The Government of the United States will under no circumstances take advantage of a state of war to take possession of property to which under international understandings and the recognized law of the land give it no just claim or title. It will scrupulously respect all private rights, alike of its own citizens and the subjects of foreign states.
This was made public two months before we found ourselves in a state of war with Germany. Soon after, A. Mitchell Palmer was appointed Custodian of Alien Property and began to seize about one thousand million dollars’ worth of German property and securities—not the property of the Imperial German Government, with which we were at war, but the property of German private persons.
Using the language of an editorial in one of the leading newspapers in America of August 29, 1919, a treaty between the United States and Germany, which had never been denounced and was in full force, provided that in case of war between Germany and the United States, Germany should permit American owners of property in Germany, or Americans doing business in Germany, to have nine months in which to wind up their business affairs, to dispose of their property and to take themselves unhindered out of Germany. And the United States bound itself, of course, to give the same treatment to German aliens doing business or owning property in America. This treaty agreement was deliberately broken by the Custodian of Alien Property. Under international law the duty of such a custodian is to take possession of the property of alien citizens of an enemy country, administer that property carefully, preserve it in good faith, and hold the earnings of the property and the property itself ready for return to the owners whenever peace shall come. “We want,” declares the paper, “to keep the name and reputation of the American people so clean and honorable that no American shall ever need to apologize either to friend or foe.” (New York “American.”)
As a result of the confiscation of hundreds of millions of dollars’ worth of alien property, a sensational scandal developed, which was aired in the House and Senate and had a perceptible bearing on the defeat of the League of Nations treaty in the Senate. Among other things, Palmer, ultimately appointed Attorney General, was charged with having sold the great Bosch magneto works, valued at $16,000,000, for $4,000,000, giving the preference to friends; and Representative J. Hampton Moore, referring to Francis P. Garvan, Mr. Palmer’s successor as Custodian, demanded to know: “Why the same Frank P. Garvan, the distinguished criminal lawyer of New York, had recently been elected to and accepted the presidency of the Chemical Foundation, which has taken over all the German patents in the United States for the manufacture of dye stuffs through an arrangement with the Alien Property Custodian, A. Mitchell Palmer, now Attorney General?”
In his speech of June 21, 1919, in the House, Mr. Moore named a number of big trust operators and financiers, including Cleveland H. Dodge, as having formed the Chemical Foundation and taking over “4,500 patents which Mr. Palmer and Mr. Garvan, this distinguished criminal lawyer from New York, the successor of Mr. Palmer as Alien Property Custodian, found on file in the Patent Office, and which they seized on the ground that they belonged to certain German patentees.” (New York “Times,” June 22, 1919.)
Hardly a pretence is made by the administration that the seizure was legal, and the death-blow to all such pretensions was delivered when, in urging the ratification of the Versailles treaty by the Senate, Senator Hitchcock, the administration’s Senate leader, declared:
Through the treaty we will get very much of importance.... In violation of all international law and treaties, we have made disposition of a billion dollars of German-owned property here. The treaty validates all that.
It is important that Americans should know the facts in the case, however unpopular the narrative may be, in order that they may set themselves right before the world, or at least be prepared for the wave of prejudice which is bound to be excited by the remarkable proceedings. Quoting Walter T. Rose, a prominent Chicago exporter just returned from a tour of Europe, the New York “Sun” of November 28, 1919, said: “It is an unfortunate fact that hardly anywhere in Europe does one hear good opinions of America and Americans.” Mr. Rose gathered his opinions in France and England as well as in central Europe. The course of the Custodian of Alien Property establishes a precedent that, of course, will be heeded by those associated with us in the war no less than by our late enemies. It is a warning that the filing of patents and patented processes insures no immunity from confiscation in the event of war, and a warning to foreign investors to go slow in investing their money in industries in the United States. To counteract this policy imposes a moral task upon every citizen of the United States who holds the honor of his country above a dollar. For we shall have flaunted in our faces this passage from President Wilson’s address to Congress, April 2, 1917:
We shall, I feel confident, conduct our operations as belligerents without passion, and ourselves observe with proud punctilio the principles of right and fair play we profess to be fighting for.... It will be easier for us to conduct ourselves as belligerents in a high spirit of right and fairness because we act, not in enmity of a people or with a desire to bring any injury or disadvantage upon them, but only in opposition to an irresponsible government. We are, let me say again, the sincere friends of the German people, and shall desire nothing so much as the early re-establishment of intimate relations of mutual advantage between us—however hard it may be for them, for the time being, to believe this is spoken from our hearts.
In a hearing before a Senate committee investigating his acts as Custodian, Mr. Palmer named as his advisory committee, Otto Barnard, Cleveland H. Dodge, George L. Ingraham and Alex Griswold, Jr. He asserted that he had seized 40,000 German properties. Upon his list were the names of 32 Germans and Austrian-Hungarians interned as enemy aliens, whose property was taken over by him. Their names and the value of their property follows: