, as I mentioned earlier, is from one of the early families. He would like it to be read.

Mr. Gibbs' address is 200 Bush Street, San Francisco.

His statement is:

I, Finley Gibbs, now practicing law in San Francisco as a partner in the firm of Gibbs & Giddeon, represent my family's claims and claims of other American civilians who would be entitled to file under H. R. 6407, if enacted by Congress. We have also been in contact with other civilians who would be entitled to file under that bill.

We believe that our claims are just, for the reasons well stated by the War Claims Commission in its 1953 report, and that the credits which we had in 1941 in the Philippines, which was then American soil under the protection of the American flag, are fully entitled to the same treatment as the credits of Americans who were doing business in Japan.

Their credits were confiscated by the Japanese and were provided for in the Japanese Peace Treaty. Our credits were confiscated by the Japanese and the United States Government abandoned our claims in the Japanese Peace Treaty. We believe both legally and equitably we are entitled to just compensation.

We understand some question was raised at the hearing of the subcommittee this morning, Friday, June 11, concerning the nature of the civilians who would be entitled to file under H. R. 6407.

The Americans living in the Philippines in December 1941 were fine, upstanding Americans, and are entitled to consideration as such. A great number were men-and, of course, their families-who went out to the Philippines during the Spanish-American War or shortly thereafter as members of the American military forces and who stayed on in the Philippines after their term of duty. Others are men who went out there in the early days of the Philippines and pioneered in the development of real democracy in the Philippines and have been a credit to the United States Government in being part of a great colonial administration of which the United States is entitled to be proud.

The Americans living in the Philippines in December 1941 were in the same position as Americans who are living in Hawaii today-they were under the American flag and were living on American soil.

Without extending this list of undue length, I would like to set forth some facts about our claimants.

My father was a veteran of the Spanish-American War, a volunteer in the Colorado regiment, who stayed in the Philippines and practiced law there. He was interned by the Japanese in Baguio, and was killed on March 15, 1945, during the bombing of Baguio by the American Air Force.

I was in the United States in December 1941 and served in the United States Army. I participated in the Leyte invasion with the Sixth Army, and assisted in the liberation of my brother and other relatives in Santo Tomas.

My brother, Allison Gibbs, was in the Philippines in December 1941, and he was interned by the Japanese at Santo Tomas.

Among our cilents is Max Blouse, an American who lived in the Philippines for 40 years and was in the bus business there. He was a civilian working with the Army Transportation Corps and was imprisoned by the Japanese as a prisoner of war.

Dr. C. T. Cross, a retired admiral, who was a dentist in the Philippines for many years, and now lives in San Francisco, is another client who would be entitled to file under the bill.

Another claimant is Luther B. Bewley, who went out to the Philippines as a teacher, and was head of the Philippine Department of Education prior to Commonwealth status. He was interned by the Japanese and is now under treatment in San Francisco for his health.

The American civilians and businessmen whose credits were taken away by the Japanese are typical of Americans living and residing in the United States. No distinction has been drawn by the Congress between servicemen and American civilians who were in the Philippines as to their eligibility for filing claims in any other bill passed by the Congress.

We repeat that these claims rest on a firm legal base, and also on a firm equitable base, and submit that they should be approved by Congress for payment from the war claims fund.

I think that I can not add anything to this statement. I think it puts these claims into proper perspective.

This is prejudiced evidence. Here is a person who has an interest, but I think this committee has before it the most objective and un

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equivocal evidence that the claims of these businessmen should be compensated and that there is no proper basis for distinguishing them.

I now refer to the fact that the War Claims Act of 1948 specifically set up the War Claims Commission, and specifically directed that Commission to make a comprehensive study of the whole subject of war claims. After a study of more than 2 years-with which I am sure this committee is more familiar than I-the Commission came up with what, to me, is one of the most outstanding studies that I have seen of this kind.

In their report, they recognized that these are property claims and that while they don't have the same emotional appeal, and they should not have, as claims of persons who had been interned and physically injured, they are claims that are based upon the highest considerations of equity and justice.

The Commission made no distinction and recognized they were making no distinction between claims of veterans and claims of business firms and the banks.

I would like to read into the record, if I may, a few excerpts from that Commission's report.

Mr. HINSHAW. Can you make it brief?

Mr. FRIEDMAN. Yes. There are about three paragraphs I would like to read into the record.

Mr. HINSHAW. If you can summarize them, it would be much better.

Mr. FRIEDMAN. I will take sentences, if I may.

The equities in favor of these claims are strong. In a converse situation, where the United States sequestered the assets of enemy nations under the Trading With the Enemy Act, the United States required the enemy countries to compensate their own nationals for the value of the assets thus sequestered.

It is the view of the Commission that the United States is under obligation to compensate its own nationals for property taken by the enemy under similar circumstances. Clearly American citizens and American business firms who sustained losses through the sequestration of their accounts and credits in the Philippines should qualify as claimants.

In the opinion of the Commission, those who paid the Americans have a just claim for compensation. Had they not paid the American citizens and American business insttiutions-and they were, in fact, under no obligation to pay the Americans after having transferred the sums to the Bank of Taiwan-the Americans would have had valid war claims for the amount they were reimbursed by the debtors.

The debtors who paid the Americans merely discharged a primary obligation of the Government of the United States and should not be required to bear the loss represented by the double payment of the debt.

The Commission, as I say, after more than 2 years of most careful study, came to this clear and unequivocal conclusion. In their report to this committee last year, they specifically recommended payment of these claims. In their letter to Representative Wolverton, dated July 24, 1953, they specifically recommended the adoption of H. R. 6407.

The War Claims Commission only placed the thing on ground of equity and moral grounds. I think, however, there is an important additional reason that has been overlooked heretofore, and that is a legal reason. Representative Rogers spoke very eloquently on that subject this morning. I think that there is a constitutional obligation on the United States to pay these claims as a result of the Japanese Peace Treaty waiver.