New-York tribune., 1919-02-27
Calder's Charges
VI Extravagance
Denied by Palmer
Says Cost of Handling
$500, 100000 in Alien
Concerns Was Only One
seventh of l Per Cent
Ne1U York Tribune
WGshin0t0n Pureau

NeU York Tribune
Washington Pureau
WASHINGTON, Feb. 26.-Declarine
krthe total expense of administering the
S7O0,000,000 of German-owned prop
erty that has passed into his hands had
not exceeded one-seventh of l pc,
cent Of the principal, A. Mitchell
Palmer, alien property custodian
issued statement tonight in answer
to the resolution of Senator Calder of
New York, calling for statement of
facts concerning the operations of the
office. similar resolution has been
introduced by Senator Frelinghuysen
of New Jersey.
Charges have been made by Senator
Calder that the office has been run in
an extravagant manner, that former
Representative John ]. FITZGERALD of
Brooklyn, and other lawyers had been
PAID eXtravagant fees and that sales
or German property by the alien prop
erty custodian have been made in p
manner that did not protect adequately
the interests of the minority American
stockholders. All these statements Mr.
Palmer denies.
IN his statement tonight, in which
ne says he courts the fullest investi-
cation, Mr.. Palmer says:
$4,000 Estates Involved
when all the property in nv hands
snail have been appraised it is likely
that the total value thereof will reach
$7oo'oOo,oo0, divided into $4,000 differ
eht trust estates located in every state
in the Union and in every insular nos
session. The cost to the government
for administering these estates has
been about S1,000,000, or less than one
seventh of 1 per cent of the principal,
for a period of sixteen months. a rec
ord of economical administration
which, I venture to say, has never
been approached by any trust company
in the world.
I'm one sense, indeed, this office has
cost the government less than nothing,
Tor through the efforts of the Alien
Property Custodian unreported and
concealed income and profits taxes
have been collected from corporations
ana other taxpayers controlled by the
enemy during the same period to the
amount of S1,604,53976. The amount
thus collected through the efforts of
the Alien Property Custodian is 60 per
cent more than the entire cost of oper-
ating this office.
"The highest paid person in the or
ganization is the Alien Property Gus
todian himself, to whom Congress gen
erously granted a salary mot to exceed
$1,000 Every employe has been taken
from list of eligibles furnished by
the Civil Service Commission, EXCEPT
attorneys, who are expressly excepted
by law. Businesses and corporations
which were wholly and partly enemy
owned have continued to be operated d
in most cases by the men who were in
charge thereof before | took over the
enemy interest, under supervision of
directors in corporations chosen by me
to represent enemy stock and of super
vlsors in many businesses which were
being liquidated All the expense of
liquidating such businesses and of op-
Grating the corporations is, of course,
borne by the businesses and corpora
tions themselves.
"The salary Of executives and en-
ployes and the fees of necessary coun-
sci have been fixed by the directors
operating these properties. The regu-
lations of this office require that bust
nesses and corporations in which the
Alien Property Custodian has a con
stances pay larger salaries to execu-
tives than were paid under the manage
ment OF the enemy owners. Fees for
legal services rendered to such corpor-
atoms are paid by the corporations, and
| think | can safely state that in no
case has any corporation paid fees or
salaries for such service one half as
large as would be charged for similar
service in purely commercial trans
actions
The statement that some New York
lawyer has received a fee of $4,000 is
absurd. OF course, no such fee has been
paid by this Office. The reference in the
newspaper story relating to a former
Congressman from Brooklyn is evident
" aimed at the Hon. J. J. Fitzgerald.
tie has been for something more than a
year counsel for the American Metal
Company, concern whose business
runs into scores of millions per annum,
and has been paid by that company at
the rate Of $500 per month very small
charge for the services he has rendered.
The American Metal Company has been
one of our largest and most difficult
problems.
Counsel Previously Employed
'ln three other corporations Mr.. Fitz-
gerald represented the companies as
counsel before took over the enemy in
tcrests therein, and permitted him to
remain Last November suggested to
Senator-elcct Harris, of Georgia, TO act
as supervisor to represent me in large
business in New York in which the
enemy was part owner. The enemy
interest vas several hundred thousand
dollars. He gave the business splendid
attention and the business will. Of
course, pay him for his services. That
Zee has not yet been fixed.
senator Calder's statement that the
interests OF American minority stock
holders have been injured by the sale
OF German owned majority stork IL