committee, I think, would have done so except for the position of the administration, and at that time I prepared a small brief. It seemed to be doing only justice that those small amounts should be returned, and I would like to leave with the committee this brief that I prepared at that time.

The CHAIRMAN. You may have that incorporated in the record. Mr. HAWLEY. I suggest that it be incorporated as part of the record.

The CHAIRMAN. The reporter will get it in the record. Is that all, Mr. Whitman?

Mr. WHITMAN. That is substantially all.

(The brief referred to above is as follows:)

[In re H. R. 13496 and similar measures]

THE REPUBLIC OF AUSTRIA V. THE UNITED STATES AND THE PROPERTY IN THE HANDS OF THE ALIEN PROPERTY CUSTODIAN

By Edmund A. Whitman of Boston, Mass., formerly a Liquidator of the Aus tro-Hungarian Bank, appointed by the Reparation Commission at Paris in August, 1920.

THE CASE FOR AUSTRIA

"The modern usage of nations, which has become law, would be violated; that sense of justice and of right which is acknowledged and felt by the whole civilized world would be outraged, if private property should be generally confiscated, and private rights annulled. The people change their allegiance; their relations to their ancient sovereign is dissolved; but their relations to each other, and their rights of property, remain undisturbed." (Chief Justice Marshall in U. S. v. Percheman, 7 Peters Reports (U. S.) 81 at page 87 (1833).) "Confiscation of debts is considered a disreputable thing among civilized nations of the present day; and indeed nothing is more strongly evincive of this truth than that it has gone into general desuetude, and whenever put into practice, provision is made by the treaty that terminates the war, for the mutual and complete restoration of contracts and payment of debts." terson, J., in Ware v. Hyton, 3 Dall (U. S.) at p. 255 (1796).)

(Pat

"In strictness it (the right to confiscate property) may still be said to exist, but it may well be considered as a naked and impolitic right, condemned by the enlightened conscience of modern times." Clifford, J., in Hangor v. Abbott, 6 Wall. (U. S.) 532 (1867).)

"Private property can not be confiscated." (Art. 46 Hague Convention of 1907, signed by the United States.)

THE NATIONALS OF THE REPUBLIC OF AUSTRIA NOT RESPONSIBLE FOR THE ACTS OF THE FORMER IMPERIAL GOVERNMENT

The Austro-Hungarian Empire was composed of two entirely separate States. Austria and Hungary, loosely bound together only for defense and by economic interest. Each had its separate government. Although the Emperor was induced to sign the declaration of war by false information that Serbia had already attacked, the war was generally popular throughout the empire as a fight against Russian czarism and was supported by the people. Evidence of this is plenary. War bonds were subscribed for throughout the empire. Czech and Slav regiments fought as vigorously against Russians and Italians as the German. Patriotic societies everywhere assured the Government of their support. After the collapse of Russia the situation changed; the diverse racial elements in the empire fell apart and the old monarchy disappeared absolutely.

By the peace treaties of St. Germain and Trianon its territory was parceled out to (1) Italy on the southwest, to (2) Rumania on the east, to (3) Serbia on the south, forming the new "Yugoslavia," to (4) Poland on the northeast. and (5) an entirely new State of "Czechoslovakia" was created on the north. What was left was divided between the two new Republics of (6) Austria

and (7) Hungary, historic names being thus preserved. From a nation of 50,000,000 people little Austria is cut to 6,000,000, of whom 2,000,000 are in the old capital city of Vienna.

This new republic, with an area about that of New England without Maine, is largely mountainous, with only 23 per cent of its land cultivable. It falls far short of feeding itself. It has no coal. Its railway system is disorganized and in confusion. It is surrounded by hostile neighbors. Its situation is deplorable and desperate, and its citizens are in misery and well nigh without hope.

Nevertheless, when the European peace treaties were drawn, our allies determined to hold somebody responsible, and, disregarding the rest of the old empire, held the new Republican Governments of Austria and Hungary alone responsible for the consequences of the war and loaded down Austria with the payment of reparations and obligations which no one has expected for a moment it could ever pay. So far from attempting to collect anything out of Austria, the European nations have from the start given serious consideration to plans for the financial rehabilitation of that unfortunate State, robbed as it has been of its means of keeping alive.

By the peace resolution of Congress of July 2, 1921, the United States reserved all rights accorded to it under this wicked treaty. Shall Congress insist on taking the pound of flesh from this skeleton, where the only effective method lies in seizing private property of citizens who inhabit only a small fraction of the old empire? Shall the citizens of these new republics be alone held responsible for the acts of an imperial government now disappeared forever?

The peace resolution of Congress speaks of the retention of the private property of Austro-Hungarian nationals by the Alien Property Custodian "until such time as the Imperial and Royal Austro-Hungarian Government, or their (its) successor or successors, shall have made suitable provision for the satisfaction of all claims against said government."

There is no successor, and there are no successors, to the Imperial and Royal Austro-Hungarian Government.

The present German Government may well be ragarded as a successor to the Imperial German Government, as German territory is substantially intact; but why should the United States single out one, or even two, of the seven fragments into which the old Austro-Hungary has been dismembered to hold them solely responsible for the acts of the former government of them all?

There are to-day 3,500,000 German-speaking people in the new Republic of Czechoslovakia. The Alien Property Custodian has returned their property to them under the amendments to the trading with the enemy act. In fact, these amendments permit the return of seized property to all nationals of the former empire except those domiciled in the present abbreviated and struggling territories of Austria and Hungary. Millions of dollars have thus been returned by the Alien Property Custodian.

The burden falls with peculiar hardship on Austria because it contains the old capital city of Vienna, where much of the business of the old empire was centered. This Government has seized properties of Vienna banks and manufacturing corporations, although depositors, creditors, and stockholders are scattered over the whole empire and even in neutral countries. As the act now stands, a citizen of Czechoslovakia has had part of his property returned to him, but his rights in corporations whose head offices are in Vienna are still withheld.

There is no need to dwell on the, woes of Austria. They are only too well known, but no one in America can appreciate the sufferings of the formerly well to do, now in poverty. For example, two Vienna ladies, now in distress, to whom a relative in New York left by will small legacies, find those legacies now in the United States Treasury. The business of the Vienna banks has been crippled, with an incidental crippling of the business interests and the employed class, by the withholding for these four years of the deposits of these banks in American banks.

THE LIQUIDATION OF THE AUSTRO-HUNGARIAN BANK

Another highly meritorious claim deserves the early attention of Congress. The sole currency of the old empire consisted of the bank notes of the AustroHungarian Bank, a private bank, with its head office in Vienna, to which had been accorded the exclusive privilege of issuing bank notes. It had 100

branches scattered over the whole empire. Its function corresponded with that of our Federal reserve banks. When the empire was broken into seven fragments, new currency systems became necessary and the treaty of St. Germain with Austria provided that each of the new States should withdraw from circulation these bank notes in its territory and substitute therefor its own or a new currency, and that then the bank should be liquidated by liquidators appointed by the Reparation Commission, and these countries should share in the assets of the bank in proportion to the notes so retired. Now, whatever may be our attitude toward the new Republics of Austria and Hungary, the other five nations, as well as several neutral countries holding these notes and entitled to share in these assets, are our friends, with whom we have no quarrel. We have returned to the citizens of these States their seized property. Shall we refuse to the States themselves their share in these assets? One part thereof is the sum of $362,902.57 now in the Treasury of the United States. This amount formed a deposit in New York banks made before the war to facilitate foreign exchange. The seven countries in March of 1922 agreed upon the division of the assets. The liquidation is substantially completed, and is held up because the United States retains this deposit. I submit that the interests of our European friendly nations demand that this claim should be paid at once.

If the United States intends to take advantage of the provisions of this treaty which it refuses to ratify, it should at least take it with its burdens and obligations, one of which is the liquidation of this bank. Whatever may be the extent of the relief now sought to be given by Congress, this claim should be included. It is a class by itself. No other claim is like it, or stands on the same or a like footing.

Austria-Hungary never had any Alien Property Custodian and seized no American property. Any war-time supervision was long ago released.

The CHAIRMAN. I believe Mr. Peaslee said he wanted a minute.

FURTHER STATEMENT OF AMOS J. PEASLEE

Mr. PEASLEE. I wanted, Mr. Chairman, to speak to a question that Mr. Garner raised. I will either make a statement now or when he is present.

The CHAIRMAN. There are so few of the committee present.

Mr. PEASLEE. It is with regard to the German banks and their relation to the German Government. The question was raised this morning, and was also raised by Mr. Garner yesterday.

The CHAIRMAN. You may proceed, if you desire.

Mr. PEASLEE. I happen to represent the Deutsche Bank, which was mentioned this morning, and although I have not been requested to appear at this time for it, the question has been raised as to the relation of that bank and other banks to the German Government.

The facts are that the Deutsche Bank and all of the other German banks whose property has been taken, except the Reichsbank, are entirely private institutions, and the German Government has no interest in them whatever. The Reichsbank is a bank which corresponds to our Federal reserve bank and to the Bank of England.

There is a further consideration which should be taken into account in this connection. There is, as you gentlemen know, a quite well recognized custom abroad of having securities of customers registered in the names of banks, and although it has been stated that there are $16,000,000 of assets of the Deutsche Bank in the possession of the Alien Property Custodian, a very large percentage of that, at least four-fifths of it, I am told, represents the properties of a large number of small customers, so that if any movement should be made which looked toward taking the large trusts of the German property owners, as was suggested this morning, the taking of those funds of

the German banks would in effect be taking the property of a large number of individual customers of the banks and a large number of small depositors.

The CHAIRMAN. I do not know what the rest of the committee may think, but I should not be much inclined myself to draw such a distinction.

The committee stands adjourned until to-morrow at 10.30 o'clock. (Whereupon, at 5.05 o'clock. p. m., an adjournment was taken until Thursday morning, November 18, 1926, at 10.30 o'clock a. m.)

HOUSE OF REPRESENTATIVES,
COMMITTEE ON WAYS AND MEANS,

Washington, November 18, 1926. The committee met at 10.30 o'clock a. m., Hon. Willis C. Hawley presiding.

Mr. HAWLEY. The first witness to be heard this morning will be the umpire of the Mixed Claims Commission, Judge Parker. He is called here by the committee at the special request of Mr. Garner of Texas, who had some questions he wished to submit. Judge Parker, if you have any statement in general which you wish to make before the committee submits questions, we will be glad to hear your statement.

STATEMENT OF HON. EDWIN B. PARKER, UMPIRE, MIXED CLAIMS COMMISSION, UNITED STATES AND GERMANY

Mr. PARKER. Mr. Chairman and gentlemen of the committee, I had some hesitancy in appearing before you, and do so only on the invitation of the committee and because I thought perhaps I might be helpful in assisting the committee to reach a sound understanding of the problems before you.

I know the committee will appreciate the fact that, occupying the position I do, having, on the nomination of the President of the United States with the concurrence of the German chancellor, undertaken to act as umpire of this international commission, I have, in a sense, denationalized myself, if I may use that term, and it would be highly improper for me to express any opinion with reference to any controversial question of a political nature with which you here have to deal. So you will permit me, I am sure, to confine myself to a naked statement of the facts as I know them to exist, because of my position as umpire. In dealing with any problem, in dealing with a complicated lawsuit, you gentlemen who are lawyers know that the problem is half solved when a clear statement of the facts is made.

I have no wish to make a speech. I had come here with the thought that we would have something in the nature of a roundtable discussion to develop the facts, but perhaps it may not be amiss for me, very briefly, to sketch the history of the negotiations, treaties, and proceedings leading up to these awards. I am not going to make a long statment, but at the outset it will be helpful to recall that in the prearmistice negotiations the thing that seemed uppermost in the minds of the allied and associated powers was that the rights of their nationals should be protected. You will recall

that in these prearmistice negotiations, which were conducted by the President of the United States with the sanction of the allied powers, it was provided (and this is the only provision in those negotiations with which we are here concerned) that compensation should be made to the nationals of the allied and associated powers for the aggressions of Germany by land, by sea, and by the air. Nothing was said there about the costs of the war. I am referring to these early negotiations and agreements to get the background of and arrive at the intent of the treaty which the Mixed Claims Commis sion had to construe to determine its own jurisdiction in passing upon claims presented to it and in laying down rules for measuring damages in the awards which it has made.

When the armistice came to be signed, that was a military document dictated by military convenience for military purposes and to carry out military ends. But when the treaty of Versailles came to be negotiated, the American delegates, having in mind the prearmistice negotiations, objected to placing on Germany any burden in the way of indemnities or reparation which were in the nature of a penalty or which, in effect, represented the costs of the war, and insisted that those reparations should be confined to the payment of compensation for damages suffered by the nationals of the allied and associated powers. Notwithstanding the vigorous protests of the American delegates, there was embodied in the treaty of Versailles, in what is known as Annex I to Section I of Part VIII, dealing with reparations, three paragraphs (Nos. 5, 6, and 7, respectively) placing on Germany the burden of paying all pensions paid by the allied and associated powers to their own nationals and all separation allowances made by these powers to the families of members of their naval and military forces. The items covered by these three paragraphs constituted a very large percentage of the allied reparation claim against Germany.

When the treaty of Berlin came to be negotiated and was before the Senate for ratification, a number of the Senators (I remember particularly Senator Walsh, of Montana) objected very vigorously to those items and it was the general consensus of opinion, as evidenced by the debates, that Germany should not be held liable for any of the costs of the war as contradistinguished from compensation to American nationals for damages caused by Germany. Article I of the treaty of Berlin provided, in substance, that the United States should be entitled to all the rights and privileges specified or reserved for its benefit in the treaty of Versailles. When the Senate came to ratify the treaty of Berlin it did so on condition (out of an abundance of caution, although the language probably admitted of that construction) that not only the Government of the United States but the nationals of the United States should be entitled to all of the rights and privileges that they would have been entitled to under the treaty of Versailles.

I mention those facts to show how zealously at every step the executive department and the legislative department of the United States has safeguarded the interests of its nationals, although, when the agreement under which this commission was constituted came to be negotiated, the United States expressly stipulated that it would not present to the commission any Government claim arising under