Civilian Agency Records RG 131

Department of Justice Records

Records of the Office of Alien Property
(RG 131)

The World War II Office of Alien Property Custodian, also know as APC, was established within the Office for Emergency Management by an Executive order of March 11, 1942. By an Executive order of April 21, 1942, there were transferred to it the functions, personnel, and property of the Alien Property Division, which had been established in the Department of Justice by the Attorney General on December 9, 1941, to handle certain enemy property responsibilities that resulted from the entrance of the United States into the war.

An Executive order of July 6, 1942, defined in detail the powers and duties of the new Office of Alien Property Custodian and clarified the distinction between its authority and that of the Secretary of Treasury in relation to alien property. The order gave to the Secretary of the Treasury authority over foreign-owned properties that constituted general purchasing power and required no active management, such as cash, bullion, bank deposits, and securities. To the Custodian it gave authority over types of foreign-owned property that were productive resources requiring active management, such as business enterprises, patents, copyrights, trademarks, and ships. An Executive order of June 18, 1945, extended the jurisdiction of the Custodian to cover all property of whatever nature in the United States owned by Germany or Japan or nationals of those countries, but the earlier limitation of its authority with respect to some types of property of other enemy countries or their nationals was not changed.

An Executive order of October 14, 1946, terminated the Office of Alien Property Custodian and transferred its functions, funds, personnel, records, and property (except those connected with property in the Philippine Islands) to the Department of Justice, in which it became the Office of Alien Property.

Leo T. Crowley held the position of Custodian from 1942 to 1944 and James E. Markham, from 1944 to 1946.

An important collection of records within the record group are those created by the Foreign Funds Control during World War II. The Foreign Funds Control was organized in April 1940 to administer the authority assigned to the Treasury Department by an Executive order of April 10, 1940, placing restrictions on transactions in foreign exchange; the export or withdrawal of gold, silver, coin, and currency; and transfers of credit, securities, or any other evidences of ownership or of indebtedness involving property of the countries or nationals of the countries that had been invaded by German and Soviet armies. After the entry of the United States into the war the scope of the Control's activity widened to include (1) the severing of all financial and commercial intercourse between the United States and the Axis and Axis-dominated countries; (2) the prevention of all financial and commercial intercourse between the United States and any countries outside the Western Hemisphere that directly or indirectly benefited the Axis; (3) the prevention of all financial and commercial transactions between the United States and any other American Republic that directly or indirectly benefited the Axis; and (4) the stopping of all financial and commercial activity on the part of persons or corporations in the United States whose influence or activity was deemed inimical to the security of the Western Hemisphere.

The Executive order of April 10, 1940, broadened by subsequent amendments, enumerated the countries with which unlicensed financial and commercial intercourse should be prohibited. A Presidential proclamation of July 17, 1941, authorized the Secretary of State, in conjunction with the Administrator of Export Control, and the Coordinator of Commercial and Cultural Relations Between the American Republics, to prepare and maintain a "blacklist," officially known as the Proclaimed List of Certain Blocked Nationals, naming all persons and business concerns whose activities were deemed to be in the interest or behalf of the Axis nations or against the interest of national defense.

On July 6, 1942, the President issued an Executive order clarifying the respective jurisdictions of the Secretary of the Treasury (acting through the Foreign Funds Control) and the Alien Property Custodian (APC). This order authorized the Secretary to handle (1) all dollar balances, bullion, and securities of governments or nationals except those belonging to an enemy business; (2) all property of the occupied and neutral countries and their nationals except those particular business enterprises which the APC determined that he must in the national interest assume control; (3) all transactions or business dealing with countries frozen under the Executive order of April 10, 1940, and its amendments; and (4) all other phases of freezing control. The order stipulated that if the Secretary of the Treasury should have occasion to vest any property (other than the assets of foreign governments and central banks), such property should be vested in the APC.

The Foreign Funds Control was abolished on July 15, 1947, and its residual functions, personnel, and records were transferred to the Treasury Department's Office of International Finance. An Executive order of August 20, 1948, transferred responsibility for all work that still remained to be done with foreign funds control to the Office of Alien Property, Department of Justice.

PRINTED SOURCES

The Alien Property Custodian: A Legislative Chronological History and Bibliography of the Trading with the Enemy Act, 50 U.S. Code App. 1-40, and the Operations of the Office of Alien Property Custodian, 1917-1952. U.S. Senate, Committee on the Judiciary (82d Congress, 2d Session). [A basic document which can be used as a general legislative and chronological history and a bibliographic guide to all the published authoritative material pertaining to the Alien Property Custodian and the administration of the Trading With the Enemy Act.]

RECORDS (Note 19)

The following records of the Office of Foreign Funds Control of the Treasury Department, 1940-47, were transferred to the Office of Alien Property Custodian.

Foreign Funds Control

Subject Files 1942-60

This series consists of correspondence, memoranda, reports, circulars, investigative reports, general licenses, tabulations, proclaimed lists, foreign documents, and other records relating to the major activities of the Foreign Funds Control during World War II. The files touch on such subjects as foreign assets control; the Safehaven program; freezing controls; defrosting activities;  the denazification program; German bankers; Latin American currency problems; gold; and, financial activities involving many countries, including all the major neutral countries. The records are arranged alphabetically by subject. Boxes 1-511 [Federal Record Center Boxes (Note 20)]

Docket Files 1942-60

This series contains correspondence, memoranda, applications, Alien Property Custodian reports, FFC reporting forms; investigation reports, customs reports, FBI reports and correspondence, and other records of investigations of activities that appeared to be in violation of freezing regulations, and financial activities outside the United States that tended to benefit the enemy. Among those investigated were the American Bosch Company, the American Civil Liberties Union, Anheuser Busch Company, Baron Edouard De Rothschild, Dow Chemical, General Analine and Film Company, the German American Bund, Hugo Stinnes Corporation, Serge Rubinstein, and UFA Films. The records are arranged numerically by docket number. An alphabetical listing, giving docket number, is in the first box. Boxes 1-248 [Federal Record Center boxes]

Foreign Funds Control Investigative Reports 1942-60

This series consists of investigative reports and exhibits. The investigations were of firms and individuals engaged in illegal financial transaction; transactions, while not illegal, which caused suspicions regarding loyalty; and, investigations pertaining to blocking actions and the proclaimed lists. The investigations involved foreign exchange, securities, ships, commercial enterprises, merchandise, diamonds, jewelry, artwork, and stamps. The files of several field offices, including New York, Chicago, Los Angeles, Washington, DC, and San Francisco are contained in this series. The records are arranged by an alpha-numeric scheme. The first box contains an alphabetical listings of the cases. Boxes 1-39 [Federal Record Center boxes]

Alien Property Custodian

The following records were created or received by the Alien Property Custodian:

Orders

Vesting orders, supervisory orders, and general orders were the three basic forms of control used by the APC and the Office of Alien Property. Vesting orders were the instrument used in the seizure of property or interests in property described in the order. During World War II over 5,000 vesting orders were issued by APC, vesting some 500 business enterprises, banks, and insurance companies; over 50,000 patents and copyrights; and thousands of pieces of property and assets. By July 1, 1952, over 13,000 more vesting orders were issued. The vested property was returned or liquidated by various means. A primary way was by allowing a title or debt claim, of which over 67,000 were made. Another means by which property was returned to private hands was by the issuance of divesting orders, whereby the Federal Government relinquished vested proprietary interests. The vesting orders were published in the Federal Register. A complete listing of all the vesting orders, giving the vesting order number, summary description of the vested property, and the Federal Register citation is contained in the annual reports of the Office of Alien Property and Office of Alien Property.

Supervisory orders provided for the direction, management, supervision, and control of specified foreign-owned property by the APC without transfer of ownership to the APC. The APC issued supervisory orders for four main purposes: to facilitate investigations; to supplement vesting orders; to acquire control over the property of nationals of enemy-occupied countries; and, to acquire control over the property of internees. In contrast to vesting orders and supervisory orders, which referred to specified pieces of property, general orders required certain classes of persons, or persons having interests in certain types of property, to perform or refrain from performing certain acts.

General orders were issued not only as a means of controlling property, but also for a variety of other purposes. Several of the general orders gave the APC control over transactions relating to property of nationals of certain foreign countries in patents, trademarks, and copyrights. Seven of the general orders related to the discovery of the interests of different persons in property subject to the control of the APC. Three general orders required payment to the APC of royalties due to nationals of enemy and enemy-occupied countries under contracts based on rights in patents, copyrights, and trademarks. Four general orders dealt with claims against the Custodian. One general order set up exchange ratios between the currency of the United States and that of five enemy countries to provide for the discharge of certain obligations, the amount of which was fixed in foreign currency.

The vesting orders and the general orders were published in the Federal Register. The supervisory orders were not.

General Orders

Case files consisting of copies of general orders, correspondence, and memoranda. Arranged numerically by general order number. Box 488

Supervisory Orders

Case files consisting of originals and copies of supervisory orders, recommendations for supervision, memoranda, and copies of recession and termination orders. Arranged numerically by supervisory order number. Boxes 484-486

Legal Records

Between 1942 and 1965 the Alien Property Custodian, later the Office of Alien Property, were involved in some 3,000 suits and other judicial proceedings. One of the litigative cases, the Interhandel case, because of its importance, is separately described below. (Note 21) Many of the suits involved title claims for return of vested property under sections 9(a) and 32 of the Trading with the Enemy Act; section 207 of the International Claims Settlement Act, and claims for payment of debts owed by the prevesting owners of vested property under section 34 of the Trading with the Enemy Act and section 203 of the International Claims Settlement Act. Suits were also initiated by the APC under section 17 of the Trading with the Enemy Act to enforce compliance with vesting orders.

Cases involving vested property in estates or trusts were by far the most numerous among those suits and judicial proceedings in which the APC had an involvement. The litigation involving estates and trusts encompassed a variety of types of cases, including those pertaining to provisions in wills that attempted to prevent vesting of enemy interests in estates by postponing distribution thereof until after the war. Other litigation concerned the constitutionality of the laws of certain States which provided, in effect, that foreigners residing outside of the United States could not take property by succession unless a reciprocal right existed in favor of American citizens under the laws of the countries of which such foreigners were citizens. Most of the remaining estate and trust cases involved attacks on wills, proof of heirship, and revocation of trusts.

Other suits and judicial proceedings in which the APC had an interest pertained to actions relating to banks and insurance companies in liquidation; matters relating to corporate and individual insolvencies; matters involving taxes and assessments; matters relative to patents, trademarks, and copyrights; actions relating to real property; causes in admiralty; and matters involving property seized in World War I.

Administrative "O" File 1941-1959

This series consists of correspondence, memoranda, telegrams, lists of cases, summaries of cases, status reports on cases, and other records relating to legal and litigative matters involving alien property.  Included is a 96-page mimeographed study entitled "Alien Property Litigation in World War II, prepared by Robert M. Vote, dated September 1, 1949. This study contains a seven-page alphabetical index listing approximately 300 cases mentioned in the study. The series is arranged chronologically. Box 1     Box 295 (Accession 131-64E896)

Alphabetical Index to Litigation

Case Files 1942-1987

This series consists of approximately 5,000 3-5-inch index cards giving name or subject, short synopsis of the case, and the case file number. Arranged alphabetically by name or subject.
Boxes 1-6

Litigative Case Files (Note 22) 1942-1965

This series consists of correspondence, memoranda, cables, affidavits, depositions, judgment orders, pretrial conference material, motions, briefs, stipulations, complaints, trial transcripts, investigative reports, copies of vesting orders, and other legal records. Arranged roughly numerically by case number. Often exhibit material is contained separately from the main case file. (Note 23) Boxes 1-89 [Federal Record Center boxes] Boxes 295-317, 320-441, 444-452, 454-531, 533-538 [Federal Record Center boxes] (Accession 131-64E896)

Records Relating to the Interhandel Case

In October 1948, Interhandel, a Swiss holding company known also as I.G. Chemie, brought suit against the Attorney General of the United States under section 9 of the Trading with the Enemy Act in the United States District Court for the District of Columbia, for the return of 93 percent of the stock of the General Aniline & Film Corporation (GAF), a Delaware Corporation, and about 1.8 million dollars in cash. (Note 24)  The property had been vested under the Trading with the Enemy Act, as amended by Vestings Orders containing formal findings that the property belonged to I.G. Farbenindustrie, A.G. (I.G. Farben) of Germany, an enemy nation (e.g., Vesting Order No. 907, February 15, 1943, 8 Fed. Reg. 2453). The suit was filed not in Interhandel's name, I.G. Chemie, under which it did business in German-speaking Basel, but in its rarely used French name, Societe Internationale pour Participations Industrielles Et Commercials S.A.

The Interhandel complaint charged that the GAF property had been wrongfully seized by the Alien Property Custodian because Interhandel had never been either an enemy or an ally of an enemy of the United States. Interhandel did not dispute the United States claim that I.G. Farben controlled I.G. Chemie (Interhandel) before June 1940. It contended, however, that after that date they had cut all ties with I.G. Farben. The United States charged that from the time of the plaintiff's incorporation in the 1920s to the surrender of Germany in 1945 that Interhandel had participated in a conspiracy or common plan with the private Swiss banking house of Hans Sturzenegger & Cie. (prior to 1940 known as Eduard Greutert & Cie.), I.G. Farben, and others to cloak the ownership, control, and domination by I.G. Farben of properties in the United States and in many other countries.

On July 5, 1949, the U.S. District Court ordered the production, discovery, and inspection by both parties of the records of the other, including, in the case of production by the plaintiff, the papers and books of the Sturzenegger firm, which the Government contended was the controlling influence in and alter ego, of the petitioner.

In the fall of 1949, in compliance with the order, the Government produced and the plaintiff copied approximately 20,000 documents ordered to be produced by the Office of Alien Property. The plaintiff, however, because of Swiss secrecy laws, refused to produce the records of Hans Sturzenegger & Cie. In November 1952, in a hearing extending over 5 days, the District Court reviewed the failure to produce the records, and held in a comprehensive opinion dated February 19, 1953, that the significance of the records was such that unless the plaintiff complied fully with the order for production by June 15, 1953, the complaint would be dismissed with prejudice. After additional extensions, the court, on December 21, 1953, entered an order dismissing the complaint. The plaintiffs then took the case to the United States Court of Appeals, which granted them an additional extension of time to produce the required documents. On August 6, 1956, the District Court, finding that there had been no compliance with the order for discovery in the time permitted by the Court of Appeals, entered an order upon the 1955 mandate of the Court of Appeals affirming the 1953 order of dismissal and adjudging that the plaintiff's complaint stood dismissed with prejudice.

While these legal battles were being fought, the Attorney General ran GAF as a vested property, one of over 400 corporations that the United States controlled as a result of vesting. Additionally, throughout the legal proceedings, the petitioner's attorney, John J. Wilson, and others attempted to work out an out-of-court settlement that would divide up the vested property among the stockholders, Interhandel, and the United States Government.

In June 1953 the Interhandel suit was legally reinstated when the United States Supreme Court decided in favor of Interhandel and reversed the lower courts. It held that Interhandel, even without the submission of the Swiss documents, was entitled to a hearing on the merits of the case.

While continuing to pursue their claim in the United States District Court, the plaintiffs continued their efforts to negotiate a settlement. Assisting them in their efforts was Prince Radziwell, President Kennedy's brother-in-law. Negotiating with Attorney General Robert Kennedy, Deputy Attorney General Nicholas Katzenbach, and Assistant Attorney General William H. Orrick, Radziwell and other spokesmen for the plaintiffs during 1962, were able to persuade the Government to settle out-of-court. They were assisted by Congress, which passed a bill in October 1962 permitting the sale of GAF without court action, and the President, who signed the bill into law on October 22, 1962. With the bill signed the sole remaining company in active operation under the supervision of OAP was ready for disposal by the United States Government.

With most of the details worked out for an out-of-court settlement, Attorney General Robert Kennedy, on March 4, 1963, held a press conference to announce the settlement of the Interhandel case. Anticipating criticism, he stated "Our fundamental aim throughout has been for the government to step out of is unnatural role as the owner of a private corporation and to end the extensive litigation in this case."  He maintained that if the Government was to go ahead and sell GAF without first settling the suit, as the law now allowed, it would be faced with from one to three years litigation over its right to do so. Deputy Attorney General Katzenbach added that if there had been sale without a prior settlement, Interhandel would have fought the constitutionally of the 1962 sales amendment in the courts and if it lost in the United States courts, it would have carried the case to the International Court of Justice at The Hague.

On March 6, 1963, at a press conference President Kennedy was questioned about the Interhandel settlement and pending sale. He was asked:

Mr. President, for twenty years the Justice Department has assured Congress that it had evidence showing that the Interhandel was a cover for the German firm of I.G. Farben, and therefore the seizure of General Aniline & Film in this country during World War II was justified. Now, in the past few days, there has been an agreement between Justice and Interhandel on the division of the proceeds from the sale of Aniline. Has the Justice Department discovered its facts are wrong...or is this the result of pressure from the Swiss government?

President Kennedy replied:

No, I would say that the agreement is an equitable agreement. It could have gone on ten years more in the courts, and it has been now fifteen or twenty years and lawyers have enjoyed it, but I don't think that there is anything else. I don't think we would get a better arrangement if we continued the litigation for another ten years. We feel that the arrangement which has been worked out will return the assets to those who have a claim to them, and I think the division of resources is fair. (Note 25)

Although the announcement of the settlement brought forth much criticism in the press and in Congress, the Government and Interhandel proceeded to work out the details for approval by the court. On December 20, 1963, a stipulation of settlement was signed by the Department of Justice and Interhandel that provided for the sale of GAF to the public and the division of the proceeds between the Government and Interhandel in the agreed proportions. The proposed compromise of the litigation was presented to the United States District Court, and on April 1964, the court approved the settlement and authorized the sale.

On March 9, 1965, the GAF stock was sold be sealed bid at the largest competitive auction in Wall Street history. A syndicate, headed by Blyth & Company, with a bid of nearly 330 million dollars was the winner. Payment to Interhandel netted about 122 million dollars-an impressive amount, especially in view of the fact that in 1950 Interhandel was willing to settle for 14 million dollars. (Note 26)

Office Files Relating to the [Interhandel] I.G. Farben Case

This series contains the files of the office of Alien Property relating to the case brought by the I.G. Chemie Co. for the return of property seized by the U.S. Government after World War II from the I.G. Farben Co. The files include correspondence files, I.G. Chemie documents, pleadings, motions, briefs and court decisions in the litigation in the District Court, Court of Appeals, and the Supreme Court. Issues relating to the case include the testimony of witnesses, Swiss inspection, litigation, recapitalization, sale, good faith, and other issues. Arranged in numerical order by folder number. The folders are arranged by type of document or by general subject and thereunder chronologically. Boxes 1-159

FBI Work Papers Relating to the I.G. Farben Case 1962-1963

This series contains records of the FBI investigation of I.G. Farben financial transactions and the relations between I.G. Farben and its subsidiary companies. Folder one contains a list of subjects that were being investigated. Arranged by subject and thereunder by the name of the Special Agent Accountants working on the case. Boxes 1-2 Records Relating to the Deposition of Hans Sturzenegger 1929-1950

This series consists of depositions taken of Dr. Hans Sturzenegger (1949-1950), a Swiss banker, and documents introduced by him in the case of I.G. Chemie Co. of Switzerland against the United States. The I.G. Chemie Co. was attempting to secure the return of the General Aniline & Film Co. that was seized at the end of World War II because of its relation to the Germany company, I.G. Farben. I.G. Chemie sought to regain the GAF property or for payment of the value of the property. Arranged in two sections, the first containing transcripts of Han Sturzenegger's deposition arranged chronologically, and the second containing copies of the documents introduced by Sturzenegger as exhibits which are arranged by exhibit number. Box 7 contains a log book of Sturzenegger exhibits. Boxes 1-22

Records Relating to the Discovery by Plaintiffs of Department of Justice Documents, 1940-1962

These records relate to the legal efforts by I.G. Chemie, for the return of the General Aniline & Film Co. property or for payment of the value of the property. Arranged in five sections: lists of documents made available to the plaintiffs, descriptions of the documents arranged by document number, correspondence about the documents arranged chronologically, cross reference tables, and miscellaneous files. Boxes 1-8

U.S. Court of Appeals Records in the I.G. Chemie Case 1948-1953

This series contains the proceedings, motions, briefs, and exhibits relating to the appeal by I.G. Chemie in its case against the U.S. Government. Arranged by document type in published volumes. Boxes 1-2

Records Relating to Settlement Negotiations with the I.G. Chemie Co. 1961-1963

This series contains files that were maintained by Assistant Attorney General William Orrick. who was responsible for alien property matters, regarding settlement negotiations with the I.G. Chemie Co. in its case against the U.S. Government. Arranged by subject according to an alphabetical filing code and thereunder arranged chronologically. Boxes 1-4

I.G. Farben Files Relating to Swiss Banks 1928-1945

This series contains photostatic copies of I.G. Farben correspondence taken from company files in Germany. The files also contain English translations. The documents concern I.G. Farben Company's dealings with Swiss banks. Arranged by document number. All documents are under the main classification number 20 with sub-numbers ranging in broken sequence from 2-53 to 20-1162, with some sub-numbers being further divided. Boxes 1-9

Captured I.G. Farben Documents 1905-1956

This series consists of the main body of documents obtained from I.G. Farben and other sources in Germany and the United States for use in the Interhandel case. The documents, with translations, are numbered from 1 to 28,697. Each file includes a brief summary, description and cross-references. The documents extensively detail I.G. Farben business dealings before and during World War II. A master card index was maintain by the Office of Alien Property describing these documents. (Note 27) Arranged by document number, generally in chronological order with some segments arranged by company and thereunder chronologically. Boxes 1-394

Miscellaneous I.G. Farben Documents 1902-1946

Documents obtained from the I.G. Farben company and from other sources for use in the Interhandel case. The documents in this series were considered less important than those in the series described above The records relate to the business dealings of the I.G. Farben Co. and the I.G. Chemie Co. as they relate to the attempt by I.G. Chemie to regain property seized after World War II. A master card index was maintained by the Office of Alien Property describing these documents. Arranged by document number. The documents are generally arranged in chronological order. Boxes 1-49

Classified I.G. Farben Documents 1941-1952

This series contains the previously classified portion of the miscellaneous documents obtained from I.G. Farben and other sources in Germany and the United States, relating to the trial of the Interhandel case. A complete list of the documents was maintained on a master index card file for the trial. This card file is not present. A partial list is given in document 21537 "Bernstein Report-List of Exhibits." Arranged by document number with numbers. The documents are primarily numbered in chronological order. Boxes 1-16

I.G. Farben Chronological File 1920-1951

This series contains a chronological set of I.G. Farben Co. and related documents. This series was compiled by the Federal Bureau of Investigation for the convenience of the attorneys in the case. The documents contain the number that corresponds to the numbered series of I.G. Farben documents. Arranged chronologically. Boxes 1-26

I.G. Chemie Documents 1928-1945

These documents are business records and correspondence taken from the files of the I.G. Chemie Company. Included are photocopies of the original documents and English translations. The files were selected by attorneys of the Department of Justice in reference to the seizure of I.G. Farben assets after World War II. The attorneys went to Switzerland in 1950 and reviewed the original documents. Arranged in three groups; an alphabetical list of documents, a group of documents arranged numerically; and a group of documents arranged by the company name of companies that dealt with I.G. Chemie. Boxes 1-2