Evening star., 1918-04-07

Islands and elsewhere, is not clearly
understood. 1t seems to be bit pug
cling to many how an American cor
poration. existing under the United
States laws and doing business in the
United States. can be seized by the
alien property custodian as il the cor
poration were an enemy alien. The
custodian frequently announces that he
has appointed a board of directors of
some large American corporation. de-
spite the fact that there seems to be
no provision in what is known as the
trading with the enemy act which
gives him any such authority. This
procedure, however. is simple, effective
and altogether regular.
The trading with the enemy act, un-
der which the office of the alien prop
erty custodian is created, requires
every corporation in the United States
to transmit to him a full list Of its
whom it has reasonable cause to be-
iieve to be enemies" When these re-
ports disclose that a majority OF the
corporations stock is enemy held" the
custodian issues a demand on the cor
poration, or on the person holding the
certificates for such stock in this coun-
try. to cause to be transferred to him
in his official capacity all the enemy
held stock. Upon compliance the Gus
todian becomes the holder Of the ma
jority of the stock, with right to ask a
representation on the board Of direc-
tors proportionate to his holdings, and
through the installation of these gov
ernment nominees the corporations al
faids are conducted or supervised un-
der the governments general direc-
tion.
All the right, title and interest Of the
enemy in the stock SO demanded be-
comes vested in the custodian. and the
"
amendments. which were fought over IN
Congress, empowers him to sell the
stock. Being sold to American citizens,
this will effectually Americanize all
been German controlled, and the Ques-
tion after the war. it is announced, Will
relate to the distribution of the pro-
ceeds of the sale and not to the restitu-
tion or distribution Of the stock it
self.
President Approved Law.
The trading with the enemy law was
approved by President Wilson october
s. 1t prohibits trading directly or in
directly, in any manner whatever. with
the enemy. In anticipation Of the dec
1aration of war, last April s.. and the
passage of this law. many of the Amer
ican corporations owned by Germans
tried to cover up the situation by
adroitly selling the German-held stock
to merican citizens, taking payment
therefor in notes payable after the war,
or In 1925, or at some other distant
date, and holding the stock as collat-
eral to such notes. Another way was
to incorporate a German partnership in
this country and issue stock IN pay
ment. which. in turn, would be sold by
the German agents to American citi-
zens for a nominal consideration, or for
consideration represented in long
time. misunderstanding notes. This
was with the hidden purpose of simply
holding the German interest free from
enemy act until after the war, when
the property would be restored to the
original German owners.
The corporation returns do not dis
close upon their face the interest which
the enemy really has in them. II the
plans resorted to were carried out
prior to the declaration of war, it is
now be assailed by the alien property
custodian, and the fact that such acts
were done in anticipation of the war
declaration does not inva1idate them
any more than the acts done in antici-
patton Of the passage of tariff laws are
invalid.
Custodian Palmer. however, has indi-
Gated his determination to make de-
mand for corporate stock in which he
has reason to believe the enemy really
is interested. In all cases up TODAY.
according to Mr.. Palmer, the American
citizens who in the first instance NAV
have taken stock with the intention Of
holding it for their German friends
have, on second thought. recognized
nrst and that their individual interests
should be secondary, and they have
tArned over these stocks to the alien
property custodian.