Message to the Congress Transmitting Annual Report of the Office of Alien Property.

To the Congress of the United States:

I am proud to transmit the Annual Report of the Office of Alien Property for the fiscal year ended June 30, 1964.

This is the twenty-second report, as required by law, of proceedings under the Trading with the Enemy Act, as amended. There is special significance in this report because it signals the completion of the functions of the Office of Alien Property in the near future. I feel it is appropriate, therefore, to review the record of this Office which has led to the successful conclusion of the purpose for which it was established by the Congress.

Upon our entry into World War II, Congress broadened the terms of the Trading with the Enemy Act of 1917 to permit effective use of enemy-owned or controlled property in our own war effort, and also to deny its use to the enemy.

The Office of Alien Property Custodian was reconstituted as an independent agency in 1942 and by February 1943, personnel of the Office had reached its peak of almost 1,300 persons. Offices were opened in Washington, New York, Chicago, San Francisco, Manila, and Honolulu--and after the war in Munich, Germany and Tokyo, Japan. In 1947, the Office of Alien Property Custodian was terminated and its functions transferred to the Office of Alien Property within the Department of justice.

Thus far, a total of $861,000,000 has been realized from all World War II vestings. Seizures affected assets of every description from the huge General Aniline & Film Corporation stock holdings to scrip certificates valued at only a few cents. Assets administered and liquidated have included personal property, trusts, estates, patents, copyrights, trademarks, stocks, bonds, industrial equipment, mineral rights, farms, urban real estate, mortgages, entire businesses, and objects of art.

In 1946, following the cessation of hostilities, Congress authorized return of vested property to individuals who were within countries which had been occupied by the enemy and to individuals who had been substantially deprived of their rights of citizenship on racial and religious grounds. Additionally, Congress authorized the payment of claims of American creditors from the vested property of their German debtors. More than 67,000 claims were filed under this authority--and, at this writing, only 134 claims involving about $25,000,000 remain for processing and decision.

Under the Act, the net proceeds of vested property which are not returnable must be placed in the War Claims Fund where it will be used to compensate American citizens who have suffered war damage. To date, about $314,000,000 has been transferred by the Office of Alien Property to the War Claims Fund. An additional amount of $165,000,000 recently obtained from the sale of the stock of General Aniline & Film Corporation will also be available for deposit to the War Claims Fund in the future.

During the years since 1942, the Office has participated in more than 7,000 litigated cases involving its assets. I am pleased to report that this caseload has now been cut drastically so that only 60 cases remain in litigation currently.

I am able to report to you now that the Department of Justice expects to complete the administration of World War II property, and to terminate the Office of Alien Property as an organizational entity, by June 30, 1966. This achievement is the result of a planned and purposeful effort made since 5961 to dose the Office within five years.

Throughout its entire existence, the Office of Alien Property has been self-supporting from the proceeds of its vested property. Since July 1, 1961, the annual budget authorization of $690,000 for each year has supported a staff of about 50 persons. The Office's budget request of $369,000 for fiscal year 1966 is designed to support a staff of 21 persons during its last year as an organization.

After June 30, 1966, certain minimal functions will remain, including the administration of the blocked assets of several satellite countries which cannot be terminated until adequate financial agreements are reached with those countries. This function which requires the full time services of only one employee may be assigned to another agency. At present, no other alien property matters are expected to require the full time services of any employee beyond June 30, 1966.

At an appropriate time, in connection with the budget for fiscal 1967, I will propose recommendations on how the burden of the few remaining alien property functions can continue to be discharged with non-appropriated funds even though the functions may be performed by persons on appropriated fund payrolls.

The termination of the Office of Alien Property as of June 30, 1966, will bring to a dose a chapter of American history which began in World War I. The first provision for an Alien Property Custodian in United States legislation is found in The Trading with the Enemy Act of October 6, 1917.

The termination of the last remaining World War I functions--impeded by the outbreak of World War II--was not accomplished until 1956, some thirty-eight years after the conclusion of hostilities. Fortunately, we shall be able to conclude the affairs related to World War II in only twenty-one years, and I welcome this occasion to report that this objective is now finally in sight.

I would take this opportunity to observe that we of the United States enjoy the unique and blessed distinction of having, as a nation, no traditional or historic, and certainly no "natural" enemies, among other nations and other peoples on this earth. We greatly prize this good fortune and I know it is the will of the people, of the Congress, and certainly of the Chief Executive that such amity and friendship may be preserved forever, through growing understanding and unwavering pursuit of our objective of peace with honor among all men and nations.

LYNDON B. JOHNSON