compensate our citizens or ourselves for the damages done by the governments of the nationals affected." In another case Zittman v. McGrath, 341 U. S. 446, Justice Jackson stated at pages 453 and 454: "The New York courts were advised of five purposes of the Federal Government's program: '1. Protecting property of persons in occupied countries'; '2. Preventing the Axis, now our enemy, from acquiring any benefit from these blocked assets'; '3. Facilitating the use of blocked assets in the United Nations war effort and protecting American banks and business institutions'; '4. Protecting American creditor'; ‘5. Foreign relations, including postwar negotiations and settlements.'" The division of authority between the Alien Property Custodian and the Secretary of the Treasury remained the same with respect to the types of enemy property to be vested and the types to be kept frozen until June 8, 1945, when jurisdiction to vest "cash and securities" owned by Germany and Japan or its nationals was also conferred upon the Alien Property Custodian under Executive Order 9567. This governmental decision to vest all German assets in the United States was apparently a part of the overall Allied decision that the enemy country must pay in reparations for the damage it caused to the Allies. This policy was made a part of foreign policy disposition of postwar problems through the final act of the Paris Reparation Conference in December 1945, in which the United States and the western European nations agreed that each would hold the German assets in its jurisdiction as part of its reparations share. It was subsequently confirmed by the Congress in section 39 of the Trading With the Enemy Act, as added by section 12 of the War Claims Act of 1948, which provides that— "The Trading With the Enemy Act of October 6, 1917, as amended, is hereby amended by adding at the end thereof the following new section: "SEC. 39. No property or interest therein of Germany, Japan, or any national of either such country vested in or transferred to any officer or agency of the Government at any time after December 17, 1941, pursuant to the provisions of this Act, shall be returned to former owners thereof or their successors in interest, and the United States shall not pay compensation for any such property or interest therein. The net proceeds remaining upon the completion of administration, liquidation, and disposition pursuant to the provisions of this Act of any such property or interest therein shall be covered into the Treasury at the earliest practicable date. Nothing in this section shall be construed to repeal or otherwise affect the operation of the provisions of section 32 of this Act or of the Philippine Property Act of 1946.'" Following the change in policy from restricted wartime vesting of assets that would contribute to all-out mobilization to a postwar objective of "reparations," it was a natural consequence to expand the vesting program to include all types of property so as to increase as much as possible the amount chargeable to reparations. This was accomplished by President Truman under Executive Order 9567 in delegating to the Alien Property Custodian the authority to vest cash and securities which had theretofore been excluded from vesting under Executive Order 9193. The Executive Order was submitted to the President by a joint memorandum of May 30, 1945, from the Acting Secretary of State, Joseph E. Grew, the Secretary of the Treasury, Henry Morgenthau, Jr., and the then Alien Property Custodian, James E. Markham. The memorandum read as follows: MEMORANDUM FOR THE PRESIDENT: MAY 30, 1945. Under Executive Order No. 9193 of July 6, 1942, control of dollar balances, securities and other liquid assets of the enemy countries and their nationals was conferred upon the Treasury, while the Office of Alien Property Custodian was directed to deal with enemy-owned property requiring active management. The order provides, however, that if the Treasury should decide to vest any property, it shall be vested in, and dealt with by, the Custodian upon the terms directed by the Treasury. Since the allocation of functions between the two agencies, the Treasury has not vested any property but has relied on its blocking controls, while the Custodian has followed a program of vesting. We are agreed that the national interest requires the complete elimination of existing German and Japanese interests in property in the United States. If you approve, we are ready to join in a coordinated program under which all German and Japanese property will be vested and will be converted into cash as soon as practicable. It is proposed that exclusive authority to vest such property and to direct the terms upon which it thereafter should be dealt with, be conferred upon the Custodian by an amendment of Executive Order No. 9193. The Treasury will continue to be responsible for developing overall procedures to insure that enemy assets held in the names of nationals of liberated or neutral countries will not be released under unfreezing programs. All proceeds of vested property will for the present continue to be held in special accounts in the Treasury of the United States. Although we believe that a governmental decision with respect to the final disposition of these funds should be deferred, we feel that American creditors who have claims against any person whose property in this country has been vested should be paid on an equitable basis, to the extent the vested assets of their debtor permit. The expenses of the Alien Property Custodian's Office will continue to be paid out of vested property and its proceeds. We are fully agreed that plans for ultimate disposition of the funds realized from vested German and Japanese property should make no provision for any return or compensation, direct or indirect, by the United States to the former owners. Subject to your concurrence, it is our intention to present these views to Congress in conjunction with legislation which will aid in effectuating the program. If you agree with the program, it is requested that you sign the attached amendment to Executive Order No. 9193. [S] JOSEPH C. GREW, Acting Secretary of State. [S] H. MORGENTHAU, Jr., Secretary of Treasury. [S] JAMES E. MARKHAM, Alien Property Custodian. With the issuance of Executive Order 9567, the Office took a census of all German-owned property in the United States. Thereafter it proceeded to vest regardless of the type of property. Senator SMITH. Mr. Myron, when did you become connected with the Office? Mr. MYRON. I started with the Office when it was established in 1942. Senator SMITH. I asked that because I did not want to place him with to much responsibility, but he started with the Office in 1942. Senator DIRKSEN. I asked Mr. Myron originally when he started and he has detailed his identity with this whole operation. Mr. MYRON. I have been connected with this Office for the last 21% years. The CHAIRMAN. Mr. Chairman, may I suggest we are not interested particularly who was the Attorney General or the Secretary of the Treasury. Senator Smith wants to know the names of the men who were in charge of the matter. Senator DIRKSEN. I think Mr. Myron understands that now. Mr. MYRON. I do, and I will try to get most of that information for you. Senator DIRKSEN. Suppose you proceed. Senator HENDRICKSON. Mr. Myron, before you do proceed, I notice in your formal statement here you say in that paragraph at the top page 14 over 11,200 of these were issued after October 15, 1946, when the Department of Justice was given jurisdiction over alien of property. Mr. MYRON. That is right. Senator HENDRICKSON. Who had jurisdiction over Alien property prior to 1946? Mr. MYRON. The Alien Property Custodian. It was an independ ent agency. Senator HENDRICKSON. Completely an independent agency? Mr. MYRON. Yes. Senator SMITH. Set up by Executive order? It is apparent from these illustrations that the Office of Alien Property, upon its establishment in the Department of Justice, was confronted, not with the final liquidation of an operation well along the road toward completion, but with several programs that had not yet reached their highest rate of activity. Simultaneous with the necessary increase in vesting activity, the Office had to undertake solution of the rapidly growing problems attending the birth of the huge World War II claims program. Before the major programs could be digested, the Office received responsibility for the foreign funds and Philippine programs. Moreover, with the passage of the War Claims Act of 1948, the Office faced still another major problem, that of financing the War Claims Fund. Under that act, awards are payable to the American citizens who suffered personal injury while internees or prisoners of war of the enemy governments. Payments were to be made from the war claims fund, with the proceeds of vested German and Japanese property which became available as the property was liquidated and claims and litigation disposed of. The procedure apparently contemplated-of transferring specific accounts after they had been cleared of all claims-faced certain difficulties. Senator SMITH. That was after the expense of the Office had been provided for and expense of liquidation? Mr. MYRON. Payment was to be made to war claims. Senator SMITH. After that? Mr. MYRON. That is right. Senator SMITH. I believe you turned over to the War Claims Commission about $150 million before this liquidation had proceeded to the point it is now. Mr. MYRON. That is true, sir. Senator SMITH. And without much reference as to what the expenses of liquidation were going to be. Why was that done? Mr. MYRON. Because at the time they just got ahead of us— Mr. MYRON. In computing awards for internees or prisoners of war. Senator SMITH. All right. Pardon me. Mr. MYRON. Section 9 (a) of the Trading With the Enemy Act prohibits the liquidation of vested property while a suit for return of such property is pending. Some of the major properties vested during World War II, such as the General Aniline & Film Corp., are involved in section 9 (a) suits and cannot be liquidated. The Attorney General is the defendant in these suits. He cannot control the speed of the litigation. Transfer to the war claims fund of the property involved in these suits must await final disposition of the litigation. Likewise, until all title and debt claims against an account have been disposed of, no transfer of that account is possible. Senator HENDRICKSON. How many of those suits are there in that case? Mr. MYRON. I have the figures later on in this statement, Senator. Senator DIRKSEN. I think Mr. Creighton will testify in some detail on this matter. Mr. MYRON. I think he will in connection with claims. On the other hand, the demands on the fund were immediate. As you know, the War Claims Act originally provided for the payment of $1 per day to American servicemen for each day they spent in substandard enemy prisoner-of-war camps. It also provided for certain monetary awards to American civilians who had been interned by the Japanese in the Philippine Islands and American Pacific possessions that had been occupied by the Japanese. When the War Claims Commission started active operations in 1949, it was soon apparent that it could compute its awards to prisoners of war at a much faster rate than the proceeds of enemy property could be made available by the Office of Alien Property through transfer of individual accounts. To meet the immediate needs of the Commission and in order that payments of awards would not be delayed, the Office in June 1949 made an initial transfer of $25 million to the war claims fund. In February 1950 the Office of Alien Property was advised by the War Claims Commission that it would require $150 million within 2 to 3 years to satisfy valid claims under the War Claims Act. Following hearings before the House Interstate and Foreign Commerce Committee, the Office, with the approval of the Bureau of the Budget, agreed to advance the required sums from the general pool of vested funds on the basis of estimates as to the amount of money which would probably remain after disposition of claims against vested property. By March 1952 advances to the fund totaling $150 million had been made. Senator SMITH. Right there I want to ask you a question, too. So up to the present time $150 has been turned over to the war claims fund? that Mr. MYRON. Yes. Senator SMITH. That has been turned over before there has ever been any real adjudication of the expense items that should be charged against the properties from which these proceeds came? Mr. MYRON. I do not think that is exactly so, Senator. Senator SMITH. Let me ask you this way: As I understood from from Sapp, he said, as I understood from him and the act and those who had been over this matter, that if you looked at it from the most favorable light you could not find but, I think he said, $16.5 million up to now, counting all expenses and liquidation cost that could possibly have been transferred legitimately to the War Claims Act. Is that right or not? Mr. MYRON. I do not think that is exactly right, Senator. I think there are funds available which are not presently encumbered by claims or suits for which we have cash which could be transferred into the war claims fund. True, this is an estimate made by the Office as to the amounts of money that would be available after any claims or suits pending against us. Senator SMITH. Now why was the $150 million transferred before that amount was really available? Let us take it another way. United the Office of Alien Property knew what were the expenses of liquidation, you could not know how much you were going to have available to transfer; could you? Mr. MYRON. We could estimate. Exactly; no, sir. Senator SMITH. You have estimated $150 million and turned over $150 million. Mr. MYRON. That is true. Senator SMITH. Do you not know that in the final analysis on the prospects of what the information before you now is, that something will have to be done to take care of that $150 million transfer, either by way of Congress appropriating new money to pay for the administration of Alien Property Office or else returning that money to the Office. Mr. MYRON. I do not think there is any question. Senator SMITH. You don't mean to say there are $150 million net being realized out of alien property? Mr. MYRON. I would say there would be at least $150 million. Mr. MYRON. I would like to check those figures. Senator SMITH. I think that is interesting because I understand from Mr. Sapp and some of the accountants who dealt with this thing there was not any such sum as $150 million, but it was transferred. I am trying to get whether or not it was political pressure brought on the Custodian to transfer more money than became available from time to time for the purpose of satisfying somebody's urging, because you say in here there were demands made under the act. Mr. MYRON. That was put in by the War Claims Commission. Those were demands by the War Claims Commission who had the authority and responsibility for paying out these claims. Senator SMITH. They had no right under law to make those demands upon you until you had a net amount available for distribution. Mr. MYRON. That is true. Senator SMITH. But they did make those demands upon you? Mr. MYRON. They asked us for money with which to pay the claims. Senator SMITH. Now, who directed your office or you to transfer that money to the War Claims Commission prior to its really being realizable, we might say? Mr. MYRON. Of course I was not in a position at the time to pass on it but I understand that the estimate was made by the office that there would be $150 million available for payment to the war claims fund. Upon demand of the War Claims Commission for the necessary money to administer their act, that we, having determined that, turn the money over to them. This was done, by advances from time to time, of course, not at $150 million at one time. Senator SMITH. Who directed you to turn over from time to time these amounts beginning with $25 million and finally going up to $150 million? What person or persons? Mr. MYRON. As I stated, that would be by the Attorney General with the approval of the Budget Bureau. Senator SMITH. Was that done by document, by letter, or order, or whatnot? Mr. MYRON. It was done by the transfer of the money by check. Senator SMITH. What is the evidence of that order? Did you get a letter of instruction from the Department of Justice saying turn |