Mr. FRASER. That is right. I referred to the idea by which the Government would be repaid for shipowners or anybody else out of the Dawes annuities. I said "ships" because Mr. Miller said "ships." If he had said "lead pencils," I am sure the attorney for the lead pencils would have found fault with it. I am against Mr. Miller's plan both this morning and this afternoon. But I am in favor of Mr. Winston's plan.

Mr. CHINDBLOM. Or if you said chocolate or jewelry somebody else would have objected?

Mr. FRASER. Yes, sir.

The CHAIRMAN. You were speaking of that particular feature in connecting with the Dawes Plan.

The CHAIRMAN. Unless there are some other witnesses here who are anxious to get away to-night we will close the hearing at this time until 10.30 to-morrow morning.

(Whereupon, at 4.10 p. m., the committee adjourned to meet again on Friday, the 19th day of November, 1926, at 10.30 o'clock a. m.)

HOUSE OF REPRESENTATIVES, COMMITTEE ON WAYS AND MEANS, Washington, November 19, 1926.

The committee met at 10.30 o'clock a. m., Hon. William R. Green (chairman) presiding.

The CHAIRMAN. Capt. E. E. Buckleton is the first witness. We will be pleased to hear from him.

STATEMENT OF CAPT. E. E. BUCKLETON ON BEHALF OF THE NORTHWESTERN RUBBER CO.

Captain BUCKLETON. Mr. Chairman and gentlemen of the committee, I appear here on behalf of the Northwestern Rubber Co., a corporation incorporated under the laws of West Virginia, with its head office in Akron, its works in Liverpool, England.

If you gentlemen will kindly turn to this document, Return of Alien Property, on page 415, Docket No. 69, you will note that this company was awarded the sum of $4,771.76 on the 8th of January, 1924, for merchandise seized by the German authorities in Belgium on November 14, 1914.

The position I desire to take up is that the United States is acting, in this case, as a receiver. On one side of the ledger they have assets of $500,000,000; on the other side they have debts due to American nationals of $260,000,000-speaking in round figures. I am here to see if we can not get our money and get it promptly. This is one of two cases. The other case I will refer to later. We see no reason why we should not be paid our money and paid it promptly and, to support our contentions, if you will kindly refer to page 19, which reads, "Articles 297 and 298 with annexes of section 4 of part 10 of the treaty of Versailles, which provides, among other things, for the disposition of the enemy property in the possession of the allied.

and associated powers, and which was made a part of the treaty of Berlin," and if you will go on down to clause E on page 20, it

states:

This compensation shall be borne by Germany and may be charged upon the property of German nationals within the territory or under the control of the claimant's state. This property may be constituted as a pledge for enemy liabilities under the conditions fixed by paragraph 4 of the annex hereto. The payment of this compensation may be made by the allied or associated state, and the amount will be debited to Germany.

That annex 4, on page 22, defines the rights and interests of American nationals.

I was here on the opening of the arguments, and heard the statement made in regard to the manner in which it was suggested that these debts should be treated.

Mr. GARNER. Will you let me ask you a question?

Captain BUCKLETON. Yes, sir.

Mr. GARNER. Is there any difference between your claim and other claims of American citizens?

Captain BUCKLETON. Yes, sir.

Mr. GARNER. I would like to have, if I can, just in a word, what the difference in your claim is from those of other firms.

Captain BUCKLETON. Yes, sir. Our claim was for merchandise supplied to German nationals previous to August, 1914. We had the right, after the declaration of war between England and Germany, being an American corporation, to sue the German nationals in the German courts or American courts for the amount of those claims: but, owing to the laws of England and the rigid censorship exercised there, we were not allowed to send any documents to the United States with reference to any claims or any matters pertaining to Germany. We therefore were debarred from exercising a right we had to prosecute this claim in the American courts.

We feel justified, under the circumstances, in making an appeal on behalf of our claim, for the reason that we were in an unfortunate position, being American nationals. of being debarred under the conditions which existed at the time. I do not wish to take up any more of your time in reference to that claim, but merely to put the facts before you.

Mr. CHINDBLOM. That claim does not come within the purview of the treaty of Berlin or the treaty of Versailles or the jurisdiction of the Claims Commission, does it?

Captain BUCKLETON. I should say it did, sir. It is a claim by American nationals against the German Government and German nationals.

Mr. CHINDBLOM. Prior to the war.

Captain BUCKLETON. Prior to our entry into the war.

Mr. CHINDBLOM. I thought you said it was before August, 1914. Captain BUCKLETON. It was.

Mr. CHINDBLOM. As I understand, this is a claim that arose prior to the beginning of the war in Europe.

Captain BUCKLETON. Yes, sir; no, I should not say that, for the simple reason the amount was due about the 15th day of August, 1914. The goods were supplied prior to August 4, 1914. That was the date of the declaration of war between England and Germany.

The CHAIRMAN. Who took the goods who appropriated them? Captain BUCKLETON. The German Government, the German military authorities. They were goods in Antwerp in transit to Liege. If the German authorities had not seized those goods the Belgian debtor would have paid it to us in November, 1914.

The CHAIRMAN. I do not understand how the Germans could have gotten hold of them in Antwerp prior to August 4, 1914.

Captain BUCKLETON. No, sir; not in Antwerp prior to August 4, 1914; in November, 1914. They were in store in Antwerp in transit to Liege and, when the Germans took possession of Antwerp in November, 1914, they seized those goods belonging to us as American nationals.

Mr. CHINDBLOM. They were stopped in transit on account of the war. Is that right?

Captain BUCKLETON. Yes, sir. At that time. Antwerp was not in possession of Germany; we were shipping from England to Belgium without interruption.

Mr. CHINDBLOM. You say they were stored in Antwerp-why were they stored in Antwerp?

Captain BUCKLETON. In transit to Liege.

Mr. CHINDBLOM. Certainly, but why?

Captain BUCKLETON. For the simple reason the Germans were in possession of Liege before the goods could have gotten to Liege. Mr. CHINDBLOM. So that you are in the same position as everybody else. I thought you had some special difficulty.

Captain BUCKLETON. Is not that a special difficulty?

Mr. CHINDBLOM. Is not that the same difficulty of everybody else? Captain BUCKLETON. It is.

Mr. CHINDBLOM. I would like to ask, Mr. Chairman, if all the people who have claims unpaid are going to make a special plea here?

Captain BUCKLETON. You might excuse me. I have come over from England especially for this, not knowing about it.

Another thing: I would like to add, on behalf of my company. another protest. I do not know whether this is the proper place for it, but I have an award here. I do not know whether such a claim comes under your jurisdiction, but this is an agreed statement reached between the Mixed Claims Commission. The amount of the claim was $46,000 and there is an award of $31,143. This was a mark debt and we have been unjustly robbed of $15,000. We claimed that this acount was due in 1914 in German marks.

Mr. HAWLEY. You are protesting against the findings of the Mixed Claims Commission?

Captain BUCKLETON. No, sir.

Mr. HAWLEY. You are claiming the amount allowed is too small? Captain BUCKLETON. No, sir, not as far as that is concerned. We would like to know why the United States valorized the German mark in this particular case at 16 cents as against its value of 24 cents. This debt was due

Mr. CHINDBLOM. Who did that? You say the United States: what agency of the United States.

Captain BUCKLETON. Well, it is the United States Government. I really do not know which department of the United States, not being familiar with it, but the United States.

Mr. HAWLEY. Was not that the action of the Mixed Claims Commission in one of their administrative decisions? Did not they decide the mark at a certain date should be valorized at 16 cents in the settlement of claims arising at that time?

Captain BUCKLETON. I presume they did, sir; but we believe and we feel we have been unjustly deprived of this amount of money. These were accounts against German nationals prior to August, 1914, when the value of the mark was 24 cents to the dollar, and we have not received payment of those marks yet, and we claim we have the right to be paid in marks as of the date when payment of the indebtedness was due.

The CHAIRMAN. I very much doubt whether this committee has jurisdiction to change the award of the Mixed Claims Commission. The Mixed Claims Commission was provided for by the treaty, and, so far as the findings of the Mixed Claims Commission are concerned, they are supported by the treaty, which is the highest law in the land, unless some congressional action is taken to set it aside in some way. And I do not see what we could do with the awards of the Mixed Claims Commission.

Captain BUCKLETON. Well, sir, letting that stand, my contention is that we do not see why the $500,000,000 should be returned to the German Government and we have to whistle for the $40,000 that will be due to us. Our contention is, as I stated before, that you are acting as a receiver; that you have this $500,000,000 on one side of the ledger, and you have on the other side $264,000,000 of American nationals' debts; and we think that you ought to pay us at once our amount out of that $500,000,000 and then return to Germany, which, by the way, is the most prosperous country in Europe to-day-and I travel in Germany once a month and I know it-and return them any balance, for I do not see why we should be forced to be deprived of our money for an indefinite period.

Another case is that in this award, sir, we have to give a waiver that we will not start suit in the German or American courts for the recovery of our money. So that we are entirely dependent on what Congress will do toward appropriating the amounts that have been awarded to us.

The CHAIRMAN. Of course, I would not care to discuss that matter with you. We have heard arguments on the other side as to Germany being the most prosperous country in Europe at the present time, and there is a great deal of difference of opinion about that.

Captain BUCKLETON. Well, sir, I can tell you it is; and I travel in every country in Europe. I travel all the time.

The CHAIRMAN. I know; but you are not the only person who travels in Europe; there are a good many others, and they are entitled to their opinion, too.

Mr. CHINDBLOM. Do you think, assuming it is within our province, it would be perfectly fair and equitable for us to take $40,000 belonging to George Schmidt, in Germany, an individual, and pay that to an American claimant ?

Captain BUCKLETON. I do, sir.

Mr. CHINDBLOM. I am not expressing an opinion on it; I just wanted your view on it.

Captain BUCKLETON. I do, sir. In England every private debtor has had his claim paid.

Mr. HAWLEY. That is because England accepted the offset arrangement. We never did.

Captain BUCKLETON. We had a clearing house over there, and it all went through the clearing house.

Mr. HAWLEY. Your country accepted that method and our country did not.

Captain BUCKLETON. We did.

Mr. BACHARACH. Were they paid in full, in England?

Captain BUCKLETON. Yes, sir; with interest to the date of payment.

The CHAIRMAN. We just had a gentleman testify here the other day that he did not get his claim paid in full, but merely got a small part of it.

Captain BUCKLETON. In England?

The CHAIRMAN. Yes.

Captain BUCKLETON. I think it must have been an excessive claim, sir. Every just claim of every claimant passed by the clearing house was paid, and paid promptly.

Mr. OLDFIELD. The full value?

Captain BUCKLETON. The full value, sir; with interest to the date of payment at 5 per cent. We are borrowing this $46,000, and we have borrowed it since 1914 and paid a much higher rate of interest. We are paying an average of 67% per cent since 1914, and we are to-day receiving 5 per cent for the amount of the claim that has been awarded to us. We consider a great injustice has been done to us as American nationals and, notwithstanding the fact the award has been made to us, that steps have not been taken to make payment to us, in consideration of the amounts of moneys held here by the United States.

Mr. CHINDBLOM. Do you know what Germany did with the claims of her nationals against British nationals that were offset against the claims of British nationals?

Captain BUCKLETON. Well, sir, it all went through the clearing house and they paid into their clearing house. We had a case there that might perhaps enlighten you, the case of a claim on the DoctorCassirer. They paid into the Treuhander in April, 1918, the sum of six hundred and some odd pounds, amounting to between twelve and thirteen thousand marks. That was paid to the treuander and the treuander, I understand, has handed that money over to the American Government, yet we have not been paid as yet.

Mr. HULL. The way it operated, when the balances would be against Germany in making settlements with the English Government, Germany would remit to England every month the amount of that balance?

Captain BUCKLETON. Yes, sir, the amount of the balance. At the time of the declaration of war Germany was indebted to England more than England was indebted to Germany; so that they were compelled every month in these settlements to remit the balance. Mr. HULL. That was under the clearing-house system?

Captain BUCKLETON. Yes; that was the clearing-house system. The CHAIRMAN. Is that all?

Captain BUCKLETON. Yes, sir.

The CHAIRMAN. Our next witness is Mr. David Rumsey.