INTERNATIONAL CLAIMS COMMISSION

FRIDAY, JUNE 17, 1949

UNITED STATES SENATE,

COMMITTEE ON FOREIGN RELATIONS,

SUBCOMMITTEE ON S. 1074,
Washington, D. C.

The subcommittee met, pursuant to notice, at 11 o'clock a. m. in the committee hearing room, United States Capitol, Senator Theodore Francis Green, chairman of the subcommittee, presiding.

Present: Senators Green (chairman of the subcommittee) and Wiley.

Senator GREEN. Gentlemen, we will proceed with this hearing. This is a subcommittee of the Foreign Relations Committee appointed to consider and report on S. 1074, a bill to provide for the settlement of certain claims of the Government of the United States on its own behalf and on behalf of American nationals against foreign govern

ments.

The subcommittee consists of Senator Wiley, who will be here presently and asked us to proceed he is presently attending another hearing and Senator McMahon, who is also attending another hearing, and myself as chairman.

We will proceed. I think these hearings can be made shorter than they otherwise would be by reason of the fact that an identical bill was introduced in the House and hearings were held there at length and we will have the record of those hearings for our consideration here.

I think we may proceed in the first instance by hearing from representatives of the State Department, and I will ask Mr. Tate if he will testify.

STATEMENT OF JACK TATE, ACTING LEGAL ADVISER, ACCOMPANIED BY BEN ENGLISH, OFFICE OF LEGAL ADVISER (INTERNATIONAL CLAIMS), SAMUEL HERMAN, ASSISTANT TO THE LEGAL ADVISER, AND COVEY T. OLIVER, ACTING CHIEF, ECONOMIC PROPERTY POLICY DIVISION, DEPARTMENT OF STATE Mr. TATE. Mr. Chairman, S. 1074 is a bill which the Department of State prepared in consultation with the Department of Justice and the Treasury Department, and such changes as were suggested by the General Accounting Office were made in the bill. Its recommendation to the Congress was prompted first by the fact that an agreement was concluded on July 19 of last year by the Governments of the United States and Yugoslavia, pursuant to which the Government of Yugoslavia paid to the United States the sum of $17,000,000 on account of claims arising out of the nationalization or other taking of properties belonging to citizens of the United States by Yugoslavia.

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The purpose of the measure is to provide a method of adjudication of the individual claims on their merits and the payment of the claims by the Secretary of the Treasury out of the $17,000,000 fund.

H. R. 4406, an identical bill, has been reported out by the Committee on Foreign Affairs with certain amendments. These amendments are not considered to be inconsistent with the Secretary of State's major recommendations and are acceptable to the Department with the exception of one minor amendment which will be discussed later.

The bill provides for the establishment of a domestic commission of three members to pass upon the claims. Consistently with recommendations of the Hoover Commission and the views of the Bureau of the Budget concerning the multiplication of agencies, the bill provides that the commission, to be known as the International Claims Commission of the United States, be established with full safeguards as to its quasi-judicial independence, in the Department of State. As an aspect of necessary over-all supervision, the bill empowers the Secretary of State to appoint and remove Commissioners for cause, to appoint Commission personnel on recommendation, and to terminate the authority of the Commission or the terms of office of the Commissioners.

The bill also provides that there shall be deducted from the amount of each payment 3 percent as reimbursement for the expenses incurred by the United States in connection with the adjudications and payment.

Provision is made for the immediate payment of awards of $1,000 or less and the immediate payment of $1,000 on awards in excess of $1,000.

Senator GREEN. That was changed by amendment in the House, was it not?

Mr. TATE. We are at a little disadvantage because we have not had a copy of the bill as reported out by the House.

Senator GREEN. Never mind; I will not interrupt you.

Mr. TATE. Then 25 percent of the amount may be paid in excess of $1,000. Provision is then made for further pro-rata payments.

The committee will observe that the bill is so framed as to permit without further congressional action similar adjudication and payment of claims of American citizens who may be covered by any similar bloc settlement which the United States may conclude with any additional countries. We have in mind the possibility of concluding agreements along the same line with Czechoslovakia and with Poland.

Mr. Chairman, we are prepared to proceed as you may indicate, either to go through the bill section by section or attempt to answer any questions which you may have.

Senator GREEN. I do not know what questions may be raised. Of course it will be of the greatest service in answering any criticisms which may be forthcoming if you indicate disagreements where there are such.

REFERENCE TO ADMINISTRATIVE PROCEDURE ACT

Mr. TATE. I think it might be well at this stage, if it is agreeable to you-Mr. English of my staff, Mr. Herman of my staff, and Mr. Oliver of the Economic Section of the Department are here to answer

questions—if we could have Mr. Herman explain the provision in the bill as reported out by the House that we think is a technical inconsistency and that should be corrected.

Senator GREEN. Mr. Herman, will you proceed?

Mr. HERMAN. Mr. Chairman, Report No. 770 to accompany H. R. 4406, which is identical with S. 1074, reports as an amendment to section 4 (j) as follows:

The Commission shall comply with the provisions of the Administrative Procedure Act of 1946.

The Administrative Procedure Act of 1946 provides, among other things, as follows; this is in section 1011:

No subsequent legislation shall be held to supersede or modify the provisions of this chapter except to the extent that such legislation shall do so expressly. It is the Department's view that in the absence of any reference in S. 1074 to the Administrative Procedure Act the Commission would nevertheless be required to comply with the Administrative Procedure Act in accordance with its terms, except to the extent that there may be a conflict between the provisions of this act and of the Administrative Procedure Act. The Administrative Procedure Act, in our view, is not designed to preempt the provisions of specific legislation. It implements existing or subsequent legislation where such legislation does not specifically provide otherwise. S. 1074, it seems to us, contains the minimum specific terms deemed necessary for proper domestic adjudication under international claims settlements of this

nature.

In the absence of the House amendment the Administrative Procedure Act of 1946 would apply insofar as it related to matters not covered by the specific terms of S. 1074. In the provisions as to rule making, which is section 1003 of the Administrative Procedure Act, the act specifically exempts "foreign affairs" functions of the United States. In the provisions as to adjudications, the Administrative Procedure Act contains an exception as to the "conduct of foreign affairs functions."

Would the proposed commission be engaged in "foreign affairs" or the "conduct of foreign affairs functions"? The Department believes not. But if this be a matter of doubt, and if it is desirable that the commission be clearly subject to Sections 1003 and 1004 of the Administrative Procedure Act of 1946, as the Department believes it should be, the purpose can, in our view, be accomplished by modifying the House amendment as follows:

The Commission shall comply with the provisions of the Administrative Procedure Act of 1946 except as otherwise specifically provided by this Act.

Senator GREEN. That is just a clarification.

Mr. HERMAN. For clarification purposes; yes, sir.

The objection to the House language is that it might create doubt and confusion as to the intention of Congress, thereby delaying the operations of the Commission and perhaps stimulating unnecessary litigation. A contention might be made that under the House lar guage Congress meant that the Commission comply with all of the terms of the Administrative Procedure Act of 1946, irrespective of the specific procedural provisions of S. 1074. If such a contention were sustained, S. 1074 would be self-nullifying.

That is our only comment, Mr. Chairman, on the proposed House amendments.

Senator GREEN. Otherwise they are acceptable?

Mr. HERMAN. Otherwise they are acceptable; yes, sir.

If it is in order, we could proceed to go over the provisions of S. 1074 at this point.

Senator GREEN. I do not know who is going to benefit by it. If anyone wants to have them read, they may be read; otherwise, the committee has read them.

Mr. TATE. I think it is unnecessary, Senator, to go through it section by section. As you say, the bill is before us and I think the people here are familiar with it. You may want to hear other witnesses and then ask questions of us after that, or not.

Senator GREEN. I think that would be a better procedure.

There are a number of witnesses who have been notified of the hearing. Some have notified the committee that they wish to appear. I call on Mr. Paul Neuberger first, representing the Committee for Protection of Claimants Pursuant to United States-Yugoslav Claims Settlement, also Mr. Asher Lans. I understand they are here as counsel for that committee.

STATEMENT OF PAUL NEUBERGER, ACCOMPANIED BY ASHER LANS, COUNSEL FOR THE COMMITTEE FOR PROTECTION OF CLAIMANTS PURSUANT TO UNITED STATES-YUGOSLAV CLAIMS SETTLEMENT

Mr. NEUBERGER. Mr. Chairman, I am testifying on behalf of the Committee for Protection of Claimants Pursuant to United StatesYugoslav Claims Settlement. In the name of this committee I wish to thank the committee for the opportunity of testifying on behalf of that committee.

The committee requested me to testify because I was for 18 years a practicing attorney in Yugoslavia, and I am also a member of the New York bar, and I have kept abreast with legislation in Yugoslavia and also the present regulations, decrees, and relations, and I am familiar with those of Yugoslavia.

One of the reasons why the committee presented these amendments was because the committee considered that S. 1074, if enacted in its present form, would give a lot of difficulty to the International Claims Commission which has been set up to adjudicate these claims.

The bill is a general one, setting up an International Claims Commission which would have to adjudicate claims based on different international settlements. In fact, the immediate reason for this bill was that the bill had been introduced to adjudicate claims against the $17,000,000 fund now in the Treasury Department as provided in the Executive agreement of July 19, 1948, between the United States and Yugoslavia.

The general character given to the bill, in the opinion of our committee, will make it difficult to solve the problems which will face the International Claims Commission set up in the bill. It would perhaps have been more appropriate to introduce a bill to carry out only the Executive agreement of July 19, 1948, as it would then have been easier to take into consideration all the special problems concerning claims against Yugoslavia based on this Executive agreement.