know; but if it were sold and it brought more than that, of course, that would in the end change our figures. Senator MCCARRAN. Is it the plan to eventually dispose of all of this property? ACCELERATED DISPOSAL HINDERED Mr. BAYNTON. Yes, sir. We dispose of property as fast as we can. What limits our speed is lawsuits and claims. We are required to maintain and operate properties as to which our seizure is challenged. The seizure of the stock of General Aniline & Film Corp. has been challenged in the courts by the I. G. Chemie Corp., a Swiss corporation. The lawsuit, simply stated, is that we claim that it was German-owned but cloaked or hidden by the Swiss ownership. The Swiss, of course, claim that it was not German, and that it was entirely Swiss. We have been in court for the last 3 years very actively on motions of one kind or another. We have taken testimony in Switzerland. We have had discovery in Switzerland, the Swiss have had discovery here, and so forth and so on. There are two collateral suits involved. Remington-Rand brought an action to come in as an intervener on the ground that they had an option to purchase from the Swiss which was tried in the district court, with the Government winning; in other words, the court found that there was no option. It is now on appeal-I beg your pardon. It has been decided on an appeal also that the Government was right. So it is now going up to the Supreme Court, if they allow certiorari. There is another suit brought by a stockholder of the I. G. Chemie Corp., by the name of Kaufman, claiming that the seizure of the corporation in America damaged the value of his stockholdings in the Swiss corporation. Now, that suit has also been thrown out of the district court. It is on appeal, and decision has not come down. So we have the main suit and two collateral suits, involving this one question. As far as the main suit is concerned, we are now going into the possible laying of ground work for a dismissal with prejudice in favor of the Government because the Swiss corporation allowed some discovery, by court order, in Switzerland, but the Swiss Government, through what is equivalent to our Attorney General, took over some of the files under his own seal and refused to let us see them. We are going in on the ground that if a person seeks the protection and the justice of the American courts, he should follow American rules. If they refuse to do that, then that is too bad. We will ask for a dismissal with prejudice. The same situation has happened in England. With regard to some of the seizures that the English custodian made, the English courts promptly threw the plaintiff out of court after he refused to meet the rules of procedure in the English courts. When they refused, they told them "That is too bad; when you seek our courts, you must live up to the rules." We are frankly coming to a stage like that in the main suit. The judge appointed a master last year, who has heard considerable testimony within the last 60 days. I believe the judge has ordered that master to take evidence with respect to this Swiss failure to produce documents. Senator ELLENDER. Is that corporation in operation? Mr. BAYNTON. Yes. It is sort of a holding company, Senator, in Switzerland. Senator ELLENDER. In Switzerland? Mr. BAYNTON. Yes, Senator. Senator ELLENDER. And some of the stock is here? Mr. BAYNTON. No. They held the General Analine & Film Corp. stock. In other words, we claimed the General Aniline & Film Corp. was part of the I. G. Farben empire. But the stock of the American corporation, General Aniline & Film, was held by this Swiss holding company. Senator ELLENDER. Is that corporation doing business here now? Senator ELLENDER. Yes. Mr. BAYNTON. Yes, sir. That is an operating company. Senator ELLENDER. And that is the one that you claim as foreign property and belongs to the Germans? Mr. BAYNTON. Yes, sir. Senator ELLENDER. And now belongs to us? Mr. BAYNTON. That is right, sir. QUESTION OF OWNERSHIP OF I. G. CHEMIE Senator KILGORE. As a matter of fact, is not one of your troubles the fact that the I. G. Chemie stock, most of the stock, is bearer stock, and that you cannot really trace the ownership of that stock? Mr. BAYNTON. I believe a great deal of the I. G. Chemie stock is bearer stock. But we are today really not too interested in the I. G. Chemie stock. Senator KILGORE. Originally, General Aniline & Film was a direct I. G. Farben subsidiary? Mr. BAYNTON. That is our claim. Senator KILGORE. Then later the stock was transferred to I. G. Chemie as a cloak, you contend, to enable them to claim neutral ownership? Mr. BAYNTON. That is right, sir. Senator KILGORE. And there is no way of really finding out who owns I. G. Chemie? Mr. BAYNTON. We think we can really prove that in court. I am very confident of that suit if we get to trial. I have a feeling that we may never get to trial. I think it may well turn on a motion to dismiss. SWISS GOVERNMENT NONCOOPERATIVE Senator KILGORE. Have you not found the Swiss Government very noncooperative in all such activities? Mr. BAYNTON. Yes, sir. Senator KILGORE. Even on the question of the confiscated gold that they have in their banks? Mr. BAYNTON. I don't know about that question, but I know about the questions that we have with them; and I would not say they were cooperative. Senator KILGORE. They have $400,000,000 of gold bullion over there. We were able to prove that part of it came from France, and that part of it came from the Bank of Belgium, and they did return that. But the rest of it they have refused to return. Mr. BAYNTON. I understand that is the situation. Senator KILGORE. Now, once the suit is decided, the stock of General Aniline & Film Corp. can be put on the market? Mr. BAYNTON. That is right. Senator KILGORE. How much of that stock does the Government hold? Mr. BAYNTON. About 97 percent. Senator KILGORE. And the other 3 percent is owned by Americans? Mr. BAYNTON. Mostly by Americans. There may be a few shares held by the English or French. MISCELLANEOUS STOCKS HELD Senator KILGORE. Will the same thing apply to General Dyestuffs Corp.? Mr. BAYNTON. In the case of General Dyestuffs, we hold 100 percent of the stock. Senator KILGORE. And that is a sales organization? Mr. BAYNTON. That is right. Senator KILGORE. Aside from General Aniline & Film Corp. and General Dyestuffs Corp., do we have any other companies in which we have as big holdings? Mr. BAYNTON. We hold 100 percent of the stock of the Schering Corp. That is an example-these are just random examples. In the case of the Arabol Manufacturing Corp., which has total assets of over $2,000,000 and which is an abrasives manufacturing concern, we hold 41 percent of the voting stock. There is a real-estate holding corporation in New York called the Avonzel Corp. We hold 100 percent of the stock. In the case of Jasco, Inc., which was originally a Standard Oil of New Jersey patent-holding company, we hold 50 percent of the stock. Senator KILGORE. Was not Jasco, Inc., a combination of Standard Oil of New Jersey and Farben? Mr. BAYNTON. That is right. Senator KILGORE. You have 50 percent and Standard Oil has their 50 percent? Mr. BAYNTON. That is correct. Senator KILGORE. It was behind that screen that they were hiding the rubber patents? Mr. BAYNTON. That is right. QUESTION OF TRANSFER OF STOCK WITH DIVIDENDS TO BONA FIDE OWNER Senator KILGORE. Now, with respect to these dividends, the earnings of these stocks that you turn into the Treasury, suppose a bona fide owner shows up, or suppose Congress passes a bill which directs you to turn over to, let's say, to Mrs. Jones, certain stock, do you have to account to her for the dividends during the period of the holding? In other words, if we were to pass a bill to turn over some stock, it is not just a question of turning over the stock certificates, but it is also a question of accounting for all of the dividends; yet the taxpayers here are paying the administrative expenses. The stockholder would get the dividends, without that administrative tax. Mr. BAYNTON. If this property were returned then, of course, the stockholders would have to pay the administrative expenses of my office, but today they come out of these moneys. We are not an appropriated group. We have an allotment from the funds we take in. So you are correct, except for that one little part of it, sir. Another example of that is this: We have been talking about General Aniline & Film. Suppose we lost that lawsuit. Of course, we would have to return the stock and all of the dividends and everything else that had accumulated. Senator KILGORE. However, you have taken part of the dividends as administrative expense. Would you also have to make those good and return that? Mr. BAYNTON. We would have certain conservatory charges against our holding of those things which we would keep. Our expenses run, percentagewise, actually less than the average trust company charges to run a trust. We think we have done a good job on the cost of the thing. So while they would complain, they would not have a legitimate complaint. ESTIMATED TIME TO TERMINATE CASE Senator KILGORE. How long do you think it will take to close out the General Aniline & Film Corp. suit? Of course, if your motion to dismiss with prejudice is sustained, it should not take very long. Mr. BAYNTON. That motion will come to a head some time this fall, I would guess. There is considerable evidence that has to be taken. For example, we have to bring a Swiss expert here from Switzerland to the hearing here in town to explain to the court exactly what Swiss law is in that respect. Of course, the plaintiffs will also have an expert. Failure of that motion means that we will probably settle down to the actual trial-also in the fall. I would hate to forecast it, because we have something like 25,000 file folders with evidence on this one case. We have tons of evidence. It is paper transactions that you have to trace through. When you start figuring how long it will take to put that into a case, I don't know. Senator KILGORE. Thank you very much. Senator ELLENDER. May I ask one question? EMBASSY PROPERTY SEIZED Senator ELLENDER. Do you handle all of the embassy property that has been seized here in Washington? Mr. BAYNTON. We have it now; yes, sir. Senator ELLENDER. Why do you say "now"? Mr. BAYNTON. Under the Trading With the Enemy Act and the Executive orders that were issued to make it effective, consular or diplomatic property was turned over to the State Department. The State Department could turn it over to us when they were through with it. Senator ELLENDER. What was done in the meantime; do you know? PROPOSED SALE OF GERMAN EMBASSY PROPERTY Mr. BAYNTON. They used it where they could. For example, at one time the State Department had clerical help in the German Embassy here in Washington. Senator ELLENDER. I noticed that that was for sale. Mr. BAYNTON. Yes. Senator ELLENDER. Who put it up for sale? Mr. BAYNTON. I put it up for sale. Senator ELLENDER. Why? Mr. BAYNTON. Because the State Department notified us that they were through with the property and that it was available for vesting. I promptly vested it. I then promptly prepared it for sale and offered it for sale. Senator ELLENDER. Who is occupying it now? Mr. BAYNTON. Nobody is occupying it. Senator ELLENDER. With all of the shortage of space, why is it not occupied by some governmental agency? Mr. BAYNTON. It is not usable, Senator. CONDITION OF GERMAN EMBASSY PROPERTY Mr. BAYNTON. It is the most awfully run-down thing you have ever seen in your life. Before the war, sometime around 1938, the German Government sent one of their top architects over to inspect that property. He condemned it. Now, by that I do not mean that he condemned it as far as the District of Columbia was concerned. But as far as the German Government using it, he condemned it right then. They went out and bought a lot in town on which they planned to build a new building. The Germans did not allow them to spend 1 cent on the old building after that period, so the thing has just run to pieces. Senator ELLENDER. Has an estimate been made as to the cost of putting it in shape so that it can be occupied? Mr. BAYNTON. The cost of putting it in shape would probably be more, as I understand it, than the cost of tearing it down and putting a new building up. It consists of four old seven- or eight-story homes, with openings between them so that they can be used as one place. Senator ELLENDER. Have you obtained a bid on it? Mr. BAYNTON. Yes, sir. Senator ELLENDER. Have you sold it? Mr. BAYNTON. No, sir; I rejected the bids, because they were too low. Senator ELLENDER. I thought so, from what I had heard. JAPANESE EMBASSY PROPERTY Senator KILGORE. The Japanese Embassy is in the same shape, is it not? Mr. BAYNTON. That is still in the hands of the State Department. I believe the Japanese Embassy and the German Embassy properties are the only consular or diplomatic properties that we have left in the United States today. We have sold all of the rest. |