Mr. MYRON. Of course the President has the authority and he delegates the authority to the proper offices.

Senator SMITH. Who were the proper offices generally? I want to get it down to the person responsible.

Mr. MYRON. He delegated authority to block property. He dele. gated that authority to the Treasury Department. He delegated certain other authorities to vest certain types of property to the Alien Property Custodian. The Executive orders were amended from time

to time.

Senator SMITH. Who are the persons? When you say the "Alien Property Custodian," what person at that time was the Alien Property Custodian?"

Mr. MYRON. At the beginning of the APC, Leo Crowley.

Senator SMITH. I know; who was at the time? You said these other orders were made by the President.

Mr. MYRON. The amended order.

Senator SMITH. What orders are you talking about when you say the orders that were made to direct the Treasury Department, one, and the Custodian two?

Mr. MYRON. The original order blocking certain types of property and authorizing the vesting of certain types of property was made by the President at the time of Leo Crowley's tenure of office as Custodian. That was President Roosevelt and he delegated the authority to the Secretary of the Treasury to block certain types of property. delegated authority to the Custodian to seize certain types of property. Senator DIRKSEN. Actually, however, the authority was in Secretary Morgenthau at the time?

Mr. MYRON. The authority to block property, particularly_cash, securities, and things of that sort. They were blocked by the Treasury Department under Secretary Morgenthau, and the authority to vest certain types of property was under the jurisdiction of the Alien Property Custodian and continued so until the Executive orders extended the powers to vest, took out of the blocking field certain types of property and put them in the vesting field.

Senator DIRKSEN. Proceed, Mr. Myron.

Senator HENDRICKSON. This is after the Alien Property Custodian had been transferred to the Treasury Department?

Mr. MYRON. The Alien Property Čustodian was never in the Treasury Department.

Senator HENDRICKSON. I understood it was.

Mr. MYRON. No, sir.

Senator HENDRICKSON. In World War I it was.

Mr. MYRON. No; in World War I there was a Custodian appointed by the President.

Senator HENDRICKSON. Under the Treasury Department.

Mr. MYRON. You see, you misunderstand, there are certain types of property

Senator HENDRICKSON. That is all right. I am sure I am right about it. It was first under the Treasury Department.

Mr. MYRON. In the First World War?

Senator HENDRICKSON. Yes.

Senator SMITH. Former Senator Sutherland of West Virginia was Custodian; and a lawyer from my home town, where I was born, was

counsel. I remember very well those two men because I happen to know them both personally.

Senator DIRKSEN. Proceed, Mr. Myron.

Mr. MYRON. The vesting function, the initial step in acquisition of enemy property, did not move into high gear until after 1945. Of the total of 19,106 vesting orders issued since the outbreak of World War II, 14,038 were issued after 1945. Over 11,200 of these were issued after October 15, 1946, when the Department of Justice was given jurisdiction over alien property. Moreover, of the total of 61,800 claims so far resulting from World War II operations, more than 55,000 were initially filed after the establishment of the present office in October 1946.

Senator SMITH. I asked why there was that delay in vesting after 1946. Who was personally responsible for that situation?

Mr. MYRON. Because at that time the Department of Justice, the Office of Alien Property of the Department of Justice, had received authority to vest cash securities and other types of property for the first time.

Senator SMITH. You mean they did not have that authority under the statute?

Mr. MYRON. They had the authority under the statute.

Senator SMITH. Who held up that authority? That is what I want to get at.

Mr. MYRON. There was no holding up of the authority, Senator. It was a separation of functions. It was considered only necessary to block this type of property prior to 1946. After 1946 it was considered necessary to vest that type of property.

Senator SMITH. What I am trying to get at, who are the persons who did that, who considered it necessary to do it this way? What individual?

Mr. MYRON. That would be by Executive order, by amendment to Executive order.

Senator SMITH. Who was responsible for those orders? Was it the Attorney General or the Custodian? I realize in the last analysis it was the President who made the Executive order, but of course he knew nothing about this, he could not have known anything about the details of who was the person responsible for this way of handling it. Mr. MYRON. The Executive orders were written by the President. Senator SMITH. I understand that.

The CHAIRMAN. This man is an intelligent man and he can answer this question, Mr. Chairman. I demand he give these names. You know who they are, Mr. Myron. You are not a fool. Answer the question that the Senator asks.

Mr. MYRON. I want to give the names if I possibly can. I will give the exact dates and have it noted who was President and who was Attorney General at the time.

Senator SMITH. The difficulty, Mr. Chairman, that I had at the beginning and the staff under me-and it is what you are going to have, too; I suspect-is to get down to the details of responsibility as to the individual responsibility. Now, we can say this, that or the other group.

The CHAIRMAN. Let me tell you we are going to find out. This committee is going to find out.

Mr. MYRON. I would like to give you all that information, and I will try to give you every date and person in the office. Senator DIRKSEN. You do not know; is that the answer?

Mr. MYRON. I would not know from the dates just exactly who. I would not want to make a mistake on it. I do not know exactly who would be President or who would be the Attorney General at the time.

Senator DIRKSEN. You do get the purport of Senator Smith's question?

Mr. MYRON. I understand it.

Senator DIRKSEN. Then at this point suppose you supply for the record the names of those who, if there was responsibility, were responsible for withholding the Executive orders or withhold pursuance under the statute of the vesting so that there was a delay here causing the major amount of these claims to be filed some time after 1945 and 1946 and deferring vesting as well as deferring claims. We would like to know then who was responsible, who was the Custodian at the time and, if the files will indicate, whether there was any affirmative action or any act of omission, shall we say, that was responsible for it. Suppose you supply them and we will insert a memorandum for the record at this point.

(The memorandum referred to follows:)

SUPPLEMENTARY STATEMENT ON VESTING POLICY BY PAUL V. MYRON, DEPUTY DIRECTOR, OFFICE OF ALIEN PROPERTY

At the hearing of February 20, 1953, the committee requested to be advised of the reasons for the delay until July 1945 in the vesting of enemy-owned cash and securities. In accordance with the committee's request, I am submitting this memoradum.

The decision not to vest enemy-owned cash and securities was made in the early summer of 1942 when Executive Order 9193 was issued by President Roosevelt as an amendment of Executive Order 9095 which had established the Office of Alien Property Custodian. Executive Order 9193 defined in detail the powers and duties of the Alien Property Custodian and the separation of authority between the Custodian and the Secretary of the Treasury, in the field of foreign and enemy owned property. Under this order the Alien Property Custodian was given authority to direct, manage, supervise, control, and vest the following properties:

"1. Any business enterprise within the United States which is a national of a designated enemy country.

2. Any other property within the United States owned or controlled by a designated enemy country or national thereof, not including in such other property, however, cash, bullion, monies, currencies, deposits, credits, credit instruments, foreign exchange and securities except to the extent that the Alien Property Custodian determines that such cash, bullion, monies, currencies, deposits, credits, credit instruments, foreign exchange and securities are necessary for the maintenance or safeguarding of other property belonging to the same designated enemy country or the same national thereof. [Italics supplied.]

3. Patents, patent applications, trade-marks, etc., in which any foreign country or national thereof has any interest.

4. Any ship or vessel or interest therein, in which any foreign country or national thereof has any interest.

5. Any property of any nature whatsoever which is in the process of administration by any person acting under judicial supervision or which is in partition, libel, condemnation or other similar proceedings and which is payable or deliverable to, or claimed by, a designated enemy country or national thereof." As will be noted, this order did not delegate to the Alien Property Custodian the authority to vest "cash and securities."

By way of history, Executive Order 9193 developed in the following manner: As early as 1940 the United States Government took steps to immobilize or "freeze" the assets in the United States owned by nationals of foreign countries

in order to prevent their use by Nazi Germany. To accomplish such purpose, Executive Order 8389, applicable to Norway and Denmark, was issued by President Roosevelt on April 10, 1940, under the authority of the Trading With the Enemy Act of 1917. The Secretary of the Treasury was designated to administer the order. Henry A. Morgenthau, Jr., was the Secretary of the Treasury at that time. Thereafter, as additional countries were invaded by Germany, the Executive order was amended to apply to those countries. Finally, on June 14, 1941, Germany and Japan were added to the freezing program.

Immediately after the entry of the United States into the war in December 1941, the Congress amended section 5 (b) of the Trading With the Enemy Act, and also ratified and confirmed all prior action of the President and the Secretary of the Treasury taken under Executive Order 8389, as amended.1 Under the amended section 5 (b) the authority of the President was greatly expanded; among other things, he was granted the authority to vest property of foreign nations. Shortly thereafter, on March 11, 1942, President Roosevelt, by Executive Order 9095, delegated his authority to vest property to the Alien Property Custodian. The order also established the Office of Alien Property Custodian within the Office for Emergency Management of the Executive Office of the President. Leo T. Crowley was appointed the first Alien Property Custodian.

Executive Order 9095 gave the Alien Property Custodian extremely broad powers. However, it was the opinion of representatives of the Treasury Department that the order had the effect of vitiating its powers in the field of foreign funds control under Executive Order 8389, as amended. They therefore proposed that Executive Order 9095 be revised for the purpose of distinguishing clearly between the controls to be exercised by the Alien Property Custodian and by the Treasury Department and between the types of property to be vested and those which should merely remain frozen under the provisions of Executive Order 8389. After numerous discussions between representatives of the Treasury Department and of the Alien Property Custodian a proposed revision to Executive Order 9095 was submitted to the White House. Certain amendments were made thereto after further conferences between representatives of the Treasury Department, the Alien Property Custodian, and the White House, finally resulting in the issuance of Executive Order 9193 on July 6, 1942. At this time the Alien Property Custodian was Leo T. Crowley, his deputy was James E. Markham, and the General Counsel and Assistant General Counsel were A. Matt Werner and John Ernest Roe, respectively. The Secretary of the Treasury was Henry Morgenthau, Jr., the General Counsel and Assistant General Counsel were Edward H. Foley, Jr., and Bernard Bernstein, respectively; the Director of the Foreign Funds Control was John W. Pehle. Judge Samuel Rosenman handled the matter on behalf of the White House.

As previously stated, property which was excluded from the authority of the Alien Property Custodian under Executive Order 9193 remained subject to the jurisdiction of the Treasury Department. Thus, the enemy and other foreign owned property previously mentioned as excepted from the vesting power of the Custodian under item 2, above, to wit, "Cash and securities," remained under the blocking controls of the Treasury under Executive Order 8389, as amended. The question is raised why the distinction was made by Executive Order 9193 that some types of property were to be vested while others were not. This distinction is well phrased in the First Annual Report of the Alien Property Custodian submitted to the President and the Congress for the period March 11, 1942, to June 30, 1943. In that report, Mr. Crowley stated on page 2:

"Wartime control over enemy-owned property serves the double purpose of eliminating any benefit to the enemy from these assets and of making available productive enterprises and strategic materials to promote our own war effort. In addition, wartime control is essential to prevent property from becoming derelict.

"In contrast with the method of handling enemy property that was followed during the last war, a distinction has been drawn this time betweeen two broad classes of property. Cash, and investment securities not involving control over specific productive assets, have been placed within the jurisdiction of the Treas ury Department. Other types of property, particularly productive assets, which must not only be kept from the enemy but which also must be positively controlled if they are to continue as parts of our economic system, have been placed under jurisdiction of the Office of Alien Property Custodian."

1 Secs. 301 and 302 of the First War Powers Act of 1941 (55 Stat, 839).

In other words, the property excepted by the President from vesting in his delegation of authority to the Alien Property Custodian, to wit, cash and securities, was not the type needed to promote our own war effort; it was essential, however, to freeze such property to prevent its being used by the enemy.

This distinction in policy was further clearly stated in subsequent annual re ports to the President and the Congress. In the Annual Report for the year ending June 30, 1944, James E. Markham, the then Custodian stated on page 4: "There are two main types of possible objectives of the control of enemy property in the United States in time of war. Wartime objectives, which include the exploitation to the full of all enemy property in this country in the interest of the United States for the duration of the war; and postwar objectives, which involve the disposition of this property or its proceeds after the war.

"The wartime objectives are of immediate relevance to the Office of Alien Property Custodian; their attainment has been the goal of this Office since its establishment. Property has been brought under the control of the Custodian, managed, and disposed of, always in an endeavor to make the maximum contribution to the prosecution of the war. A more detailed discussion of the wartime objectives occurs in the Annual Report of the Office of Alien Property Custodian, March 11, 1942, to June 30, 1943, pages 12-14.

"The postwar objectives involve an undecided question of national policy which is within the competence of the Congress and not of the Custodian. After the last war the bulk of the proceeds of the sale of the property which had been seized by the then Alien Property Custodian was returned to its former owners. This precedent conceivably might be followed. There is also the possibility that the property (or its proceeds) will be retained. Legislation has already been introduced into Congress by various members of both houses proposing that the property vested from nationals of enemy countries by the present Custodian should not be returned. Although the issue is not one for him to decide, the Custodian has had to reckon with both possibilities.

"An additional postwar objective of the Custodian concerns primarily vested patents and patent contracts. The Custodian attempts to seek out any restrictive holds which foreign-owned patents may have on American industry and, with the aid of other agencies of the Government, to break them wherever they are found, by whatever means may be available.

"The alternative objectives suggest different vesting policies. If the property is to be returned it would seem, from the point of view of post-war objectives, that the Custodian would do well to avoid vesting wherever possible; for he would have to divest himself of the property before long. If, on the other hand, the enemy property is not to be returned, the Custodian should vest all such property under his jurisdiction in order to bring it under the control of the Government.

"The dilemma has not proved too serious. The Custodian has found that the resting of all enemy property in this country which should be vested in order to attain the first type of objectives, the wartime objectives, has meant the vesting of the bulk of the property under his jurisdiction. It has been his policy, broadly speaking, to vest only those types of property where vesting may contribute to the attainment of wartime objectives. Accordingly, he has not ordinarily vested such property as mortgages, life insurances, and accounts owed to nationals of enemy countries, categories of enemy property which are quantitatively of secondary importance. If enemy property is not returned, this property can be vested later." [Emphasis supplied.]

The Supreme Court of the United States, speaking through Justice Reed recognized the above policy of our Government in the case of Propper v. Clark (337 U.S. 472). The Court said at pages 481, 483, and 484:

"Through the Trading with the Enemy Act, in its various forms, the nation sought to deprive enemies, actual or potential, of the opportunity to secure advantages to themselves or to perpetuate wrongs against the United States or its citizens through the use of assets that happened to be in this country.

"When the Custodian vests blocked property, title passes to the Custodian and his authority to vest and hold cannot be questioned except as provided in the Trading with the Enemy Act. The freezing order of June 14, 1941, immobilized the assets covered by the terms so that title to them might not shift from person to person except by license until the Government could determine whether those assets were needed for prosecution of the threatened war or to 41389-54-pt. 1—2