Opinion ID: 254329
Heading Depth: 1
Heading Rank: 4

Heading: Adherence

Text: 23 The Standstill Agreements provided a procedure, called 'adherence,' by which individual foreign creditor banks and their respective debtors could become parties thereto, become bound thereby, and become entitled to the benefits thereunder. The procedure demanded that the individual creditors, within a stated period of time, notify their respective German debtors on a standard form letter of their willingness to adhere to the agreement, setting forth the short-term credit lines with respect to which adherence was being effected. In turn, the German debtors then sent to their respective creditors a letter on a standard form confirming their adherence. It was not until such adherence was so effected that the foreign bank creditors and their German debtors 'became parties to (the) Agreement in respect to short-term credit lines so specified and    entitled to the rights granted to and    subject to the obligations under (the) Agreement.' 24 If American creditor banks, which were adherents to the Agreement, had ceased to be creditor banks because of payments by their debtors between the time of adherence and the apportionment date, they could, nevertheless, obtain their share of the license fees by transferring their rights thereto to another adhering creditor, or by paying to the Reichsbank the reichsmarks equivalent out of their accumulated registered credit balances. 25 The German - American Standstill Agreement of 1940 was to expire on May 31, 1941, and on that date no new agreement had been reached by the American and German Committees. The two Committees were about to agree on a proposed draft when, on June 14, 1941, financial transactions with Germany and its nationals were blocked by Executive Order 8389. The last member of the American Committee signed the Agreement on June 30, 1941. An application by the American Committee to obtain a Treasury License to use blocked German funds to service the Standstill debt was denied on August 11, 1941. It is conceded by the plaintiffs that no American creditor ever adhered to the 1941 Agreement. 26 After the 1940 Standstill Agreement expired on May 31, 1941, the transferors of marks for travel and benevolent purposes continued to collect and remit license fees to the Trust Company. These collections came about because the American banks possessed registered credit balances and travel mark accounts after expiration of the 1940 Agreement. The license fee collections paid into the Trust Company after May 31, 1941 (the date the last Agreement which had been adhered to by any American creditor expired) amounted to the sum of $328,653.20, and constitute the specific property involved in this action. Millions of dollars in license fees were distributed to to creditor banks under the 1940 and prior agreements. 27 On May 21, 1941, and again on November 26, 1941, the Reichsbank instructed the Trust Company to credit these license fee payments to its Standstill Accounts 1941. The Trust Company opened the Reichsbank accounts (I and II), but entitled them 'Special Account Manufacturers Trust Company as Trustee for American Creditor Banks under German-American Standstill Agreement of 1941' (I and II). There is conflict in the affidavits as to whether the Reichsbank consented to the labelling put on the accounts by the Trust Company. 5 But we are of the opinion, for the reasons hereafter stated, that the title put on the accounts is not decisive. We must decide what the accounts were, irrespective of what they were called by either party. 28 From June 1, 1941, through November 29, 1941, a total of $315,578.81 was credited to Account No. I and from December 1, 1941, through July 9, 1942, a total of $13,074.39 was credited to Account No. II the Reichsbank directing the Trust Company as to the particular account into which the money was to be deposited. These two accounts are the subject of the first two causes of action, and together make up the total amount of $328,653.20 involved in this action. 29 After June 1, 1941, no American creditor bank was ever advised by the Reichsbank of any apportionment of license fees, as to fees paid into the Trust Company after June 1, 1941, and no demand was made by any American creditor bank upon any of its German debtors for payment into the Reichsbank of an equivalent in reichsmarks as required by the agreements before release of the license fees by the Reichsbank to American creditor banks. No reichsmarks were thereafter paid into the Reichsbank by any German debtor of American creditor banks, or by any American creditor banks, or by any other person with respect to apportionment of license fees, as required by the agreements before the Reichsbank was to release its license fees on deposit with the Trust Company. By order dated November 25, 1947, the Attorney General vested these two license fee accounts as property owned by the German Reichsbank.