22> CLAIMS OF GENERAL DYESTUFFS C O R P .^ ^

GOVERNMENT STOCKHOLDERS

Storage

H E A R I N G S

BEFORE A

SUB COM MITTEE OF THE 

COMMITTEE ON

INT ERSTAT E AND FO RE IGN COMMERCE 

HOU SE OF RE PR ES EN TA TIVE S

EIGH TY -EIG IIT H CONGRESS

SE CO ND SE SS IO N

ON

S. 1451

TO AM EN D SE CT IO N 4 1 (a ) OF T H E TRA DIN G W IT H T H E 

EN EM Y ACT

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FE BR UARY 25 AN D 26, 1964

P ri n te d fo r th e us e of th e 

Com m itt ee o n In te rs ta te a nd Fore ig n Co mm erc e

33-873

U.S . GOVERNMEN T PR INTING OFF ICE

WA SHING TON : 1904
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COM M IT TEE ON IN T E R S T A T E A N D FO REIG N CO M M ER CE

ORE N H A R R IS , Ark an sa s, C hair m an

JO HN B E L L W IL LIA M S, M iss iss ip pi 

K E N N E TH A. R O BERTS, Al ab am a 

H A R L E Y O. STA G G E R S, W es t V ir gin ia 

W A L T E R RO GER S, T exas 

SA M U E L N. F R IE D E L , M ar yl an d 

T O R B E R T H. M AC DONAL D, M as sa ch us et ts 

JO HN JA RM AN , Ok lah om a 

LE O W. O’B RIE N , Ne w Yor k 

JO HN E . MOS S, Califo rn ia 

JO HN D. D IN G ELL, M ichiga n 

P A U L G. RO GE RS , Flo ri da 

R O B E R T W. H E M P H IL L, So ut h Car ol in a 

DAN R O STE N K O W SK I, Il lin oi s 

JA M ES C. H E A L E Y , Ne w Yor k 

H O RACE R. K O R N EG A Y, Nor th Car ol in a 

W. R, H U LL, J r., Miss ou ri 

G IL L IS W. LO NG , Lou is ia na 

LIO N E L VAN D E E R LIN , C alifo rn ia 

JA M ES J. P IC K L E , Tex as

W. E. W il l ia m s o n , C le rk

K en n eth J. P a in te r, A s s is ta n t Cle rk

JO HN B. B EN N ETT, M ichiga n 

W IL L IA M L. SPR IN G ER , Il lin oi s 

P A U L F. SC H EN CK , Ohio 

J. A R TH U R YO UNGER , Califo rn ia 

M IL TO N W. GL EN N, New Je rs ey 

SA M U E L L. DEVIN E, Oh io 

A N CH E R N ELS EN , M inne so ta 

H A STIN G S K E IT H , M as sa ch us et ts 

W IL LA R D S. CU RTI N , Pen nsy lv an ia 

A B N E R W. SIB A L, Co nn ec ticu t 

G LEN N CU NNI NGH AM , Neb ra sk a 

JA M E S T. B R O YH IL L, Nor th Ca ro lin a 

DO N ALD G. BROTZ M AN , Co lor ad o

A nd re w Ste ven so n

K urt B or ch ar dt

P ro fe ssio n a l S ta ff

G eorge W. P er ry

Ja m e s M. Men ge r, Jr .

Subcommittee on Commerce and Finan ce

H A R L E Y O. STA G G E R S, W es t Virgi nia , Chairm an

JO HN D. D IN G E LL, M ichiga n 

JA M ES C. H E A L E Y , New Yor k 

G IL L IS W. LO NG, Lou is iana 

LIO N E L VAN D E E R LIN , Califo rn ia

M IL TO N W. GLE NN, New Je rs ey 

H A ST IN G S K E IT H , M as sa ch us et ts 

W IL L A R D S. CU RTI N , Pen nsy lv an ia

II
C O N T E N T S

Pare

Te xt of S. 1451________________________________________ 1

Repor t of— Bureau of the Budget_________________________________________ 1 Foreigns Claims Settlem ent Commission_________________________ 2 Sta te De par tment____________________________________________ 2

Sta tem ent of— Barry , Hon. Robert R., a Rep rese ntative in Congress from the S tate of New York______________________________________________ 10 Burke, Coleman, Burk e & Burke, New York, N.Y ________________ 27, 30 Dirksen, Hon. Ev erett McKinley, a U.S. Senator from the Sta te of Illinois___________________________________________________ 3 Jaffe, Irving, Chief, Court of Claims Section, Civil ^Division, DepartRose, Stanley D., Legislative Officer, Civil Division, Depar tment of Ju stic e_____ ______ _____________________ ____ ____________ 29,52 Schmidt, Manfred, atto rney, Civil Division, De partm ent of Jus tic e.. 29, 52 

Additional inform ation subm itte d for the record by— Burke, Coleman, supp lementa l s tat em ent________________________ 52 Justice Dep artm ent, letter from Nicholas deB. Katzenb ach, Deputy Attorney General___________________________________________ 26

in

CLAIMS OF GENERAL DY ES TU FF S CORP.

STO CKHOLDE RS

TUESD A Y , F E B R U A R Y 25 , 19 64

H ouse of Repr ese ntative s,

Subc omm itte e on Comm erce and F in an ce of th e

Com mittee on I nterstate and F oreign Commerce,

D.C.

The subcommittee met at 10 a.m., pursuant to call, in room 1334, Longworth Building, Hon. Oren Harris (chairman of the full committee) presiding.

Mr. Harris. The committee will come to order. Today the committee has met for the purpose of public hearings on 

S. 1451. (S. 1451 and departmental reports follow :)

[S. 1451. 88 th Cong., 1s t se ra .]

AN ACT To am en d se ction 41 (a ) o£ t he T ra din g W ith th e En em y Act

lie it en ac ted by th e Senate an d H ou se of R ep re se nta ti ves of th e United Sta te s

of Am erica in Co ng res s as semb led, T hat section 4 1 (a ) of th e Tra din g W ith th e 

En em y Ac t (50 U.S.C. App. 4 2 ( a ) ), as ad de d th ere to b y se ct io n 206 of the Ac t of 

Octo be r 2 2,1 962 ( 76 S ta t. 1115), is am en de d by— (1 ) st rikin g ou t in th e first se nt en ce t her eo f th e w or ds “report to the Con gress co nc er ni ng '’, an d in se rt in g in lie u th ere of th e wor ds “re nder ju dg m en t upon"; (2) st rikin g ou t in th e second se nt en ce th er eo f th e w ord s "one yea r aft e r th e d ate of th e en ac tm en t of th is A ct”, an d in se rt in g in lie u th er eo f th e wor ds “t wo 

years a ft e r th e date of e nac tm en t of this s ec tion ”. Pas se d th e Se na te O ctob er 30 (l eg is la tive day . Octob er 22), 1963.

A tt est: F elton M. J oh ns to n, Se cr et ar y.

E xecutiv e Off ic e of th e P res ide nt,

B ureau of th e Budget,

W as hi ng to n. D.C., F eb ru ar y 2}, 196}.

Hon . O ren H arris,

Cha irm an , Com m itt ee on In te rs ta te an d For eign Co mmerce , Lo ng wor th Hou se Office Bu ild ing, Hou se o f Rep re se nta tive s, W as hi ng to n, D.C.

Dear Mr. Cha irman : Ref er en ce is mad e to your le tt er of No vemb er 5, 1963, 

re que st in g th e co mmen ts o f th is < )ffice w ith res]>ect to S. 1451, a bill to am en d 

se ction 4 1 (a ) of th e T ra d in g W ith th e En em y Act. F or the reas on s se t out in th e st at em ent on th is bil l to be pr es en ted to you r co m m itt ee by re pre se nta ti ves of th e D ep ar tm en t of Ju st ic e, th e Bur ea u of th e Bud ge t is un ab le to rec om men d th e en ac tm en t of S. 1451.

Sinc erely you rs, P h il lip S. H ug he s,

A ss is ta nt D irec to r fo r L eg is la tive Refer en ce .

1
2 CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS

Depa rtme nt of State, 

W as hing ton, F eb ru ar y 24, 1964-

Hon . Oren H ar ris,

Cha irm an , Com m itte e on In te rsta te and F or eign Com merce ,

Hou se of R ep re se nta tive s.

Dear Mr. Cha irman : I re fe r agai n to your l ett er of Nov em be r 5, 1963, re ques tin g a re port on S. 1451, an act to am en d section 41(a ) of th e T ra din g W ith th e 

Ene m y Act.

Se cti on 4 1 (a ) of th e T ra din g W ith th e En em y Ac t co nf er re d ju ri sd ic ti on on 

th e U.S. C ou rt of Claim s to hea r, det er m in e, an d re port to th e Co ng ress cert ain 

cl ai m s again st th e U ni ted S ta te s fo r th e pro ce ed s rece ived by th e United Sta te s 

fr om th e sa le of pro per ty ve sted under th e prov isions of th e T ra din g W ith th e 

Ene my Act by ve stin g ord er No. 33. Pr oc ee di ng s w ith re sp ec t to su ch clai m s ha d 

to be in sti tu te d w ithin 1 y ea r a ft e r th e date of en ac tm en t of Pub lic La w 87-8 46, 

ap pr ov ed O cto be r 22,1 962.

S. 1451 wou ld am en d section 4 1 (a ) of th e T ra di ng W ith th e En em y Ac t by 

confe rr in g ju ri sd ic ti on on th e U.S . C our t of Cl aims to re nder ju dgm en t on th e 

cl ai m s invo lved. S. 1451 wou ld also ex te nd th e tim e lim it ati on fo r in st it uti ng 

pr oc ee di ng s w ith re sp ec t to s uc h cl ai m s to 2 y ea rs a ft er th e d ate of its en ac tm en t.

The D epar tm en t of S ta te do es not ha ve inde pe nd en t kn ow ledg e of th e su bje ct 

m a tt e r of S. 1451, but unders ta nds th a t th e D ep ar tm en t of Ju sti ce has bee n han ­

dling th e clai m s in qu es tion sinc e 1942. Th e D ep ar tm en t of Sta te , th er ef or e, 

defe rs to th e view s of th e D ep art m ent of Ju st ic e on S. 1451.

T he B ur ea u of th e Bud ge t ad vi se s th a t from th e st andpoin t of th e ad m in is ­

tr a ti o n ’s p ro gr am th ere i s no ob ject io n to th e sub miss ion of th is re po rt.

Si nc erely yo urs,

F rederic k G. Dutton ,

A ss is ta nt Se cr et ar y.

F oreign Cla im s Sett leme nt Com mission

of th e Unit ed Sta tes,

W as hing ton, D.C., F eb ru ar y 19, 1964.

Hon . Oren H arr is,

Cha irman , Com m itte e on In te rs ta te a nd F oreig n Comm erc e,

H ou se o f Rep re se nt at iv es ,

W as hi ng to n, D.C.

Dear Mr. C hair m an : Thi s is in fu rth e r re fe re nc e to y our re qu es t of No vemb er 

5, 1963, co nc er ni ng th e vie ws of th e For ei gn Cl aims Set tlem en t Co mm iss ion on 

S. 1451, 88 th Co ng ress, en titled , “An Ac t To Am end Se cti on 4 1 (a ) of th e T ra din g 

W ith the En em y Act.’’

I t wo uld appea r th a t th e pri m ary pu rp os e of th is bi ll is to am en d se ction 

41 ( a ) of th e T ra din g W ith th e Ene m y Act, as ad de d th ere to by section 206 of 

th e act of Octo be r 22, 1962 (76 S la t. 1115), to pe rm it th e U.S. C ou rt of Cl aims 

to re nder judg ment, upon cl ai m s again st th e Un ite d S ta te s from the sa le of 

G en er al Dye stuf f Co rp, as au th ori zed under section 4 1 (a ), an d to ex te nd th e 

pe riod of tim e from 1 to 2 years in which proc ee ding s w ith re sp ec t to such 

cl ai m s may be in st it ute d.

In eff ect, th e bil l wou ld pr ov id e tw o tech ni ca l ch an ge s to th e ex is ting st atu te 

to co nfor m w ith th e or ig in al in te nt of th e Co ng res s re gard in g th es e claim s an d 

to co nf or m w ith th e op inion of th e U.S . Su prem e C ou rt (Gtidricn Co. v. Zd an ok ,

370 U.S. 530 ) re la ti ng to th e ge ner al ju ri sd ic ti on of th e C ourt of Cl aim s.

Sinc e th e Fo re ig n Claim s S et tlem en t Co mm ission is not dir ec tly affe cted by 

th e am en dm en ts as pr op os ed under th e ac t, it wo uld p re fe r to mak e no rec om ­

m en da tion on th is m ea su re .

Ad vice ha s been rece ived from th e B ure au of the Bud ge t th a t th er e wo uld be 

no ob ject io n to the pre se nta tion o f t h is r eport to y ou r co mmittee .

Sinc er ely yo ur s,

E dward D. Re, Ch airm an .

M r. Harris. The Subcommittee on Commerce and Finance has had 

this matter referred to it for some time. The proposal would amend 

section 41(a) of the Tra ding With the Enemy Act. It would serve 

little purpose to describe the proposed changes insofar as I am concerned because I feel sure the testimony to be presented will bring out
CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS 3

the problems involved. This proposal is directed at a specific situ a­ tion which involves a settlement of a claim for the return of vested 

property. It is alleged, I understand, tha t a proceeding was brought some time ago and a settlement for less than the value of the property was entered into. A question about duress being exercised was raised and consequently the matter got into such condition tha t legislation seemed 

to be necessary to clear it up. This legislation was passed during the last Congress, the 87th Con­ gress, in the course of the conference between the House and the Sen­ ate on the omnibus war claims bill. I did not have the privilege of being present at the conference. Unfortunately, I think that was the time, wasn't it, Mr. Clerk, when I was in the hospital ?

Mr. Wili JAMSON. Yes.

Mr. Harris. I was advised about what happened and to me there seems to be some merit in our efforts to clarify the problem. It was again brought to my attention in the latter part of the first session of 

this Congress. Realizing it is a technical problem, I asked the committee, if my col­ leagues will recall, to consider it in executive session without hear­ ings, and it may be recalled that two or three members of the com­ mittee thought that, tha t was unusual procedure and that hearings 

should be conducted. I remember that our colleague, Mr. O'Brien, who was on the confer­ ence and who is fam iliar with the problem, made a ra ther strong pitch for the matter being reported without hearings, but in view of the questions raised by some members and the way the matter was brought up, I thought tha t it should be probably considered in this manner in order that the problem would not be prejudiced. So that gives a brief description of this matter that we have. We are honored this morning by the presence of our former distin­ guished, and amiable, and very able colleague, who is serving so ably in the other body. I would not comment about a Member leaving the House and going to the other body at any time under the circum­ stances, but anyone who can be trained over here to the extent that he can go to the other body and take over the leadership of his own party of tha t operation I think deserves commendation. Senator Dirksen, we in all seriousness are very glad to have you come back to the House and come back with us in this committee. We welcome you, and we know of your interest in this legislation and we feel that your appear­ ance will be helpful to get it straightened out.

STATEMENT OF HON. EVER ETT McKINLEY DIRKSEN, A U.S. 

SENATOR FROM THE STATE OF ILLINOIS

Senator Dirksen. Mr. Chairman, it is a pleasure to be here and coming to the House Office Building obviously invokes a lot of pleasant memories of the 16 years I spent in the House. I used to say that if the country was ever to be saved it was going to be saved by the I louse of Representatives. I presume on occasions I must vary that just a little bit, but frankly this is a great body and I was delighted with all the associations I had and with what few feeble, I hope, durable things 1 could do as a consideration to the well-being of the country.
4 CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS

Mr. Harris. I might say, if the Senator would permit, tha t I look 

back and point to with pride and satisfaction and have cherished memories of the days we served together on the same committee.

Senator Dirksen. Right.

Mr. Harris. Part of the time the Democrats were in the majority. 

We got along fine. And part of the time the distinguished Senator 

was chairman of that committee, whom I had the honor of serving 

under, and I might say, as I will probably explain to our grandchildren, tha t I look back to the days when Senator Dirksen used to visit 

my office. If he had time I am sure he would do it again.

Senator Dirksen. Mr. Chairman, you are very kind. I thought 

perhaps the best purpose I could serve here this morning would be 

somewhat narrative in character because there will be others to testify. 

It occurs to me that it is 12 or 13 years that I dealt off and on with 

this question of alien property, the work of the custodian’s office, 

and all the complications th at were involved in that undertaking. I 

finally landed as chairman of the subcommittee o f the Senate Ju diciary Committee having jurisdiction of the Trading With the Enemy 

Act and everything that had to do with alien property and property 

rights.

I served as chairman of th at committee for several years and sought 

to address myself to it with vigor in the hope, at long last afte r so 

many years afte r the war was over, that finally we could liquidate 

tha t whole matter and get it out of our hair. I had a considerable 

education while I was the chairman and I sought to probe into every 

aspect of the matter.

At tha t time we still had on hand a great many vested properties. 

There was then about $150 million in funds and in addition we had 

the War Claims Settlement Commission. I worked with them 

rath er closely, so you become identified with the personalities, the 

problems, that inured in this whole matter. I became particularly 

interested in one facet of the matter because I thought a real injustice 

had been done.

I discovered that one of the few satisfactions in life is that you 

carry a cross and get an injustice undone, because that is the richest 

satisfaction that can come to anyone in public service. I may say, 

by way of qualification, I never had a nickel's worth of interest in 

any piece of alien property. I never had a share of stock or a part 

of a share of stock. None of my family, none of my kinsfolk, none 

of my friends, insofar as I know, had any interest in it whatsoever. 

My interest was a compassionate one because in the course of the many 

hearings we held, and the testimony we took, I did discover an injustice and with particular reference to one individual. I can speak 

about him best because I got to know him. I not only got to know 

him, but I got to know the story from the Alien P rope rty Custodian 

himself, namely, the Honorable Leo T. Crowley, of Chicago, who, as 

you will recall, was a troubleshooter to whom President Roosevelt 

assigned many tasks, including chairmanship of the Federal Deposit 

Insurance Corporation and likewise the job as Alien Property Custodian, when that Office was still in the Treasury and had not been 

transferred to the Justice Department.

However, in the course of the hearings there came to my particular 

attention one individual named Ernest Halbach. I learned to know 

some of the others, but I think the ir cases were all the same.
CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS 5

However, I can use him as a symbol for what I will say this morn­ ing. I had him before the committee just like I had Mr. Crowley. I had the officials and investigators of the Alien Property Office before the committee and we compiled a long and very substantial report, 

and here is the thing tha t appealed to me. Mr. Halbach was the operating head of what was known as the General Dyestuff Corp. That, corporation was made up entirely of American citizens. It was under contract and handled the products of General Aniline & Film Corp., which la ter became quite controver­ sial, until we finally passed the bill making it possible for the D epa rt­ ment of Justice to ultimately dispose of the property. I presume in due time it will, but General Dyestuff was only a sales agency oper­ ating not only in the United States, but in this entire hemisphere, and so, among others, I had Mr. Halbach on the stand along with everybody else. I tried to get at the roots of the problem and ascertain the trut h as best, I could, and generally speaking this is what I discovered. The Alien Pro perty Custodian had investigated General Dyestuff and u lti­ mately stated it was really a shameful act on the part of the Govern­ ment, because that statement by him is in the record of the hearings 

when I was chairman. lie finally stated when I had him before the committee that he did it only as a matter of expediency. Subsequently, I asked Leo Crowley, the Custodian, to assign an investigator to investigate this whole matter, and particularly Mr. Halbach. That investigator was a young accountant from North Dakota named Edward Shaffer. Mr. Shaffer under testimony related to our 

committee tha t he spent nearly 7y2

 months in a thoroughgoing investigation of the m atter and concluded and reported to the Custodian that Dyestuff should never have been vested by this Government. In addition, John J. Burns, a onetime judge who was counsel to the Alien Property Custodian, was also assigned to make an investiga­ tion and Judge Bums came up with the same conclusion. However, the property was vested and there you were and there­ afte r the Department, of Justice did what was probably the normal thing to do, and tha t was to procure the stock of General Dyestuff so that it could have sole ownership and dispose of it in a way that it saw fit. It then began to bargain with the various stockholders. In the case of Mr. Halbach, may I say for the record, that he was not only the operating head, but in fact General Dyestuff depended on his talent. He was in fact such a talented person that in the war itself the Government summoned him to Washington as a consultant to the 

War Production Board. It was at a time when our dye supplies were so low that it looked as if the Navy could not even use the proverbial blue uniform and it, was Mr. Halbach, the operating head of Dyestuff, who came here as a $l-a-year man and patriotically and loyally served his Government. He was bom in Pennsylvania. His wife was native born. He was an American citizen, and yet here this property was vested by this Government. I thought tha t in itself was a shameful proceeding, but it was done and after tha t you couldn’t quarrel very much. The ques­ tion then was what were they going to do about paying a ppropriate 

33-873— 6- e
6 CLAIMS OF GENERAL DYESTUFFS CORP, STOCKHOLDERS

compensation to the holders of the stock. The Custodian, and perhaps 

the Department of Justice, began to bargain with these stockholders. 

Some had more stock. Some had less. There was one stockholder 

by the name of Dr. St. George. They paid him $365 a share for his 

stock. This stock had belonged to this doctor in New York, by the 

name of St. George, and he and his wife were paid $365 a share. That 

is exactly what they paid fo r it.

Well, Mr. Halbach, of course, felt that he was entitled to far more 

for his stock than that. He hired an attorney. He hired one of the 

best firms in the country, Sullivan & Cromwell, in New York, and I 

remember the particula r attorney in tha t firm who represented him, 

but to me it was one of the most astounding things, the type of advice 

tha t his attorney gave him. To this very good day, I can’t for the 

life of me understand how one representing, as a lawyer and as an 

advocate, the interest of an individual, would give Mr. Halbach the 

kind of advice that he did, but at long last the otfer was made and 

Mr. Halbach accepted it.

The question then arose as to just why he accepted not $365 a share 

for his stock, but $118 a share, and when T had him on the stand here 

was his testimony. This is Mr. Halbach speaking. He says:

The se ttle m ent? W hy , we sold th e stoc k fo r th e se ttle m en t. F ir st , m.v wife, 

as yo u kn ow , w as des pe ra te ly ill and th e ne w sp ap er noto ri et y an d th e 1 (ea tin g 

sh e go t and sh e kn ew t h a t I w as g et ting , weigh ed t er ri bly h ea vy o n her a nd on m y 

daughte r, and mys elf , an d her bro th er , wh o is one of th e tr ust ees. Th ey w er e 

ve ry an xio us to re liev e her of th a t st ig m a an d th e effect it had on h er be ca us e 

sh e w as a n int en se ly a nd r ab id ly lo ya l American .

Mr. H arrts. May T interru pt, Senator, and ask what year that was?

Senator Dtrksen. T will have to be refreshed on the exact year; 

Jan uary 1945. That is a long time ago. Incidentally, Mrs. Halbach 

was a cancer victim and finally died of cancer and this had a contrib uting effect because of the harassment that she was under, but now 

Halbach continues in his testimony.

lie sa id:

The seco nd co mpe lli ng r ea so n w as th e f a c t th a t du e to o ur ag re em en t as to o ur 

op tion w hi ch w e had se t up f or our ow n pr ote ct io n i t was u se d and tu rn ed ar ou nd 

ag ain st us be ca us e whe n th e G ov er nm en t took th e co mpa ny we w er e har ass ed 

w ith th e fe a r th a t I m ig ht be dis ch ar ged and my sto ck wou ld tr ip th e op tio n 

an d au to m ati call y he offered ha ck to th e co mp an y, an d my att orn ey, who w as a 

m em be r of Cr om we ll & Su lli va n, re ci te d th a t to me so m an y tim es be ca us e he 

sa id , “Y ou ha ve to be ca re fu l. Yo u w ill lose yo ur job if yo u do n’t loo k out.”

That was the second reason. You see, he had a stock option in the 

company. Had he l>een discharged his stock option wouldn't have 

been worth anything if in fact at some subsequent time the company 

might have been recovered. So here is a lawyer saying to h im :

Be very care fu l ab out w hat yo u do. The y may di sc ha rg e yo u from you r job 

as th e hea d of th e co mpa ny an d your stoc k op tio n goes alon g w ith it.

Obviously that would inspire fear in any man and was a kind of 

duress. Then he said :

My fu nds w er e p re tt y we ll dis si pate d in al l of th is an d I co ul dn ’t affo rd to 

los e my po sitio n. D es pi te th e re du ce d sa la ry , it w as st il l so m et hi ng th a t we 

had to ha ve . Tho se w er e th e tw o th in gs I re mem be r ve ry dis ti nctl y him sa yi ng 

to me w he n th is th in g w as fina lly s ett le d—

And this is his lawyer talking—

E rn est , yo u are a ve ry se ns iti ve m an an d if you go on w ith th is tr ia l you are 

go ing to k il l your wife.
CLAIMS OF GEN ERA L DY ESTUFFS CORP. STO CKHOLDE RS 7

Well, great God, th at’s fine testimony or fine advice to be received from a lawyer from one of the most prominent law firms in the coun­ try. If tha t isn't a species of duress, then as a lawyer 1 simply don't know the meaning of the term, and meanwhile this man was getting older, but there were other things. His bank account was frozen in New York. lie couldn’t even pay his wife's doctor bills unless lie got a lifting order from the Treasury Department so he could pay his bills and have a little money with which to go on. lie says:

‘‘There was nothing else to do."

Now, Senator Kefauver said : “Mr. Halbach, when was the settlement made ?” 

lie s aid : “In 1945.” And then I said: “As a m atter of fact, your wife had cancer and 

those Federal men kept bothering her."

Well, here is what he said :

Fed er al ag en ts ca me ou t. I ca me ho me one ni gh t an d I could har dl y be lie ve it. I sa w th a t he r fa ce w as sc ar le t and I said, “ W hat on eart h is th e m att er w ith yo u? ” She told me th en th a t tw o ag en ts from th e T re asu ry ha d bee n (h er e and qu es tion ed he r ab ou t me an d my co nn ec tio n an d tr yin g to in tim at e th at I w as G er m an or so m et hi ng to th a t effect. 1 ne ve r co uld get it out of he r. Sh e w as so up se t an d so be wild ered w ith it all th a t I ne ve r co uld find out, ex ce pt I kn ow th a t thos e tw o me n ha d bee n th er e. Sh e died sh ort ly aft er.

This is the kind of harassment (hat this old man was under and meanwhile his attorney was saying, “Don't do this. Don’t do that. You might lose your job as president of the company. You will lose 

your salary. You will lose your stock options.” And at the same time this Government was bringing him down here and accepting his advice as a patriot and as one of the ablest people in the dyestuff field that could be found anywhere in the country, a native-born American citizen who was born in the State of Pennsylvania. Now, that is the way this thin g carried on, so at long last this thing went into court. Well, the Justice Department set up all the technical defenses. I can understand that, but I still believe that it was a frig ht­ ful injustice. Bob Taft was then leader in the Senate. I went to Bob. We discussed this matter many times at great length and at long last Bob Ta ft wrote the Attorney General a letter. This was in Ja nua ry of 1953. Our old friend Jim McGranery, with whom we served here in the House together, was then the Attorney General. I read only one sentence out of Bob Taft's letter. lie said to the Attorney 

General:

I am fu lly co gn izan t of th e su cc es sful te ch ni ca l po sition of th e Gov ernm en t be hi nd it, it s “p urc ha se re le ase ” of th e H al ba ch sto ck, but le t me po int ou t. ho w ­ ev er, th a t a tr ia l on th e m er its of th a t tech ni ca l de fe ns e is not. a tr ia l on th e 

m eri ts of th e Ha lba ch ca se. W het her H alba ch ca n te ch nic al ly prov e dur es s— al w ay s an alm os t im po ssib le bur de n to su st ain —th e ve ry op po sitio n of a w a r­ tim e go ve rnmen t an d th e re la ti ve he lplessne ss of a ci tize n in a ne go tiated w a r­ tim e sa le do es cr ea te pre su m pt io n of ov er re ac hi ng by th e Gov ernm en t ev en th ou gh th er e might no t be te ch ni ca l dure ss which is pro va ble in co urt.

Any lawyer knows how difficult it is to establish duress, but look at this advice he got. Look at the Treasury agents going to a wife afflicted with cancer, and if I had to write a book about it 1 could give you details that would make your hair curl because I became familiar with it in the various details, and so here this fellow finally
8 CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS

sold liis stock under duress, not for the $365 that was offered to the 

St. Georges, but for less than one-third: $118. To me that was such 

a palpable injustice that I almost took an oath at the time tha t I 

would see it undone if it was the last thing I did in public life, and 

this is the 13th year that I have had this thing before me off and on 

and I do not propose to quit until this injustice is undone.

Now, all that is asked is why not let this case go to the Court of 

Claims on the merits, not on a technicality, not on a technical defense. 

Great conscience, what kind of a free government is this if a free, 

native-born citizen can't on the merits go into a court that the Congress specially provided for his citizenry in order to get justice. Why, 

when that day comes then our courts aren't open on the basis of the 

merits of the case; that is about the time when you can throw away 

the kev and say freedom and justice is in jeopardy in our own country. So that is all we tried to do. When this bill passed the Senate 

this was a floor amendment that I offered. It was accepted. We had 

the conference on the last day of the last session of the 87th Congress. 

It was in the afternoon. We held it over on the Senate side. I was 

a member of the conference; and then we began to hassle back and 

forth and finally garbled language crept into it before we could reach 

an agreement, and so the bill went back to l>oth Houses for approval 

with language that was not only garbled, but that didn't take account 

of the dictum tha t appeared in the so-called Glidden case. It was a 

case in which Tom Clark, former Attorney General, indicated that 

the Court of Claims could not be held to render advisory opinions, 

and finally 35 cases were stuck down there which had either gone 

there from one House or the other on the basis of securing some 

kind of an advisory opinion.

The way I wrote the amendment was to have the court render judgment on the merits of the case, but the garbled language provided that 

the court would consider it and then send it back to the Congress, and 

that certainly didn’t take account of what happened in the Glidden

case.

I was quite disturbed about it. Frankly, I went to see our old 

friend and colleague, Marvin -Tones, onetime chairman of the Committee on Agriculture of the House, with whom I served for many, 

many years, and so did the distinguished chairman of this committee. 

We had a long talk about it. He said, “I think there ought to be a 

substantive modification and T want to come up and talk to you and 

the members of the Judiciary Committee, but in the welter of things 

we haven't quite gotten around to >t yet and meanwhile the thing is 

stuck.'’ so they had a hearing in which to file their case under these circumstances and counsel for the American citizens and stockholders of 

General Dyestuff had no choice except to file their case.

It is pending, but it is in a state of suspension in the hope that we can 

get some lend of a clarification of this matter, so, frankly, the only 

reason I am here this morning is to see an injustice undone, to see 

justice done to the memory and to the estate of a man, and his wife, 

who died of cancer, who rendered yeoman patriotic service to this 

country, both native-born citizens of the United States.

That is all tha t was involved and it is pathetic th at in the welter of 

things this language in the bill tha t finally was approved in the 87th 

Congress should have been garbled, but it was the last day. We knew
CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS 9

it was the last day . We knew we were go ing to ad jou rn. Eve ry ­ body was ru sh ing h elt er- skelt er to get th e l ast-m inu te th ings out of the way. You kno w wh at happens in the con ferenc e com mittee un de r 

those circ ums tanc es. You give and yo u tak e. I was so reluctan t to do it, an d at lon g last I did do it, bu t I was outvoted in th e conference comm ittee and I ha d to abide by th e resu lt because when the adjo urnm ent fev er is in th e a ir it becomes a contag ion , as you know, and a m at ter in which t he re was little int ere st, or as one of you said, an obscure matter, th at isn ’t enough to keep th e two Hou ses of Congress in session very long , b ut the inju stice is still t her e. Th e duress is s till there. Th e injustice to the estate and to th e memory of a gr ea t Am erican is still the re. I so earnestly hope th at you will undertake to r ig ht it by mod ify ing th at lan guage as 1 have don e in the 

Senat e bill th at is prese ntl y p en ding befo re you. Tha t is my na rrat iv e sto ry, I could be here all mo rni ng an d give you h ighli gh ts. Th ere is no p oint in it. Mr. Coleman Bu rke of New York, who will be one of yo ur witnesses, kno ws this th in g back wa rd and for wa rd. I do n’t pro fess, co un try law ye r th at I am, to be so skil led in the art th at af te r 12 or 13 ye ars I can keep all thes e things in min d, bu t in my he art is the fee ling th at this injustice must be rig hted . I hop e th is com mittee will do it and send the bill to the floor and pas s it and let th is estate and thes e Am erican citize ns hav e 

th eir day in co urt on th e m eri ts of th e case. I f th e cou rt finds ag ain st them, well and good. Tha t puts a per iod to it so f ar as I am concerned. Bu t to let th e Government find ref uge in all the technical defe nses th at were used in court heretofore still doesn't resolve the me rits of the case, so th at is it. Now, with yo ur permission , the Fina nce Com mittee is conside rin g coffee leg islation this mo rni ng an d the y th in k I ought to be there, Mr. Ch air ma n. 

Th an k you.

Mr. H arris. Senator , you have given us a v ery in ter estin g na rrativ e of this prob lem. I can rea dil y un de rst an d why members of this committee who served on the conference have expressed the fee ling th at they have. Mr. O'Br ien is not here , bu t he has told th is com­ mittee how he felt about it. Mr. Glenn is here. He served on th at conferen ce and I think he probably would like to comment before you 

leave.

Mr. Glenn . Yes, Mr. Ch air ma n. Se nator , you have indeed pe r­ formed a service to th is comm ittee an d to me b y this very fine recita tio n of the fac ts which I had to some exten t forgotten as the y pe rtain 

to th is conference which we had on that bill. Now t ha t you ha ve h elped me I do reca ll th at this was a v ery p oorly conducted conference. We had to wai t fo r the attendance of the variou s Se nator s because of the fact there was action on the floor, and it run s in my mind th at you were not fee lin g too well. In fact, I think I sat nex t to you at tlie conference and you told me th at you 

had been un der a doc tor ’s care.

Senator Dirk sen . I had been out of Navy hospita l where they had 

me fo r 5 or 6 days.

Mr. Glenn. Yes. While you wer en’t at all pleased wi th wh at we finally came up with, fo r the purpo se of ge tti ng this bill ou t you did agree un de r t he circum stance s, it bein g the last day , th at we w ould rep ort it out, and. as I say, this was a very po or way of do ing it, bu t
10 CLAIMS OF GEN ERA L DY ESTU FFS CORP. STO CKHOL DER S

for the purpose of getting the things disposed of we did report it out. 

T have been sorry since for tha t because I realized after reading this 

opinion by the Supreme Court that this could not be done the way we 

wanted to do it, that it would have to he remedied by future legislation, and T am wholly in accord with what you do in your bill, and 

it is a simple thing and will certainly rectify the situation, which 

should have been done long before this.

Senator Dirksen. Mr. Glenn, you may remember the Senators had 

to leave that conference five times to go to the Senate floor and vote 

on first one thing and another, because the old urge was on to clean 

the calendars, get everything out of the way, so there would he no impediment to adjournment.

Mr. Glenn. Yes; I recall that we House Members had to take recesses and then wait for the Senators to come down and that it was 

a very unfortunate circumstance to have to have a conference committee meeting in this way, but it was the only way that could be done 

under the circumstances.

Senator Dirksen. Tha t is rig ht, Mr. Chairman. I thank you.

Mr. Harris. Senator, thank you very much. I might say that I was 

in Bethesda Hospital during that time, too. I hope you and I both 

have that out of our systems.

Senator Dirksen. Thank you.

Mr. H arris. I am going to put in the record at the appropriate place 

a letter from the Foreign Claims Settlement Commission, but I noted 

this one comment:

In eff ect, th e bill wou ld pr ov id e tw o te ch ni ca l ch an ge s to th e ex is ting sta tu te 

to co nf or m w ith th e or ig in al in te n t of th e Con gress re ga rd in g th es e claims.

Senator Dirksen. Right.

Mr. Harris. I know you are a very busy man. We will not detain 

you longer. I am sure we can get answers to what questions we might 

have from the other witnesses who will be here. Thank you verv 

much.

Senator Dirksen. Thank you, Mr. Chairman, and what a pleasure 

it is to come back and revisit old scenes.

Mr. H arris. We wish time would permit you to stay longer.

Senator Dirksen. Thank you very much.

Mr. Harris. I am pleased to observe the presence of our colleague 

from New York, Mr. Barry. Did you want to make any comment 

on this?

STA TEM ENT OF HON. ROBERT R. BARRY, A RE PR ES EN TA TIVE IN 

CONGRESS FROM TH E STA TE OF NEW YORK

Mr. Barry. Mr. Chairman, I am very pleased to have this o pportunity to stand before you and to say that I have been acquainted with 

this situation for over a decade and know that there are people who 

have felt a grave injustice was done on this issue, and I am very thankful and happy th at you are reconsidering this measure and attempting 

to do what can he done to make certain tha t the will of the Congress 

as we expressed it formerly is and will be carried out in legislation tha t 

is now before you.

I tha nk you for the privilege of just making this short statement.
CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS 11

Mr. Harris. Thank you. We are very pleased to have you and your 

expression of interest in this problem. We have the Honorable Irving Ja de, Chief of the Court of Claims Section of the Department of Justice. Mr. Jaffe, we will be glad to 

have your statement.

STATEMENT OF IRV ING JAFFE, ESQ., CHIEF, COURT OF CLAIMS 

SECTION, CIVIL DIVISION, DEPARTMENT OF JUSTICE

Mr. J affe. Thank you, Mr. Chairman and members of the sub­ committee. My name is Irving Jaffe. I am Chief of the Court of Claims Section of the Civil Division of the Department of Justice. 1 

am pleased to have this opportunity to testify on S. 1451. S. 1451 proposes to amend section 41(a) of the Trading With the Enemy Act, 50 U.S.C. App. section 42, by strik ing the words “report to the Congress concerning” in the first sentence of that section, and substituting therefor the words “render judgment upon." It would also extend the time within which suits may be instituted on the claims 

authorized to be brought by that section. I think that I can be of some assistance to the committee if I were to 

review for the committee the background of this bill. Section 41(a) was added to the Trading W ith the Enemy Act by section 206 of title II of the act of October 22, 1962 (76 Stat. 1115). That act amends the War Claims Act of 1948, and was originally in­ troduced into this House as H.R. 7283, 87th Congress, 2d session. As passed by the House, the bill did not provide for the addition of section 41(a) to the Trading With the Enemy Act. This provision was added bv the Senate as an amendment from the floor. As passed by the Senate, section 41(a) did provide for the investiture of the Court. of Claims with jurisdiction to render judgment. However, when the final bill emerged from conference of House and Senate con­ ferees, the language had been changed to provide only that the Court of Claims report to the Congress. The Department had had no oppor­ tunity to express any views on the provisions of section 41(a ) until it. was invited to do so before the joint conferees at which time the 

Department of Justice opposed the provision. The section is intended to give to all but one of the stockholders of General Dyestuff Corp, the righ t to sue in the U.S. Court of Claims for the proceeds received by the United States from the sale of stock of the General Dyestuff Corp, which had been seized under the Trad­ ing With the Enemy Act, not withstanding any statute of limitations, lapse of time, any prior decision by any court of the United States or any compromise, release, or assignment to the Alien Prop erty Cus­ todian. The relief which this Public Law would give to 10 of the 11 stockholders of General Dyestuff Corp, had been the subject of pro­ posed private legislation as far back as 1952. None of the private 

bills ever passed. The former stockholders or their successors filed a petition in the Court of Claims on October 17, 1963, purportedly pursuant to the act of October 22, 1962, and the Constitution of the United States. The Government has moved to dismiss the petition on jurisdictional grounds. The court has suspended further proceedings in the matter 

for 6 months.
12 CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS

All the stock of General Dyestuff Corp, was seized by the Alien 

Property Custodian in 1942 by Vesting Order No. 33 upon the finding 

and determination that all the stock was beneficially owned by I. G. 

Farbenindustrie, A.G. All the nominal stockholders of General Dyestuff Corp, were American citizens. General Dyestuff Corp., formed 

in 1925, has been the selling agent for dyestuffs produced by I. G. 

Farb en since 1926.

From 1927 until 1953, when it was absorbed into General Aniline 

& Film Corp.—GAF—it has also been the exclusive sales agent for 

dyestuffs manufactured by GAF.

GAF was organized in 1929 by I. G. Farben under the name of 

American 1. G. Chemical Co. From the time of its incorporation 

until 1939 its president was Hermann Schmitz, who, during tha t same 

time, was also chairman of the board of I. G. Farben. The controlling 

stockholder of General Dyestuff Corp. was. between 1928 and 1931, 

Herman Metz whose company, II. A. Metz & Co., had been the sole 

American sales representative of one of the large German manufacturers which had merged into I. G. Farben.

The majority stockholder between 1931 and Jul y 1939 was I). A. 

Schmitz, a naturalized American citizen and brother of Hermann 

Schmitz of I. G. Farben; and from 1939 until the seizure in 1942 the 

majority stockholder was E rnest K. Ilalbach. Mr. Halbach's entire 

business career had been with Kuttroff, Pickhardt & Co., a company 

which merged into General Dyestuff Corp, and which had, since 

before World W ar I days, also represented one of the large firms which 

later became part of the 1. G. Farben combine.

'Elie interesting aspect of the stockholdings in General Dyestuff 

Corp, was tha t a t all times since the formation of the company, every 

stockholder ‘"owned” his stock subject to an option which originally 

ran to I. G. Farben itself, then to successive corporations controlled 

by I. G. Farben, and finally, in 1939, to General Dyestuff Corp, 

itself.

The option, briefly described, required each holder of the stock to 

sell the stock to the optionholder at $100 per share, regardless of its 

actual value, plus a 6-percent dividend from the date of the last 

dividend. No stockholder ever paid more than $100 per share for 

his stock, notwithstanding the actual value of the stock at time of 

purchase. No stockholder ever received more than $100 per share 

regardless of the actual value at the time of sale.

The stock options in General Dyestuff Corp, were held as follows: 

From 1926 to 1933 the option was held by 1. G. Farben itself. All 

stock was endorsed in blank and was held by Farb en’s attorneys in 

the United States as escrow agents. In 1933, 2 years after D. A. 

Schmitz purchased Mr. Metz’ stock interest—for, incidentally, $100 

per share, notwithstanding a book value of $200 per share—the stockholders, at the request of Schmitz, executed new options in favor of 

the Marion Co., an Illinois corporation whose three stockholders were 

D. A. Schmitz, Walter Duisberg—a son of Carl Duisberg, one of the 

founders of I. G. Farben—and William vom Rath —the son of a 

director of I. G. Farben. The stock of the Marion Co. was, in turn, 

under option to E. Greutert et Cie., of Switzerland, a private banking 

firm owned and controlled by I. G. Farben.
CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS 13

All the stock of General Dyestuff Corp., after the signing of this 

agreement, was again endorsed in blank and deposited with I. G. Farben’s American attorneys. In 1938 the options were changed from Marion Co. to Chemnyco, Inc., a technical service agency in the United 

States for I. G. Farbe n, of which D. A. Schmitz was the major 

stockholder.

In 1939, at about the same time tha t I. G. Farben was “Ameri­ canizing” its holdings in the United States, the stock options were 

transferred from Chemnyco to General Dyestuff Corp, itself. D. A. Schmitz sold his stock valued at $460 per share for the option price of $100 and resigned as chairman of the board. It was at this time, too, that American I. G. Chemical Co. changed its name to General 

Aniline & Film Corp, and Hermann Schmitz and Walter Duisberg 

resigned as officers and directors of GAF. Ernest Halbach in 1939 purchased 2,100 shares of General Dyestuff Corp, stock at $100 a share at a time when the stock had a book value of $460 per share. I want to digress just briefly here rather than lie 

misleading. Mr. Ilalba ch had owned 900 shares and had purchased 1,200 in 1939 from those shares that were given up by Hermann 

Schmitz. He did have, in 1939, 2,100 shares for each of which he had 

paid $100 per share.

Thus, Mr. Halbach allegedly purchased assets worth almost a mil­ lion dollars for $210,000. In 1940-41, 2 successive 50-percent stock 

dividends were declared so that Mr. Ilalbach’s shares increased from 2,100 to 4,725. Even at the option price of $100 per share, Mr. Ilal- bach’s $210,000 investment was now worth $472,500. The other stockholders fared similarly. It is interesting to note that in 1941, when 

Mr. Halbach had occasion to evaluate his stock interest in General Dyestuff Corp, for tax purposes, he declared its value at $100 per 

share.

After all the stock of General Dyestuff Corp, was vested by the Alien Property Custodian on June 30, 1942, each of the 11 stockholders filed a claim for the return of the seized stock and most of 

them instituted lawsuits under section 9(a) of the Trading With the

Enemy Act All but two of the stockholders, Walter Duisberg and Arm in V. 

St. George, were represented bv the New York law firm of Sullivan & 

Cromwell. Settlement negotiations between the claimants, who were 

represented by eminent counsel, and attorneys in the Department of Justice, culminated in 1945 by the payment to Mr. Halbach and eight other shareholders of the option price of $100 per share, plus 6-percent 

dividends for each of the 3 years since the last payment of dividends, 

or $118 per share, in full settlement of their claims.

The suits were dismissed with prejudice and the claims withdrawn as part of the settlement. Mr. Halbach, for example, by reason of the settlement, received $557,550 for the stock interest for which he 

had paid $2J0.000.

Walter Duisberg, the second largest stockholder of General Dyestuff Corp., had instituted suit under section 9(a) of the Trading 

With the Enemy Act in the U.S. District Court for the District of New Jersey. That suit was dismissed with prejudice in 1944 fo r lack 

of prosecution, and the dismissal was upheld bv the appellate courts. 

Mr. Duisberg vainly attempted to reopen the district court judgment 

or to have his claim to the seized stock otherwise adjudicated.
14 CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS

Finally, in 1959, the House of Representatives, by House Resolution 128, 86th Congress, 1st session, referred to the Court of Claims 

H.R. 2692, a bill for the relief of W alter H. Duisberg, for tha t court 

to report to the House of Representatives such facts and conclusions 

as would be sufficient to inform the Congress of the nature and character of Mr. Duisberg’s demand as a claim, legal or equitable, against 

the United States and the amount which might be legally or equitably 

due.

Up to that point, Mr. Duisberg was the only stockholder of General 

Dyestuff Corp, who had received no payment whatever, by settlement 

or otherwise, for the seized shares tha t had stood in his name. In 

June 1961, the attorneys for Mr. Duisberg and for the Government, 

by stipulation, recommended to the Court of Claims that it find that 

Mr. Duisberg has an equitable claim against the United States in the 

sum of $327,850. That sum, as is set forth in the stipulation itself, 

was calculated at the option price of $100 per share plus dividends 

at 6 percent from 1942, the date of the last declaration of dividends, 

to 1953 when General Dyestuff Corp, terminated its independent 

existence.

Mr. Duisberg was paid on the same basis, namely, the option price, 

as was Mr. Halbach and every other stockholder, except Dr. St. George. 

Mr. Duisberg is the only stockholder who is not included within the 

provisions of section 41(a) which is now sought to be amended by 

S .1451.

Dr. St. George purchased, subject to the outstanding option agreement, 500 shares of stock in 1940 at $100 per share, although the actual value of the stock was almost five times that amount. In 1941, 

he received an additional 250 shares as a stock dividend. Dr. St. 

George died in 1943. In 1949, some 4 years after the interests of nine 

other stockholders had been settled and paid and some 5 years after 

Mr. Duisberg’s suit had been dismissed with prejudice, the executrix 

of Dr. St. George’s estate institu ted a suit under section 9(a) of the 

Trading With the Enemy Act. Because this suit presented issues 

not present in the other lawsuits and because it sought recovery of the 

only outstanding stock interest which had not by then fully and 

finally vested in the Alien Property Custodian free from the injunctive restraints of the Trad ing With the Enemy Act, settlement was 

made with the St. George estate in 1951 at a price of $365 per share. 

This settlement eliminated the last barrier to the absorption of General Dyestuff Corp, by GAF.

I would like to disgress again for a moment, if I may. Senator 

Dirksen, I believe, had his chronology a little bit in error. He seemed 

to imply that, when the settlement was made with Mr. Halbach in 

1945, a settlement had already been made at a considerably higher 

figure with Dr. St. George. This was not so. The settlement with Mr. 

Halbach and eight other stockholders occurred in early 1945. The 

settlement with Dr. St. George occurred more than 6 years later.

Between the time of seizure of the stock of General Dyestuff Corp, 

and 1950, Mr. Halbach remained on the payroll of General Dyestuff 

Corp. During tha t period of 8 years he received as salary, bonuses, 

and salary adjustments, the total of $558,600. Mr. Halbach retired 

in August 1950 at which time he was entitled to receive $257 per month 

under the company’s employee retirement plan, and an additional $45 

a month under social securitv.
CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS 15

The board of General Dyestuff Corp., however, by resolution, undertook to make a voluntary payment to him sufficient to bring his total 

retirement pay to $1,500 per month. Between the time of settlement 

and the time of his retirement, Mr. Halbach never questioned either 

the propriety or the fairness of the settlement he had consummated in 

early 1945.

But in 1951, the year afte r his retirement, Mr. Halbach instituted 

suit in the U.S. District Court for the District of New Jersey to vacate 

the 1945 judgment of the dismissal of his lawsuit and to reopen his 

claim, contending tha t the settlement had been forced upon him by 

coercion and duress exerted by Government officials.

After full and complete hearings in the U.S. District Court for the 

District of New Jersey, his motion to vacate the judgment was denied 

on the ground tha t there had been a complete failure to prove duress. 

The Court of Appeals for the Third Circu it upheld the judgment of 

the lower court, and the Supreme Court of the United States denied 

certiorari. Mr. Halbach’s simultaneous efforts to obtain private legislation to permit him to reopen the settlement were also unsuccessful 

until the enactment of section 41(a) as pa rt of the act of October 22, 

1962, amending the War Claims Act of 1948.

The stock of General Dyestuff Corp, was seized because it was believed that the beneficial ownership of the stock reposed in I. G. Farben 

of Germany, notwithstanding the nominal ownership of tha t stock by 

citizens of the United States. This belief was induced by the option 

agreement, the close association of the officers and directors of General 

Dyestuff Corp, with the personnel of I. G. Farbe n in Germany, by 

blood relationship, or economic dependence, and the sole business concern of the corporation itself with Farben products and interests.

After Germany found itself at war in 1939, Mr. Halbach and General Dyestuff Corp, cooperated with I. G. Farben to distribute Farben 

products to South American companies in evasion of the British 

blockade. In 1940, when I. G. Farben was no longer able to pay pensions to its retire d employees in the United States, Mr. Halbach arranged to have General Dyestuff Corp, make these payments, and 

those payments continued until 1941 when U.S. Treasury blocking 

regulations no longer permitted it. These and similar activities were 

the subject of testimony during hearings before the Kilgore committee in December 1945. See ‘‘‘Elimination of German Resources for 

War," hearings before a subcommittee of the Senate Committee on 

Military Affairs, June 1945-March 1946, at page 1079; see also 

pages 972-977.

The stockholders of General Dyestuff Corp, have received, through 

settlement, the option price placed on their shares by their own agreement. It was the price at which they themselves, prior to the war, 

bought and sold those shares of stock.

The suggestion that coercion or duress was exerted by officials of 

the United States to force that settlement has been fully litigated in 

the courts of the United States and has been found to be wholly baseless. Sixteen years after the settlement was made at the option price 

with Mr. Halbach and eight other stockholders Mr. W alter Duisberg, 

the second largest stockholder of General Dyestuff Corp., settled his 

claim against the United States on precisely the same terms as the settlement effected in 1945; namely, the option price of $100 per share plus
16 CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS

6-percent dividends. Mr. Duisberg also agreed to waive any rights 

that might be extended to him under private legislation which was 

then pending before the Congress and which ultimately was added 

as section 41(a) of the Tra ding With the Enemy Act by the act, of 

October 22, 1962. It is perhaps for this reason tha t Mr. Duisberg 

alone of all the stockholders, although he fared no differently from 

the others, is excluded from the provisions of section 41(a).

The settlements with all the stockholders of General Dyestuff Corp, 

were entered into fairly, at arm’s length, free of duress or coercion. 

Each stockholder received at least the maximum price for which he had 

agreed to sell his stock under the option agreement. Such settlements 

should not be disturbed. As a practical matter, almost 20 years have 

elapsed since 9 of the 11 settlements were consummated. Knowledgeable witnesses, both here and abroad, have died.

For the foregoing reasons, the Department of Justice cannot support the enactment of S. 1451.

Mr. I I arris. Thank you, Mr. Jaffe. Any questions, Mr. Van Deerlin ?

Mr. Van Deerlin. Is Mr. Halbach still alive?

Mr. J affe. No, Mr. Halbach is dead.

Mr. V an Deerlin. How is the estate held ?

Mr. J affe. I can't answer that. Perhaps the attorney who represents the Ilalbach interests can say. The stock, however, had been 

transferred by Mr. Halbach in, I believe, 1941 to a trus t which he had 

established for the benefit of members of his family and I believe that 

those who petition for those shares pursuant to this bill are his 

daughters as the beneficiaries or as the trustees of that trust, so that 

I believe his estate as such, apart from the trust which he had created, 

is not interested in this matter any more.

Mr. Van Deerlin. Thank you, Mr. Chairman.

Mr. Harris. Mr. Glenn?

M r. Glenn. What are the grounds which the Government has alleged in its move to dismiss the suit of the former stockholders in the 

court of claims?

Mr. J affe. The jurisdictional ground which we have alleged so far 

is the one that was suggested by the Glidden case and which of course 

has been, as I see it, the law of the country since its inception, th at a 

constitutional court created under article II I may not be called upon 

bv the Congress to render an advisory opinion either to the Congress 

or to the executive branch of Government. Tha t is the basis of the motion.

Mr. Glenn. When you say constitutional court, you are referring 

in this instance to the Court, of Claims.

Mr. J affe. To the Court of Claims.

Mr. Glenn. And that, of course, would be dispositive and there 

would be nothing as to the merits ?

Air. J affe. That motion does not involve the merits of this controversy, that is quite right.

Mr. Glenn. And the recital which you have given in your statement, of course, does refer to the past history of these claims and to 

the merits.

Mr. J affe. Yes.
CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS 17

Mr. Glenn. That is ail. Thank you, Mr. Chairman.

Mr. Harris. Mr. Curtin ?

Mr. Curtin. Thank you, Mr. Chairman. Mr. Jaffe, you say that settlement was made with I)r. St. George on the basis of $365 a share and all the other settlements were on the basis of $100 a share and this larger settlement was made “for issues not present in the other lawsuits.” What were those issues?

Mi-. J affe. I would be happy under normal circumstances to tell 

you them, but they will become involved in the. litigation that is pending in the Court of Claims, if, for example, the court should either deny our motion to dismiss or if this bill should be enacted and the court be authorized to render judgment. I would for that reason prefer not to discuss those issues, because they will still lie involved in that litigation—these other factors which existed for Dr. St. George but which did not exist with respect to other stockholders. There were 

some very serious differences.

Mr. Curtin. I yield to the chairman.

Mr. Harris. You are representing one of the parties, the I nited 

States, to that suit.

Mr. J affe. Yes.

Mr. Harris. You do not have to render a judgment or decision, do 

you, in this case?

Mr. J affe. No. Yon mean in discussing the 1 itigation ?

Mr. H arris. What is it t hat would prohibit you from then answering the question ?

Mr. J affe. Well, the reason T don’t answer the question is because 

these factors have not been raised, that is, the considerations, tha t prompted us to settle for what seems to be a very high sum of money were not raised at any time. They were known to the Government attorneys. If I were to discuss them now I think I might be inject­ ing something into the lawsuit that would be prejudicial to its defense, that is, the considerations that went into the settlement. The Gov­ ernment’s willingness to pay to Dr. St. George more than $100 a share was primarily motivated by its desire to get rid of this last barrier to the complete ownership of General Dyestuff Corp., but, secondly, it was justified on the basis that Dr. St. George was not, and his estate was not, in the same position as was each of the other stockholders, 

both legally and from personal points of view.

Mr. Harris. Repeat your quest ion.

Mr. Curtin. Mv question originally was, What were the “other issues’’ that made it seem just to give Dr. St. George $365 a share for his stock in settlement where all the other persons only got $100 per share in their settlements? Mr. Jaffe indicated on page 8 of his state­ ment that there were these issues not present in the other lawsuit, which were the factors th at caused that increase in the settlement made with Dr. St. George, and I am curious as to what those issues were.

Mr. Harris. And you say even your discussing them would prejudice the defense tha t you have before the Court of Claims?

Mr. J affe. Yes: in my opinion.

Mr. Glenn. Will the gentleman yield ?

Mr. Curtin. I have yielded to our chairman, and will yield to 

you when lie has concluded.
IS CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS

Mr. Harris. That puts us in a rather unusual position, Mr. Jaffe. 

W e are called upon to extend jurisdiction to a constitutional court for 

a particular purpose and tha t is to decide what is alleged to be a 

matter of equity. You tell us tha t there are matters involved here 

and information which you have which you do not want to discuss 

because it might prejudice your defense before the court. One of 

the members has asked for this information to help base his judgment 

on whether or not this bill should be passed.

I think we are getting righ t down to the crux of this thing, as to, 

from the standpoint of equity, what should be done and what decision 

should be made. We should have information to support your position tha t the matter has already been adjudicated and tha t there is 

no injustice, but you are indicating to us there are issues which had 

not been raised.

Xow, if you were a member of the court and you were going to 

make a decision on the thing I would not even permit discussion of 

this this far, but since you are representing one of the parties and 

the allegation is made here I do think that the committee is entitled 

to the information. You insist it might prejudice the Government’s 

case. I don't want to do that and I think perhaps if that is the way 

this is going to end up we might have to have an executive session 

at which we will have to go into this matter furth er with you.

Mr. J affe. May I merely say this, Mr. Chairman? First, the 

question is addressed only to the settlement with respect to 1 of the 

stockholders out of 11.

Mr. Harris. That is the basis of the whole case before us to make 

a decision, that the Justice Department settled with one of them at 

what was considered to be the fair value of it and there was duress 

prior to that time which caused another one and others to settle at a 

greatly reduced price.

Mr. J affe. That is why T insisted on the chronology. The settlement with the one at $365 a share occurred 6 years after the first 

group and 10 years before the last.

In other words, there was one stockholder who owned the second 

largest number of shares of stock who only 2 years ago settled for the 

same price as had Mr. Ilalbach in the beginning, knowing full well 

of the amount we had paid to Dr. St. George’s estate, and this last 

settlement was in 1961. I did not understand that the discrepancy 

between those two prices was the basis for the duress, because that 

certainly didn't figure nor did it enter into the trial on the duress.

There was no pitting of one price against the other. But coming 

back to the question, I believe it has been customary for the Dep artment of Justice to ask not to be compelled to answer a question that 

might affect or that had a bearing on pending litigation. In this 

particular case the issues have not been framed. The petition has 

been filed. Xo answer has been interposed, but a motion has been 

made to dismiss.

For me to discuss issues or to discuss contentions that might be 

made before they have been asserted in court would, in my opinion, 

prejudice the interests of the Government.

However, 1 don’t want to try to give the impression that there is 

anything mysterious about what these other considerations were, and 

I do believe that if you consider them important I would perhaps be 

permitted to tell you what they are in executive session.
CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS 19

Mr. Harris. I think that is a reasonable suggestion, as I have 

already indicated, but it seents to me a ra ther serious question. 1 here are two things involved here. There is the question of whether or not this party, and I assume the estate now since he is dead, received for the stock a price that was far below what should have been received. Then there is the more serious allegation, and 1 certainly do not blame the Department for taking its position, as to whether or not there was duress tha t brought about the settlement.

Mr. J affe. That, of course, was fully litigated, Air. Chairman. There was no technicality that barred that suit or tha t did not permit them to bring in all the witnesses they wanted and to bring in the Government witnesses against whom the duress was alleged and for 

testimony to be taken and to be heard. The issue of duress was fully litigated without barrier of any 

technicality.

Mr. H arris. I think that is the real issue here for us to consider in 

arriving at a decision.

Mr. J affe. It wouldn’t be an issue in the Court of Claims, you know. There is nothing in the petition nor would there be anything in the answer which would even suggest a relitigation in the Court of 

Claims of thequestion of duress. The hill eliminates almost every defense and the duress would not need to be placed in issue in the Court of Claims, as I see it.

Mr. H arris. As I understand from the contention, that is the only 

issue.

Mr. J affe. On the contrary, they claim tha t they were the full owners of the stock and tha t they were entitled to its book value, not the option price, as I understand it. I can't see the issue of duress in 

the Court of Claims at all.

Mr. Harris. Perhaps I misunderstood Senator Dirksen.

Mr. J affe. I understood that Senator Dirksen was referring to this.

Mr. Harris. I think we have a problem and we will have to have 

another session and go into executive session on this.

Mr. Curtin. I yield to you now, Mr. Glenn.

Mr. Glenn. I thank you. I believe the chairman has brought up what I wanted to bring out, as to why there was such a difference between the settlement of $365 a share with Dr. St. George and $100 a share with the others, and you say the reasons you cannot disclose at this time. I think you said originally that no answer had been filed in this litigation, but did I hear you just now’ say that an answer 

has been filed ?

Mr. J affe. Xo. AVe have not answered the petition in the Court of 

Claims. We have moved to dismiss it.

Mr. Glenn. How* do you know’ what their defense is going to be 

then?

Air. J affe. They filed a petition. AVe are the defendants. They 

have filed a petition and set forth the basis of their claim.

Air. Glenn. Suppose the petition is not allowed and then you join issues. AVouldn’t they be entitled to have a bill of particulars which will disclose to them what these reasons are which you claim entered 

into the settlement with Dr. St. George ?

Air. J affe. I think not. The settlements aren't in issue, because they 

get credit for those settlements: that is, the Government gets credit.
20 CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS

They are hoping to prove in the Court of Claims, as they say they have 

been attempting to prove ever since 1952 or 1951—they had the opportunity to prove it, of course, in 1945, but they settled the case; they 

were in court then, and they could have had their day in court—but 

what they claim now and what appears in their petition is that they 

were the full and beneficial owners of this stock and that when the 

Government seized it they should have been paid—or they would 

have been successful in establishing, had they ever tried this case on the 

merits, that, the stock interest being theirs entirely, they would have 

received—what its true value was, not the option price. That, as I understand, is what they will attempt to establish, and if they do establish 

it, the only manner in which the settlement figures come into play is 

tha t the Government will receive a credit.

Let us assume for the sake of argument that the court finds that the 

true value of the stock was $500 a share, and they have only received 

$100, 9 of the 10. Then instead of the Government paying them $500 

a share, it would only pay them an additional $400, receiving a credit 

for the $100 that was paid. I)r. St. George's estate is also a plaintiff in 

this. Dr. St. George's estate, too, is claiming that it was not fairly 

dealt with, even though it received more than three times the amount 

that the other stockholders did. Dr. St. George can't claim duress on 

the basis of having received more than the other stockholders.

The gravamen of this petition is th at they are the true and beneficial owners and tha t they are entitled to whatever the full value was. I 

assume there is something in the bill that is a little bit uncertain and 

tha t is th at they are supposed to get the proceeds of the sale of the 

stock, and the proceeds of the sale, of course, didn't occur or we didn't 

get any proceeds until some 8 or 9 years after the first settlement.

I am not certain what the judgment, if any, they get is directed 

against. I am not certain, for example, whether this money will be 

paid out of the Treasury, which would be an unusual thing, if not a 

unique thing, in alien property matters because heretofore any suit 

against property seized under the Trading With the Enemy Act has 

been satisfied either bv the return of the specific property or, if it has 

been sold, its proceeds of sale.

They are not entitled to claim just compensation, for example, because the Supreme Court has long ago held th at the provisions in the 

Trading With the Enemy Act is a perfectly valid, constitutional basis 

for sustaining the act, so long as it gives them either the specific property or, if it has been sold, the proceeds of sale, and any suit that has 

heretofore been brought which suggested that the proceeds of sale 

were not adequate has been dismissed as not presenting a justiciable 

question.

I am not even certain what they are going to get here. Perhaps if 

they get a judgment against the United States the Treasury will pay 

it out of taxpayers' funds. That would be the first alien property matter to which that would occur. Or, if this is going to l)e satisfied out 

of whatever we determine to be the sale price or the sale proceeds, because there wasn't actually a cash transaction in this matter, then I 

presume that would deplete the war claims fund by that amount. 

This, however, is not unusual. Any time there is recovery under the 

Trading With the Enemy Act tha t would be the net result, so I don't 

suggest that as a consideration.
CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS 21

Mr. Glenn. Thank you. Thank you, Mr. Curtin.

Mr. Curtin. So far as this member of the subcommittee is concerned, 

I think before I can arrive at a decision as to the merits of this pro ­ posed legislation, I would like to know why the Government saw fit to make settlement with a number of these stockholders at a certain figure which was much lower than the amount in a settlement with the one additional stockholder some years later. Whether tha t is done in executive session or not. I would like to have th at information and I am sure th at the other members of the committee would, too. I don't think it is quite a complete answer to say that the fact that the St. George settlement was made some years later, could be a very large contributing factor, particula rly if there were other suits pending or 

threatened at the time of that settlement.

Mr. J affe. There were none, Mr. Congressman.

Mr. Curtin. There were not ?

Mr. J affe. There were none. They were all concluded.

Mr. Curtin. There are suits pending now, I understand.

Mr. J affe. Only because of the enactment of section 41(a). The only suit pending is presumably under the authority of that statute, 

the one before us now.

Mr. Curtin. And you say you do not want to answer further at this 

point.

Mr. J affe. I say that I can't answer further, without in my opinion 

prejudicing the Government, in a public session.

Mr. Curtin. Under those circumstances, Mr. Chairman, I would make a motion tha t we take that testimony in executive session of the subcommittee at some time to be fixed by the chairman.

Mr. H arris. We will tr y to arrange an ap propriate meeting for that purpose. I observe this amendment to section 41(a) would extend jurisdiction or confer jurisdiction in the court of claims to hear, deter­ mine, and render judgment upon the claims against the United States for the proceeds received by the United States from the sale of prop­ erty vested under the provisions of the Trading With the Enemy Act. I would assume that, would mean the difference between what this 

par ty received—$118 I believe, wasn’t it?

Mr. J affe. Yes; well, most of them.

Mr. Harris. $118 a share, and what the United States received from 

the sale of it.

M r. J affe. Tt. lends itself to t hat interpretation. It would certainly 

be the one that I would urge if it ever came to that.

Mr. Harris. Is there any reason why I shouldn't ask you what the 

United States did receive per share?

Mr. J affe. It was an exchange of stock. No, there is no reason. There was an exchange of stock. There wasn’t any cash sale. The Alien Property Custodian, who at tha t time was the Attorney Gen­ eral of the United States, as advised by his advisers, I presume, felt that it would be most advantageous for General Dyestuff, whose sole occupation for years immediately prio r to that, time was as sales agent for General Aniline & Film Corp., to become absorbed into General Aniline & Film Corp, as one of its divisions. Tha t was accomplished in 1953 and what occurred at that time was tha t the Attorney General received, in exchange for the General Dyestuff stock, shares of General Aniline & Film Corp. I am sure that when-
22 CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS

ever one is dealing with property there will be some means or manner 

bv which a value can be placed on it. It presents a difficult problem 

because General Aniline & Film stock was not freely traded because 

at that time the. Attorney General owned or controlled approximately 97 percent of the stock of General Aniline & Film Corp, and of 

course 100 percent of General Dyestuff stock after the settlement. 

Mr. Harris. Does the Government own 97 percent of the stock? 

Mr. J affe. Of General Aniline & Film Corp. There was only 3 

percent owned by the public in the United States or nonenemv 

public.

Mr. Harris. What was the date of tha t now ?

Mr. J affe. That was true since 1942.

Mr. Harris. The Government seized it.

Mr. J affe. The Government seized the stock.

Mr. H arris. It was just holding it actually. It didn’t own it at that 

time?

Mr. J affe. The law says th at the ownership transfers to the Government at that point when they seize it. They become the owners 

of that stock and they treat with it as owners, so tha t they did own 

the stock.

Mr. Harris. The Government then through this procedure owned 

97 percent of General Aniline & Film Corp.

Mr. J affe. Yes.

Mr. Harris. And 100 percent of General Dyestuff?

Mr. J affe. General Dyestuff.

Mr. Harris. So there is no way tha t you can give the committee 

an accurate figure as to what the United States did receive at any 

time.

Mr. J affe. No. I would hesitate to try to give you a figure, which 

would have to be a matter of personal opinion or speculation. I 

am sure, however, tha t if ever the need arises a monetary value can 

be placed on it as of that time.

Mr. Harris. At the time the Government took this over in 1942 

what was the value of the stock ?

Mr. J affe. Of General Dyestuff Corp. ?

Mr. Harris. Yes; and also General Aniline.

Mr. J affe. We seized the stock at tha t time of General Aniline & 

Film too; tha t is, General Aniline & Films was one of the first seizure 

orders that was executed by the United States.

Mr. Harris. What was the value of the stock at the time the Government took over General Aniline ?

Mr. J affe. I can’t recall, but I could find out for the committee. 

My recollection is that i t was somewhat in the area of $200 a share, a 

little bit less.

Mr. Harris. Will you submit that for the record ?

Mr. J affe. Yes, I shall.

Mr. Harris. What was the value of General Dyestuff stock?

Mr. J affe. I can give you the value of General Dyestuff stock on 

the basis of book value, that is, our records I think will show a book 

value, the Alien Property Custodian records, rather than an actual 

value, that is, rath er than an actual value in any other sense. Jus t a 

moment. I think I may have t hat figure. I am sorry. I thought I 

might have it here. I don't have the book value of General Dyestuff, 

but I can get that for you too.
CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS 23

(The information referred to appears on p. 26.)

Mr. Harris. Would you get tha t for us too. As a matter of fact, 

will it be convenient for you to come back in the morning ?

Mr. J affe. Yes; I could come back tomorrow morning.

Mr. Harris. Would you try to get t hat for us and b ring it back with 

you in the morning ?

Mr. J affe. Yes.

Mr. Harris. What was the basis of the exchange of the General Dyestuff stock for the General Aniline stock? M as it 1 for 1, or 2 for 

2, or 2 for 1, 3 for 1, or what ?

Mr. J affe. No; it wasn't 1 for 1. I would have to get tha t fig­ ure. I think tha t there was an exchange for the outstanding 8,678 General Dyestuff. I think, but I would certainly want to verify it, tha t there were approximately 65,000 shares of GAF, exchanged for it. The book value of the General Dyestuff Corp, stock was much 

greater than the value of the GAF stock.

Mr. Harris. It must have been if it was 8,000 plus to 65,000 plus. 

It would be about 8 to 1, a little less.

Mr. J affe. It might very well have been.

Mr. Harris. Would you see if you could obtain that information 

for us ?

Mr. J affe. Yes.

Mr. Long. Mr. Chairman, may I ask one question ?

Mr. Curtin. May I ask one other question before I conclude? I 

had n't concluded.

Mr. H arris. I thought you had. Go right ahead.

Mr. Curtin. Just one other question. Mr. Jaffe, when the Gov­ ernment made its settlement in 1949 with Dr. St. George's estate it must have felt tha t the stock of General Dyestuff was worth at least $365 a share or else it wouldn't have made a settlement at that figure.

Mr. J affe. Yes; that is correct. The stock was at all times that we have mentioned—tha t is, at any time except when the company first began—worth more than the option price, t ha t is; when any of these stockholders bought the stock it was worth considerably more. When we settled with Dr. St. George it was worth more than $365 a share. When Dr. St. George bought the stock at $100 a share it 

was worth $540 a share.

Mr. Curtin. Could you tell us in 1949 what the value of the stock 

was ?

Mr. J affe. Yes. It was 1951 tha t I can give you because that is 

when we settled with Dr. St. George.

Mr. Curtin. I thought it was in 1949.

Mr. J affe. Xo ; it was in 1945 for the other eight, 1951 for Dr. St. 

George, and 1961 for Mr. Duisburg. Our figures would indicate t hat the stock was worth $846 a share when we settled with Dr. St. George.

Mr. Curtin. In 1951 ?

Mr. Harris. 'Which stock?

Mr. J affe. The General Dyestuff Corp, stock.

Mr. Curtin. Thank you. Tha t is all Mr. Chairman.

Mr. Harris. Mr. Long?

Mr. Long. Mr. Jaffe, what law firm in the United States repre ­

sented General Dyestuff?
24 CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS

Mr. J affe. I am sorry, I can't answer that. I really don’t know.

Mr. L ong. Do you think it would be possible to find that out when 

you come back ?

Mr. J affe. I think so. What period of time, Congressman Long, 

do you have in mind ?

Mr. Long. At the time the options were granted. It would be interesting to me if it were Sullivan & Cromwell.

Mr. J affe. No; the options existed at all times from the time the 

corporation was organized. They had those stock options at all times. 

I am firm in my conviction that Sullivan & Cromwell did not repre ­

sent. General Dyestuff at any time, but I could check th at.

Mr. Long. From your experience with the holdings of I. G. Farben, 

does this option with a right to repurchase represent a pattern?

Mr. J affe. Yes, i t does; in almost every foreign investment they 

have.

Mr. Long. In all of the others or most of the others your department found this to be the pattern followed by I. G. Farben ?

Mr. J affe. Yes; th at is correct.

Mr. Long. Thank you.

Mr. J affe. I want to say one other thing that may have been lost 

sight of by the question as to who represented them. You realize 

that, from 1942 on, the dominant force in the operation of General 

Dyestuff Corp, was either the Alien Property Custodian or the 

Attorney General.

Mr. Long. Yes.

Mr. J affe. When I said, for example, that the board of directors 

of General Dyestuff voted to increase the allowance, or the amount 

that would be paid to Mr. Tlalbach, to give him $1,500 a month, tha t 

was a Government board of directors; tha t is, one that, was appointed 

by the Attorney General. While they were businessmen and designated to operate the company and their judgment was respected, they 

were all appointed, or at least approved, by the Attorney General of 

the United States, because he was the 100-percent stockholder.

Mr. V an Deerlin. If the gentleman will yield, we didn't have an 

opportunity to question the Senator and I think tha t the Senator 

made a great point of the advice th at Mr. Halbach had received from 

Sullivan & Cromwell. This left an unanswered question, in at least 

a couple of committee minds, and I think that Mr. Long is interested 

in finding what the Senator is implying in regard to the advice tha t 

the client received from Sullivan & Cromwell.

Mr. J affe. I can ascertain for you who the attorneys were for 

General Dyestuff if they had private counsel, and they may have, 

on and after the seizure; that is, from 1942 on, and this settlement 

didn’t occur until 1945.

Mr. H arris. Senator Dirksen was quoting the advice that was given 

from Sullivan & Cromwell as attorney for Halbach.

Mr. J affe. That is right.

Mr. Harris. As attorney for Halbach. I don’t know that this 

witness would have any information on that, other than what he 

heard.

Mr. J affe. Oh, no: I have no knowledge of what advice Mr. 

Stevens, as it happens, had given to Mr. Halbach.

Mr. Harris. I assume that there would be no question about it. 

If an attorney advised him to take it he had good reason to do it.
CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS 25

Mr. Long. That is all I have, Mr. Chairman.

Mr. H arris. You stated tha t between the time of the seizure of the 

stock—which was 1942,1 believe, wasn’t it ?

Mr. J affe. Yes.

Mr. H arris (continuing). Of General Dyestuff Col'll, and 1950 Mr. Halbach remained on the payroll of General Dyestuff Corp. Did he 

remain on the payroll as an employee ?

Mr. J affe. Oh, yes; as an important employee.

Mr. Harris (reading) :

During that perio d of 8 yea rs he received as salary , bonuses, and sal ary 

adju stments, the total sum of $558,600.

The question is with reference to this statement. In the first place I don’t know the purpose of the statement except tha t it is a matter 

of gratuitous information.

Mr. J affe, I can tell you why that statement is included in the statement. I know th at permeating the concern th at has been shown for the alleged injustice tha t was sustained by these stockholders is the allegation, the charge, the suggestion, that duress was practiced by the Government of the United States against these stockholders and that an unconscionable settlement was forced upon them. I indi­ cated tha t this settlement occurred in 1945. The sole stockholder of the General Dyestuff Corp, was, from 1946 on at least, the Attorney General of the United States and prior to that time the Alien Property 

Custodian. If there was any desire to practice duress against Mr. Halbach or to treat him u nfairly or unkindly in any way it would seem to me the Government would not have retained him as, perhaps, their highest 

paid employee.

Mr. Harris. The point is the salary of Mr. Halbach was approved 

by the Attorney General.

Mr. J affe. That is correct, or the Alien Property Custodian.

Mr. Harris. Well, yes. I used the Attorney General’s name as the 

head of an agency.

Mr. J affe. Yes, sir.

Mr. Harris. Any bonuses that were paid and any salary adjustments 

were made by the appropriate agency of the Government.

Mr. J affe. The General Dyestuff Corp, under the influence of the 

Attorney General; that is, he certainly controlled that.

Mr. Harris. That is what I say. it had to be with the acquiescence 

of the Government official who was in charge of it.

Mr. J affe. Yes.

Mr. Harris. I mention that merely for clarification of the record to show that for whatever reason the salary was set, or the bonuses were paid, or salary adjustments were made thereto, it was not just an arbitrary situation to give someone a break, I suppose.

M r. JxAFFE. No .

Mr. Harris. But it was made by a responsible party involved in the business and with the approval of the U.S. Government ; that is, the agency of the U.S. Government which had such responsibility.

Mr. J affe. Yes. I don't suggest tha t to indicate tha t he was over­ paid, or tha t he didn't deserve this, or that there was any other signifi­ cance other than to indicate that this is not the conduct of a person 

who is practicing duress against a man.
26 CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS

Mr. Harris. Yes. I wanted to be sure to have tha t understood. I 

think in order th at we might go into this a little more, in view of the 

question raised by a member of the committee, tha t we will ask you to 

come back in the morning at 10:30 for an executive session. Thank 

you very much.

Mr. J affe. Thank you very much.

(The following letter was later received from the Department of 

Justice:)

U.S. Department of J ustice,

Office of the Deputy Attorney General.

Washington, D.C., March 6,196}. lion. Harley O. Staggers,

Chairman. Subcommittee on Commerce and Finance, Committee on Interstate

and Foreign Commerce, House of Representatives, Washington, D.C.

Dear Congressman Staggers : During th e course of the testimony given by Mr.

Irving Jaffe of the Civil Division on Senate bill 1431, before the House Subcommittee on Commerce and Finance of the House Committee on In terstate and Foreign Commerce, Mr. Jaffe was asked to subm it for the record certain additional 

information. We are now pleased to furnish this information.

The following ar e the questions asked Mr. Jaffe and the ir answers :

(1) Wh at was the value of General Aniline & Film and General Dyestuff Corp, 

at the tim e of vesting?

(«) The book value of General Aniline & Film on March 31, 1942 ( 24 days before vesting) was $40,191,732. There were t hen outstanding 527,637 A shares and 

2,030,000 B shares of stock.

(b) The book value of General Dyestuff Corp, on June 30, 1942, was $3,645,727. 

There were then outstan ding 8,678 shares of stock.

(2) How many shares of General Dyestuff stock were exchanged for the General Aniline & Film stock?

(a) Each share of General Dyestuff stock was exchanged for 7 ^ shares of 

General Aniline & Film stock. The Alien Pro perty Custodian exchanged all of 

the General Dyestuff stock (8,678 shares) for 63,085 sha res of G eneral Aniline & 

Film common A shares.

(3) Wh at law firms represented General Aniline & Film, General Dyestuff 

Corp., the Marion Corp., and Chemnyco?

(a ) Our records do not indicate which of several law firms was principal 

counsel to these firms. Our records do indicate, however, that for the stated 

years, the following law firms received paym ents for services rend ered :

General Aniline & Film—1941, 1942 : Breed, Abbott & Morgan; 1942 : Hu ts & 

Joslyn; 1943. 1944. 1945. 1946: Wicks, Riddell. Bloomer. Jacoby & McGuire.

General Dyestuff Corp.—1942: Garey, Desvernine & Garey Sullivan & Cromwell: 1942, 1943, 1944, 1946: Burns, Curry, Walker & Rich; 1945: Whitman, 

Coulsen, Goetz & Ronsom.

Marion Corp.—Breed. Abbott & Morgan.

Chemnyco—Hutz & Jo slin ; Breed, Abbott & Morgan; Briesen & Schrenk.

We also have been asked by Mr. Coleman Burke, counsel for the former shareholders of General Dyestuff Corp., who testified on February 26, to request on his 

behalf th at the record remain open should Mr. Jaffe introduce into the record 

the court decisions reje cting contentions of duress. During the executive sessions held on Feb rua ry 27, Mr. Jaffe asked that these decisions be inserted into 

the record and. accordingly, we convey Mr. B urke’s request.

Should you or any members of your subcommittee desire additional information, we shall be pleased to assist in any way we can.

With best regards.

Sincerely,

Nicholas deB. Katzenbach,

Deputy Attorney General.

Mr. Harris. Mr. Burke, do you want to make any statement ?
CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS 27

STATEMENT OF COLEMAN BURKE, ESQ., BURKE & BURKE, 

NEW YORK, N.Y.

Mr. Burke. Indeed I do, Y ou r H onor.

Mr. H arris. You com plim ent me, but the way you have responded 

wou ld indicate th at you want substan tia l tim e, and I must say th at 

un de r t he circum stance s we do not have s ub sta ntial tim e now. Tha t's 

the call of the House.

Mr. Burke. I quite appreciat e th at , Mr. Ch air man. I d id n't mean 

to burd en you with a lon g sto ry, but I am very muc h surpris ed at the 

na tu re of the presen tat ion of the De partm ent of J us tic e and , with the 

gr ea test respect fo r the questions th at have been aske d, with the lack 

of inf orma tio n th at has been supplied on those questio ns whi le th is 

grou p has heard th is discussion, I would like an op po rtu nity quickl y 

to touch some of thes e po ints .

Mr. H arris. We are going to have to ask you to come back in the 

mo rning then because I see righ t now we get righ t in the middle of 

th is discussion and we would have to conclude th is session, so I th in k 

pe rhap s it will be b etter if you come back at 10 o’clock in the m orn ing .

Mr. Burke. Tha nk you v ery much. sir.

Mr. Harris. Th e com mittee will ad jour n un til the mo rni ng at 10 

o'clock.

(W hereu pon, at 11:47 a.m., the com mittee ad jou rned until 10 a.m., 

Fe br ua ry 26, 1964.)

CLAIMS OF GENERAL DY ES TU FF S CORP.

STO CKHOLDERS

W ED N ESD A Y , F E B R U A R Y 26 , 19 64

Houseof Representatives,

Subcommittee on Commerce and F inance of the

Committee on I nterstate and F oreign Commerce,

Washing ton, D.C.

The subcommittee met at 10 a.m., pursuant to recess, in room 1334, 

Longworth Building, Hon. Harley O. Staggers (chairman of the 

subcommittee) presiding.

Air. Staggers. The committee will come to order.

We will continue our hearings on S. 1451. This is a continuation of 

our hearings from yesterday and our first witness will be Mr. Coleman 

Burke. Is Mr. Burke present? Would you take your chair and give 

your name and address and identify yourself for the record, Mr. 

Burke, and you may proceed ?

Mr. Harris. Mr. Chairman, before Mr. Burke begins, let me explain 

about the status of this situation. Yesterday in your absence hearings 

were held, at which time Senator Dirksen, from Illinois, the minority 

leader of the Senate and the sponsor of this bill, opened the hearings 

with his testimony and gave a narrative on what he thought the situa ­

tion to be and from his viewpoint. Following his presentation 

we had a representative of the D epartment of Justice, Mr. Jaffe, and 

I do not believe we identified for the record, Mr. Jaffe, your associates.

STATEMENT OF IRV ING JA FFE , CHIEF, COURT OF CLAIMS SECTION;

ACCOMPANIED BY STANLEY D. ROSE, LEGISLATIVE OFFICER;

AND MANFRED SCHMIDT, ATTORNEY, CIVIL DIVISION, DEPARTMENT OF JUSTICE— Resumed

Mr. J affe. We did not.

Mr. Harris. I think even at this late date we probably should do 

that and let the record show whom you had with you.

Mr. J affe. Mr. H erbert Hoffman was here yesterday, who is Chief 

of the Legislative Section in the Deputy Attorney General’s Office, 

Mr. Stanley Rose on my left, who is the Legislative Officer of the Civil 

Division, and Mr. Manfred Schmidt, who is an attorney on my staff 

and working on the case in the Court of Claims.

Mr. Harris. I am sorry I didn’t include tha t yesterday, but I 

thought it should be a p art of the record. During the course of Mr. 

Jaffe’s testimony he was asked a question by our colleague on the committee, Mr. Curtin. Mr. Jaffe did not feel that he should respond 

to the question in a public hearing, since it might prejudice their 

29
30 CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS

defense in pending litigation. It appeared to me, as chairman, that 

there was merit in the question and if we were going to be called 

to judge th is matter and decide it we should have all the information 

in order to make up our minds. It was about a quarter to 12 when 

we had reached this point. I suggested to Mr. Jaffe that we probably 

should hold an executive session in which we would undertake to get 

the questions and answers and then decide as to whether or not it should 

remain executive, but that we should get all the information so we 

could make a decision, to which he agreed.

In the meantime, Mr. Burke showed some reaction to the presentation of Mr. Jaffe and it was obvious tha t he was going to require some 

time. In view of the situation I suggested that the committee recess 

and tha t Mr. Burke be brought back this morning and given time to 

present his statement to the committee, following which we would go 

into executive session and hear Mr. Jaffe further, at least on the question that was asked by Mr. Curtin which Mr. Jaffe felt he should not 

give public response to. Tha t is the situation we have now.

Mr. Staggers. Fine. We will follow tha t procedure then, Mr. 

Chairman. Mr. Burke, will you proceed with your statement?

STA TEM ENT OF COLEMAN BURKE. ESQ., BUR KE & BURKE, 

NE W YORK

Mr. Burke. My name is Coleman Burke, Burke & Burke, 1 Wall 

Street, New York City.

Mr. II arris. If you will pardon me, I did not include the fact that 

our colleague from New York, Mr. Barry, appeared briefly yesterday 

and expressed an interest in this, too. I thought you should have the 

entire picture.

Mr. Burke. Thank you, Chairman Harris.

Mr. Chairman, Chairman H arris, and members of the subcommittee, 

I usually prefer to talk without notes, without a statement, but in 

view of what transpired yesterday and to save the time of this committee if you will permit me I will speak from a statement which I 

had prepared for yesterday and from some notes.

While I very much appreciate the opportunity to appear before you, 

I came away from the hearing yesterday surprised and shocked. I 

thought this hearing was scheduled to consider a slight amendment 

to Public Law 87-846, passed by the Congress and signed by President 

Kennedy on October 22, 1962, which granted certain Americans the 

right to a trial on the merits of their claims against the Government 

with respect to their stockholdings in General Dyestuff Corp., which 

had been confiscated during 'World W ar II, to wit, Ju ne 30,1942.

A dictum by the Supreme Court in the so-called Glidden case, decided 4 months before, in June 1962—that is 4 months before this bill 

was passed—and presumably well known to the Justice Department, 

has raised a question about the jurisdiction of the Court of Claims 

in the light of the language in this law.

Mr. Staggers. Would you mind an interruption just 1 minule? 

Do we have a copy of your prepared statement?

Mr. B urke. Yes, Chairman Staggers.

Mr. Staggers. Are you reading from this ?
CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS 31

Mr. Burke. I am not reading from that, no ; but I am going to in 

just a minute. These are some preliminary remarks and then I will 

come into the prepared statement which I had here yesterday.

Mr. Staggers. All right. You may proceed. I ju st wanted to know 

where you were.

Air. Burke. S. 1451, passed by the Senate last October 30, sought 

to restore two words to eliminate any question, and this bill is before 

you today. I have it here and its main provision rea ds:

Strikin g out in the first sentence thereof the words “Report to the Congress 

concerning,” and inserting in lieu thereof the words, “Render judgment upon.”

The original bill not only provided for a r ep ort; it provided for a 

hearing and a determination, but what might be deemed the vital 

words, “render judgment,” were eliminated in the conference committee.

An orderly hearing yesterday was turned into a trial on the merits 

of the case by Mr. Jaffe, representing the Justice Department, in his 

remarks and answers to questions yesterday. Moreover, innuendoes, 

guilt by association, and inferences which the Department of Justice 

has used for years to try to hammer a group of Americans into submission, were once again used in what appeared to me to be another 

attem pt and this time to confuse the committee members and to thwart 

the will of Congress as expressed in Public Law 87-468.

Mr. Harris. Now, Mr. Chairman, I am not sure tha t this witness 

is in order by coming to this committee and making such a public 

charge here against the Department of Justice. I was chairman of 

tha t hearing yesterday. I conducted the hearing I think in the regular 

and usual order. The witnesses of the Departm ent of Justice appeared 

and they gave the benefit of their information, a chronology, and they 

presented tha t to the committee just like Senator Dirksen did. I 

can't let this record stand with tha t kind of a charge against the 

Department of Justice without commenting on it. I trust the witness will proceed with giving the benefit of the information he has on 

this and not make it a personal slugging match between him and the 

Department of Justice.

Mr. Staggers. The witness will proceed in giving his views on the 

matter without any indictment.

Mr. Burke. Air. Chairman, may I say that I am very much distressed. Aly comment was not meant out of disrespect for Air. Jaffe, 

but was a sincere comment, and my interpretation of the prepared 

statement which is before you was not intended to bring controversy. 

I am personally very much distressed, with the responsibility tha t is 

on my shoulders, that my statement has had this reaction on Chairman 

Harris. I apologize to you all collectively.

Air. Harris. I think you better modify the record. As I told you 

in the presence of Air. Barry the day before yesterday, we do waive 

the requirements of the rules. You indicated tha t you would have a 

statement, but at tha t time you didn't have it ready and I told you it 

would be all right. To tha t extent we do waive the requirements of 

presenting a statement 5 days in advance which the rules provide. You 

have provided a statement. You submitted it not in advance, but you 

had it here with you yesterday.

However, you did not have in the statement anything like the accusations which you have cast at the Department of Justice. I am not
32 CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS

fighting the battle for the Department of Justice, I will have you know. 

What we are here for is to try to get the facts, but I do not believe 

that this committee should be used as a forum for the kind of attack 

tha t you have just made against the Department of Justice. We want 

to get all the facts. We have no sentimental feeling about this thing, 

Mr. Burke, I will assure you, but if there is an inequity that the facts 

develop and it requires our action, we want to give it the attention that 

it should have. 1 do believe that if you are going to stick to the rules, 

all right.

If we are going to waive the rules I think we have to proceed within 

reason.

Mr. Burke. Chairman Harris, I appreciate your allowing me to 

waive the rules. I received notice of this meeting on Monday when I 

was away from my office. I did have a prepared statement yesterday. My difficulty at a qua rter of 12 was that I could not have a prepared statement to answer the position in the written statement of the 

Department.

I have spent considerable time since the hearing in anticipation of 

appearing before you and trying to present this in an orderly and fair 

manner. I am prepared to have the committee strike my remarks or 

do anything which you prefer as far as this record is concerned. I 

meant to make no unfriendly comment. Characterization is a dangerous thing, but I would request this committee, and I am sure it will, 

to understand my feelings toward some of the statements made in the 

Justice Department’s presentation yesterday.

Mr. Glenn. Mr. Chairman, may I comment at this point ?

Mr. Staggers. Mr. Glenn.

Mr. Glenn. I think it is pertinent to point out that what we try to 

do in our committee system in the Congress is to develop a record. We 

are not sitting as a court. We have no rules of evidence as such. 

Sometimes we wonder whether we should have this and perhaps save 

some time. A lot of things are repetitious, but, as I said, the main 

purpose is to develop a record which we can use in considering whether 

or not legislation should be reported out on the basis of the record. 

Wh at we do receive are statements and testimony from the witnesses, 

but we don’t permit any controversy to be brought in whereby a court 

would determine the propriety of such arguments as would be properly submitted to it as a legal forum, and for that reason 1 think that 

which the chairman has pointed out to you is in order.

We are prepared to receive your statement of what you think is 

proper for us in considering this bill, and from the standpoint of what 

evidence may be submitted later as to the position of the Department 

of Justice there will be something for the committee to consider 

Thank you, Mr. Chairman.

Mr. Burke. T intended, gentlemen, to make perhaps no statement 

yesterday, or a t most the statement I had prepared of 10 minutes, but 

it seemed to me that the position of the Department got into the trial 

on the merits, which it did not seem to me was appropriate for this 

committee. I felt tha t the chairman was offering me and really requesting me, to make a replv to those comments, and I would like the 

privilege, if I may, and I will lie guided by the guidelines that you all 

suggested just now in answering Mr. Jaffe’s statement, but I could not 

sit silently by, having lived with this case for 10 years, and not make 

some reply to that statement.
CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS 33

Mr. II arris. Mr. Burke, I didn't indicate that we would cut you off from making any statement about the case and citing the facts in the development of the record, but I do think that you were completely out of line when you started off with your abuse of the Justice Department. This committee, as Mr. Glenn indicated a moment ago, is interested in developing information tha t would be helpful to us in making our decision. We have no interest in any filed or emotional feeling that might exist between you and the Justice Department. That is not our business at all. But we don't want you to use this as your forum.

Mr. Burke. 1 have no unfriendly emotions, Chairman Harris, 

to the Justice Department. I have had a feeling tha t their feelings were rather unfriendly to my cause and I am down here to do what I 

can about it.

Mr. Harris. This is no place to develop that. What we want to know are what the facts are to let us act on this case. We want to de­ velop a record on this bill, and we want to get the information tha t you may be able to give us about it—about the bill, not about the 

Justice Department.

Mr. Burke. Right. In order to get the matter back in perspective, I wish to make this statement that I had left here yeserdav on behalf of these American claimants, who have never had their day in court, and, reluctant as I am to take the valuable time of the committee in con­ sidering the merits of the case, I find it necessary to reply to Mr. Jaffe's statement, and I shall be glad to answer any questions of the chairman or the committee members after I read this prepared 

statement. Each of my clients is a former stockholder of General Dyestuff Corp. Following the seizure of their stock each of them filed a claim in the appropriate district court for the return of his property. At the height of World W ar II, and in one case soon thereafter, the claims were released under circumstances which the Judiciary Committee of the Senate of the United States found to be inequitable. The parties whom I represent have always felt that the settlements were made under duress, which included, among other things, the threat to ter ­ minate their jobs. But they have never succeeded in providing legal duress, which the late Senator Taft, in a letter to Attorney General McGranery, relating to this situation, which Senator Dirksen quoted yesterday, once described as an almost impossible burden against a 

wartime government. I would like, i f I may, to read again a sentence or two more from 

the letter of Senator T aft to Mr. McGranery in Janu ary 1953 to which 

reference was made by Senator Dirksen yesterday. In this letter 

Senator Taft wrote as follows:

I am fully cognizant of the successful techn ical position of the Government behind its “purc hase release” of the Halbach stock. Let me point out. however, th at a tri al on the merits of that technical defense is not a trial on the merits 

of the Halbach case. Whethe r Halbach can technically prove duress—alwa ys an almost impossible burden to sus tain—the very opposition of a wartime govern­ ment and the relative helplessness of a citizen in a nego tiated wartime sale does cre ate a presumption of overreaching by government, even though there might not he technical duress which is provable in a court. A tr ial on the merits in my judgment is a tri al of the fundam ental issue: namely, whether the Halbaclis were enemy nationals or cloaks for enemy nation als so th at Government was entitle d to seize their property prior to its “purchase” after seizure. Such a seizure does c arry an implication of disloyalty in time of war. It is impor tant
34 CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS

th a t a go ve rn m en t de di ca te d to do ing ju st ic e, th a t it look be yo nd th e m er its of 

te ch ni ca l devic es an d ex am in e th e fu ndam en ta l iss ue s of ju st if ic at io n fo r th e 

co nfisc ation of p ro pe rt y in th e first in st an ce an d th e im pl ic atio n of di sloy al ty th a t 

so ea si ly g oes w ith it. If th e Gov er nm en t ac te d pr op er ly an d lega lly in th is m atter. it ha s no th in g to fe ar or to lose, sinc e th e co urt wo uld confirm such se izure. 

If t his is no t a pr op er a ct io n by G ov ernm en t, it shou ld not hid e be hind a tech ni ca l 

curt ain an d pr ev en t a citize n fr om ass ert in g his ri ghts on th e ba sic m er its 

inv olv ed. I am co nv inc ed in th e in te re st of ju st ic e th a t th e D epar tm en t of Ju stic e. unde r which th is co nfisca tio n w as eff ected , sh ou ld le nd ev er y ef fo rt to 

cla ri fy t he m att er be fo re i t goe s o ut o f office.

I re sp ec tful ly sugg es t, th er ef ore , th a t you re ex am in e th e who le m att er in th e 

ligh t of my se cond le tt er an d also the le tt e r of S en at or L an ge r.

Gentle men , needless to say, t his lette r from not only a dis tin guish ed 

leg islato r, hu t fro m a disti ng uis he d and able law yer, has been my 

bible thro ug h these dr ea ry 10 ye ars when I have been tryi ng to set 

righ t wha t 1 rega rd as one of the g rav e inju stic es of all times in this 

cou ntry.

Ac cordingly, in recent ye ars when the pre jud ices of the wartim e 

began to subside we ha ve s ought to help these people get a n o pp or tunity 

throug h leg islation to have the ir cases tried on the me rits .

I hav e been rep resenting these pe ople since 1954. As you heard from 

Se na tor Di rksen yeste rda y, begin ning abo ut 1953 a subcom mittee of 

the J ud ic ia ry C ommittee of the S enate cond ucted exhaustive hearings 

cov ering the tre atmen t of m y clients. They conc luded th at the settlements “cannot be h eld equitable,” a nd fu rthe r repo rted :

The s ub co m m itt ee fe els th a t it s exam in at io n of t his ca se h as re ve al ed a re as on ­

ab le do ub t as to w het her th e var io us Am er ic an st oc kh olde rs of G en er al Dye stu ff 

Co rp, w er e tr eate d in an eq ui ta bl e m an ner . In vie w of th e do ub t which ex is ts as 

to th e m er its of th e or ig in al ve stin g and su bs eq ue nt m et ho ds us ed in obt ai ni ng 

se ttle m en t, t he c om m itt ee f u rth e r finds th e decis ion of th e Office of A lien Pro per ty 

to re si st , on a te ch ni ca lity , a tr ia l of th e tr u e issu es in th is ca se by a court of 

th e U ni ted S ta te s to be a su bst anti al d ep art u re from th e ac ce pt ed do ct ri ne th a t 

a ci tize n is entitled to his da y in co ur t. (F in al re port of th e Su bc om m itt ee To 

Exa m in e an d Rev iew th e A dm in is tr at io n of th e T ra din g W it h th e En em y Act, 

1954, p. 3 8.)

Th e views of the Senate subcom mittee were subsequen tly adopted 

by the full com mittee in Re po rt No. 2358, Ca lend ar No. 2411, 85th 

Con gress, 2d session (1958). Th e full committee, at page 14, rema rke d af te r discussing the fin din gs o f th e su bcom mittee:

In th e ligh t of th es e fin ding s by th e su bc om mitt ee th e co m m ittee be lie ve s it 

ad vi sa bl e to p er m it th es e cla im ants to pr oc ee d to a tr ia l on th e m er its be fo re th e 

U.S. C ou rt of Claim s.

The re af ter Se na tor Dirksen reques ted the legisla tive counsel of the 

Senate to dra ft an amend ment to acco mplish the recommendation of 

the comm ittee. Th is amend ment was introd uced as an amend ment to 

the W ar Cla ims Act of 1962.

It wou ld hav e pe rm itted my client s to tak e th eir cases to the Court 

of Claim s fo r he aring on th e me rits and would hav e pe rm itted the 

Co urt of Claims to rend er a def initive jud gm ent as to the va lid ity of 

th ei r claims. Se na tor Di rksen’s amend me nt was referre d to a conference com mittee of the House an d Sen ate where the lan guage was 

cha nged in the fol low ing man ne r: La nguage directing the Co urt of 

Cla ims to “h ear, determine, an d rend er jud gm ent,” was cha nge d to 

rea d “ bear, determine, an d repo rt to the Cong ress.”

On its face this seemed a dequate , pro bably because none of the conferees was fully cogniza nt of the dic tum which ha d appe ared in the
CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS 35

case of Gltdden v. 7dnnok which was decided on June 25,1962, approximately 4 months before the conference report came out, undoubtedly known to the Justice Department and to which I have already made reference. That dictum cast some doubt as to the authority of the Court of Claims to decide the matter unless there was a specific direction to render judgment in the statutory language. The bill as amended in conference, with the Justice Department ex­ pressing its views, was passed by the House and Senate and signed into 

law, Public Law 87-846, on October 22,1962. When we arranged to file our suit in December 1962 the clerk of the Court of Claims requested us to defer filing our petition until the sit­ uation had clarified with reference to the effect of the Glidden dictum on our case and 35 additional cases of the conventional congressional reference type. Ours was the only bill passed by both Houses of Congress and signed by the President, whereas the other cases were referred solely by either the House of Representatives or the Senate. We deferred to the wishes of the court, and in the ensuing months we were gratified to learn tha t Members of Congress who were fa­ miliar with the situation were desirous of eliminating any question about the jurisdiction of the Court of Claims in our case. Nevertheless, as the 1-year period for filing our claims as provided in Public Law 87-846 neared its end, we found it necessary and pru­ dent to file our suit in the Court of Claims on October 17, 1963, before 

the end of the 1-year deadline. The court accepted our case for filing at that time and shortly there­ after, on October 30, 1963, the Senate, by unanimous action, pursuant to recommendation of the Judiciary Committee of the Senate, adopted S. 1451. The matter was then referred to the House Committee on Interstate and Foreign Commerce for consideration. Thereafter the Department of Justice moved to dismiss our case on behalf of the 12 claimants and we opposed the motion to dismiss on the ground that corrective legislation had already passed the Senate 

and had been referred to the House of Representatives. The Court of Claims then stayed all proceedings presumably on the basis of our argument that if the corrective legislation were also passed by the House and S. 1451 became law the motion to dismiss by the Department of Justice would lie moot and we would be able to proceed with our case on the merits. This is where the matter now 

stands. As I appear before you this morning, I feel a great sense of respon­ sibility not only to the people I represent, but to the cause of justice in this country. I don't need this case any more than Senator Dirk- sen needs another cause, but I wish to associate myself with his moving remarks and. like him, I shall not cease until the frightening injustice 

of the Dyestuff case is undone. I do not intend to take your time with the long and incredible story of injustice to this group of Americans. These matters were thorough­ ly investigated in great depth by the Alien Prop erty Custodian, Air. Leo T. Crowley, who vested the properties; by the Honorable John J . Burns, a distinguished lawyer who was counsel for Mr. Crowley as Alien Property Custodian of General Dyestuff Corp., and made an in­ vestigation following (he vesting; by Edward M. Shaffer who was retained by the Department to make an investigation in depth; and by extended hearings in the Senate in 1953 and in later years.
36 CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS

I have already referred to the reports and conclusion of the Senate 

Judiciary Committee. In these and other references Mr. Crowley described the vesting of the Ilalb ach property as “one of the shameful 

injustices of the war.*' Mr. Shatte r said he believed the U.S. Government made a mistake in vesting the stock. Mr. Burns reported to Mr. 

Crowley, afte r his investigation, tha t “I could not find the slightest 

basis which would jus tify the action of vesting the stock of General 

Dyestuff.”

And here, gentlemen, I would like to read to you a letter from the 

same Mr. Crowley who was Alien Property Custodian at the time of 

the vesting in 1942, a former Chief of Federal Deposit Insurance Corporation and Alien Property Custodian from 1942 to March 1944. lie 

was in charge when the vesting took place on Ju ne 30, 1942, and from 

a le tter to a Senate committee which is reported at pages 591 and 593 

of the hearings before the subcommittee of the Committee on the Ju diciary, U.S. Senate, 85th Congress, I read to you sentences in the two 

last paragraphs of Mr. Crowley’s letter:

T his w as a ca se in which th e stoc k of th e Gen eral Dye stuf f Corp.. 100 pe rc en t 

ow ne d by American s, and th e m ajo ri ty of wh ich w as ow ne d by an American 

tr u ste e ho ldin g fo r th e be ne fit of th e na tiv e-bo rn dau ghte rs , w as sei zed an d 

ad m in is te re d. On th e as su m pt io n th a t a t th e end of t he w ar all pro per ties wo uld 

be re tu rn ed in ac co rd an ce w ith our tr adit io nal policy, th e stoc k of G en er al 

D ye stuf f w as ta ken in to a kin d of ag re ed pr ot ec tiv e cu stod y be ca us e ot he rw is e 

it wo uld ha ve b een ve ry diffi cu lt to h av e man ag ed th e ass ets of G en er al A nilin e & 

Fi lm , of wh ich G en er al Dye stuf f had an ex clu siv e sa le s co nt ra ct . Il al bac h, 

hi m se lf, an American citiz en , w as in th e ag re em en t pe rm itte d, in effect, to 

re m ai n in co mman d of th e ve sted ass et s an d to ho ld hi gh plac e in th e W ar 

Pro du ct io n B oa rd th ro ughout th e w ar . In oth er wor ds , th e stoc k w as sei zed 

fo r re as on s of e conomic ne ce ss ity in th e fu ll ex pe ct at io n th a t it w ou ld be r etu rn ed 

a t th e en d of the w ar .

I re sp ec tful ly re fe r yo u to my te st im on y cited ab ov e an d to th e su pp or tin g 

te st im on y of Jo se ph B. Kee na n, th e Hon or ab le Jo hn J. B ur ns , E dw ar d M. 

Sh af fe r, an d E rn es t K. Il alb ach hi m se lf. I believe th a t te stim on y has w ith in 

it th e st or y of one of th e mos t gre vi ou s m is ta kes ev er m ad e an d ne ve r co rr ec te d 

by th e Office of Alien P ro p ert y : i.e., th e re te ntion of th e stoc k a fte r th e w ar . 

All ef fo rts to ob ta in it s re tu rn ha ve been re sisted by th e Gov ernm en t by ev ery 

te ch ni ca l devic e av ai la ble to it, w ith th e re su lt th a t th ere has ne ve r been a h earin g on th e m eri ts by a court of co m pe te nt ju ri sd ic tion to te st th e Gov er nm en t’s 

th eo ry of se iz ur e an d co nfisca tio n. W ha te ve r di sp os itio n is mad e of enem y 

ass ets as a whole, I re sp ec tfully su bm it to th is co m m ittee th a t th e G en eral 

Dye stuf f ca se is on e of firs t p ri ori ty , th a t be fore ta kin g care of Ja pan es e. G er ­

m an s. an d oth er s th e co m m ittee ow es a duty to ri ght th e w ro ng s it ha s inf lic ted 

up on American s.

Tt seems to me that in a day when the passions of wartime have 

subsided and when our courts and legislatures have a high duty to 

preserve justice and law for a free society and when the rights of the 

strong and the weak, the honest and the dishonest, the loyal and the 

disloyal, are treated with grea t consideration and concern, the least 

tha t can be done for these good Americans is to assure them their 

rig ht to a tria l on the merits as was intended for them by the Congress when it passed Public Law 87-846.

This case, when one understands its full ramifications, is so incredible that I sometimes awake in the night and wonder when and how 

a grave injustice will be undone, to use Senator Dirksen’s phrase, but 

if some of the most despicable criminals and international crooks are 

given the maximum of protection and benefit of every doubt, as they 

should be under a government conceived in liberty and dedicated to 

fairp lay, I find it vitally important tha t the Congress give equal
CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS 37

treatment to a group of able, law-abiding American citizens whose only sin was the absolute ownership of a New York company which the U.S. Government needed, and wanted, and used to its great advantage in 

wartime. And now, if I may, I would like to make some comments on Mr. Jaffe’s statement. I am concerned about the notes that I have pre­ pared, lest I overstep along the lines tha t I already have. I shall try my best, Chairman Harris, Chairman Staggers, and other mem­ bers of the committee, not to err again on the point. I bear no malice toward the Department of Justice. They have done their job as they 

conceived it to be done. It is my duty as a lawyer and American citizen, feeling this thin g as I do, and with the Arthu r Vanderbilts, and the Irving Ives, and the late John Burns, and the late Bolicrt T aft, and others looking over 

my shoulder, to do justice for these people. I expected that a trial lawyer of Mr. Jaffe’s competence, with the full facilities of the Department of Justice behind him, would have confined himself to what seemed to me to be material and relevant to the inquiry before this committee. I am sorry. 1 hope I didn't offend 

by my remarks. I apologize, if I did.

Mr. H arris No. In order to relieve you, I just merely asked who 

was John Burns.

Mr. Burke. Mr. Chairman, Joh n B ums was a distinguished lawyer, a judge in Massachusetts, who was brought in by Mr. Crowley to be his counsel in General Dyestuff immediately following this vesting. John Burns at one time I believe was counsel for the Securities and Exchange Commission. He was a brilliant lawyer. He died in 1956 or 1957 I think. John Burns was the one to whom I referred earlier as having made this investigation and reported to Mr. Crowley that 

there was no basis for this vesting.

Mr. Harris. Someone raised the question as to whether he was a former Member of Congress and I was merely trying to clear that up in my own mind. It had nothing to do with what you said.

Mr. Burke. I don’t quite recall whether he represented the great State of Massachusetts at one time. I wish I could remember. My 

mind is faulty on that. Pages 1 and 2 and the first two lines of page 3 I accept as material and relevant to our discussion. I am referring now to the pages of the prepared statement of Mr. Jaffe which I would hope that you all may have before you because I intend to advert to some of the state­ ments made by him. The remainder of pages 3, 4, and 5 bother me very much. I won’t describe why I think they were put in. I won’t characterize them, but I will note th at in those scant 3 pages there are 14 separate references to I. G. Farben Co., and later on in the statement there are 6 or 7 more. It seems to me that here again we have a presentation where, by constant reference to the fact that these men knew of the I. G. Farben Co., had had relationships during the way, this was a basis for their dishonor, for the confiscation, and for their conviction. I am con­ cerned about it. The material included in these three pages is the very warp and woof of a tria l on the merits which your legislation 

in ()ctober 1962 was intended to provide.
38 CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS

We do not accept these allegations at face value. We deny the 

truth of many of them. But the tru th can only be determined in a 

court trial and, while from the judicial manner in which this proceeding was conducted yesterday 1 fell into the lawyer’s sin of calling the 

chairman “Your Honor,” 1 think you men have already indicated to 

me that this is not the place to try our case. It also seems to me that 

in his presentation Mr. Jatfe is guilty, and again I say this not in an 

unfriendly sense, of some sin of omission because, with all of these 

references to Farben, and Metz, and all the rest, he has not pointed 

out to you that the II. R. Metz Co., to which reference is made—I 

would like you to listen to this carefully—was controlled by II. R. 

Metz, an American-born citizen. Metz was a former member of Congress from Brooklyn—I did my homework on this, Mr. Harris —a 

former comptroller of New York City, and a general in the New York 

Militia.

In the Fir st World War the Alien Property Custodian vested the 

assets of II. A. Metz & Co., but was forced to return them by court 

order when it was found there were no grounds for vesting and that 

Metz, an American citizen, was not under the domination and control 

of the enemy.

Again when reference was made to Kuttroff, a company with foreign connections which became a part of General Dyestuff Corp., I 

wondered why Mr. Jaffe did not point out that, with respect to Ku ttroff, Pickhardt & Co., the Government attempted to seize its assets 

in World W ar I and again was defeated in a trial on the merits.

When Air. Jaffe talks about the options going to the Chemnyco Co. 

on page 5 o f his remarks, why does he not reveal to you tha t the 

Chemnyco options were canceled by Mr. Hochschwender, its president, on the insistence of Air. Ilalba ch that he would not buy the General Dyestuff* stock with the options attached.

And why were we not told tha t the minutes of the directors meeting 

of Chemnyco, dated August 15, 1939, just after Air. Ilalbach’s purchase of tlie control of General Dyestuff, revealed the ratification of 

the cancellation of these options.

Instead of placing these rhetorical questions which may be offensive, 

because I do not want to criticize Air. Jatfe in a way that would offend 

this committee, perhaps I should recast this to say I would like to point 

out the reference in the middle of page 4 where Air. Jatfe has said:

* * * every stockholder “owned” his stock su bject to an option which originally 

ran to I. G. Farben itself, then to successive corporations controlled by I. G. 

Farben. and finally in 1939 to General Dyestuff Corp, itself.

And then on page 5 just below the middle where he said:

* * * the stock options were tra nsferre d from Chemnyco to General Dyestuff 

Corp, itself.

I would point out tha t these options were not transferable. What 

happened with respect to these corporations which had been subject 

to options to Germans or German-connected people in the past, was 

that these options were terminated as a condition of Ilalbac h’s purchase and there was substituted in the ir place a conventional option 

solely among Americans, among Ilalbach, his own doctor, and his men 

who had been on his staff for many years.

I would like to point out to you other things that were missing in 

this statement. Air. Ilalbach never even owned this stock at the time
CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS 39

of the vesting. In 1940, after the war had started and after the 

stock had been acquired, and iy 2

 years, approximately, before the 

stock was vested, Mr. Halbach executed an irrevocable trust agreement for the benefit, of his wife and two daughters drawn by the 

eminent firm of Breed, Abbott & Moreau, with an independent trustee. 

Aft er the transfer to his family Mr. Halbach hever had either a 

beneficial or even a nominee or trustee title to any stock. Both his 

sons-in-law were in service, one a prisoner of war for a long time. 

The case has in a sense been miscalled the Halbach case, but his stock 

which he acquired he passed on to his family.

I have my own ideas as to the reasons. I talked with him about it. 

Esta te planning was involved, but with the war coming on it is very 

clear that if Mr. Halbach had wanted to play ball with some German 

friends he would not have transferred this beyond his control, so that 

it couldn’t possibly be taken, and put it into the hands of his daughters. 

These daughters, on the death of their mother from cancer, as described by Mr. Dirksen yesterday, have owned the rights to this stock 

down through the years.

Yesterday, in the course of his testimony, Senator Dirksen mentioned that he could cite many incidents which would make your hair 

curl, which led him to his firm conclusion tha t the stockholders of 

General Dyestuff Corp, had not been treated equitably, notwithstanding their inability to establish technical duress in a court of law.

Mr. Jaffe on page 6 adverted to the settlements in 1945. I understood why Mr. Curtin asked his question about the $365 settlement to 

Mrs. St. George several years after that. Neither Dr. St. George 

nor Mrs. St. George had been employees of General Dyestuff Corp, and, 

unlike the settlement with Halbach at the time of the Battle of the 

Bulge, they weren’t threatened with being fired from the company 

if they didn’t settle at $100 a share.

The Government reported that it could create conditions where they 

would have to offer the stock for $100. That was the condition— 

tha t if you were separated from the company or wanted to offer your 

stock on the outside you had to offer to sell first to the company for 

$100, and it was on that basis that the capitulation finally came.

Also, I don’t think this committee, with the reference to value yesterady, may have understood how these settlements were made by the 

declaration of a dividend by the Government on stock confiscated 

in wartime from my people, so t hat they took a dividend of $702,000 

out of the cash of this company, a company worth a few million dollars, and used this money to make a settlement for this stock with 

my people. The Government never had to pay one red cent out of 

separate Government moneys.

This came from the lefthand pocket of my clients to the right or 

from the right to the left, as you will.

There was no reference in the testimony yesterday that Mr. Halbach 

was indicted in 1941 on criminal charges which were similar to the 

issues in this case. This indictment was held against him for 10 years. 

He stood trial in this case and was acquitted in 1951.

The relevancy of these payments to our people was raised by the 

members of the committee yesterday, particularly Mr. Curtin, and, 

of course, tha t is relevant, but the question, it seems to me, relevant 

before this committee is, Are you going to proceed with the conclusions
40 CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS

reached in 1962 and give these people a trial on the merits as was 

intended by tha t legislation? Are yon going to again affirm the conclusions of the distinguished Judiciary Committee of the Senate which 

has held long hearings and gone through all the angles of this thing 

and concluded th at this was inequitable and that there was a somewhat higher law which entitled these people to have their day in court 

and to end once and for all the claim of over-reaching by an allpowerful Government ?

It seems to me, also, that what is material here today is to show the 

effect of the Gluiden case, known to the Department of Justice before 

the conference hearings in 1962, has in thwarting the intent of Congress to give these people their day in court.

We have started our suit, as we were given a right to do under this 

statute. These two words th at are deleted we think should be reinserted. I submit the language should be amended to the original 

form, as adopted by the Senate and as incorporated in S. 1451, so that 

we may eliminate a doubt which, if not cleared up, could take this case 

to the Supreme Court, and so that we may be allowed to try this case 

on the merits and settle these issues once and for all and end the 

opprobrium involved for these good Americans.

We ask very little. We seek the right to go forward as we conceive 

you gave it to us on the merits and as we think you intended 1 year and 

4 months ago. I submit this will save time for all concerned. If we 

lose on the merits, that ends it. If we win, a towering injustice will 

have been undone. I am at a loss to understand why the Justice Department continues to resist a trial on the merits so hard and so long. I 

can scarcely believe that they have used the dictum of the Supreme 

Court in this hearing to endeavor to reverse the will of this Congress 

as expressed in Public Law 87-846, which was intended to permit these 

Americans to have their day in court, and I respectfully request that 

bv this amendment you confirm your desire to have this matter concluded in the U.S. Court of Claims.

Gentlemen, a closing word. I am more distressed than I can possibly 

tell you that I gave offense to you this morning in my opening remarks. 

None was intended. I bear a very heavy burden. I have no contingency. I have no fee arrangements. I have stuck loyally at this 

thing because I believe in this cause and I don’t think any man, 

woman, or child should be afraid of entrusting this case to a validly 

and properly constituted constitutional court of this country.

I will not cease if you should reverse your position. It is not for 

me to state our moral rights. I can’t be sure about these things. 

But I am unafraid of the arbitrament of a U.S. court and I think 

there is evidence enough here to allow you to be convinced that what 

you did in 1962 was righ t and to go on this small step further in 

entrusting this to a U.S. court for its jurisdiction. I assure you, as 

I assured the gentleman of the Justice Department this morning, th at 

we mean no trouble as f ar as the sale of the General Aniline & Film

case. If there is concern in this committee or in the Department that 

we are wangling for a position to make things difficult, you may forget it.

These questions will be faced when they can be faced. I have not 

thought of values. Values are immaterial. This is a valuable prop ­

erty, but I say to you if your family had its leader, then a small
CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS 41

stockholder, work for a lifetime to get the opportunity to acquire 

control, and saw the image of the greatest dyestuff company for the 

United States of America, what is the crime in getting a profit ? 

What is the crime in getting a high salary which even our Government paid him because he was the most vital man in the dyestuff 

industry through the war? And there is not a word in this record 

anywhere, past or present, and I think in the future, of the disloyalty 

of this man. I have a sheaf of recommendations from highly placed 

Government people concerning his loyalty to our Government.

The reason tha t I took issue with the Department of Jus tices 

statement before was not to be critical of a distinguished lawyer try ­

ing to do a competent job for his Government, but ra ther was out of a 

concern of the effect of stories about I. G. Farben and other matters 

upon men like yourselves who are exposed to these matters for only 

short periods of time and do not have the opportunity to consider 

such matters in their relation to the whole picture.

I hope you will not be too concerned with such stories and references 

which go to the very merits of the cases. I hope you will leave those 

matters to the court and give us our day in court.

Mr. Staggers. Just a moment, Mr. Burke. If you will remain there 

just a moment, I am sure tha t some members of the committee want 

to ask you a few questions.

Mr. Burke. I will be very happy to answer them. I have taken 

more time than I anticipated and again I apologize for my errors of 

commission early in the day.

Mr. Harris. I think I would defer to Mr. Glenn who was on the conference committee for quest ions he might have.

Mr. Glenn. Thank you, Mr. Chairman. It has been somewhat 

difficult for me to remember all the occurrences in the conference 

committee which resulted in the present law, as I indicated yesterday, 

but I do remember that we had hoped that we would be finished with 

all these claims by the enactment of that bill.

However, there was some reservation in my mind at the time because of the fact that it was as a compromise we wrote into the bill 

the phrase, “report to the Congress concerning.’’ This indicated to 

me tha t when this would happen and the Court of Claims would go 

into the facts and report back to the Congress, we would again have 

to go through what we have been through for so many years, so tha t 

it would not be finished. I was fearful that something would occur 

which would continue the claims and the process of judicial reviews 

conference which, as we know, do take considerable time.

I think that was the opinion of a number of the members of the 

conference, but we felt that to dispose of it on the last day of the 

session we would do the best that we could under the circumstances 

and as a result we reported it out. What we are now considering is 

something which we should have done then and delete that “report to 

the Congress” and divorced Congress from any more factual consideration of the matter and leave the factual consideration and judgment to 

the U.S. Court of Claims.

Now, by the statements which have been submitted, we are getting 

back again into the history and the facts, which are controversial, to 

say the least, and heaven knows whether the complete story of the 

General Aniline <& Film case will ever be brought out in our lifetime.
42 CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS

I hesitate to have to go into all that again when actually what we are 

tryin g to do is to rectify something which should have been done 

in the reporting out of the bill in 1962.

However, now that we are into it I suppose we should hear from you, 

Mr. Burke, as to what you have to say on the U.S. District Court decision which Mr. Jaffe referred to yesterday when he said that full 

and complete hearings were had in the U.S. District Court for the District of New Jersey in the attempt to reopen the judgment of 1945.

Can you enlighten us as to what took place in that hearing which 

was appealed to the Supreme Court of the United States ?

Mr. Burke. Thank you, Mr. Glenn, for this opportunity. When 

I came into this picture in 1954 the horse was about, all except his tail, 

out of the barn. There had been a settlement; there had then been the 

duress case, so that it had two good strikes against the situation. One 

cannot deny the fact tha t these people tried the case on the subject of 

duress. The district court, the court of appeals, held against them, 

and the Supreme Court denied certiorari. That is an elemental fact of 

this case. I read to you the paragraphs from Senator Taft's letter 

because, as I said, this is the bible I have clutched to myself in these 

dreary years when I have been fighting for justice for these 

people, because I thought what was good enough for Bob Taft in his 

attitude toward a technical decision to put another strike against this 

was good enough for me, and here was a distinguished man, a great 

friend of his country, an exceedingly knowledgeable lawyer, saying 

there is a somewhat higher law; the burden of proving duress is an 

almost impossible burden for a citizen in wartime.

I happen to know that this case had such an effect on Mr. Halbach, 

with whom I spent hours and hours before his death, tha t his health 

deteriorated. It affected his mind. A question was raised as to why he 

didn’t brin g up this duress subject earlier than 1951, but here you had 

a man who if he spoke up too much would be fired from his job. ITe 

was worried about it. ITe was a very sensitive man. He carried on in 

his position until 1950 and he was finally released.

Much point has been made of the fact that he was paid high salary 

by the Government, but he was the biggest man in the industry. Coming back to the duress case, if the Judiciary Committee of the Senate 

after hearings that go on several inches worth can conclude unanimously that there was enough question about overreaching that this 

thing should be given its trial on the merits, I fully subscribe to that 

conclusion.

I don’t like to deal in personalities, but I perhaps should say to this 

body that in 1955 afte r I had examined this carefully, afte r T had 

asked John J . Burns who made the investigation, “John, is there any 

skeleton in this closet ?” And I looked him righ t in the eye and he 

said, “Coleman, there isn’t a one.” He had lived with this case since 

1942. Death took him away from our team. I presented this to Mr. 

Brownell. He knew enough about me. We were fellow members of 

the same church in New York. He knew I wasn’t throwing any curve 

balls at the Justice Department.

I got a standard letter back about the technical release and so 

forth. Three or four years later one of the distinguished Senators 

to whom I had talked about this case is seeking this kind of relief 

of a trial on the merits, or for the Justice Department to release its
CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS 43

technical defenses and say, “There is enough here; we will allow it 

to he tried and we will not raise these defenses,” called the Attorney 

General in my presence and said, “ Yon must see th is lawyer.” After 

tha t conference the Attorney General then changed his mind and said 

that the Department of Justice would not oppose a proper bill. Tha t 

was when things somewhat turned in 1958. Then there were elections. 

Then there were changes. Then other things happened. Time went 

under the bridge, and 1 had a livelihood to earn in New York and trips 

to Washington and beseiging people on Capitol Hill is a business I 

do not enjoy, greatly as I respect the men. I respect their business 

and the multitude of their problems, but you can't sit down with this 

case in the lobby of the Halls of Congress and tell a man, “This is it. 

Now carry my suitcase for me in this just cause.”

So much has been written and said that there is extreme confusion. 

But, in view of the action taken by the Senate Judiciary Committee, 

in view of the position of Mr. Ta ft, in view of the exhortations I have 

had from men of the stature of Senator Alexander Smith of my own 

State and Chief Justice Vanderbilt of my own State who told me only 

a few days before his death “never give up,” how can I leave the case?

And I simply cannot get into my mind this great fear of a case in 

the courts. If all these things are true about these people a Federal 

court is going to throw us out on our ears, and if they are not true 

and if what I described is innuendo, without meaning any personal 

reference, and again I deeply apologize, because 1 hope it will not 

prejudice my presentation today on behalf of my people, if this is the 

case I say eliminate the problems in the Houses of Congress and let this 

go to the U.S. Court of Claims. Let them do the factual business which 

we do not have time for here.

Let them save costs for all of us, including the Department of 

Justice. It will be cheaper for the D epartment of Justice in my jud gment to try this than to let it go on as is, because I am not through. 

Therefore I think it is in the interest of us all as fellow Americans to 

lay this at rest once and for all. I will be a good soldier and accept 

the judgment of tha t court and T want it to be the judgment as you 

indicated, Congressman Glenn. I think it is unfortunate that this one 

little slip happened, and I was concerned yesterday that all thes-e 

things had to be reopened and all your time taken.

I wasn’t prepared to stay up till all hours of the night last nigl t 

digging back through these things trying to get some sort of sequential 

presentation for you today. We are not here asking for an appropriation from Congress. We are not asking for that kind of thing.

I told the members of the Department of Justice here today I wasn’t 

even thinking through to those questions. I haven’t even bothered to 

make arrangements with my clients, but I want this opportunity. 

And in view of all that has happened, if a man like Senator Dirksen, 

be he Democrat or Republican—and there have been men on both sides 

of the aisle on this matter—would come over here and make the presentation he did yesterday, and he knows more about this case tha n 

almost anybody else; I join him.

I was so moved by his remarks, so surprised, that my voice breaks. 

This is my commitment to this case and I seek the opportunity to try 

it. Thank you.
44 CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS

Mr. Glenn. Air. Burke, if we enact this bill into law you will then 

proceed with your case in the Court of Claims. The Court of Claims 

will render its judgment and as f ar as you are concerned that will then 

be the end. Is that so ?

Mr. Burke. Tha t is correct, Mr. Glenn. And I have assured the 

men in the Department of Justice this morning if there was any concern that because the General Dyestuff shares were merged at the end 

of 1953 or 1954 into General Aniline & Film we are not going to make 

trouble for the Government on that. If we should get the relief then 

one has to determine how it is handled.

Mr. Glenn. Thank you, Mr. Burke. May I also say tha t you are 

a very able advocate and you have certainly pleaded a very good case 

for your clients. I am sure you have added something to the record 

which will help us in our discussions and considerations when we get 

around to an executive session.

Air. Burke. Afte r my concern earlier I appreciate those comments, 

Air. Glenn.

Air. Glenn. Thank you, Air. Chairman.

Air. Staggers. Air. Curtin?

Air. Curtin. Thank you, Air. Chairman. Air. Burke, how many 

suits would be affected if this legislation should be enacted? Just 

the Ilalbaeh case, or are there other suits also ?

Air. Burke. No; there are no other suits. We have combined all 

the plaintiff's in one petition. I might say tha t I have not sought to 

represent these other people, but these were the friends tha t worked 

together in General Dyestuff' Corp.; and when the suit was brought 

Airs. St. George’s son, who is a lawyer, Air. An nin St. George, and I 

discussed then whether they shouldn't want to go along with it.

The facts are somewhat different in the St. George situation and I 

could have my own ideas as to the $365 against the $100. I don’t 

think that that, is of overpowering significance, however. The point, 

is that the St. George stock was a part of the bundle that was taken 

by the Government in 1942 and the essential fact that I want to get 

at is was there something that I have never learned in 10 years of 

investigation? Was there a cloaking here? Because by tlie great, 

God Almighty if there was a cloaking this property should have been 

taken. But I have, never found it, and so we welcome Airs. St. George 

and her son who appear on the brief. We have combined these in one 

proceeding. We will handle it as simply as we can and that will dispose of it.

Air. Curtin. Then this one proceeding is the only matter that would 

be affected by this legislation ?

Air. Burke. Seventy-seven percent of the stock of General Dyestuff 

is involved. The proceeding involves everyone except Air. Duisberg, 

who was referred to in the Department of Justice's presentation, 

where they made a settlement a while back. Air. Duisberg, as I understand it, is in very ill health. His case was handled from the beginning in a different wav from the rest of these. I wouldn't want to 

tell you Air. Halbach’s reactions to him. This was something that we 

just didn't touch and he has never been a p art of our group, but Air. 

Swensen, Mr. Martin, Air. Wingender, all these men—Air. Alartin 

lived in the town of Summit and he was delighted to find—he was a 

friend of my father's—that I was handling this—all these people have 

signed and joined in the suit and have asked us to handle it.
CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS 45

I have no arrangement with any of them.

Mr. Curtin. Thank you, Mr. Burke. That is all, Mr. Chairman.

Mr. Staggers. Mr. Harris.

Mr. Harris. Mr. Burke, you have made a very persuasive plea. I am sure it is appealing to all of us who have heard it. This problem of vested property has been a tremendous problem for this committee ever since the war. This isn't the first time we have had people, I may say, perhaps with some apology to you, show their emotional reactions. We have been faced with a tremendous problem ever since we were called upon to deal with the first war claims legislation, I 

believe about 1945. We have had people from all over the country in here pleading, begging, and crying, in some instances rather pitifully. We have seen prisoners of war parade in front of this committee still showing the effects of their tragic experience. We have had people come from as far away as California and I have seen this room filled with them, claiming that they are entitled to a part of the proceeds of vested properties. The late Carl Hinshaw from California gave the matter a lot of thought and study. It worried him. I am not sure but what this and some other things probably affected his health. The late Percy Priest gave a lot of study, and thought, and attention to it. Jim Dolliver from Iowa was a member of the committee, I recall. He gave it a great deal of though t and conscientious treatment, as did 

all of these members. I recall it was Mr. Hinshaw and Mr. Beckworfh from Texas, who was on this committee at the time, who somewhat locked horns on the various approaches to it. It isn't strange at all that I. G. Farben was right at the head of that controversy, and I would suspect that we will hear from Mr. Beckworfh if this matter goes to the floor of the Con­ gress. He probably will take up the fight where he left off. I am merely reciting this to let you know that this is not the first time that we have had this brought to our attention in a most conscientious and 

serious fashion. I remember when we had prisoners of war from both the Fa r East and European countries who claimed entitlement because of what had been done to them. I was a member of the committee when we provided that certain of these funds vested by the Government would be used to pay prisoner of war claims, so we have had this issue of who is going to get the proceeds from this property ever since its inception. I have seen some very grave injustices. You feel very deeply about it. I have listened to the plea of the children, the heirs, the family of a former U.S. Senator from Nevada for property rig ht around W ash­ ington that he had himself developed during his lifetime. His daughter married a German national. The property that the former U.S. Senator developed, and that was his own in this country, went to his heirs and then was vested by the United States. I have heard their story many times. It did seem to me a terrible injustice. German nationals had nothing to do with the development of the property. We did try to do something about it under the 1962 act, and an amendment, section 205, was added, but we didn't correct the injustice completely. Sometimes matters develop to a point where you cannot correct one injustice in a matter of this kind without per ­

haps doing a greater injustice.
46 CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS

We bad th at same question fo r the gr ea ter pa rt of 2 weeks on the 

floor o f the H ouse o f tliis gre at co un try on the civil righ ts bill, b ut this 

same question is, A re you doing a g re at er injustic e by co rre cti ng an injustice ? Some th in k injustice exists and maybe th ei r cause is me ritorious. So w hat we did in t ha t instan ce o f th e U.S. Senator , a fter the 

matter ha d been conside red before this com mittee fo r y ears and yea rs 

and y ears, w as fina lly pro vid e th at the retu rn s from the prop erty fo llow ing the am end me nt in 1962, a nd ret roactiv e 10 months or so, and 

all fu tu re rec eipts fro m th at pr op erty, wou ld go to th e heirs of the 

form er U .S. Senator.

I f I am rem ember ing c orr ectly t here were a good ma ny millions of 

dolla rs th at had been vested by the Government, bu t those amoun ts 

hav e re ma ine d vested in the Go ver nm ent , and the S en ator's h eir s never 

did get any portion o f th is, and never will.

I am merely recitin g th is histo ry of th is whole problem in orde r 

th at you may know, Mr. Burke , th at th is c omm ittee h as give n serious 

th ou gh t and con sideration to this problem for almo st 20 years. When 

we tr y to correct, an ine quity in one case, then we find ourselves g oin g 

in an othe r direction and fina lly win d up, with the huma n elem ent 

worki ng here, with who can get the bigges t slice, an d j us tify themselves 

in doing it, of thi s pr op erty th at has been vested by th e Gov ernment 

un de r law as a result of a te rrib le war. I don ’t suppos e a war can 

do an ythi ng b ut br ing inequitie s and sadness. Th ere are going to be 

a lot o f questions raised here. I my self have lived with the dem and s 

from ma ny people for the las t several years tryi ng to get int o this 

treme ndous in du stiy of Gen eral A niline.

Dur in g th at time t ha t Mr. Ha lbach was op erating G eneral Dyestuff, 

ru nn ing it, and others, th ere were all kin ds of grou ps and organiza tio ns 

tryi ng t o get control of it, tryi ng to buy it, tryi ng to get the proceeds 

from it. I don’t object to th at in ou r cou ntry. We live in a c ountry 

where as long as the people proc eed leg ally tow ard a business en terprise we encourage it. Som etim es we are called upo n to make a 

decision when the general public becomes affected. The general pu blic becomes affected here. 1 do n't know wheth er it was the righ t tiling 

to do to use these fund s to pay the millio ns upon million s of dollars 

for priso ner-o f-w ar claims instea d of ap pr op riat in g am ounts to pay 

their clai ms direc tly out of the Tr ea su ry of the Un ite d State s, but 

the re were those who felt deeply, and I have some feeling , th at our 

enemies, the Germans among the m, were responsible fo r the ter rib le 

tra gedie s th at brought these th ings th at we suffer. There are two sides 

to it.

Th at money has been used for pur poses which the Cong ress au th or ­

ized. We set up a W ar Claims Commission, now call ed the Foreign 

Cla ims Se ttle me nt Commission. We ha ve been called upon from time 

to tim e by the De partm ent of Ju stice to autho rize funds to be used 

fo r this purpo se or th at purpo se. If I remember correc tly, when it 

was firs t brought to ou r attention the re were over $800 million, I believe, in assets.

I am not argu in g wh eth er the matters have been lit igated in 1945 

or wh eth er the m atter of duress has been settled by the courts under 

our j uri sprud ence. You said 77 percent of the stock was involved and 

I would assum e if an un de rta king would lie successful it would be a 

good man y m illio ns of dollar s, w ouldn ’t it ?
CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS 47

Mr. Burke. Yes, sir.

Mr. Harris. Where would that money come from if a judgment was 

obtained through a constitutional court and had to be paid to the people you represent ?

Mr. Burke. Were you asking me to answer that ?

Mr. Harris. Yes.

Mr. Burke. 1 am not sure. I am not expert enough to know. I do 

know the simple fact that the shares-----

Mr. H arris. You are still going back aijd trying to talk about the 

merits.

Mr. Burke. No, I am not going to talk about the merits. The shares 

of my clients were transferred-----

Mr. Harris. I know that. We have heard that. But suppose a judgment is obtained in the regular way, which you are asking that we give you the chance to go into court and seek. Suppose a judgment is obtained and the court of claims says that your people, regardless of 

the equities involved, are entitled to x number of dollars. You would 

expect that to be paid. General Aniline & Film Corp, has not yet been disposed of by the Government, but the proceeds to the United States from that sale are to go eventually into the war claims fund. Sup ­ pose there isn't enough in that fund to pay such a judgment and to take care of other claims which the Foreign Claims Settlement Com­ mission is processing now. The judgment will have to be paid 

Where would the money come from to pay it ?

Mr. Burke. I am not enough of an expert on Government financial 

affairs to be very sure footed in my answer. I do happen to know that the General Aniline & Film stock has not yet l>een sold. The program to get General Aniline & Film sold was handled in the very bill which T believe came out of your committee and was a rider on the bill as was 

this bill itself. I was in real sympathy with all those items as they came through. The settlement has been made with the Swiss after years and years of argument so that the Swiss are going to have a really large part of General Aniline & Film once the underwriting is made in this country 

and it is distributed. I would hope tha t our case might be settled and disposed of before 

General Aniline & Film is ever sold.

Mr. I I arris. Mr. Burke, the Department of Justice called me many 

months ago—if I remember correctly it was one Saturday morning— and advised me that an agreement had been reached and they were announcing a contract had already been completed of the sale of the General Aniline. I have not had them up here and gone into the sale or the detail of it. We gave that responsibility to the Department of Justice in the bill that you mentioned and it was their responsibility, but Mr. Katzenbach called me one Saturday morning last year some­ time—I don't remember the date, since it has been a good while ago— and advised me tha t they had concluded arrangements as to the divi­ sion and the disposition of the business and how it was to be divided.

Mr. Burke. If and when th at goes through and the proceeds of that were to come to the Government, it would seem to me that the proceeds allocable to these shares, which were in tu rn allocable to the General Dyestuff’s position, would be a source of funds to deal with whatever judgment the Court of Claims may give in this case, but again I say
48 CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS

I am no t eno ugh of an expert to kno w how the fiscal officers o f the 

Gover nment w ould h andle it.

Mr. H arris. You are a good law yer. I can tell th at from y our p re ­

sen tation h ere today. You are a good law yer, b ut w ha t I am tr yi ng to 

do is to get fro m you, is—and you ought to know in the 10 years you 

have been d ealin g with this pro ble m—are we b eing ca lled upon h ere to 

pass some thing on to a constituti onal court to make a judgme nt, and 

sho uld it be a sizab le am ount then are we going to be called upo n a 

lit tle la te r to ap pr op riate fund s ou t of the Tr ea su ry of the Un ite d 

State s to pay it ?

Mr. Burk e. I would think it wou ld come out of these very fun ds. 

It cost the Government no thing to get this prop erty and so an ything 

th at t he Gover nment ------

Mr. H arris. Air. Bu rke , let ’s not go into tha t any more.

Mr. Burk e. I am sorry.

Mr. H arris. We know th at we foug ht a wa r and we l ost tho usands 

upon tho usands o f ou r boys who fo ug ht in t ha t war a nd we know th at 

the reason this pr op erty was vested was because o f a tra gic war. We 

ran ou r indebtedness in th is c ou ntr y into the billions of d ollar s from 

abo ut $30-odd billion to up ward of o ver $200 billion. It cost the Govern me nt som ething in my jud gm ent.

Mr. Burk e. It cost it dearly, but I see no reason why my clie nts 

should lie any more respon sible fo r th at than I should be.

Mr. H arris. You pro bably have a merito rious comment an d the re 

are those in this Co ngress who feel th at even so today all of the prop erty 

th at the Governm ent seized t hat belo nged to oth er peop le, even thou gh 

the y were natio nals or belonged to o ur enemies du rin g the war, ought 

to be ret urned. We have had th at fight. We have ha d th at prob lem 

befo re us and it is a real tou gh contro versial one. We have to rea listic ­

ally deal with these th ing s.

Mr. Burke. I am deeply conscious, Ch airma n Har ris, of these 

prob lems. I fel t it would be im pe rti ne nt fo r me to spe ak to them. I 

feel tha t my a nsw ers are at best r at he r inad equate.

Mr. H arris. Let me ans wer fo r you then and if you disagr ee you 

say so. If th e fund s are no t avail able and the c ourt g ives a jud gm ent, 

wh ate ver amoun t it mi gh t be, x numb er of dollars, an d un de r the 

present law and the contr act fro m the sale and the st at us of the pr op ­

erty invo lved, the proceeds o f sale are not ava ilable to be utilized for 

thi s purpo se, the n the re is only one way to get the fund s and that is 

ap pr op riated out o f th e T reasury o f the Un ite d States.

Mr. Burk e. That is co rrect.

Mr. H arris. Le t’s not fo rget th at when we are de ali ng with this 

because I th in k it would help all of us to know just where we are now 

and wha t we are going to lie called upon to do. We get righ t back 

into the same fuss, and I use the wo rd “fu ss” because it is a messy 

name th at we have had du ring the years of this thing. T hat is, 

wh eth er or not we are going to ap pr op riat e fun ds ou t of the Tr easury 

of the Uni ted State s to rep len ish th is fund , or use the fund solely to 

tak e car e of the obl iga tions which this f un d was set aside to tak e care 

of.

Up un til this tim e the Congress has nev er agr eed to the princ ipl e 

of ap pr op riat in g to this fund out of the Treas ury . I am not say ing 

th at is rig ht. You tal k about ineq uities. I am not sayin g it is righ t
CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS 49

at all. Maybe this should be one of the responsibilities after a tragedy or tragic war was brought on us. I don't know. But nevertheless the Congress never agreed to it, and so I think tha t you raise problems which we have had a long, long time that I must say in all frankness 

I have serious and mixed feelings about. Unfortunately, I fully realize you can't divorce the political re­ actions from this and looking from this side, which I am suggesting tha t you try to do on your own, understanding your personal feeling about what you think has been done to certain people who are citizens of this country, you can imagine Congressman Staggers, or Congress­ man Harris, or Congressman Glenn, or Congressman Long, or any other Congressman going back home and saying to his constituency, “I voted to pay funds out of the Treasury of the United States, tax­ payer's funds, to take care of further obligations that belonged to German-connected people as a result of the war 20 years ago.”

Mr. Burke. Mr. Chairman, if we got a favorable decision in the 

court, Chairman Harris, and Chairman Staggers, no one would have to say, “We had to appropriate money out of the Treasury to pay to German-connected people, because the inevitable decision of the court if that were the conclusion would be that these were simon-pure Amer­ icans, and not cloaks, and so held, and if justice prevails it seems to me 

the politics follows pretty easily, and-----

Mr. Harris. This would be a very difficult point to get across to 

people who don't know as much about this as we do.

Mr. Burke. I ought to know that I can't win making a statement 

with you, with the greatest respect, when you are talking about considerations of this kind, and it is intrepid of me to even try, sir.

Mr. Harris. I point out to you you have made a very strong and 

serious plea, and I point out to you the problem we have had through­ out the days. It isn’t a simple one. I don't think there is any member of this committee who would not like to do equity to anybody, to any human being, but there is not a member of this committee who is going to overlook the fact that we have had some situations brought on us 

in this country that we are still paying dearly for.

Air. Burke. I again say I see no reason why I shouldn't have the 

same obligation to contribute as another proved American. This is the problem that we are facing, and this is the question that you gen­ tlemen said might be tried in the courts, and again getting back to our issue, I am not saying what our moral rights are at all in this, but it seems to me that, having made this conclusion to let it go to a trial on 

the merits, this is the way to solve that aspect of the problem. Financially, I can only look at it in one way. If the court concludes tha t this is an improper taking, the Government has received a wind­ fall, and whatever this amount may be, and I am not an expert enough on value to tell you what that amount is, and if it has a windfall there, 

the Government isn't losing any money. As I pointed out to you here today, the point that is sometimes lost sight of is the paper blared forth this settlement of $118 in 1945 against the then book value of $540 as justification for it. This was simply a payment out of the cash of this very company that was taken from these 

people, so the Government hasn't lost anything.

Mr. Harris. Back to what you are trying to do, you do recognize, 

and, of course, it is admitted that there was a settlement in 1945.
50 CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS

Mr. Burke. No question about that.

Mr. Harris. Of $118 approximately ?

Mr. Burke. No question about that. And that would be dealt with 

in any legal proceeding and faced up to.

Mr. ir arris. What are you trying to recover then? The difference 

between $118 per share and what?

Mr. Burke. We are trying to recover for property or the proceeds 

thereof.

Mr. Harris. You know you can't recover the property because the 

property is already intermingled with General Aniline.

Mr. Burke. So it becomes the proceeds, and whether or not the 

settlements are credited and how they are credited in different amounts 

in th e St. George case and in our case, these are matters for the court 

to determine.

Mr. Harris. Yes: they are matters for the court to determine, but 

you have to allege what you are entitled to in your petition.

Mr. Burke. That is correct.

Mr. IT arris. What, do you claim you are entitled to ?

Mr. Burke. We allege that we are entitled to our property back.

Mr. H arris. You can’t get the p roperty back. You know that.

Mr. Burke. I mean the equivalent of our property. I have the 

document here if you would like me to file it, or the petition if you 

would like me to file it, as a part of the record.

Mr. Harris. I don’t think it is necessary, but you ought to be familiar with it enough to tell us what you are asking for.

Mr. Burke. That is correct. We have asked for that.

Mr. Harris. Asked for what ?

Mr. Burke. We have asked fo r the proceeds of the property which 

was improperly taken by the Government in 1942.

Mr. Harris. You are asking for all of the proceeds of that property ?

Mr. Burke. We are asking for all the proceeds. This isn't a gray 

area. This is either black or white. We get it all or we get nothing 

at all.

Mr. Harris. T am not arguing with you. I am just trying to get 

information from you.

Mr. Burke. That is correct. It is as simple as that.

Mr. II arris. In other words, you are asking us to extend jurisdiction to the Court of Claims to render a judgment as to whether or not 

the people that you represent should get 77 percent of the proceeds 

of the sale of General Aniline & Film Corp. ?

Mr. B urke. That is correct as to General Dyestuff and not General 

Aniline & Film.

Mr. Harris. That is all, Mr. Chairman. Thank you very much for 

your appearance.

As far as I am concerned if there is no objection, you may correct 

that record any way you wish to.

Mr. Burke. I would like to, Chairman Harris, and I hope I have 

said enough to indicate that there is surely nothing personal intended. 

It has been called to my attention in my last answer to you, Chairman 

Harris, that I referred to General Aniline & Film, and tha t should not 

be confused with the relief requested in our case.

It only might be material as a matter of value, as you yourself have 

traced the General Dyestuff situation, as you did yesterday and today,
CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS 51

into sha res o f Gener al An ilin e & Fil m. We hav e no thing to do with 

Ge ner al A niline & Film.

Mr. L ong. It is 77 p erc ent of the proc eeds of Gen eral Dyestuff and 

not G eneral A nil ine & Fil m ?

Mr. Burke. Tha t is co rrect. 1 misspoke on the record here. It has 

been called to my a tte ntion and I would like the p rivilege of co rre cti ng 

the reco rd with respec t to th at and say th at it aris es from the fa ct o f 

the m erg er of the com panies, Mr. Long.

Mr. H arris. Th e Gen eral Dyestu ff Cor p, was merged into Gener al 

An iline & Fi lm Corp , in 1953?

Mr. Burke. End of 1953. One mea sure of value could be w ha t the 

pr op erty we nt into.

Air. Harris. In o rd er th at the record may express th e t rue f act, you 

are seeking 77 percen t of the stock of G ene ral Dyestu ff at t he time it 

was merged with Gener al Anilin e, wh ate ver th at value might pro ve 

to be.

Mr. B urke. I wo uld n’t be prep ared to pu t the tim ing on it. Th is 

was a tak ing in 1942 and the question w hethe r th e timing is 1942 or 1953 

or cu rre ntly are que stio ns which I think are ap prop riately in a ju dicial forum , and I do n't think th at I should issue off-the-cuff legal op in ­

ions as to wh at the court may det erm ine on tha t.

Mr. H arris. I am not ask ing you to issue an y opinions as to wh at 

the court may sa y: I am merely askin g what did you allege in yo ur 

pe tition t ha t yo u wan ted to recover.

Air. Burke. I think pe rhaps I should read this to you, Mr. Har ris, 

to pre vent confusion.

Mr. Harris. I do n't think we be tte r tak e time to read the petition 

now. If you do n't know in a br ief message of wh at you are spe aking 

we will let the record sta nd at that. It is almost 2 min utes of 12. 

We don't have tim e to rea d the petition. Tha nk y ou, Mr. Ch airma n.

Air. B urke. I did n't mean to read the pe tition, Air. Ch airma n. I 

ju st m eant th e final clause.

Air. Staggers. Air. Bur ke, if that is the conclusion of yo ur stat ement, I have no questions. I had several here th at I think have been 

asked. I would say to you th at you certa inly have made an able pre ­

senta tio n of yo ur case and the people whom you repres ent can be assured t hat you hav e done you r very best to r epres ent them in yo ur case.

Air. H arris. I join you, Air. Ch air ma n, in say ing tha t they have very 

able rep res entat ion and counsel in Air. Burke.

Air. Staggers. I f th at com pletes yo ur presen tat ion th at will be all. 

Do y ou have som eth ing to say ?

Air. Burke. I just wonde red if I may have the privileg e to correct 

any statem ents in this record that, wou ld be confu sin g or improper.

Air. Staggers. Tha t was under stood by Air. H ar ri s when lie said 

you would have t hat privilege .

Air. Burke. Th an k you, Air. Ch air man , an d th an k you, mem bers 

of the committee.

Air. Staggers. I might say too I notice in the grou p here ou r col ­

league from New Yo rk, Air. Bar ry . I assume th at his is connected 

wi th you and I might sa y th at he is a very able Re prese nta tiv e in the 

Congress.

Air. Burke. Tha nk y ou, sir. Some of t hese peo ple are in his j uri sdic tion and I have known Congr essman B ar ry f or a long time.
52 CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS

(M r. B urk e la te r su bm itt ed t he fol lo win g su pp lem en tal st at em en t:)

S u pple m e n t to Cole m an B u r k e’s T estim o n y

B ec au se of th e un iq ue si tu ati on th a t th e G en eral Dye stuf f pro pe rt y (now 

m er ge d in to G en er al Ani lin e) has no t yet been sold , sa ti sf acti on of claim s to 

ow ne rs hi p of t h is spec ific D ye stuf f pro per ty a ft e r sa le w ill n ot be lik e sa tisf ac tion 

of a g en er al w ar claim o ut o f a g en er al fu nd .

G en er al Ani line ha s no t yet be en sold alth ou gh Co ng ress has au th ori ze d its 

sa le and a co mprom ise has be en re ac he d be tw ee n Sw iss cla im an ts an d the 

D epart m ent of Ju st ic e to div id e th e pr oc ee ds of sa le o n a per ce nta ge ba sis wh en, 

as , an d i f th er e a sa le a nd ca sh pr oc ee ds a re re ce ived fro m t h e p ur ch as er . Befor e 

sa le , th e D ep ar tm en t of Ju sti ce st il l m ust co mplete re gis tr ati on of th e se cu rities 

w it h th e SEC, issu e a pr os pe ct us an d p u t G en er al Anilin e up fo r pu blic bidd ing. 

T he G en er al Dye stuf f cl aim ants ha ve ag re ed not to in te rf ere w ith th is pro cess.

If th e G en er al Dye stuf f st ock hol der s obt ai n a ju dgm en t from th e C ou rt of 

C la im s p ri o r to sale, th e ju dg m en t, whi ch w ill es ta blish th e ir ow ne rs hi p to th is 

si»ecific pr op er ty , ca n be sa tisf ie d out of th e as se ts of G en er al Anilin e in to which 

G en er al Dye stu ff w as merge d by th e D ep ar tm en t of Ju st ic e. I f a ju dgm en t is 

se cu re d a fte r sale, th e ju dg m en t, like th e Sw iss cla im , ca n be sa tisf ied fr om th e 

pr oc ee ds o f th e G en er al A nilin e sale.

A sa ti sf acti on of su ch a ju dgm en t will co st th e U ni te d S ta te s no thin g, sin ce 

th e ju dg m en t will be on ly a dete rm in at io n th a t th e pr op er ty ad ju dged to belon g 

to th e G en er al Dye stuf f st oc khol der s nev er belong ed to th e U nited S ta te s in th e 

fi rs t plac e be ca us e it w as im pr op er ly v ested.

T he an al og y is to a ba nk de po sit whi ch a ba nk re fu se s to pa y to a de po sito r 

on some pre te xt th a t th e de po sito r has lo st hi s ri ght to it. If a court d et er m in es 

in fa vor of a de po si to r and he is per m itte d to w ithdra w his mo ne y th e ba nk ha s 

no t su ffered . So lik ew ise th e U.S . T re asu ry wi ll no t su ff er whe n it pa ys back 

th e pr oc ee ds of th e sa le of pro per ty whi ch ne ve r belon ged to th e U ni ted Sta te s 

in th e firs t pla ce. Thi s is not like a ge ner al w ar claim w her e th e cla im ant’s 

ri g h t is cre at ed by Gov ernm en t le gi slat io n. In th is c ase th e U.S. cla im ants ’, lik e 

th e Sw iss cla im ants ’, ri ght ori gin ate s ou ts id e of Gov ernm en t legi slat io n in th e 

ow ne rs hi p of pri vate pro per ty se ized by t h e Gov ern me nt.

M r. Staggers. T han k you . T he ho ur is 12 o’clock . IIow lo ng 

wo uld y ou r p re se nt at io n ta ke ?

STATEMENT OF IRVING JA FFE , CHIE F, COURT OF CLAIMS SECTION;

ACCOMPANIED BY STANLEY D. ROSE, LEGISLATIVE OFFICER;

AND MANFRED SCHMIDT, ATTORNEY, CIVIL DIVISION, DEPARTMENT OF JUSTICE, WASHINGTON, D.C.

M r. J af fe. My pr es en ta tion wo uld not take long , bu t I wo uld re ­

m in d th e co mmittee th at I wa s aske d qu est ion s ju st at th e con clu sio n 

of yes te rd ay ’s he ar in g wh ich I ca n’t an sw er pu bl ic ly ; th at is, the only 

qu es tio n th at I rese rv ed or was he sita nt to an sw er pu blicly was th at 

which co nc ern ed th e m at te rs an d issues wh ich were pr es en ted in the 

St . Ge orge li tigat io n th at we re diffe rent fro m thos e pres en ted in the 

oth er , bu t yo u di d ask som e qu es tio ns with res pect to th e co m pa ra tiv e 

va lu e o f stoc ks, i f you will recall.

M r. H arris. Mr. Ja ffe, sin ce I had t he u nder st an di ng wi th you yeste rd ay , I ha d no t ex pe cte d to ta ke all m or ni ng w ith Mr. Bu rke. I 

th in k th is ha s bee n very he lp fu l to th e rec ord , howe ver, bu t the p u rpose is to deve lop all th e facts, an d th at is wh at we tr y to do, b ecause 

th ey are sens iti ve an d de lic ate p roblem s.

W e ha ve a bill ou t of thi s co mmitt ee tha t is sched ule d fo r co ns ideration on th e floor of th e Ho us e th is af te rn oo n an d it is 12 o’clock now. 

W it h ap olog ies to you, it ap pear s th at we ar e go in g to ha ve to ask 

yo u to com e back .
CLAIMS OF GENERAL DYESTUFFS CORP. STOCKHOLDERS 53

Mr. J affe. No objection to that at all, Congressman Harris.

Mr. Harris. I would suggest, Mr. Chairman, tha t we come back at 10:30 tomorrow for an executive session in order that Mr. Curtin might get, answers to the question or at least have an opportunity to get answers to the question tha t he propounded yesterday under the 

circumstances that were agreed to at that. time.

Mr. J affe. I would be happy to come back.

Mr. Staggers. Is tha t satisfactory; 10:30 tomorrow?

Mr. J affe. Yes, and I will answer the other questions that were

asked at that, time too if you like.

Mr. Staggers. All right. The committee will stand adjourned until 10:30 tomorrow. (Whereupon, at 12 noon; the hearing adjourned to reconvene in 

executive session at 10:30 a.m., February 27, 1964.)

O


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