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injury, shall be subjected to punishment. Again, it is wisely rendered punishable to impersonate for a fraudulent purpose a diplomatic or consular or other official of a foreign government duly accredited as such to the Government of the United States. In order to safeguard the transaction of diplomatic and consular business, it is provided that one who, other than a diplomatic or consular officer or attaché, acts in the United States as an agent of a foreign government without prior notification to the Secretary of State, shall be subjected to fine or imprisonment, or both. The words “foreign government” as used in the Act (and also in certain specified sections of the Penal Code), are said to embrace any government, faction, or body of insurgents within a country with which the United States is at peace, and whether or not recognized by the United States as a government. Of no small significance is g 5 of the same title, rendering criminal a conspiracy within the jurisdiction of the United States to injure or destroy specific property within a foreign country and belonging to a foreign government or to any political subdivision thereof, with which the United States is at peace, or any railroad, canal, bridge, or other public utility so situated. It is provided, moreover, that if a conspirator commits an act within the jurisdiction of the United States “to effect the object of the conspiracy,” he shall be subjected to punishment.
Elaborate and sensible provisions are made for the safeguarding of the issuance of American passports, as well as for the punishment of those who make fraudulent use of passports or counterfeit the same. Lack of space forbids discussion of the titles relative to the counterfeiting of governmental seals, the issuance of search warrants, and the use of the mails.
No one outside of the Department of Justice can state authoritatively what titles of the Act, or what provisions thereof, are, or may be, most useful to the United States. Of special interest and of utmost significance are those sections designed to facilitate the effort of the state to fulfill by executive action its obligations as a neutral. It is believed that the procedure established greatly increases the efficacy of the means theoretically at the disposal of the nation to perform duties of prevention arising from maritime warfare, and acknowledged to be imposed by international law, if not by conventions supposedly declaratory of it.
CHARLES CHENEY HYDE.
THE CUSTODIAN UNDER THE TRADING WITH THE ENEMY ACTS
Anglo-American jurisprudence makes domicile the test of enemy character. Thus an American citizen, resident today in Germany and making no effort to withdraw, is legally an enemy. And vice versa, German subjects now domiciled in the United States, if they observe the laws and comply with such regulations for the national safety as the President may prescribe, are not regarded as enemies. Now, property follows the status of its owner. Therefore, the property of the American aforesaid in Germany is enemy's property. If captured at sea, for instance, on an enemy's ship, it is good prize. But there is an inconsistency in this rule. Though all the property of an enemy house of trade is enemy's property, even if certain of its partners are neutral, in a neutral house the share of an enemy subject is not exempt from capture. Nationality has replaced domicile in the determination of its character.
As we do not regard Germans here domiciled as enemies, their property likewise is not enemy's property and is not confiscable. But owing to the intricacies and complexities of modern commerce, there may be, nevertheless, enemy's property in great variety within our territory; their goods are here on sale; stocks and bonds evidence their share in our corporations; branches of their banks have been established here; their insurance companies for years have taken risks here; under their patents our licensees are operating; an American heiress marries an enemy subject and her income is in question. No government can permit its enemy to draw resources for the prosecution of the war from itself. All this makes a third class of property to be considered.
For a good part of a century, certain treaty provisions also were frequent which should be added to this summary of the usage as to enemy's property before the Great War. These gave time and privileges for the withdrawal of persons and property.
How does this usage compare with the rules under which we are living today? These rules are set forth in the Trading with the Enemy Act, approved October 6, 1917, which will be discussed in a later issue of the JOURNAL. This comment is confined to that provision of the Act which is comparatively new, as offering a solution of the problem
1 Printed in SUPPLEMENT to this JOURNAL, p. 27.
how to do justice to enemy property rights and yet prevent their use against oneself, by impounding on a great scale, in charge of a public official who shall account after the war for all property taken over. This official is the Alien Property Custodian, "vested with all of the powers of a common-law trustee in respect of all property, other than money, which shall come into his possession in pursuance of the provisions of this Act."
Before enumerating the scope of this official's duties, however, it will be convenient to call attention to certain variants of the definition of “enemies” under the Act, which bear upon the Custodian's duties. The first is that, under the Act “enemy” and “ally of an enemy” are lumped together. Thus, since the declaration of war with Austria, the Act applies to those subjects of Bulgaria and of Turkey who may own property here. Another is that residents of territory occupied by an enemy are classed as enemy's subjects for the purposes of the Act. Therefore, a Belgian capitalist owning shares in an American concern is not differentiated from a Berliner. And third, enemy subjects wherever resident are included; a German coffee planter in Brazil, for instance, if the President shall so determine.
Having thus defined enemies, enemy allies, and the property of both, the Act prescribes the duties of the Alien Property Custodian with regard to them. He is to receive enemy's money and property transferred to him, and to administer and account for it, giving proper security. He is appointed by the President, his many assistants being under the regulations of the Civil Service Commission. With him is to be filed a list of officers and shareholders in American companies who are known or suspected to be enemies, together with the amount of their holdings. Trustees and agents with enemy principals, and debtors owing money to enemy creditors, must report to him also as to said debt due or trust property received. And unless licensed to the contrary, such fiduciary will actually pay over such property or money to the Custodian, this payment to be a full discharge.
In case of contracts with enemies abrogated by war, notice thereof is deposited with the Custodian. Claimants to property deposited with the Custodian may sue in equity, making him a defendant, in the United States court of the claimant's district. The users of enemy patents, trade-marks, and copyrights must account to the President and pay not to exceed 5 per cent of their gross sales to the Custodian, with liberal provision for a settlement after the war. The regulation of enemy
owned patents is very favorable to the owner, for he may both take out patents during hostilities and protect against infringement by suit.
Enemy money coming into the hands of the Custodian is to be turned over by him into the United States Treasury and may be invested in Government securities. But other property in the Custodian's keeping is to be duly administered and its income placed in the Treasury. To this end, on his demand, stock or other evidences of beneficial interest of enemy ownership must be transferred to the Custodian's account.
This is a brief summary of the part played by the Custodian in this vast impounding of the property of enemies within the jurisdiction of the United States, the evident intention being that after the war there shall be an accounting and refunding, although the Act says all such claims “shall be settled as Congress shall direct.” He represents a supplemental part of the machinery of the process by which a middle course is steered between the ancient harshness of confiscation and the modern idea that foreign property rights have been encouraged to enter a foreign state with the implication of fair treatment.
The Custodian named by the President for the purposes of the Act was A. Mitchell Palmer, Esq. The date set within which return of enemies' money and property must be made to the Custodian was December 5. He has publicly stated that its amount already exceeds six hundred million. The staff in charge of this vast and complicated business numbered 250, with a prospect of increase.
The machinery thus created was set in motion by Executive Order 1 on October 29, 1917. A form of report is provided and specific instructions are given as to (1) who must make the report, and (2) what must be reported, with penalty for failure. These instructions are too long to warrant quoting here; they are well and clearly expressed, but the Act itself is clumsily phrased. One clause adds to the Act's comprehensiveness: “If a person, even an American citizen, is resident within the territory of an enemy or ally of an enemy, including that occupied by its military and naval forces, his property must be reported."
Corresponding to this Trading with the Enemy Act and the employment of a Custodian under it, we learn by the official Reichsanzeiger “that the ordinances dated October 7, 1915, governing compulsory notification to the authorities of foreign property in Germany, have been extended, together with the penalties in cases of noncompliance,
1 Printed in SUPPLEMENT to this JOURNAL, p. 60.
to property owned by citizens of the United States as from November 20," such property to be placed under the Trusteeship of the German Government. The term "property" includes shares in German enterprises within the empire and legal claims upon persons domiciled there. The immediate object of this registration is declared to be “to prevent the illegal transfer or liquidation of American property held within the limits of the empire, for the purpose of removing it from official control and conveying its proceeds abroad. These restrictions do not apply to such disposition as Americans may desire to make of their property within Germany. They, however, are not permitted to sell their holdings to a resident member of a firm in this country without specific permission. American manufacturing plants are not molested and American residents in Germany may also continue freely to dispose of their private means within the confines of the country.” It is officially added that the compulsory liquidation of the administration of the property of American firms is not contemplated, as it is presumed the provisions of the Trading with the Enemy Act do not purpose the sequestration or confiscation by the American Government of German property held in the United States. A Copenhagen dispatch significantly adds that these German regulations are of such nature that they can be used as a basis for financial reprisals.
As the text of the German ordinance concerning trading with the enemy is not accessible, further details cannot be given.
From remote times, trading with the enemy has been illegal in Great Britain; the prohibition had accordingly only to be made operative by royal proclamation, which was issued on the day after the declaration of war, though subsequently modified. Penalties and details were specified in the Act of September 18. It was not until the end of November, the 27th, that the Custodian of Enemy Property was appointed by and under the regulations of the Board of Trade. To this Custodian are to be paid any dividends, interest, or share of profits belonging to an enemy, together with any money paid into a bank or held in trust, for an enemy's account, with penalty for noncompliance. Evasion of full distribution is penalized. Enemy's rents are to be lodged with the Custodian. Notification of all facts relating to the above is compulsory. The High Court or one of its judges may vest in the Custodian debts due from an enemy or damages recoverable from him, or property or property rights, real and personal, belonging to him, with power to sell and manage. The Custodian