UC-NRLF 
 
 SB 5T1 321 
 
 Trading with the 
 Enemy Act 
 
 WITH THE REPORT ON THE 
 
 ACT SUBMITTED TO THE 
 
 SENATE BY THE COMMITTEE 
 
 ON GOMMERGE 
 
 National Bank of Commerce 
 in New York 
 
 OCTOBER, 1917 
 
GIFT or 
 T)qXl$iu& QaHjGal C^%um^j>l£l 
 
Trading with the Enemy 
 
 Act 
 
 PART I. 
 
 Note by John Qumn, 
 
 PART II. 
 
 The Act, approved by the President, 
 October 6, 1917. 
 
 PART III. 
 
 Report on the Act submitted to the Senate 
 August 15, 1917, by the Senate Com- 
 mittee on Commerce. 
 

 
 • 
 
 
tf- 
 
 PART I. 
 Note 
 
 (The following note consists in large part of a reprint of a letter to The 
 New York Times published prior to the enactment of the Trading 
 with the Enemy A ct and which attracted considerable attention. The 
 writer is an authority upon the principles of international law 
 governing transactions now covered by the Act, and his brief refer- 
 ences to the salient provisions of the Act as regards banks and 
 banking transactions will, it is believed, be found helpful). 
 
 The l 'Trading with the Enemy Act" which has just 
 been enacted into law is one of the most important pieces 
 of administrative legislation enacted to meet the problems 
 raised by the war. It deals with a great variety of sub- 
 jects, among them the delicate matters of administering 
 patent rights, controlling foreign insurance, censorship 
 of cables and mails, in addition to banking transactions. 
 Since this brochure is designed primarily for bankers, and 
 since the Act, considered from a standpoint of public 
 policy, is most deeply concerned with banking transac- 
 tions, I have limited myself here to a discussion of the 
 banking portions of the Act. 
 
 The Act gives bankers and other business men, as I 
 wrote to The New York Times September 5, 1917, when 
 it was under consideration before the Senate, "a perfectly 
 definite law to follow.* ' It had come to my attention 
 prior to that time that some banks and bankers had "a 
 rather surprising lack of knowledge of the legal effect of a 
 declaration of war." Because of my belief that that lack 
 of knowledge was leading to dangerous consequences, I 
 went to Washington and urged Senator Fletcher, Chair- 
 man of the Senate Committee on Commerce, to do 
 everything in his power to expedite the passage of the 
 then pending Act, which was then in the hands of a sub- 
 committee of his committee. Senator Fletcher called a 
 meeting of the full committee on the following day and the 
 bill was very shortly reported out, with many very ad- 
 mirable amendments. As I said in my letter to The Times, 
 the banking transactions at which the Act is aimed are 
 "of the utmost concern to the speedy success of the nation 
 and its Allies in the present war." In my letter to The 
 Times I said further: 
 
 y£«52V 
 
• 
 
 "A large part of the support which America is thus 
 far giving to its allies in this war is financial. All of the 
 belligerents are directly concerned with maintaining their 
 credit and the parity of exchange, not only in Europe, but 
 in South America and the Orient. It should not be nec- 
 essary to say that anything which promotes the business 
 and financial interests of enemy countries or citizens or 
 subjects of enemy countries, or which expedites payments 
 or business ventures of citizens or subjects of enemy coun- 
 tries, including the maintenance of their credit, and which 
 gives them the use of banking facilities in neutral coun- 
 tries, is a military advantage, and that anything which 
 hinders the freedom of their exchange, deprives them of 
 the use of banking facilities, and lowers their credit is a 
 military disadvantage. 
 
 "Ina war of the present world-wide dimensions the 
 old forms of trading with the enemy, involving the phys- 
 ical transfer of tangible goods, are largely obsolete. Ger- 
 many^ one attempt to imitate the blockade runners of the 
 Civil War with the submarine Deutschland was abruptly 
 abandoned. The entry of America into the war, followed 
 by President Wilson's embargo, has, we all sincerely hope, 
 put a stop to the surreptitious smuggling of American 
 goods into Germany through the territories of contiguous 
 neutrals. The chief form of trade, therefore, in which 
 Germany can engage to her advantage is that within the 
 limit of banking transactions. 
 
 "It is well known that one of Germany's methods of 
 capturing world trade was the establishment of strong 
 banks with subsidiaries in Central and South America and 
 the Orient. It is by manipulations through these banks 
 that German exchange is to be maintained and German 
 credit bolstered, if at all, during the present struggle. 
 This war is being fought with money as well as with men. 
 It is a great advantage to Germany to keep up the pur- 
 chasing power of the mark. Anything which would tend 
 to beat down the value of the mark is of advantage to the 
 allies. It would therefore seem to be a patriotic duty on 
 the part of bankers to refrain from any dealings whatever 
 with German banks or their South American or Oriental 
 subsidiaries.' ! 
 
 In discussing the then pending Act in my letter to 
 The Times of September 5th, I further said: 
 
"The Trading with the Enemy Act itself is stated by 
 both the House and Senate Committee reports to be de- 
 claratory of the existing common law of the United States. 
 In its definitions of trade, the Act lays particular emphasis 
 on banking transactions. The word 'trade' is thus 
 defined: 
 
 (a) Pay, satisfy, compromise, or give security 
 for the payment or satisfaction of any debt or 
 obligation; 
 
 (b) Draw, accept, pay, present for acceptance 
 or payment, or endorse any negotiable instrument or 
 chose in action ; 
 
 (c) Enter into, carry on, complete, or perform 
 any contract, agreement, or obligation; 
 
 (d) Buy or sell, loan or extend credit, trade in, 
 deal with, exchange, transmit, transfer, assign, or 
 otherwise dispose of, or receive any form of property; 
 
 (e) To have any form of business or commercial 
 communication or intercourse with. 
 
 "The Act does not have the effect of making illegal 
 anything which is legal at the present time, with but one 
 exception, namely, that it prohibits dealings with allies of 
 an enemy, such as Austria, which is not forbidden by ex- 
 isting international law. Its passage does not mean, as I 
 have pointed out, that any prior transactions were 
 legalized. 
 
 "Two main effects will result from its passage. The 
 first will be to add a criminal penalty to the civil penalties 
 and dangers which now attach to the acts prohibited by 
 the international law of this country, as evidenced by the 
 decisions of our Courts. The other effect will be to per- 
 mit the licensing of certain acts and payments under 
 strict Government supervision within very closely defined 
 limits for the purpose of mitigating the present rules of 
 law which prohibit every sort of transaction with an 
 enemy. As was stated in the Senate report, 
 
 'The purpose of this Bill is to mitigate the rules of law which 
 prohibit all intercourse between the citizens of warring nations, and 
 to permit, under careful safeguards and restrictions, certain kinds of 
 business to be carried on. It also provides for the care and admin- 
 istration of the property and property rights of enemies and their 
 allies in this country pending the war. The spirit of the Act is to 
 
permit such business intercourse as may be beneficial to citizens of 
 this country, under rules and regulations of the Secretary of Com- 
 merce, (now the President) which will prevent all enemies and their 
 allies from receiving any benefits therefrom until after the war 
 closes, leaving to the Courts and to the future action of Congress 
 the adjustment of rights and claims arising from such transactions.' " 
 
 As I explained in my letter to The Times , even prior 
 to the passage of the Act, it was not only the patriotic duty 
 of bankers to refrain from dealings with alien enemies, but 
 it was their legal duty to do so. The Trading with the 
 Enemy Act not only extends what I may call the com- 
 mon international law of civilized countries, as distin- 
 guished from the perversions and distortions of what 
 had been believed to be international law that in this 
 war have been resorted to by the countries who speak of 
 and treat solemn treaties as "mere scraps of paper/' so 
 as to make illegal transactions with allies of enemies as 
 well as with enemies, for example with Austrians as well as 
 Germans, but it places the acts in question in the category 
 of crimes and adds fine and imprisonment to the machinery 
 for their prohibition. I need not refer here at length to 
 the drastic penal provisions of the Act, for I am sure that 
 the whole Act so far as it relates to banks and bankers 
 will receive the careful attention of the banking world 
 generally in this country. 
 
 The Act will tend to relieve the hardship which might 
 otherwise be imposed upon persons residing in this country 
 dependent for their support upon foreign funds deposited 
 in American banks prior to the declaration of war. Such 
 payments may by express provision be licensed by per- 
 mission of the Secretary of Commerce. The Act excludes 
 from its licensing provisions: 
 
 "Any act or attempted act of transmission, or transfer 
 of money or other property out of the United States, and 
 the use or attempted use of such money or property as the 
 basis for the establishment of any credit within or outside 
 of the United States, to, or for the benefit of, or on account 
 of, an enemy or ally of an enemy." 
 
 The events and revelations of the past few days, 
 showing the criminal activities of German and pro-German 
 plotters in this country while we were still at peace, seem 
 to me amply to justify what I said in my Times letter about 
 "the wide use of German money in this country during the 
 
last two or three years to bribe, to subsidize pro-German 
 propaganda, to incite labor disputes, and to bring about 
 explosions and the burning of property, involving in many 
 cases wholesale murder." One of the good effects of the 
 Act should be promptly to dam up physically the stream 
 of German money which has been the means of promoting 
 such material and malicious mischief. 
 
 As finally passed with the Senate amendments, the 
 Act is an admirable piece of legislation. It not only 
 points out what may not be done and prescribes appro- 
 priate penalties, but it indicates the proper procedure for 
 obtaining Government permission to carry out transac- 
 tions under proper safeguards to mitigate the possible 
 harsh cases under the general law. One of the most im- 
 portant features of the Act provides for the taking over 
 of alien property, its conservation in the hands of the 
 alien property custodian, and its investment in United 
 States bonds. This investment feature is an entirely new 
 provision of law, and as stated in the Senate Report, is 
 found in no previous statute, and is in line with modern 
 policies with reference to private property in time of war. 
 The alien property custodian is, by the Act, vested with 
 all the powers of a common law trustee. The act author- 
 izes the investment in United States bonds of the funds 
 of alien enemies held by American banks, thus making 
 them contribute to the success of the national cause. 
 This is an eminently just measure, since it provides a 
 method for keeping them safely, preventing their use for 
 enemy purposes and making them serve a public purpose. 
 When we realize that under the former harsh laws of 
 war, such funds might have been confiscated, and when 
 we recall to mind the levying of forced loans with scant 
 chance of repayment by the Germans in Belgium and 
 Northern France, this provision of the act seems not 
 only just, but generous. One of the best features of the 
 Act is its elasticity. It gives wide discretionary powers 
 to the President and makes it possible for him to deal 
 quickly and effectively with special situations as they arise. 
 
 JOHN QUINN, 
 
 31 Nassau Street. New York.. 
 
PART II. 
 
 Trading with the Enemy Act 
 
 Approved October 6, 1917 
 
 (Public No. 91— 65th Congress) 
 (H. R. 4960) 
 
 An Aet to define, regulate, and punish trading with the enemy, and for other 
 
 purposes. 
 
 Be it enacted by the Senate and House of Representa- 
 tives of the United States of America in Congress assem- 
 bled, That this Act shall be known as the ' 'Trading with 
 the enemy Act." 
 
 SEC. 2. That the word "enemy," as used herein, 
 shall be deemed to mean, for the purposes of such trading 
 and of this Act — 
 
 (a) Any individual, partnership, or other body of 
 individuals, of any nationality, resident within the terri- 
 tory (including that occupied by the military and naval 
 forces) of any nation with which the United States is at 
 war, or resident outside the United States and doing busi- 
 ness within such territory, and any corporation incorpo- 
 rated within such territory of any nation with which the 
 United States is at war or incorporated within any country 
 other than the United States and doing business within 
 such territory. 
 
 (b) The government of any nation with which the 
 United States is at war, or any political or municipal sub- 
 division thereof, or any officer, official, agent, or agency 
 thereof. 
 
 (c) Such other individuals, or body or class of indi- 
 viduals, as may be natives, citizens, or subjects of any 
 nation with which the United States is at war, other than 
 citizens of the United States, wherever resident or wher- 
 ever doing business, as the President, if he shall find the 
 safety of the United States or the successful prosecution 
 of the war shall so require, may, by proclamation, include 
 within the term "enemy." 
 
The words "ally of enemy, M as used herein, shall be 
 deemed to mean — 
 
 (a) Any individual, partnership, or other body of 
 individuals, of any nationality, resident within the terri- 
 tory (including that occupied by the military and naval 
 forces) of any nation which is an ally of a nation with 
 which the United States is at war, or resident outside the 
 United States and doing business within such territory, 
 and any corporation incorporated within such territory of 
 such ally nation, or incorporated within any country 
 other than the United States and doing business within 
 such territory. 
 
 (b) The government of any nation which is an ally 
 of a nation with which the United States is at war, or any 
 political or municipal subdivision of such ally nation, or 
 any officer, official, agent, or agency thereof. 
 
 (c) Such other individuals, or body or class of indi- 
 viduals, as may be natives, citizens, or subjects of any 
 nation which is an ally of a nation with which the United 
 States is at war, other than citizens of the United States, 
 wherever resident or wherever doing business, as the 
 President, if he shall find the safety of the United States 
 or the successful prosecution of the war shall so require, 
 may, by proclamation, include within the term "ally of 
 enemy.' ' 
 
 The word "person," as used herein, shall be deemed 
 to mean an individual, partnership, association, company, 
 or other unincorporated body of individuals, or corporation 
 or body politic. 
 
 The words "United States," as used herein, shall be 
 deemed to mean all land and water, continental or insular, 
 in any way within the jurisdiction of the United States or 
 occupied by the military or naval forces thereof. 
 
 The words "the beginning of the war," as used herein, 
 shall be deemed to mean midnight ending the day on 
 which Congress has declared or shall declare war or the 
 existence of a state of war.* 
 
 ♦April 6th, 1917. 
 
The words "end of the war," as used herein, shall be 
 deemed to mean the date of proclamation of exchange of 
 ratifications of the treaty of peace, unless the President 
 shall, by proclamation, declare a prior date, in which case 
 the date so proclaimed shall be deemed to be the "end of 
 the war" within the meaning of this Act. 
 
 The words "bank or banks," as used herein, shall be 
 deemed to mean and include national banks, State banks, 
 trust companies, or other banks or banking associations' 
 doing business under the laws of the United States, or of 
 any State of the United States. 
 
 The words "to trade," as used herein, shall be deemed 
 to mean — 
 
 (a) Pay, satisfy, compromise, or give security for 
 the payment or satisfaction of any debt or obligation. 
 
 (b) Draw, accept, pay, present for acceptance or 
 payment, or indorse any negotiable instrument or chose in 
 action. 
 
 (c) Enter into, carry on, complete, or perform any 
 contract, agreement, or obligation. 
 
 (d) Buy or sell, loan or extend credit, trade in, deal 
 with, exchange, transmit, transfer, assign, or otherwise 
 dispose of, or receive any form of property. 
 
 (e) To have any form of business or commercial 
 communication or intercourse with. 
 
 SEC. 3. That it shall be unlawful— 
 
 (a) For any person in the United States, except 
 with the license of the President, granted to such person, 
 or to the enemy, or ally of enemy, as provided in this Act, 
 to trade, or attempt to trade, either directly or indirectly, 
 with, to, or from, or for, or on account of, or on behalf of, 
 or for the benefit of, any other person, with knowledge or 
 reasonable cause to believe that such other person is an 
 enemy or ally of enemy, or is conducting or taking part in 
 such trade, directly or indirectly, for, or on account of, or 
 on behalf of, or for the benefit of, an enemy or ally of 
 enemy. 
 
 (b) For any person, except with the license of the 
 President, to transport or attempt to transport into or 
 
 10 
 
from the United States, or for any owner, master, or other 
 person in charge of a vessel of American registry to trans- 
 port or attempt to transport from any place to any other 
 place, any subject or citizen of an enemy or ally of enemy 
 nation, with knowledge or reasonable cause to believe 
 that the person transported or attempted to be trans- 
 ported is such subject or citizen. 
 
 (c) For any person (other than a person in the serv- 
 ice of the United States Government or of the Govern- 
 ment of any nation, except that of an enemy or ally of 
 enemy nation, and other than such persons or classes of 
 persons as may be exempted hereunder by the President 
 or by such person as he may direct), to send, or take out 
 of, or bring into, or attempt to send, or take out of, or 
 bring into the United States, any letter or other writing 
 or tangible form of communication, except in the regular 
 course of the mail ; and it shall be unlawful for any person 
 to send, take, or transmit, or attempt to send, take, or 
 transmit out of the United States, any letter or other 
 writing, book, map, plan, or other paper, picture, or any 
 telegram, cablegram, or wireless message, or other form 
 of communication intended for or to be delivered, directly 
 or indirectly, to an enemy or ally of enemy: Provided, 
 however, That any person may send, take, or transmit out 
 of the United States anything herein forbidden if he shall 
 first submit the same to the President, or to such officer 
 as the President may direct, and shall obtain the license 
 or consent of the President, under such rules and regula- 
 tions, and with such exemptions, as shall be prescribed by 
 the President. 
 
 (d) Whenever, during the present war, the President 
 shall deem that the public safety demands it, he may 
 cause to be censored under such rules and regulations as 
 he may from time to time establish, communications by 
 mail, cable, radio, or other means of transmission passing 
 between the United States and any foreign country he 
 may from time to time specify, or which may be carried by 
 any vessel or other means of transportation touching at 
 any port, place, or territory of the United States and 
 bound to or from any foreign country. Any person who 
 
 11 
 
willfully evades or attempts to evade the submission of 
 any such communication to such censorship or willfully 
 uses or attempts to use any code or other device for the 
 purpose of concealing from such censorship the intended 
 meaning of such communication shall be punished as 
 provided in section sixteen of this Act. 
 
 SEC. 4. (a) Every enemy or ally of enemy insurance 
 or reinsurance company, and every enemy or ally of 
 enemy, doing business within the United States through 
 an agency or branch office, or otherwise, may, within 
 thirty days after the passage of this Act, apply to the 
 President for a license to continue to do business; and, 
 within thirty days after such application, the President 
 may enter an order either granting or refusing to grant 
 such license. The license, if granted, may be temporary 
 or otherwise, and for such period of time, and may contain 
 such provisions and conditions regulating the business, 
 agencies, managers and trustees and the control and dis- 
 position of the funds of the company, or of such enemy or 
 ally of enemy, as the President shall deem necessary for 
 the safety of the United States; and any license granted 
 hereunder may be revoked or regranted or renewed in such 
 manner and at such times as the President shall determine: 
 Provided, however, That reasonable notice of his intent to 
 refuse to grant a license or to revoke a license granted to 
 any reinsurance company shall be given by him to all in- 
 surance companies incorporated within the United States 
 and known to the President to be doing business with such 
 reinsurance company: Provided further, That no insur- 
 ance company, organized within the United States, shall 
 be obligated to continue any existing contract, entered 
 into prior to the beginning of the war, with any enemy or 
 ally of enemy insurance or reinsurance company, but any 
 such company may abrogate and cancel any such contract 
 by serving thirty days' notice in writing upon the Presi- 
 dent of its election to abrogate such contract. 
 
 For a period of thirty days after the passage of this 
 Act, and further pending the entry of such order by the 
 President, after application made by any enemy or ally of 
 
 12 
 
enemy insurance or reinsurance company, within such 
 thirty days as above provided, the provisions of the 
 President's proclamation of April sixth, nineteen hundred 
 and seventeen, relative to agencies in the United States of 
 certain insurance companies, as modified by the provisions 
 of the President's proclamation of July thirteenth, nine- 
 teen hundred and seventeen, relative to marine and war- 
 risk insurance, shall remain in full force and effect so far 
 as it applies to such German insurance companies, and the 
 conditions of said proclamation of April sixth, nineteen 
 hundred and seventeen, as modified by said proclamation 
 of July thirteenth, nineteen hundred and seventeen, shall 
 also during said period of thirty days after the passage of 
 this Act, and pending the order of the President as herein 
 provided, apply to any enemy or ally of enemy insurance 
 or reinsurance company, anything in this Act to the con- 
 trary notwithstanding. It shall be unlawful for any en- 
 emy or ally of enemy insurance or reinsurance company, 
 to whom license is granted, to transmit out of the United 
 States any funds belonging to or held for the benefit ot 
 such company or to use any such funds as the basis for the 
 establishment directly or indirectly of any credit within or 
 outside of the United States to, or for the benefit of, or on 
 behalf of, or on account of, an enemy or ally of enemy. 
 
 For a period of thirty days after the passage of this 
 Act, and further pending the entry of such order by the 
 President, after application made within such thirty days 
 by any enemy or ally of enemy, other than an insurance 
 or reinsurance company as above provided, it shall be 
 lawful for such enemy or ally of enemy to continue to do 
 business in this country and for any person to trade with, 
 to, from, for, on account of, on behalf of or for the benefit 
 of such enemy or ally of enemy, anything in this Act to the 
 contrary notwithstanding: Provided, however, That the 
 provisions of sections three and sixteen hereof shall apply 
 to any act or to any attempted act of transmission or 
 transfer of money or other property out of the United 
 States and to the use or attempted use of such money or 
 property as the basis for the establishment of any credit 
 within or outside of -the United States to, or for the 
 
 13 
 
benefit of, or on behalf of, or on account of, an enemy or 
 ally of enemy. 
 
 If no license is applied for within thirty days after the 
 passage of this Act, or if a license shall be refused to any 
 enemy or ally of enemy, whether insurance or reinsurance 
 company, or other person, making application, or if any 
 license granted shall be revoked by the President, the 
 provisions of sections three and sixteen hereof shall forth- 
 with apply to all trade or to any attempt to trade with, to, 
 from, for, by, on account of, or on behalf of, or for the 
 benefit of such company or other person: Provided, how- 
 ever, That after such refusal or revocation, anything in 
 this Act to the contrary notwithstanding, it shall be lawful 
 for a policyholder or for an insurance company, not an 
 enemy or ally of enemy, holding insurance or having 
 effected reinsurance in or with such enemy or ally of 
 enemy insurance or reinsurance company, to receive pay- 
 ment of, and for such enemy or ally of enemy insurance or 
 reinsurance company to pay any premium, return pre- 
 mium, claim, money, security, or other property due or 
 which may become due on or in respect to such insurance 
 or reinsurance in force at the date of such refusal or 
 revocation of license ; and nothing in this Act shall vitiate 
 or nullify then existing policies or contracts of insurance 
 or reinsurance, or the conditions thereof; and any such 
 policyholder or insurance company, not an enemy or ally 
 of enemy, having any claim to or upon money or other 
 property of the enemy or ally of enemy insurance or rein- 
 surance company in the custody or control of the alien 
 property custodian, hereinafter provided for, or of the 
 Treasurer of the United States, may make application for 
 the payment thereof and may institute suit as provided in 
 section nine hereof. 
 
 (b) That, during the present war, no enemy, or 
 ally of enemy, and no partnership of which he is a 
 member or was a member at the beginning of the war, 
 shall for any purpose assume or use any name other than 
 that by which such enemy or partnership was ordinarily 
 known at the beginning of the war, except under license 
 from the President. 
 
 14 
 
Whenever, during the present war, in the opinion of 
 the President the public safety or public interest requires 
 the President may prohibit any or all foreign insurance 
 companies from doing business in the United States, or 
 the President may license such company or companies to 
 do business upon such terms as he may deem proper. 
 
 SEC. 5. (a) That the President, if he shall find it 
 compatible with the safety of the United States and with 
 the successful prosecution of the war, may, by proclama- 
 tion, suspend the provisions of this Act so far as they apply 
 to an ally of enemy, and he may revoke or renew such 
 suspension from time to time; and the President may 
 grant licenses, special or general, temporary or otherwise, 
 and for such period of time and containing such provisions 
 and conditions as he shall prescribe, to any person or 
 class of persons to do business as provided in subsection 
 (a) of section four hereof, and to perform any act made 
 unlawful without such license in section three hereof, and 
 to file and prosecute applications under subsection (b) 
 of section ten hereof; and he may revoke or renew 
 such licenses from time to time, if he shall be of opinion 
 that such grant or revocation or renewal shall be com- 
 patible with the safety of the United States and with the 
 successful prosecution of the war; and he may make such 
 rules and regulations, not inconsistent with law, as may 
 be necessary and proper to carry out the provisions of 
 this Act; and the President may exercise any power or 
 authority conferred by this Act through such officer or 
 officers as he shall direct. 
 
 If the President shall have reasonable cause to be- 
 lieve that any act is about to be performed in violation of 
 section three hereof he shall have authority to order the 
 postponement of the performance of such act for a period 
 not exceeding ninety days, pending investigation of the 
 facts by him. 
 
 (b) That the President may investigate, regulate, 
 or prohibit, under such rules and regulations as he may 
 prescribe, by means of licenses or otherwise, any transac- 
 tions in foreign exchange, export or ear-markings of gold 
 
 15 
 
or silver coin or bullion or currency, transfers of credit in 
 any form (other than credits relating solely to transactions 
 to be executed wholly within the United States), and 
 transfers of evidences of indebtedness or of the ownership 
 of property between the United States and any foreign 
 country, whether enemy, ally of enemy or otherwise, or 
 between residents of one or more foreign countries, by any 
 person within the United States; and he may require any 
 such person engaged in any such transaction to furnish, 
 under oath, complete information relative thereto, in- 
 cluding the production of any books of account, con- 
 tracts, letters or other papers, in connection therewith in 
 the custody or control of such person, either before or 
 after such transaction is completed. 
 
 SEC. 6. That the President is authorized to appoint, 
 prescribe the duties of, and fix the salary (not to exceed 
 $5,000 per annum) of an official to be known as the alien 
 property custodian, who shall be empowered to receive all 
 money and property in the United States due or belonging 
 to an enemy, or ally of enemy, which may be paid, con- 
 veyed, transferred, assigned, or delivered to said cus- 
 todian under the provisions of this Act; and to hold, 
 administer, and account for the same under the general 
 direction of the President and as provided in this Act. 
 The alien property custodian shall give such bond or 
 bonds, and in such form and amount, and with such 
 security as the President shall prescribe. The President 
 may further employ in the District of Columbia and else- 
 where and fix the compensation of such clerks, attorneys, 
 investigators, accountants, and other employees as he 
 may find necessary for the due administration of the pro- 
 visions of this Act: Provided, That such clerks, investiga- 
 tors, accountants, and other employees shall be appointed 
 from lists of eligibles to be supplied by the Civil Service 
 Commission and in accordance with the civil-service law: 
 Provided further, That the President shall cause a detailed 
 report to be made to Congress on the first day of January 
 of each year of all proceedings had under this Act during 
 the year preceding. Such report shall contain a list of all 
 persons appointed or employed, with the salary or com- 
 
 16 
 
pensation paid to each, and a statement of the different 
 kinds of property taken into custody and the disposition 
 made thereof. 
 
 SEC. 7. (a) That every corporation incorporated 
 within the United States, and every unincorporated asso- 
 ciation, or company, or trustee, or trustees within the 
 United States, issuing shares or certificates representing 
 beneficial interests, shall, under such rules and regulations 
 as the President may prescribe and, within sixty days 
 after the passage of this Act, and at such other times 
 thereafter as the President may require, transmit to the 
 alien property custodian a full list, duly sworn to, of every 
 officer, director, or stockholder known to be, or whom the 
 representative of such corporation, association, company, 
 or trustee has reasonable cause to believe to be an enemy 
 or ally of enemy resident within the territory, or a subject 
 or citizen residing outside of the United States, of any 
 nation with which the United States is at war, or resident 
 within the territory, or a subject or citizen residing outside 
 of the United States, of any ally of any nation with which 
 the United States is at war, together with the amount of 
 stock or shares owned by each such officer, director, or 
 stockholder, or in which he has any interest. 
 
 The President may also require a similar list to be 
 transmitted of all stock or shares owned on February third, 
 nineteen hundred and seventeen, by any person now de- 
 fined as an enemy or ally of enemy, or in which any such 
 person had any interest; and he may also require a list to 
 be transmitted of all cases in which said corporation, 
 association, company, or trustee has reasonable cause to 
 believe that the stock or shares on February third, nine- 
 teen hundred and seventeen, were owned or are owned by 
 such enemy or ally of enemy, though standing on the 
 books in the name of another: Provided, however, That 
 the name of any such officer, director, or stockholder shall 
 be stricken permanently or temporarily from such list by 
 the alien property custodian when he shall be satisfied 
 that he is not such enemy or ally of enemy. 
 
 Any person in the United States who holds or has or 
 shall hold or have custody or control of any property 
 
 17 
 
beneficial or otherwise, alone or jointly with others, of, for, 
 or on behalf of an enemy or ally of enemy, or of any person 
 whom he may have reasonable cause to believe to be an 
 enemy or ally of enemy and any person in the United 
 States who is or shall be indebted in any way to an enemy 
 or ally of enemy, or to any person whom he may have 
 reasonable cause to believe to be an enemy or ally of 
 enemy, shall, with such exceptions and under such rules 
 and regulations as the President shall prescribe, and 
 within thirty days after the passage of this Act, or within 
 thirty days after such property shall come within his 
 custody or control, or after such debt shall become due, 
 report the fact to the alien-property custodian by written 
 statement under oath, containing such particulars as said 
 custodian shall require. The President may also require a 
 similar report of all property so held, of, for, or on behalf 
 of, and of all debts so owed to, any person now defined as 
 an enemy or ally of enemy, on February third, nineteen 
 hundred and seventeen: Provided, That the name of any 
 person shall be stricken from the said report by the alien- 
 property custodian, either temporarily or permanently, 
 when he shall be satisfied that such person is not an enemy 
 or ally of enemy. 
 
 The President may extend the time for filing the lists 
 or reports required by this section for an additional period 
 not exceeding ninety days. 
 
 (b) Nothing in this Act contained shall render valid 
 or legal, or be construed to recognize as valid or legal, any 
 act or transaction constituting trade with, to, from, for 
 or on account of, or on behalf or for the benefit of an enemy 
 performed or engaged in since the beginning of the war 
 and prior to the passage of this Act, or any such act or 
 transaction hereafter performed or engaged in except as 
 authorized hereunder, which would otherwise have been 
 or be void, illegal, or invalid at law. No conveyance, 
 transfer, delivery, payment, or loan of money or other 
 property, in violation of section three hereof, made after 
 the passage of this Act and not under license as herein 
 provided shall confer or create any right or remedy in re- 
 spect thereof; and no person shall by virtue of any assign- 
 
 18 
 
ment, indorsement, or delivery to him of any debt, bill, 
 note, or other obligation or chose in action by, from, or on 
 behalf of, or on account of, or for the benefit of an enemy 
 or ally of enemy have any right or remedy against the 
 debtor, obligor, or other person liable to pay, fulfill, or 
 perform the same unless said assignment, indorsement, or 
 delivery was made prior to the beginning of the war or 
 shall be made under license as herein provided, or unless, 
 if made after the beginning of the war and prior to the date 
 of passage of this Act, the person to whom the same was 
 made shall prove lack of knowledge and of reasonable 
 cause to believe on his part that the same was made by, 
 from or on behalf of, or on account of, or for the benefit 
 of an enemy or ally of enemy; and any person who know- 
 ingly pays, discharges, or satisfies any such debt, note, 
 bill, or other obligation or chose in action shall, on con- 
 viction thereof, be deemed to violate section three hereof: 
 Provided, That nothing in this Act contained shall prevent 
 the carrying out, completion, or performance of any con- 
 tract, agreement, or obligation originally made with or 
 entered into by an enemy or ally of enemy where, prior to 
 the beginning of the war and not in contemplation thereof, 
 the interest of such enemy or ally of enemy devolved by 
 assignment or otherwise upon a person not an enemy or 
 ally of enemy, and no enemy or ally of enemy will be 
 benefited by such carrying out, completion, or perform- 
 ance otherwise than by release from obligation thereunder. 
 
 Nothing in this Act shall be deemed to prevent pay- 
 ment of money belonging or owing to an enemy or ally of 
 enemy to a person within the United States, not an enemy 
 or ally of enemy, for the benefit of such person or of any 
 other person within the United States, not an enemy or 
 ally of enemy, if the funds so paid shall have been received 
 prior to the beginning of the war and such payments arise 
 out of transactions entered into prior to the beginning of 
 the war, and not in contemplation thereof: Provided, 
 That such payment shall not be made without the license 
 of the President, general or special, as provided in this Act. 
 
 Nothing in this Act shall be deemed to authorize the 
 prosecution of any suit or action at law or in equity in any 
 
 19 
 
court within the United States by an enemy or ally of 
 enemy prior to the end of the war, except as provided in 
 section ten hereof: Provided, however, That an enemy or 
 ally of enemy licensed to do business under this Act may 
 prosecute and maintain any such suit or action so far as 
 the same arises solely out of the business transacted 
 within the United States under such license and so long as 
 such license remains in full force and effect: And, provided 
 further, That an enemy or ally of enemy may defend by 
 counsel any suit in equity or action at law which may be 
 brought against him. 
 
 Receipt of notice from the President to the effect 
 that he has reasonable ground to believe that any person 
 is an enemy or ally of enemy shall be prima facie defense 
 to any one receiving the same, in any suit or action at law 
 or in equity brought or maintained, or to any right or 
 set-off or recoupment asserted by, such person and based 
 on failure to complete or perform since the beginning of 
 the war any contract or other obligation. In any prose- 
 cution under section sixteen hereof, proof of receipt of 
 notice from the President to the effect that he has reason- 
 able cause to believe that any person is an enemy or ally 
 of enemy shall be prima facie evidence that the person 
 receiving such notice has reasonable cause to believe such 
 other person to be an enemy or ally of enemy within the 
 meaning of section three hereof. 
 
 (c) If the President shall so require, any money or 
 other property owing or belonging to, or held for, by, on 
 account of, or on behalf of, or for the benefit of an enemy 
 or ally of enemy not holding a license granted by the 
 President hereunder, which the President after investiga- 
 tion shall determine is so owing or so belongs or is so held, 
 shall be conveyed, transferred, assigned, delivered, or paid 
 over to the alien property custodian. 
 
 (d) If not required to pay, convey, transfer, assign, 
 or deliver under the provisions of subsection (c) hereof, 
 any person not an enemy or ally of enemy who owes to, or 
 holds for, or on account of, or on behalf of, or for the 
 benefit of an enemy or of an ally of enemy not holding a 
 license granted by the President hereunder, any money or 
 
 20 
 
other property, or to whom any obligation or form of 
 liability to such enemy or ally of enemy is presented for 
 payment, may, at his option, with the consent of the 
 President, pay, convey, transfer, assign, or deliver to the 
 alien property custodian said money or other property 
 under such rules and regulations as the President shall 
 prescribe. 
 
 (e) No person shall be held liable in any court for or 
 in respect to anything done or omitted in pursuance of any 
 order, rule, or regulation made by the President under the 
 authority of this Act. 
 
 Any payment, conveyance, transfer, assignment, or 
 delivery of money or property made to the alien property 
 custodian hereunder shall be a full acquittance and dis- 
 charge for all purposes of the obligation of the person 
 making the same to the extent of same. The alien prop- 
 erty custodian and such other persons as the President 
 may appoint shall have power to execute, acknowledge, 
 and deliver any such instrument or instruments as may be 
 necessary or proper to evidence upon the record or other- 
 wise such acquittance and discharge and shall, in case of 
 payment to the alien property custodian of any debt or 
 obligation owed to an enemy or ally of enemy, deliver up 
 any notes, bonds, or other evidences of indebtedness or 
 obligation, or any security therefor in which such enemy 
 or ally of enemy had any right or interest that may have 
 come into the possession of the alien property custodian, 
 with like effect as if he or they, respectively, were duly 
 appointed by the enemy or ally of enemy, creditor, or 
 obligee. The President shall issue to every person so 
 appointed a certificate of the appointment and authority 
 of such person, and such certificate shall be received in 
 evidence in all courts within the United States. When- 
 ever any such certificate of authority shall be offered to 
 any registrar, clerk, or other recording officer, Federal or 
 otherwise, within the United States, such officer shall 
 record the same in like manner as a power of attorney, and 
 such record or a duly certified copy thereof shall be re- 
 ceived in evidence in all courts of the United States or 
 other courts within the United States. 
 
 21 
 
SEC. 8. (a) That any person not an enemy or ally 
 of enemy holding a lawful mortgage, pledge, or lien, or 
 other right in the nature of security in property of an 
 enemy or ally of enemy which, by law or by the terms of 
 the instrument creating such mortgage, pledge, or lien, 
 or right, may be disposed of on notice or presentation or 
 demand, and any person not an enemy or ally of enemy 
 who is a party to any lawful contract with an enemy or 
 ally of enemy, the terms of which provide for a termination 
 thereof upon notice or for acceleration of maturity on 
 presentation or demand, may continue to hold said prop- 
 erty, and, after default, may dispose of the property in 
 accordance with law or may terminate or mature such 
 contract by notice or presentation or demand served or 
 made on the alien property custodian in accordance with 
 the law and the terms of such instrument or contract 
 and under such rules and regulations as the President 
 shall prescribe; and such notice and such presentation 
 and demand shall have, in all respects, the same force 
 and effect as if duly served or made upon the enemy or 
 ally of enemy personally: Provided, That no such rule or 
 regulation shall require that notice or presentation or 
 demand shall be served or made in any case in which, by 
 law or by the terms of said instrument or contract, no 
 notice, presentation, or demand was, prior to the passage 
 of this Act, required ; and that in case where, by law or by 
 the terms of such instrument or contract, notice is re- 
 quired, no longer period of notice shall be required: 
 Provided further, That if, on any such disposition of prop- 
 erty, a surplus shall remain after the satisfaction of the 
 mortgage, pledge, lien, or other right in the nature of 
 security, notice of that fact shall be given to the President 
 pursuant to such rules and regulations as he may pre- 
 scribe, and such surplus shall be held subject to his further 
 order. 
 
 (b) That any contract entered into prior to the be- 
 ginning of the war between any citizen of the United 
 States or any corporation organized within the United 
 States, and an enemy or ally of an enemy, the terms of 
 which provide for the delivery, during or after any war in 
 
 22 
 
which a present enemy or ally of enemy nation has been 
 or is now engaged, of anything produced, mined, or manu- 
 factured in the United States, may be abrogated by such 
 citizen or corporation by serving thirty days' notice in 
 writing upon the alien property custodian of his or its 
 election to abrogate such contract. 
 
 (c) The running of any statute of limitations shall 
 be suspended with reference to the rights or remedies on 
 any contract or obligation entered into prior to the be- 
 ginning of the war between parties neither of whom is an 
 enemy or ally of enemy, and containing any promise to 
 pay or liability for payment which is evidenced by drafts 
 or other commercial paper drawn against or secured by 
 funds or other property situated in an enemy or ally of 
 enemy country, and no suit shall be maintained on any 
 such contract or obligation in any court within the United 
 States until after the end of the war, or until the said funds 
 or property shall be released for the payment or satisfac- 
 tion of such contract or obligation: Provided, however, 
 That nothing herein contained shall be construed to 
 prevent the suspension of the running of the statute of 
 limitations in all other cases where such suspension would 
 occur under existing law. 
 
 SEC. 9. That any person, not an enemy, or ally of 
 enemy, claiming any interest, right, or title in any money 
 or other property which may have been conveyed, trans- 
 ferred, assigned, delivered, or paid to the alien property 
 custodian hereunder, and held by him or by the Treasurer 
 of the United States, or to whom any debt may be owing 
 from an enemy, or ally of enemy, whose property or any 
 part thereof shall have been conveyed, transferred, as- 
 signed, delivered, or paid to the alien property custodian 
 hereunder, and held by him or by the Treasurer of the 
 United States, may file with the said custodian a notice of 
 his claim under oath and in such form and containing such 
 particulars as the said custodian shall require; and the 
 President, if application is made therefor by the claimant, 
 may, with the assent of the owner of said property and of 
 all persons claiming any right, title, or interest therein, 
 order the payment, conveyance, transfer, assignment or 
 
 23 
 
delivery to said claimant of the money or other property 
 so held by the alien property custodian or by the Treas- 
 urer of the United States or of the interest therein to 
 which the President shall determine said claimant is 
 entitled: Provided, That no such order by the President 
 shall bar any person from the prosecution of any suit at 
 law or in equity against the claimant to establish any 
 right, title or interest which he may have in such money 
 or other property. If the President shall not so order 
 within sixty days after the filing of such application, or if 
 the claimant shall have filed the notice as above required 
 and shall have made no application to the President, said 
 claimant may, at any time before the expiration of six 
 months after the end of the war, institute a suit in equity 
 in the district court of the United States for the district in 
 which such claimant resides, or, if a corporation, where it 
 has its principal place of business (to which suit the alien 
 property custodian or the Treasurer of the United States, 
 as the case may be, shall be made a party defendant), to 
 establish the interest, right, title, or debt so claimed, and 
 if suit shall be so instituted then the money or other 
 property of the enemy, or ally of enemy, against whom 
 such interest, right, or title is asserted, or debt claimed, 
 shall be retained in the custody of the alien property 
 custodian, or in the Treasury of the United States, as 
 provided in this Act, and until any final judgment or 
 decree which shall be entered in favor of the claimant shall 
 be fully satisfied by payment or conveyance, transfer, 
 assignment, or delivery by the defendant or by the alien 
 property custodian or Treasurer of the United States on 
 order of the court, or until final judgment or decree 
 shall be entered against the claimant, or suit otherwise 
 terminated. 
 
 Except as herein provided, the money or other prop- 
 erty conveyed, transferred, assigned, delivered, or paid to 
 the alien property custodian shall not be liable to lien, 
 attachment, garnishment, trustee process, or execution, 
 or subject to any order or decree of any court. 
 
 This section shall not apply, however, to money paid 
 to the alien property custodian under section ten hereof. 
 
 24 
 
SEC. 10. That nothing contained in this Act shall be 
 held to make unlawful any of the following Acts: 
 
 (a) An enemy, or ally or enemy, may file and prose- 
 cute in the United States an application for letters patent, 
 or for registration of trade-mark, print, label, or copy- 
 right, and may pay any fees therefor in accordance with 
 and as required by the provisions of existing law and fees 
 for attorneys or agents for filing and prosecuting such 
 applications. Any such enemy, or ally of enemy, who is 
 unable during war, or within six months thereafter, on 
 account of conditions arising out of war, to file any such 
 application, or to pay any official fee, or to take any action 
 required by law within the period prescribed by law, may 
 be granted an extension of nine months beyond the ex- 
 piration of said period, provided the nation of which the 
 said applicant is a citizen, subject, or corporation shall 
 extend substantially similar privileges to citizens and 
 corporations of the United States. 
 
 (b) Any citizen of the United States, or any cor- 
 poration organized within the United States, may, when 
 duly authorized by the President, pay to an enemy or ally 
 of enemy any tax, annuity, or fee which may be required 
 by the laws of such enemy or ally of enemy nation in 
 relation to patents and trade-marks, prints, labels, and 
 copyrights; and any such citizen or corporation may file 
 and prosecute an application for letters patent or for 
 registration of trade-mark, print, label, or copyright in 
 the country of an enemy, or of an ally of enemy after first 
 submitting such application to the President and receiving 
 license so to file and prosecute, and to pay the fees re- 
 quired by law and customary agents' fees, the maximum 
 amount of which in each case shall be subject to the con- 
 trol of the President. 
 
 (c) Any citizen of the United States or any corpora- 
 tion organized within the United States desiring to manu- 
 facture, or cause to be manufactured, a machine, manu- 
 facture, composition of matter, or design, or to carry on, 
 or cause to be carried on, a process under any patent or to 
 use any trade-mark, print, label, or copyrighted matter 
 owned or controlled by an enemy or ally of enemy at any 
 
 25 
 
time during the existence of a state of war may apply to 
 the President for a license; and the President is hereby 
 authorized to grant such a license, nonexclusive or ex- 
 clusive as he shall deem best, provided he shall be of the 
 opinion that such grant is for the public welfare, and that 
 the applicant is able and intends in good faith to manu- 
 facture, or cause to be manufactured, the machine, manu- 
 facture, composition of matter, or design, or to carry on, 
 or cause to be carried on, the process or to use the trade- 
 mark, print, label, or copyrighted matter. The President 
 may prescribe the conditions of this license, including the 
 fixing of prices of articles and products necessary to the 
 health of the military and naval forces of the United 
 States or the successful prosecution of the war, and the 
 rules and regulations under which such license may be 
 granted and the fee which shall be charged therefor, not 
 exceeding $100, and not exceeding one per centum of the 
 fund deposited as hereinafter provided. Such license 
 shall be a complete defense to any suit at law or in equity 
 instituted by the enemy or ally of enemy owners of the 
 letters patent, trade-mark, print, label or copyright, or 
 otherwise, against the licensee for infringement or for dam- 
 ages, royalty, or other money award on account of any- 
 thing done by the licensee under such license, except as 
 provided in subsection (f) hereof. 
 
 (d) The licensee shall file with the President a full 
 statement of the extent of the use and enjoyment of the 
 license, and of the prices received in such form and at such 
 stated periods (at least annually) as the President may 
 prescribe ; and the licensee shall pay at such times as may 
 be required to the alien property custodian not to exceed 
 five per centum of the gross sums received by the licensee 
 from the sale of said inventions or use of the trade-mark, 
 print, label or copyrighted matter, or, if the President shall 
 so order, five per centum of the value of the use of such 
 inventions, trade-marks, prints, labels or copyrighted 
 matter to the licensee as established by the President; 
 and sums so paid shall be deposited by said alien property 
 custodian forthwith in the Treasury of the United States 
 as a trust fund for the said licensee and for the owner of 
 
 26 
 
the said patent, trade-mark, print, label or copyright 
 registration as hereinafter provided, to be paid from the 
 Treasury upon order of the court, as provided in subdivi- 
 sion (f) of this section, or upon the direction of the alien 
 property custodian. 
 
 (e) Unless surrendered or terminated as provided in 
 this Act, any license granted hereunder shall continue dur- 
 ing the term fixed in the license or in the absence of any 
 such limitation during the term of the patent, trade-mark, 
 print, label, or copyright registration under which it is 
 granted. Upon violation by the licensee of any of the 
 provisions of this Act, or of the conditions of the license, 
 the President may, after due notice and hearing, cancel 
 any license granted by him. 
 
 (f) The owner of any patent, trade-mark, print, 
 label, or copyright under which a license is granted here- 
 under may, after the end of the war and until the expira- 
 tion of one year thereafter, file a bill in equity against the 
 licensee in the district court of the United States for the 
 district in which the said licensee resides, or, if a corpora- 
 tion, in which it has its principal place of business (to 
 which suit the Treasurer of the United States shall be 
 made a party), for recovery from the said licensee for all 
 use and enjoyment of the said patented invention, trade- 
 mark, print, label, or copyrighted matter: Provided, 
 however, That whenever suit is brought, as above, notice 
 shall be filed with the alien property custodian within 
 thirty days after date of entry of suit: Provided further, 
 That the licensee may make any and all defenses which 
 would be available were no license granted. The court 
 on due proceedings had may adjudge and decree to the 
 said owner payment of a reasonable royalty. The 
 amount of said judgment and decree, when final, shall be 
 paid on order of the court to the owner of the patent from 
 the fund deposited by the licensee, so far as such deposit 
 will satisfy said judgment and decree; and the said pay- 
 ment shall be in full or partial satisfaction of said judg- 
 ment and decree, as the facts may appear; and if, after 
 payment of all such judgments and decrees, there shall 
 remain any balance of said deposit, such balance shall be 
 
 27 
 
repaid to the licensee on order of the alien property custo- 
 dian. If no suit is brought within one year after the end 
 of the war, or no notice is filed as above required, then the 
 licensee shall not be liable to make any further deposits, 
 and all funds deposited by him shall be repaid to him on 
 order of the alien property custodian. Upon entry of 
 suit and notice filed as above required, or upon repayment 
 of funds as above provided, the liability of the licensee to 
 make further reports to the President shall cease. 
 
 If suit is brought as above provided, the court may, 
 at any time, terminate the license, and may, in such event, 
 issue an injunction to restrain the licensee from infringe- 
 ment thereafter, or the court, in case the licensee, prior to 
 suit, shall have made investment of capital based on 
 possession of the license, may continue the license for such 
 period and upon such terms and with such royalties as it 
 shall find to be just and reasonable. 
 
 (g) Any enemy, or ally of enemy, may institute and 
 prosecute suits in equity against any person other than a 
 licensee under this Act to enjoin infringement of letters 
 patent, trade-mark, print, label, and copyrights in the 
 United States owned or controlled by said enemy or ally 
 of enemy, in the same manner and to the extent that he 
 would be entitled so to do if the United States was not at 
 war: Provided, That no final judgment or decree shall be 
 entered in favor of such enemy or ally of enemy by any 
 court except after thirty days' notice to the alien property 
 custodian, such notice shall be in writing and shall be 
 served in the same manner as civil process of Federal 
 courts. 
 
 (h) All powers of attorney heretofore or hereafter 
 granted by an enemy or ally of enemy to any person 
 within the United States, in so far as they may be requisite 
 to the performance of acts authorized in subsections (a) 
 and (g) of this section shall be valid. 
 
 (i) Whenever the publication of an invention by the 
 granting of a patent may, in the opinion of the President, 
 be detrimental to the public safety or defense, or may 
 assist the enemy or endanger the successful prosecution 
 of the war, he may order that the invention be kept secret 
 
 28 
 
and withhold the grant of a patent until the end of the 
 war: Provided, That the invention disclosed in the appli- 
 cation for said patent may be held abandoned upon it 
 being established before or by the Commissioner of 
 Patents that, in violation of said order, said invention has 
 been published or that an application for a patent therefor 
 has been filed in any other country, by the inventor or his 
 assigns or legal representatives, without the consent or 
 approval of the commissioner or under a license of the 
 President. 
 
 When an applicant whose patent is withheld as herein 
 provided and who faithfully obeys the order of the Presi- 
 dent above referred to shall tender his invention to the 
 Government of the United States for its use, he shall, if 
 he ultimately receives a patent, have the right to sue for 
 compensation in the Court of Claims, such right to com- 
 pensation to begin from the date of the use of the inven- 
 tion by the Government. 
 
 SEC. 11. Whenever during the present war the 
 President shall find that the public safety so requires and 
 shall make proclamation thereof it shall be unlawful to 
 import into the United States from any country named in 
 such proclamation any article or articles mentioned in 
 such proclamation except at such time or times, and under 
 such regulations or orders, and subject to such limitations 
 and exceptions as the President shall prescribe, until 
 otherwise ordered by the President or by Congress: 
 Provided, however, That no preference shall be given to 
 the ports of one State over those of another. 
 
 SEC. 12. That all moneys (including checks and 
 drafts payable on demand) paid to or received by the alien 
 property custodian pursuant to this Act shall be deposited 
 forthwith in the Treasury of the United States, and may 
 be invested and reinvested by the Secretary of the Treas- 
 ury in United States bonds or United States certificates of 
 indebtedness, under such rules and regulations as the 
 President shall prescribe for such deposit, investment, 
 and sale of securities ; and as soon after the end of the 
 war as the President shall deem practicable, such secu- 
 
 29 
 
rities shall be sold and the proceeds deposited in the 
 Treasury. 
 
 All other property of an enemy, or ally of enemy, 
 conveyed, transferred, assigned, delivered, or paid to the 
 alien property custodian hereunder shall be safely held 
 and administered by him except as hereinafter provided; 
 and the President is authorized to designate as a deposi- 
 tary, or depositaries, of property of an enemy or ally of 
 enemy, any bank, or banks, or trust company, or trust 
 companies, or other suitable depositary or depositaries, 
 located and doing business in the United States. The 
 alien property custodian may deposit with such designated 
 depositary or depositaries, or with the Secretary of the 
 Treasury, any stocks, bonds, notes, time drafts, time bills 
 of exchange, or other securities, or property (except 
 money or checks or drafts payable on demand which are 
 required to be deposited with the Secretary of the Treas- 
 ury) and such depositary or depositaries shall be author- 
 ized and empowered to collect any dividends or interest 
 or income that may become due and any maturing obliga- 
 tions held for the account of such custodian. Any moneys 
 collected on said account shall be paid and deposited 
 forthwith by said depositary or by the alien property 
 custodian into the Treasury of the United States as here- 
 inbefore provided. 
 
 The President shall require all such designated de- 
 positaries to execute and file bonds sufficient in his judg- 
 ment to protect property on deposit, such bonds to be 
 conditioned as he may direct. 
 
 The alien property custodian shall be 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, 
 and, acting under the supervision and direction of the 
 President, and under such rules and regulations as the 
 President shall prescribe, may manage such property and 
 do any act or things in respect thereof or make any dis- 
 position thereof or of any part thereof, by sale or other- 
 wise, and exercise any rights which may be or become 
 appurtenant thereto or to the ownership thereof, if and 
 
 30 
 
when necessary to prevent waste and protect such property 
 and to the end that the interests of the United States in 
 such property and rights or of such person as may ulti- 
 mately become entitled thereto, or to the proceeds thereof, 
 may be preserved and safeguarded. It shall be the duty of 
 every corporation incorporated within the United States 
 and every unincorporated association, or company, or 
 trustee, or trustees within the United States issuing 
 shares or certificates representing beneficial interests to 
 transfer such shares or certificates upon its, his, or their 
 books into the name of the alien property custodian upon 
 demand, accompanied by the presentation of the certifi- 
 cates which represent such shares or beneficial interests. 
 The alien property custodian shall forthwith deposit in 
 the Treasury of the United States, as hereinbefore pro- 
 vided, the proceeds of any such property or rights so sold 
 by him. 
 
 Any money or property required or authorized by the 
 provisions of this Act to be paid, conveyed, transferred, 
 assigned, or delivered to the alien property custodian 
 shall, if said custodian shall so direct by written order, be 
 paid, conveyed, transferred, assigned, or delivered to the 
 Treasurer of the United States with the same effect as if 
 to the alien property custodian. 
 
 After the end of the war any claim of any enemy or 
 of an ally of enemy to any money or other property re- 
 ceived and held by the alien property custodian or de- 
 posited in the United States Treasury, shall be settled as 
 Congress shall direct: Provided, however, That on order 
 of the President as set forth in section nine hereof, or of 
 the court, as set forth in sections nine and ten hereof, the 
 alien property custodian or the Treasurer of the United 
 States, as the case may be, shall forthwith convey, trans- 
 fer, assign, and pay to the person to whom the President 
 shall so order, or in whose behalf the court shall enter final 
 judgment or decree, any property of an enemy or ally of 
 enemy held by said custodian or by said Treasurer, so far 
 as may be necessary to comply with said order of the 
 President or said final judgment or decree of the court: 
 And provided further, That the Treasurer of the United 
 
 31 
 
States, on order of the alien property custodian shall, as 
 provided in section ten hereof, repay to the licensee any 
 funds deposited by said licensee. 
 
 SEC. 13. That, during the present war, in addition to 
 the facts required by sections forty-one hundred and 
 ninety-seven, forty-one hundred and ninety-eight, and 
 forty-two hundred of the Revised Statutes, as amended 
 by the Act of June fifteenth, nineteen hundred and seven- 
 teen,* to be set out in the master's and shipper's manifests 
 before clearance will be issued to vessels bound to foreign 
 ports, the master or person in charge of any vessel, before 
 departure of such vessel from port, shall deliver to the 
 collector of customs of the district wherein such vessel is 
 located a statement duly verified by oath that the cargo is 
 not shipped or to be delivered in violation of this act, and 
 the owners, shippers, or consignors of the cargo of such 
 vessels shall in like manner deliver to the collector like 
 statement under oath as to the cargo or the parts thereof 
 laden or shipped by them, respectively, which statement 
 shall contain also the names and addresses of the actual 
 consignees of the cargo, or if the shipment is made to a 
 bank or other broker, factor, or agent, the names and 
 addresses of the persons who are the actual consignees on 
 whose account the shipment is made. The master or 
 person in control of the vessel shall, on reaching port of 
 destination of any of the cargo, deliver a copy of the 
 manifest and of the said master's, owner's, shipper's, or 
 consignor's statement to the American consular officer of 
 the district in which the cargo is unladen. 
 
 SEC. 14. That, during the present war, whenever 
 there is reasonable cause to believe that the manifest or 
 the additional statements under oath required by the 
 preceding section are false or that any vessel, domestic or 
 foreign, is about to carry out of the United States any 
 property to or for the account or benefit of an enemy, or 
 ally of enemy, or any property or person whose export, 
 taking out, or transport will be in violation of this Act, 
 the collector of customs for the district in which such 
 
 *The Espionage Act. 
 
 32 
 
vessel is located is hereby authorized and empowered, 
 subject to review by the President, to refuse clearance to 
 any such vessel, domestic or foreign, for which clearance 
 is required by law, and by formal notice served upon the 
 owners, master, or person or persons in command or charge 
 of any domestic vessel for which clearance is not required 
 by law, to forbid the departure of such vessel from the 
 port, and it shall thereupon be unlawful for such vessel to 
 depart. The collector of customs shall, during the present 
 war, in each case report to the President the amount of 
 gold or silver coin or bullion or other moneys of the United 
 States contained in any cargo intended for export. Such 
 report shall include the names and addresses of the con- 
 signors and consignees, together with any facts known to 
 the collector with reference to such shipment and partic- 
 ularly those which may indicate that such gold or silver 
 coin or bullion or moneys of the United States may be 
 intended for delivery or may be delivered, directly or 
 indirectly, to an enemy or an ally of enemy. 
 
 SEC. 15. That the sum of $450,000 is hereby appro- 
 priated, out of any money in the Treasury of the United 
 States not otherwise appropriated, to be used in the dis- 
 cretion of the President for the purpose of carrying out the 
 provisions of this Act during the fiscal year ending June 
 thirtieth, nineteen hundred and eighteen, and for the 
 payment of salaries of all persons employed under this 
 Act, together with the necessary expenses for transporta- 
 tion, subsistence, rental of quarters in the District of 
 Columbia, books of reference, periodicals, stationery, 
 typewriters and exchanges thereof, miscellaneous supplies, 
 printing to be done at the Government Printing Office, 
 and all other necessary expenses not included in the 
 foregoing. 
 
 SEC. 16. That whoever shall willfully violate any of 
 the provisions of this Act or of any license, rule, or regu- 
 lation issued thereunder, and whoever shall willfully 
 violate, neglect, or refuse to comply with any order of the 
 President issued in compliance with the provisions of this 
 Act shall, upon conviction, be fined not more than 
 
 33 
 
$10,000, or, if a natural person, imprisoned for not more 
 than ten years, or both ; and the officer, director, or agent 
 of any corporation who knowingly participates in such 
 violation shall be punished by a like fine, imprisonment, 
 or both, and any property, funds, securities, papers, or 
 other articles or documents, or any vessel, together with 
 her tackle, apparel, furniture, and equipment, concerned 
 in such violation shall be forfeited to the United States. 
 
 SEC. 17. That the district courts of the United 
 States are hereby given jurisdiction to make and enter all 
 such rules as to notice and otherwise, and all such orders 
 and decrees, and to issue such process as may be necessary 
 and proper in the premises to enforce the provisions of 
 this Act, with a right of appeal from the final order or 
 decree of such court as provided in sections one hundred 
 and twenty-eight and two hundred and thirty-eight of the 
 Act of March third, nineteen hundred and eleven, entitled 
 "An Act to codify, revise, and amend the laws relating to 
 the judiciary." 
 
 SEC. 18. That the several courts of first instance in 
 the Philippine Islands and the district court of the Canal 
 Zone shall have jurisdiction of offenses under this Act 
 committed within their respective districts, and concur- 
 rent jurisdiction with the district courts of the United 
 States of offenses under this Act committed upon the high 
 seas and of conspiracies to commit such offenses as de- 
 fined by section thirty-seven of the Act entitled "An Act 
 to codify, revise, and amend the penal laws of the United 
 States," approved March fourth, nineteen hundred and 
 nine, and the provisions of said section for the purpose of 
 this Act are hereby extended to the Philippine Islands 
 and to the Canal Zone. 
 
 SEC. 19. That ten days after the approval of this 
 act and until the end of the war, it shall be unlawful for 
 any person, firm, corporation, or association, to print, pub- 
 lish, or circulate, or cause to be printed, published, or 
 circulated in any foreign language, any news item, editor- 
 ial, or other printed matter, respecting the Government 
 of the United States, or of any nation engaged in the 
 
 34 
 
present war, its policies, international relations, the state 
 or conduct of the war, or any matter relating thereto: 
 Provided, That this section shall not apply to any print, 
 newspaper, or publication where the publisher or distrib- 
 utor thereof, on or before offering the same for mailing, 
 or in any manner distributing it to the public, has filed 
 with the postmaster at the place of publication, in the 
 form of an affidavit, a true and complete translation of 
 the entire article containing such matter proposed to be 
 published in such print, newspaper, or publication, and 
 has caused to be printed, in plain type in the English 
 language, at the head of each such item, editorial, or other 
 matter, on each copy of such print, newspaper, or publica- 
 tion, the words "True translation filed with the post- 
 master at on (naming the postoffice where 
 
 the translation was filed, and the date of filing thereof), 
 
 as required by the Act of (here giving the date of 
 
 this Act)." 
 
 Any print, newspaper, or publication in any foreign 
 language which does not conform to the provisions of this 
 section is hereby declared to be nonmailable, and it shall 
 be unlawful for any person, firm, corporation, or associa- 
 tion, to transport, carry, or otherwise publish or distribute 
 the same, or to transport, carry, or otherwise publish or 
 distribute any matter which is made nonmailable by the 
 provisions of the Act relating to espionage, approved 
 June 15, 1917: Provided further, That upon evidence 
 satisfactory to him that any print, newspaper, or publica- 
 tion, printed in a foreign language may be printed, pub- 
 lished, and distributed free from the foregoing restrictions 
 and conditions without detriment to the United States in 
 the conduct of the present war, the President may cause 
 to be issued to the printers or publishers of such print, 
 newspaper, or publication, a permit to print, publish, and 
 circulate the issue or issues of their print, newspaper, or 
 publication, free from such restrictions and requirements, 
 such permits to be subject to revocation at his discretion. 
 And the Postmaster General shall cause copies of all such 
 permits and revocations of permits to be furnished to the 
 postmaster of the post office serving the place from which 
 
 35 
 
the print, newspaper, or publication, granted the permit is 
 to emanate. All matter printed, published and distrib- 
 uted under permits shall bear at the head thereof in plain 
 type in the English language, the words, "Published and 
 
 distributed under permit authorized by the Act of 
 
 (here giving date of this Act), on file at the post office of 
 
 , (giving name of office).' ' 
 
 Any person who shall make an affidavit containing 
 any false statement in connection with the translation 
 provided for in this section shall be guilty of the crime of 
 perjury and subject to the punishment provided therefor 
 by Section 125 of the Act of March 4, 1909, entitled 
 "An Act to codify, revise, and amend the penal laws of 
 the United States,' ' and any person, firm, corporation, or 
 association, violating any other requirement of this section 
 shall, on conviction thereof, be punished by a fine of not 
 more than five hundred dollars ($500), or by imprison- 
 ment of not more than one year, or, in the discretion of 
 the Court, may be both fined and imprisoned. 
 
 Approved: October 6, 1917. 
 
 36 
 
PART III. 
 
 Report on the Trading with the Enemy 
 
 Act 
 
 Submitted to the Senate August 15, 1917, by the Senate Committee 
 on Commerce. 
 
 (It is believed that the Senate Report, together with a memorandum 
 of American and English cases on the law of Trading with the 
 Enemy, will help to a fuller understanding of the Act, and of its 
 passage through Congress). 
 
 The Committee on Commerce, to whom was referred 
 the bill (H. R. 4960) to define, regulate, and punish trad- 
 ing with the enemy, and for other purposes, having had 
 the same under consideration, report it back with sundry 
 amendments and recommend that the bill as amended 
 do pass. ^ 
 
 Your committee devoted more than a month to 
 careful, painstaking consideration of this bill. It spent 
 several days in giving hearings to various interested 
 parties, and to representatives of several departments of 
 the Government. These hearings cover more than two 
 hundred printed pages. 
 
 A lucid report was submitted by the House Com- 
 mittee on Interstate and Foreign Commerce, and same 
 is annexed hereto and made a part hereof as Appendix 
 "A." 
 
 The purpose of this bill is to mitigate the rules of 
 law which prohibit all intercourse between the citizens 
 of warring nations, and to permit, under careful safe- 
 guards and restrictions, certain kinds of business to be 
 carried on. It also provides for the care and adminis- 
 tration of the property and property rights of enemies 
 and their allies in this country pending the war. The 
 spirit of the act is to permit such business intercourse as 
 may be beneficial to citizens of this country, under rules 
 and regulations of the Secretary of Commerce, which will 
 
 37 
 
prevent our enemies and their allies from receiving any 
 benefits therefrom until after the war closes, leaving to 
 the courts and to future action of Congress the adjust- 
 ment of rights and claims arising from such transactions. 
 Under the old rule warring nations did not respect the 
 property rights of their enemies, but a more enlightened 
 opinion prevails at the present time, and it is now thought 
 to be entirely proper to use the property of enemies 
 without confiscating it; also to allow such business as 
 fire insurance, issuance and use of patents, etc., to be carried 
 on with our enemies and their allies, provided that none 
 of the profits arising therefrom shall be sent out of this 
 country until the war ends. The general principles 
 governing the bill are so well stated by Assistant Attorney 
 General Warren, of the Department of Justice (see hear- 
 ing pp. 130 and 131), that we quote from him as follows: 
 
 Trade with the enemy is unlawful under the common law both 
 in England and the United States. (See memorandum of American 
 cases prepared by me and submitted as an appendix to my remarks.) 
 In England it has always been a common law criminal offense 
 (Regina v. Castro (1880), 5 Q. B. D., 490). In the United States, 
 so far as such trade is criminal, it must be made so by Federal legis- 
 lation, there being no common law of crimes. Such trade has a 
 civil aspect — being unlawful, the acts of all parties engaging in such 
 trade are void, or their rights and remedies are suspended during the 
 war. It has also a Federal fiscal aspect, in that the United States 
 may cause to be forfeited in the courts all property concerned in the 
 unlawful trade. (See memorandum of law hereto attached.) 
 
 The questions of what constitutes trade with the enemy and 
 what constitutes an enemy within the purview of the illegal trade 
 are settled by the decisions of the English and of the American 
 courts. These decisions constitute part of the common law of the 
 two countries. Strictly speaking, they are not founded on interna- 
 tional law. They are purely domestic decisions, founded on such 
 view of public policy as the courts of each country decide to adopt, 
 paying attention, however, to the general consensus of other coun- 
 tries as to what shall constitute a wise public policy in dealings 
 affecting outside countries. 
 
 It follows that when the legislature of a country enacts a 
 statute relative to trade with the enemy containing provisions differ- 
 ing from the law laid down by the courts, it is not violating or 
 departing from international law. It is simply expressing its views 
 as to the need of change in the domestic law of the country. Each 
 country must decide for itself what it shall regard as unlawful trade 
 
 38 
 
with the enemy, and also what persons it shall regard, for the pur- 
 poses of such trade, as enemy. 
 
 Changes in economic, commercial, financial, military, naval, 
 and political conditions may make it highly necessary that doctrines 
 as to trade with the enemy laid down by our courts a century ago 
 should be modified by the legislature either by making them more 
 stringent or less stringent, according to the needs and conditions 
 of the present day. The complexity of modern business demands 
 far greater stringency in certain directions than the old cases de- 
 cided by the courts provided for. On the other hand, the more 
 enlightened views of the present day as to treatment of enemies 
 make possible certain relaxations in the old law. 
 
 In former days, trade consisted wholly in the actual transfer 
 and transport of commodities. To-day a form of trade even more 
 helpful to the enemy consists of transfer of credits and money by 
 letter, cable, or wireless. Hence, while formerly the mere accumu- 
 lation of enemy property or funds in this country did not assist the 
 enemy materially, so long as it remained here, now with the ready 
 ease by which credits may be transferred and funds used it becomes 
 just as important to prevent an enemy from building up, using, or 
 transferring his credit or credits as from actually transferring 
 physical property. Hence much more rigid supervision or preven- 
 tion of such transactions becomes necessary. 
 
 So also, with the greater ease of intercommunication between 
 countries, it may become necessary to expand the class of persons 
 who, within the purview of unlawful trade with the enemy, shall be 
 deemed "enemy." Even under the old court decisions the term 
 "enemy" (when used in connection with trade with the enemy) was 
 not confined to citizens of the enemy nation; it applied under cer- 
 tain circumstances to neutrals and their business within the enemy 
 country, and even to our own citizens when having business or 
 property in the enemy country. For these reasons a modern 
 trading-with-the-enemy act must define the term "enemy" accord- 
 ing to the particular conditions confronting each country so legis- 
 lating, and likewise must on the same lines define the particular acts 
 which it thinks necessary to forbid as unlawful trade. It was my 
 intent in drafting this bill to make it as little restrictive of American 
 commerce and as liberal toward the enemy private person as was 
 compatible with the safety of the United States and with justice to 
 American interests. 
 
 For the general scope of the present bill (H. R. 4960), I refer to 
 a memorandum in the printed hearings before the House committee, 
 pages 24-25, and also to the testimony of Secretary Lansing, Secre- 
 tary Redfield, and myself, ibid., pages 3-16, 31-44. For previous 
 American trade with the enemy statutes and proclamations, see 
 printed hearings, pages 26, and United States v. Lane (1868), 
 8 Wall., 185. 
 
 39 
 
The present bill is less stringent, and designedly so, than the 
 present English act. And it is less stringent than the law of trade 
 with the enemy as laid down by our courts, for it provides for a 
 system of licenses by which any act or business forbidden by the 
 bill may be licensed to be done, if the Secretary of Commerce shall 
 be of opinion that it can be carried on or done with safety to the 
 United States. The provisions of this bill greatly amplify and 
 make more practical a system of license or permit which was pro- 
 vided for by the Government during the Civil War. The bill may 
 in some ways interfere with the freedom of American commerce, 
 and it may bear hardly, in places, upon individuals. By this 
 license system, however, we provide a method of relief in individual 
 cases where the relief can be extended without injury to the interests 
 of the country. But it is necessary always to bear in mind that a 
 war can not be carried on without hurting somebody, even, at 
 times, our own citizens. The public good, however, must prevail 
 over private gain. As was said in Bishop v. Jones (28 Texas, 294), 
 there can not be "a war for arms and a peace for commerce." 
 
 One of the most important features of the bill is that which 
 provides for the temporary taking over of enemy property, its 
 conservation in the hands of the alien property custodian, and its 
 investment in United States bonds. The investment feature, so 
 far as I know, is an entirely new provision, contained in no previous 
 statute, and in line with modern, lenient policies with reference to 
 private property in time of war. I call attention to Secretary 
 Redfield's characterization of this part of the bill, in the House 
 committee hearings. He said: "I do not know who was the origin- 
 ator of the idea, but whoever was has created something as fine in its 
 way as the return of the Boxer indemnity, because the enemy prop- 
 erty is all in our hands to bear its share of our expenses in fighting 
 the enemy, and yet it is safeguarded so that if it be the will of 
 Congress, under urgent conditions, it may be returned to him in- 
 tact and safeguarded by us during the whole period of the war." 
 
 The theory of the bill is that enemy property in this country 
 shall not remain in the hands of the enemy's debtor or agent here; 
 but that, if the President so directs, it shall be temporarily con- 
 scripted by the Government to finance the Government through 
 investment in its bonds, and to be paid back to the enemy or 
 otherwise disposed of at the end of the war as Congress shall direct. 
 In other words, we fight the enemy with his own property during 
 the war; but we do not permanently confiscate it. Moreover, this 
 temporary conscription of enemy property is also conservation of 
 enemy property ; for it is taken from the hands of debtors or agents, 
 as to whose solvency the enemy would otherwise have to assume the 
 risks, and invested in the safest security in the world — United 
 States bonds — or deposited in Government depositaries. 
 
 40 
 
For convenience reference is herein made to the 
 pages of the printed hearings, at which detailed expla- 
 nation may be had of the various sections of the bill. 
 
 The American judicial authorities on trading with 
 the enemy are collected in a memorandum in the Senate 
 subcommittee hearings, pages 170-175, and are published 
 herein with additions as Appendix B. The English 
 judicial authorities, collected by Assistant Attorney 
 General Warren, are published herein as Appendix C. 
 
 The bill is susceptible of division into four portions. 
 
 The first portion defines the word "enemy" and pre- 
 scribes the acts which shall be forbidden and which are 
 made criminal if performed without license. 
 
 The second portion provides for a system by which 
 any act otherwise unlawful and criminal may be licensed 
 by the Secretary of Commerce if compatible with the 
 safety of the United States and the successful prosecu- 
 tion of the war. 
 
 The third portion deals with the conservation and 
 utilization of enemy property during the war. 
 
 The fourth portion deals with the entirely separable 
 question of patents. 
 
 Taking up the sections in detail: 
 
 Section 2 prescribes the classes of persons who shall 
 be deemed within the purview of the term ' 'enemy" for 
 the purposes of trade during time of war and for the pur- 
 poses of this act. (Hearings, pp. 133-136.) 
 
 Briefly speaking, as applied to the present situation, 
 any person residing or doing business within Germany, 
 and any person residing outside the United States 
 and doing business within Germany, and any corpora- 
 tion incorporated within Germany or incorporated within 
 any country (other than the United States) and doing 
 business within Germany are termed ' 'enemy." "Doing 
 business within Germany," of course, means having 
 a branch or agency actively conducting business within 
 that country. The bill does not bring within the 
 term "enemy" a neutral, unless such neutral has a 
 branch of its business within Germany. Nor does 
 the bill term "enemy" a German residing in a neutral 
 
 41 
 
country and conducting no part of his business within 
 Germany. In this respect the bill differs from the more 
 extreme provisions of the English law, under which the 
 English "blacklist" was set up A German residing in 
 the United States is not included in any way within the 
 term "enemy" by the direct operation of the act itself. 
 The act provides, however, that a German residing or 
 doing business anywhere may, if the President shall find 
 the safety of the United States or the successful prosecu- 
 tion of the war so requires, be, by proclamation of the 
 President, included with the term "enemy." A corpora- 
 tion chartered in the United States does not come within 
 the purview of the term "enemy," even if controlled by 
 German stockholders; but such corporation may not 
 transmit dividends or profits out of the United States to 
 its German stockholders and is criminally liable, just as 
 any other citizen of the United States may be, for engag- 
 ing in an act of trade with the enemy made illegal by 
 the act. (Hearings, p. 189.) 
 
 The term "ally of enemy" is defined along similar 
 lines as the definition of the term "enemy." 
 
 Section 3 taken in connection with the definition of 
 the words "to trade" in section 2, sets forth the forms 
 of intercourse with the enemy or with the ally of enemy 
 which are made specifically criminal. It is to be noted 
 that this section does not purport and is not intended to 
 be declaratory of every form of intercourse with the 
 enemy which is unlawful at common law. The act 
 specifically provides in section 7 (b) that it shall not be 
 construed to recognize as valid any act which would 
 otherwise have been void at law, unless such act is ex- 
 pressly authorized by the statute. In other words, the 
 mere fact that section 3 fails to make any given form of 
 intercourse with the enemy criminal does not make such 
 intercourse lawful if it is unlawful under the general doc- 
 trines of law, as between private individuals and as 
 affecting their civil rights and liabilities. (Hearings, pp. 
 151-158, 184.) 
 
 Any form of trade with the enemy which is made 
 criminal by section 3 may be performed under license 
 
 42 
 
from the Secretary of Commerce granted either to the 
 person engaged in the trade or to the enemy person him- 
 self. Full provision for licenses to be issued by the Sec- 
 retary of Commerce is found in section 5. Such au- 
 thorization of trade under license constitutes relaxation 
 of the rule of international law forbidding trade with the 
 enemy. The right to license such trade, however, has 
 always been recognized, and statutory and executive 
 provisions were made for such licenses during the Civil 
 War in the United States. The present bill contains 
 much more elaborate provisions for such licenses. 
 
 Section 3 further contains provisions making it un- 
 lawful to transport Germans or their allies into or out 
 of the United States without license from the Secretary 
 of Commerce. The necessity for this provision is very 
 evident. 
 
 Section 3 also makes criminal the transmission or 
 attempted transmission out of or into the United States 
 of letters or other tangible forms of communication except 
 in the regular course of the mail, and also the transmission 
 of letters and all other forms of communication intended 
 for or to be delivered directly or indirectly to the enemy. 
 A provision, however, is made whereby persons who 
 desire to take matter out of the United States other than 
 in the regular course of the mail or who desire to send 
 letters to the enemy may accomplish their purpose, if 
 the same shall be proper, by submitting the letters, etc., 
 to the Secretary of Commerce or to such officer as the 
 President may direct and obtaining his consent. At 
 present there is no adequate law on the statute books 
 which prevents the smuggling into or out of this country 
 of mail matter outside of the regular mail service. The 
 lack of any criminal statute on this subject constitutes a 
 great source of danger to this country. (Hearings, pp. 
 190-192.) 
 
 Section 4 (a) contains elaborate provisions to cover 
 the case of branches or agencies of German corporations 
 doing business in this country — insurance, reinsurance, 
 commercial, and otherwise (and also of German ally 
 corporations). One of the purposes of this section is to 
 
 43 
 
give the United States Government full control over all 
 enemy and ally of enemy insurance or reinsurance com- 
 panies, and to safeguard the interests of American com- 
 panies which, in the past, have had business dealings 
 with them. 
 
 These transactions have been in the nature of rein- 
 surances. During the year 1916 the reinsurance pre- 
 miums written by foreign companies, with branch offices 
 in this country, amounted to $50,000,000. Of this total, 
 47 per cent went to Russian and French companies, 11 
 per cent to neutral companies, and the balance, or 42 per 
 cent, to enemy countries or their allies. 
 
 Absolute control over all such companies of enemy 
 nations (and their allies) is vested in the Secretary of 
 Commerce, who is authorized to grant or refuse to grant 
 all license applications emanating from said companies, 
 or their agents, doing business in the United States. 
 
 Section 4, in conjunction with section 9 also protects 
 and safeguards those insurance companies of the United 
 States which have existing contracts, entered into prior 
 to the war, with enemy reinsurance companies. The 
 latter, under the proposed act, may be compelled to turn 
 over to the alien-property custodian, an official created 
 by said act, all their assets in the United States. 
 
 In such cases the American companies are enabled 
 to replace their contracts elsewhere, those existing with 
 enemy countries being liquidated, upon proper proof of 
 claim, presented to the alien-property custodian, to the 
 Treasurer of the United States, to the Secretary of Com- 
 merce, or, upon suit, to the United States courts. Ameri- 
 can branches of German corporations are given 30 days 
 within which to apply for a license. If the license is 
 refused, any further doing of business in this country by 
 the German corporation will be illegal. Pending the 30 
 days within which application may be made, and further 
 pending the decision of the Secretary on the question of 
 license, insurance companies are allowed to continue to 
 do business under the present provisions of the President's 
 proclamation — that is, they may continue their ordinary 
 business, but they may not transmit any funds out of 
 
 44 
 
the country or allow any funds to be used as a basis for 
 credits. A German insurance or reinsurance company 
 may not, however, do any marine or war-risk insurance, 
 and provision is made that the Secretary of Commerce 
 shall not have power to license any such marine or war- 
 risk insurance or reinsurance. (Hearings, pp. 99-111, 
 139-144, 147.) 
 
 As to branches of business corporations pending the 
 30 days and further pending the decision of the Secretary 
 as to license, such German branches may continue to do 
 business, but they also may not transmit or transfer any 
 money or property out of the United States or use it for 
 the basis of the establishment of credits. Detailed pro- 
 visions are made to safeguard American interests in case 
 the Secretary of Commerce refuses a license to a branch 
 of a German insurance company or revokes any license 
 after he shall have granted it. (Hearings, pp. 145-146.) 
 
 Section 4 (b) provides that no enemy and no partner- 
 ship of which he was a member shall assume or use any 
 name other than that by which he or it was ordinarily 
 known at the beginning of the war, except under license 
 from the Secretary of Commerce. 
 
 Section 5 gives the President the power to suspend 
 the provisions of the act in so far as they apply to an ally 
 of enemy, if he shall find it compatible with the interests 
 of this country. The Secretary of Commerce is given 
 power to issue licenses, and by section 5 (b) is further 
 authorized to order the suspension for not more than 30 
 days of any transaction which he has reason to believe is 
 an enemy transaction, pending investigation by him. 
 (Hearings, pp. 159, 186.) 
 
 In order to prevent any conflict between the powers 
 of the Secretary of the Treasury and those of the Secre- 
 tary of Commerce relative to banks, it is provided in 
 section 5 (b) that any investigation of a bank shall be 
 made through the Secretary of the Treasury, or the 
 Federal Reserve Board, or with the concurrence of the 
 Secretary of the Treasury, and he must also concur in 
 any licenses issued relative to the export of gold or silver 
 coin or bullion. (Hearings, pp. 113-130, 194, 221.) 
 
 45 
 
By section 5 (c) the Secretary of the Treasury is 
 given broad power to investigate any transactions in for- 
 eign exchange, gold or silver exports, and transfers of 
 foreign credits (hearings, pp. 113, 130, 194, 221), and 
 whenever it shall appear to the Secretary of the Treasury 
 that the export of any gold or silver coin, or bullion, or 
 of any moneys of the United States may result in viola- 
 tion of the provisions of this act, he may withhold such 
 export for a period of not exceeding 90 days pending in- 
 vestigation by him. 
 
 Section 6 provides for the general administration of 
 the bill by the Secretary of Commerce and for the ap- 
 pointment of a new official known as the alien property 
 custodian, who shall have charge of all money or property 
 belonging to an enemy or ally of enemy which may be 
 paid or conveyed to him under the provisions of the bill. 
 
 The bill next provides for the power of the Govern- 
 ment to deal with enemy property so as to conserve and 
 utilize such property found within its jurisdiction so far 
 as practicable, both in the interests of this Government 
 and of the enemy owner. The general provision is made 
 that the Government may require any form of enemy 
 property found within the United States to be paid 
 or conveyed to the alien property custodian, and any 
 person holding enemy property in this country is given 
 the option, with the consent of the Secretary of Com- 
 merce, to transfer such property into the hands of the 
 Government. 
 
 The most novel and important feature of this portion 
 of the bill is the requirement that all money and quick 
 assets paid over to the Government shall be invested in 
 United States bonds. So far as known this is an entirely 
 new provision, contained in no previous statute. It is in 
 line, however, with the modern and advanced lenient 
 policy with reference to private property in time of war. 
 By this means, enemy property is temporarily con- 
 scripted by the Government to finance the Government 
 through investment in these bonds, and to be paid back 
 to the enemy or otherwise disposed of at the end of the 
 war, as Congress shall direct. In other words, we fight 
 
 46 
 
the enemy with his own property during the war but 
 we do not permanently confiscate it. This temporary 
 conscription of enemy property is also conservation of 
 enemy property, for it takes the property from the hands 
 of debtors or agents, as to whose solvency the enemy 
 would otherwise be obliged to assume the risk, and it 
 invests the property in the safest security in the world 
 — bonds of the United States — or deposits it in Govern- 
 ment depositories. 
 
 Section 7 contains provisions for ascertainment as 
 to enemy property in this country. 
 
 Section 7 (a) requires reports from corporations and 
 associations of enemy officers, directors and stockholders. 
 As, however, it is known that much enemy property was 
 transferred after the severing of relations with Germany 
 and prior to the beginning of the war, provision is made 
 that the Secretary of Commerce may require lists of all 
 stock which was owned on February 3, 1917, by any 
 person now defined as an enemy or ally of enemy. This 
 provision is highly necessary in order that investigation 
 may be made as to the bonafide character of these trans- 
 fers. As to any actual and legal transfer, of course the 
 bill would have no retrospective action. This provision 
 is merely for the purpose of obtaining information. 
 
 Further provision is made that any person in this 
 country who holds property belonging to or for an enemy 
 or who owes any debt to an enemy shall report the same 
 to the Secretary of Commerce, and there is a similar pro- 
 vision for a report of money or property held or debt 
 owed on February 3, 1917. (Hearings, pp. 153-157.) 
 
 Section 7 (b) contains a provision whereby nothing 
 in this act shall be deemed to render valid any act or 
 transaction constituting trade with or for an enemy 
 performed or engaged in since the beginning of the war 
 and prior to the passage of the act which would have 
 otherwise been void or illegal at law. (Hearings, pp. 
 157-158, 184.) 
 
 In order to prevent evasion of the act by assignments 
 of enemy interests to neutrals, to be collected for the 
 benefit of the enemy, it is provided that no person shall 
 
 47 
 
acquire any right or remedy by virtue of any such assign- 
 ment or conveyance made after the passage of the act, 
 or, unless such assignment or conveyance is made under 
 license as provided in the act. Safeguard is given to 
 American citizens who may have acquired interests 
 under contracts assigned prior to the passage of the act, 
 so that such contracts may be carried out and completed 
 if there is no actual interest of the enemy remaining in 
 such contract. (Hearings, p. 184.) 
 
 Provision is also made for payment to American 
 citizens out of German funds in this country where the 
 funds were received prior to the war and the necessity 
 for payment arises out of transactions entered into 
 prior to the war, but such payments are to be made only 
 with the license of the Secretary of Commerce. (Hear- 
 ings, pp. 47-72.) 
 
 Section 7 (c) provides that the Secretary of Com- 
 merce may, by direction of the President, require any 
 enemy property to be paid to the alien property custo- 
 dian. 
 
 Section 7 (d) authorizes any person holding property 
 for an enemy or owing money or property to an enemy 
 to pay or convey the same, at his option, with the con- 
 sent of the Secretary of Commerce, to the alien property 
 custodian. (Hearings, pp. 158-159.) 
 
 Section 7 (e) contains provisions giving protection 
 to any person who may have performed any act in pur- 
 suance of an order, rule, or regulation made by the Sec- 
 retary of Commerce, and provides also for acquittances 
 and discharges to any such person paying or conveying 
 property to the alien property custodian. 
 
 Section 8 (a) contains provision by which American 
 citizens holding security on enemy property may dispose 
 of such security on notice, presentation, or demand 
 served by him on the alien property custodian, with the 
 same force and effect as if duly served on the enemy 
 personally. 
 
 Similarly, American citizens who have contracts 
 with the enemy terminable on notice or presentation or 
 demand may terminate such contracts by such notice, 
 
 48 
 
presentation, or demand served on the alien property 
 custodian. (Hearings, pp. 160-161, 185-186.) 
 
 Section 8 (b) protects American citizens who may 
 have entered into contracts for the delivery of goods after 
 the ending of the European War and who now find them- 
 selves subject to conditions which were not contemplated 
 when they entered into the contracts, namely, the entry 
 of the United States into the war. It is provided that 
 such contracts may be abrogated by notice served on the 
 alien property custodian. (Hearings, pp. 161-165, 178— 
 183.) 
 
 Section 8 (c) provides that the statute of limitations 
 shall be suspended on any contract entered into prior to 
 the beginning of the war between a citizen of the 
 United States and a neutral whereby the United States 
 citizen has become liable for the payment of money which 
 is evidenced by an obligation secured by funds or property 
 situated in an enemy country. 
 
 Section 9 protects American citizens who have any 
 claim or interest, right or title in or to any money or 
 property which has been paid or conveyed to the alien 
 property custodian. This section is necessary to pre- 
 serve and protect innocent claimants, notwithstanding 
 the enforced absence of the parties in interest. If the 
 enemy and all other parties claiming intere-t in his 
 property assent, the Secretary of Commerce may order 
 the property returned or paid over or transferred to the 
 claimant. (Hearings, pp. 148-151.) 
 
 If such assent is not obtained, then adequate pro- 
 vision is made for a suit in equity. Such a suit may be 
 instituted at any time before the expiration of six months 
 after the end of the war. 
 
 Section 10 relates solely to patents which are placed 
 under control and supervision of the Federal Trade Com- 
 mission. This section is fully explained in subdivision 
 111 of the House report, to which reference is made. 
 Two material amendments were added by the Senate 
 committee, one authorizing the Federal Trade Commis- 
 sion to fix prices when licenses are granted to use a patent, 
 trade-mark, print, label, or copyright, and the other 
 
 49 
 
authorizing the Commissioner of Patents to enforce 
 secrecy in regard to any invention which may, in his 
 opinion, be detrimental to the public safety or defense. 
 
 Section 1 1 contains provisions for the preservation of 
 enemy property by governmental agency and in the 
 interest of the enemy himself. The chances of trade in 
 time of war may involve the solvency of debtors or holders 
 of enemy property, but the taking over and custody of 
 the property by the Government gives to the enemy the 
 best possible protection. Not only is the enemy property 
 preserved and protected, but provision is made for its 
 utilization in the interest of this Government. Moneys 
 (including checks and drafts payable on demand) held 
 by the alien property custodian are required to be de- 
 posited immediately by him with the Treasurer of the 
 United States, and may be thereupon invested or rein- 
 vested by the Secretary of the Treasury in the bonds or 
 certificates of the United States under appropriate rules 
 and regulations. Thereby the enemy property may be 
 utilized to support and promote the success of the war. 
 This investment and reinvestment is not only sound 
 business policy but a just method of auxiliary warfare. 
 
 As there may be paid or conveyed to the alien prop- 
 erty custodian, in addition to moneys, checks, and drafts 
 payable on demand, much other property, such as stocks, 
 bonds, tangible personal property and otherwise, provi- 
 sion is made vesting the alien property custodian with the 
 power of a common-law trustee in respect to all property, 
 other than money, so that he may be enabled to manage 
 such property and exercise any rights which might be 
 appurtenant thereto. (Hearings, pp. 70-72, 167.) In 
 case of sale, however, of any such property, the proceeds 
 are required to be paid to the Treasurer of the United 
 States. 
 
 In order to simplify governmental bookkeeping, pro- 
 vision is made that any money or property required to 
 be paid or conveyed to the alien property custodian shall, 
 on his written order, be so paid or conveyed direct to the 
 Treasurer of the United States. 
 
 50 
 
While the theory on which the bill is drafted is that 
 enemy property shall be protected and utilized, but not 
 confiscated, the ultimate disposition of the enemy prop- 
 erty received and held by the Government is left entirely 
 to Congress, and provision is made that after the endfof 
 the war enemy claims to such property ''shall be settled 
 as Congress shall direct/' 
 
 Sections 12 and 13 relate to the regulation of clear- 
 ance of vessels bound for foreign ports, in order that 
 adequate machinery may be provided for the prevention 
 of departure of such vessels in case of cargoes shippedjn 
 violation of the provisions of the act. 
 
 Section 14 contains appropriations of $350,000 for 
 the Secretary of Commerce, $50,000 for the Federal 
 Trade Commission, and $50,000 for the Secretary of the 
 Treasury, to be expended for the purpose of carrying 
 out the provisions of the act. 
 
 Section 15 provides penalties for the violation of the 
 provisions of the act or any license, rule, or regulation 
 issued thereunder or for failure to comply with any order 
 issued thereunder. 
 
 Sections 16 and 17 vest jurisdiction in appropriate 
 courts for carrying out the provisions of the act. 
 
 APPENDIX A. 
 
 (Appendix A consisted of the House report, but in view of the many 
 changes that have been made in the Bill since it was first reported 
 to the House, it is not deemed advisable to reprint the House report 
 here, the Senate report fully covering the situation). 
 
 51 
 
APPENDIX B. 
 
 MEMORANDUM OF AMERICAN CASES AND RE- 
 CENT ENGLISH CASES ON THE LAW OF 
 TRADING WITH THE ENEMY. 
 
 Ry Charles Warren, Assistant Attorney General of the United State*. 
 
 I. 
 
 AMERICAN CASES. 
 
 (1) Every species of intercourse with the enemy is 
 illegal. The prohibition is not limited to mere commercial 
 intercourse. 
 
 Johnson, J., in The Rapid (1814) (8 Cranch, 155, 162, 
 163): 
 
 "Whether this was a trading in the eye of the prize 
 law such as will subject the property to capture. 
 
 "The force of the argument on this point depends 
 upon the terms made use of. If by trading in prize law 
 was meant that signification of the term which consists 
 in negotiation or contract, this case would certainly not 
 come under the penalties of the rule. But the object, 
 policy, and spirit of the rule is to cut off all communica- 
 tion or actual locomotive intercourse between individuals 
 of the belligerent States. Negotiation or contract has 
 therefore no necessary connection with the offense. 
 Intercourse inconsistent with actual hostility is the of- 
 fense against which the operation of the rule is directed, 
 and by substituting this definition for that of trading 
 with an enemy an answer is given to this argument.' ' 
 
 And see especially Story, J., in The Julia (1814) 
 (8 Cranch, 181, 193, 194, 195): 
 
 "Nor is there any difference between direct inter- 
 course between the enemy countries and an intercourse 
 through the medium of a neutral port. The latter is as 
 strictly prohibited as the former." 
 
 See also Story, J., in The Julia (1813) (1 Gallison, 
 594,602,603): 
 
 52 
 
"* * * It would seem a necessary result of a state 
 of war to suspend all negotiations and intercourse be- 
 tween the subjects of the belligerent nations. By the 
 war every subject is placed in hostility to the adverse 
 party. He is bound by every effort of his own to assist 
 his own government and to counteract the measures of 
 its enemy. Every aid, therefore, by personal communi- 
 cation or by other intercourse which shall take off the 
 pressure of the war or foster the resources or increase the 
 comforts of the public enemy, is strictly inhibited. No 
 contract is considered as valid between enemies, at least 
 so far as to give them a remedy in the courts of either 
 government, and they have, in the language of the civil 
 law, no ability to sustain a persona standi in judicio. 
 The ground upon which a trading with the enemy is 
 prohibited is not the criminal intentions of the parties 
 engaged in it or in the direct and immediate injury to the 
 State. The principle is extracted for a more enlarged 
 policy, which looks to the general interests of the Nation, 
 which may be sacrificed under the temptation of unlim- 
 ited intercourse or sold by the cupidity of corrupted 
 avarice." 
 
 See also The St. Lawrence (1814) (8 Cranch, 434); 
 The Alexander (1814) (8 Cranch, 169); The Rugen (1816) 
 (1 Wheaton, 62); United States v. Barber (1815) (9 
 Cranch, 243); United States v. Sheldon (1817) (2 Whea- 
 ton, 119). 
 
 Story, J., in The Liverpool Packet (1813) (1 Gallison, 
 512, 521, 522): 
 
 "I look back upon that decision (The Julia) without 
 regret, and after much subsequent reflection can not 
 doubt that it has a perfect foundation in the principles 
 of public law. To the many authorities there stated I 
 might have added the pointed language of Sir W. Scott, 
 in the Jonge Pieter (4 Rob., 79), that 'without the license 
 of the government no communication, direct or indirect, 
 can be carried on with the enemy,' and the rule strongly 
 illustrative of the principle, which is acknowledged as 
 early as the yearbooks and has received sanction down to 
 the present times, that every contract and engagement 
 
 53 
 
made with the enemy pending war is utterly void/' 
 
 The Lord Wellington (1814) (2 Gallison, 102). 
 
 The case of United States v. Barker (1820, Circ. Ct. 
 N. Y.) (1 Paine, 156), constitutes a departure from the 
 general rule. 
 
 The rigid rule was reaffirmed in Scholefield v. Eichel- 
 berger (1883) (7 Pet., 586, 593): 
 
 "The doctrine is not at this day to be questioned; 
 that during a state of hostility the citizens of the hostile 
 States are incapable of contracting with each other. For 
 near 20 years this has been acknowledged as the settled 
 doctrine of this court, and in a case which proves it to 
 be a rule of very general and rigid application {The 
 Rapid). * * * The question has never yet been ex- 
 amined whether a contract for necessaries, or even for 
 money to enable the individual to get home, would not 
 be enforced, and analogies familiar to the law as well as 
 the influence of the general rule in international law, that 
 the severities of war are to be diminished by all safe and 
 practical means, might be appealed to in support of such 
 an exception. But at present it may be safely affirmed 
 that there is no recognized exception but permission of a 
 State to its own citizen, which is also implied in any 
 treaty stipulation to that effect entered into by the bellig- 
 erents." 
 
 The Jecker v. Montgomery (1855) (18 How., 110, 
 112, 119): 
 
 "The consequence of this state of hostility is that all 
 intercourse and communication between them is unlaw- 
 ful. * * * 
 
 "We have seen, by the authorities cited, that inter- 
 course with the enemy is sufficient cause for personal pun- 
 ishment and for the confiscation of property; that it is a 
 cause originating in and inflexibly enforced by necessity for 
 guarding the public safety.'' 
 
 (2) Property engaged in illegal intercourse with the 
 enemy is deemed enemy property and is liable to forfeiture. 
 The Sally (1814) (8 Cr., 382, 384): 
 "By2the|general|law of^prize, property engaged in 
 
 54 
 
an illegal intercourse with the enemy is deemed enemy 
 property. It is of no consequence whether it belongs to 
 an ally or to a citizen; the illegal traffic stamps it with 
 the hostile character, and attaches to it all the penal 
 consequences of enemy ownership." 
 
 The Rapid (1814) (8 Cr., 155, 162, 163): 
 
 'The law of prize is part of the law of nations. In 
 it a hostile character is attached to trade, independently 
 of the character of the trader who pursues or directs it. 
 Condemnation to the use of the captor is equally the fate 
 of the property of the belligerent and of the property 
 found engaged in antineutral trade. But a citizen or 
 ally may be engaged in a hostile trade, and thereby 
 involve his property in the fate of those in whose cause 
 he embarks. 
 
 "This liability of the property of a citizen to con- 
 demnation as prize of war may be likewise accounted for 
 under other considerations. Everything that issues from 
 a hostile country is, prima facie, the property of the 
 enemy, and it is incumbent upon the claimant to support 
 the negative of the proposition. But if the claimant be 
 a citizen or an ally at the same time that he makes out 
 his interest, he confesses the commission of an offense 
 which, under a well-known rule of the civil law, deprives 
 him of his right to prosecute his claim. * * * 
 
 "Whether, on the breaking out of a war, the citizen 
 has a right to remove to his own country with his prop- 
 erty is a question which we conceive does not arise in 
 this case. This claimant certainly has not a right to 
 leave the United States for the purpose of bringing home 
 his property from an enemy country; much less could he 
 claim it as a right to bring into this country goods the 
 importation of which was expressly prohibited." 
 
 See also The Diana (1814) (2 Gallison, 93, 97) ; Jecker 
 v. Montgomery (1855) (18 How., 110, 114); The Adula 
 (1899) (176 U. S., 361, 379), and cases cited. 
 
 The Benito Estenger (1900) (176 U. S., 568, 571): 
 
 "By the law of prize, property engaged in any illegal 
 intercourse with the enemy is deemed enemy property, 
 whethei belonging to an ally or a citizen, as the illega 
 
 55 
 
traffic stamps it with the hostile character and attaches 
 to it all the penal consequences." 
 
 See also The Carlos F. Roses (1900) (177 U. S., 655). 
 
 Betts, J., in The Crenshaw (1861), Blatchford's Prize 
 Cases, 27 : 
 
 "Not only is property taken trading with the enemy 
 liable to forfeiture, but it is subject to forfeiture as a 
 prize of war." 
 
 Nelson, J., in Charge to Grand Jury (1861) (5 
 Blatchf., 549; Fed. Cases No. 18271): 
 
 "Trade with the enemy * * * according to the 
 law of nations is forbidden and the property engaged in 
 it is liable to forfeiture." 
 
 Betts, J., in The Shark (1862) (Blatchford's Prize 
 Cases, p. 218). 
 
 (3) All persons doing business with the enemy, 
 whether citizens of the United States or citizens of the other 
 belligerent nation or neutrals, are as to their property to be 
 deemed enemies. 
 
 Prize Cases (1862) (2 Black, 674): 
 
 "But in defining the meaning of the term 'enemies' 
 property,' we will be led into error if we refer to Fleta 
 and Lord Coke for their definition of the word 'enemy.' 
 It is a technical phrase peculiar to prize courts, and de- 
 pends upon principles of public policy as distinguished 
 from the common law. 
 
 "Whether property be liable to capture as 'enemies' 
 property' does not in any manner depend on the personal 
 allegiance of the owner. 'It is the illegal traffic that 
 stamps it "as enemies' property." It is of no conse- 
 quence whether it belongs to an ally or a citizen. (8 Cr., 
 384.) The owner, pro hac vice, is an enemy.' (3 Wash. 
 C. C. R., 183.) 
 
 "The produce of the soil of the hostile territory, as 
 well as other property engaged in the commerce of the 
 hostile power, as the source of its wealth and strength, 
 are always regarded as legitimate prize, without regard 
 to the domicile of the owner, and much more so if he 
 residefand trade within their territory." 
 
 56 
 
The Flying Scud (1867) (6 Wall., 263, 266): 
 
 "Although they are Mexican citizens, yet being es- 
 tablished in business in the enemies' country, must be 
 regarded according to settled principles of prize law, as 
 enemies, and their cotton as enemies' property." 
 
 See Juragua Iron Co. v. United States (1909) (212 
 U. S., 297, 305, 306): 
 
 "Cuba, being a part of Spain, was enemy's country, 
 and all persons, whatever their nationality, who resided 
 there were, pending such war, to be deemed enemies of 
 the United States and of all its people. The plaintiff, 
 though an American corporation, doing business in Cuba, 
 was, during the war with Spain, to be deemed an enemy 
 to the United States with respect to its property found 
 and then used in that country, and such property could 
 be regarded as enemy's property, liable to be seized and 
 confiscated by the United States in the progress of the 
 war then being prosecuted." 
 
 So in Young v. United States (1877) (97 U. S., 
 39, 60): 
 
 "All property within enemy territory is in law enemy 
 property just as all persons in the same territory are 
 enemies." 
 
 30 Hogsheads of Sugar v. Boyle (1815) (9 Cranch, 
 191). 
 
 The Sarah Starr (1861) (Blatchford's Prize Cases, 
 74, 76): 
 
 «* * * L y a i citizens or neutrals who * * * 
 have a mercantile domicile in an enemy country are re- 
 garded in the prize courts in their commercial dealings 
 and transactions there as enemies in relation to vessels 
 and cargoes owned by them and captured at sea. * * * 
 
 "The American authorities are equally explicit that 
 a neutral, even enjoying the privilege of consul, domiciled 
 and trading in a belligerent country, is, in war, deemed a 
 belligerent, and his acts are clothed with the character 
 of one of its subjects; and he can neither hold title to 
 property acquired in such country during war, nor confer 
 it upon others, against the interests imparted, by capture 
 at sea, to adversary belligerents." 
 
 57 
 
The Mary Clinton (1863) (Blatchford's Prize Cases, 
 p. 560). 
 
 See also The Venus (1814) (8 Cranch, 253); The 
 Vowles (1814) (ibid., 348); The Frances (1814) (ibid., 
 351); Livingston v. Maryland Ins. Co., (1813) (7 Cranch, 
 542); U. S. v. Guillem (1859) (11 How., 50); The William 
 Bagaley (1866) (5 Wall., 377); Miller v. U. S. (1870) (11 
 Wall., 268). 
 
 (4) In general, during war, contracts with, or powers 
 of attorney or agency from, the enemy executed after out- 
 break of war are illegal and void; contracts entered into with 
 the enemy prior to the war are either suspended or are abso- 
 lutely terminated; partnerships with an enemy are dissolved; 
 powers of attorney from the enemy, with certain exceptions, 
 lapse; payments to the enemy {except to agents in the United 
 States appointed prior to the war and confirmed since the 
 war) are illegal and void; all rights of an enemy to sue in 
 the courts are suspended. 
 
 The William Bagaley (1866) (5 Wall., 377,405,407): 
 
 "Public war duly declared or recognized as such by 
 the lawmaking power, imports a prohibition by the sov- 
 ereign to the subjects or citizens of all commercial inter- 
 course and correspondence with citizens or persons domi- 
 ciled in the enemy country. " 
 
 Hanger v. Abbott (1867) (6 Wall., 532, 535): 
 
 "War, when duly declared or recognized as such by 
 the war-making power, imports a prohibition to the sub- 
 jects or citizens of all commercial intercourse and cor- 
 respondence with citizens or persons domiciled in the 
 enemy country. Upon this principle of public law it is 
 the established rule in all commercial nations that trading 
 with the enemy, except under a Government license, 
 subjects the property to confiscation or to capture and 
 condemnation. 
 
 "Partnership with a foreigner is dissolved by the 
 same event which makes him an alien enemy. * * * 
 Direct consequence of the rule as established in those 
 cases is that as soon as war is commenced all trading, 
 negotiation, communication, and intercourse between the 
 citizens of one of the belligerents with those of the other 
 
 58 
 
without the permission of the Government is unlawful. 
 No valid contract, therefore, can be made, nor can any 
 promise arise by implication of law, from any transaction 
 with an enemy. Exceptions to the rule are not admitted ; 
 and even after the war has terminated the defendant, in 
 an action founded upon a contract made in violation of 
 that prohibition, may set up the illegality of the transac- 
 tion as a defense. Various attempts, says Mr. Wheaton, 
 have been made to evade the operation of the rule and to 
 escape its penalties, but they have all been defeated by its 
 inflexible rigor/ ' 
 
 Coppell v. Hall (1868) (7 Wall., 542, 554, 557, 558): 
 
 "When international wars exist all commerce be- 
 tween the countries of the belligerents, unless permitted, 
 is contrary to public policy, and all contracts growing out 
 of such commerce are illegal. Such wars are regarded 
 not as wars of the governments only, but of all the inhab- 
 itants of their respective countries. The sovereign may 
 license trade, but in so far as it is done it is a suspension 
 of war and a return to the condition of peace. It is said 
 there can not be, at the same time, war for arms and peace 
 for commerce. The sanction of the sovereign is indispen- 
 sable for trade. A state of war ipso facto forbids it. The 
 government only can relax the rigor of the rule. * * * 
 
 "The payment of money by a subject of one of the 
 belligerents, in the country of another, is condemned, 
 and all contracts and securities looking to that end are 
 illegal and void. * * * 
 
 "In Griswold v. Waddington (16 Johnson, 459, 460), 
 Kent, C. J., said: The law had put the sting of disability 
 into every kind of voluntary communication and contract 
 with an enemy which is made without the special per- 
 mission of the Government. There is wisdom and policy, 
 patriotism and safety in this principle, and every relaxa- 
 tion of it tends to corrupt the allegiance of the subject 
 and to prolong the calamities of war.'" 
 
 Miller v. United States (1870) (11 Wall., 268, 305, 
 306): 
 
 59 
 
"It is immaterial to it whether the owner be an alien 
 or a friend, or even a citizen or subject of the power that 
 attempts to appropriate the property. In either case 
 the property may be liable to confiscation under the rules 
 of war. It is certainly enough to warrant the exercise 
 of this belligerent right that the owner be a resident of 
 the enemy's country, no matter what his nationality. 
 The whole doctrine of confiscation is built upon the 
 foundation that it is an instrument of coercion, which, 
 by depriving an enemy of property within reach of his 
 power, whether within his territory or without it, impairs 
 his ability to resist the confiscating government, while at 
 the same time it furnishes to that government means for 
 carrying on the war. Hence any property which the 
 enemy can use, either by actual appropriation or by the 
 exercise of control over its owner, or which the adherents 
 of the enemy have the power of devoting to the enemy's 
 use, is a proper subject of confiscation." 
 
 United States v. Lapene (1873) (17 Wall., 601, 602): 
 
 "All commercial contracts with the subjects or in 
 the territory of the enemy, whether made directly by 
 one in person or indirectly through an agent who is neu- 
 tral, are illegal and void * * *. No property passes 
 and no rights are acquired under such contracts." 
 
 And see also Mrs. Alexander's Cotton (1864) (2 
 Wall., 404); The Ouachita Cotton (1867) (1 Wall., 521); 
 United States v. Lane (1868) (8 Wall., 185, 195); Dean v. 
 Nelson (1869) (10 Wall., 158) ; Lasere v. Rochereau (1873) 
 (17 Wall., 437); Day v. Micou (1873) (18 Wall., 156); 
 Mitchell v. United States (1874) (21 Wall., 350); Fretz 
 v. Stover (1874) (22 Wall., 198); Mathews v. McStea 
 (1870) (91 U. S., 7, 9, 10); Desmare v. United States 
 (1876) (93 U. S., 605, 612); Pike v. Wassell (1876) (94 
 U. S., 711); Conrad v. Waples (1877) (96 U. S., 279, 286); 
 Burbank v. Conrad (1877) (96 U. S., 291); United States 
 v. Pacific R. R. (1887) (120 U. S., 227, 233); Briggs v. 
 United States (1892) (143 U. S., 346, 353); Nelson, J., 
 dissenting in Prize Cases (1862) (2 Black, 635, 687). 
 
 See also Kershaw v. Kelsey (1868) (100 Mass., 561, 
 
 60 
 
672) ; Trotter on Contract During War; Page on War and 
 Alien Enemies. 
 
 (5) Effect of war on contracts previously entered into 
 with the enemy. 
 
 Hanger v. Abbott (1867) (6 Wall., 532, 536): 
 
 "Executory contracts also with an alien enemy, or 
 even with a neutral, if they can not be performed except 
 in the way of commercial intercourse with the enemy, are 
 dissolved by the declaration of war, which operates for 
 that purpose with a force equivalent to an act of Congress. 
 
 "In former times the right to confiscate debts was 
 admitted as an acknowledged doctrine of the law of na- 
 tions, and in strictness it may still be said to exist, but it 
 may well be considered as a naked and impolitic right, 
 condemned by the enlightened conscience and judgment 
 of modern times. Better opinion is that executed con- 
 tracts, such as the debt in this case, although existing 
 prior to the war, are not annulled or extinguished, but the 
 remedy is only suspended, which is a necessary conclu- 
 sion, on account of the inability of an alien enemy to 
 sue or to sustain, in the language of the civilians, a per- 
 sona standi in judicio." 
 
 What contracts are merely suspended and what are 
 terminated by a state of war is considered in New York 
 Ins. Co. v. Statham (1876) (93 U. S., 24, 31, 32/33, 35): 
 
 "The case, therefore, is one in which time is material 
 and of the essence of the contract. * * * 
 
 "But the court below bases its decision on the as- 
 sumption that, when performance of the condition be- 
 comes illegal in consequence of the prevalence of public 
 war, it is excused, and forfeiture does not ensue. It 
 supposes the contract to have been suspended during the 
 war, and to have revived with all its force when the war 
 ended. Such a suspension and revival do take place in 
 the case of ordinary debts. But have they ever been 
 known to take place in the case of executory contracts 
 in which time is material? * * * 
 
 "The truth is that the doctrine of the revival of 
 contracts suspended during the war is one based on con- 
 
 61 
 
siderations of equity and justice, and can not be invoked 
 to revive a contract which it would be unjust or inequit- 
 able to revive. 
 
 "In the case of life insurance, besides the materiality 
 of time in the performance of the contract, another 
 strong reason exists why the policy should not be revived. 
 The parties do not stand on equal ground in reference to 
 such a revival. It would operate most unjustly against 
 the company. * * * 
 
 "We are of opinion, therefore, that an action can 
 not be maintained for the amount assured on a policy 
 of life insurance forfeited, like those in question, by non- 
 payment of the premium, even though the payment was 
 prevented by the existence of the war. * * * 
 
 "* * * Failure being caused by a public war, 
 without the fault of the assured, they are entitled ex 
 aequto et bono to recover the equitable value of the 
 policies with interest from the close of the war." 
 
 The William Bagaley (1866) (5 Wall., 377, 407): 
 
 "* * * Executory contracts with an alien enemy, 
 or even with a neutral, if they can not be performed ex- 
 cept in the way of commercial intercourse with the 
 enemy, are ipso facto dissolved by the declaration of war, 
 which operates to that end and for that purpose with a 
 force equivalent to that of an act of Congress." 
 
 See also Gates v. Goodloe (1879) (101 U. S., 612, 
 619-621); Lamar v. Micou (1884) (112 U. S., 452, 464); 
 United States v. Dietrich (1908) (126 Fed., 671, 674). 
 
 See also Griswold v. Waddington (1819) (10 Johns, 
 438); Abell v. Insurance Co. (1881) (18 W. Va., 406, 438); 
 Moore's International Law Digest, volume 10, page 244. 
 
 (6) As to the effect of war on payment of interest. 
 
 See Trotter on Contract During War (supplement), 
 p. 61; Trotter on Contract During- War, p. 49. 
 
 See also Brown v. Hiatts (1872) (15 Wall., 177, 185); 
 Hoare v. Allen (1789) (2 Dallas, 102); Foxcroft v. Nagle 
 (1791) (2 Dallas, 182); Conn. v. Penn. (1818) (1 Peters 
 C. C, 496, 524); Ward v. Smith (1868) (7 Wall., 447, 
 452); Moore, Dig. Int. Law (vol. 7, p. 252). 
 
 m 
 
See also statement in 22 Cyc, 1562, and 30 American 
 and English Ency. Law (2d ed.), p. 8. (The statements 
 contained in these last two references do not seem to be 
 in entire accord with the Supreme Court decisions.) 
 
 (7) As to the effect of war on payment to agents of 
 the enemy, and upon appointment of agents, and upon 
 acts performed under power of attorney granted by the 
 enemy prior to war. 
 
 Conn. v. Penn. (1818, Circ. Ct. Penn.) (1 Peters C. 
 C. 496, 527, 528); United States v. Grossmeyer (1869) 
 (9 Wall., 72, 73); Ward v. Smith (1868) (7 Wall., 447); 
 University v. Finch (1873) (18 Wall., 106); Insurance 
 Co. v. Davis (1877) (95 U. S., 425, 429); Williams v. 
 Paine (1897) (169 U. S., 55, 70, 71). 
 
 (8) As to the power to sue in the courts. 
 
 See Hanger v. Abbott (1867) (6 Wall., 532, 536, 
 542); Caperton v. Bowyer (1871) (14 Wall., 216, 236); 
 Masterson v. Howard (1873) (18 Wall., 99, 105). 
 
 An alien enemy may be sued in the courts of the 
 United States, though he has no right to sue. McVeigh 
 v. United States (1870) (11 Wall., 259); University v. 
 Finch (1873) (18 Wall., 106, 111). 
 
 (9) As to power of the government to license trade 
 with the enemy. 
 
 See especially United States v. Lane (1868) (8 Wall., 
 185, 195); Hamilton v. Dillin (1874) (21 Wall., 73, 97): 
 
 "* * * The power of the Government to impose 
 such conditions upon commercial intercourse with an 
 enemy in time of war as it sees fit is undoubted. It is?a 
 power which every other government in the world claims 
 and exercises and which belongs to the Government of the 
 United States as incident to the power to declare _war 
 and to carry it to a successful termination." 
 
 (10) As to effect of war on statutes of limitation. 
 See Stewart v. Kahn (1870) (11 Wall., 493); United 
 
 States v. Wiley (1870) (11 Wall., 508); The Protector 
 (1869) (9 Wall., 687); Hanger v. Abbott (1867) (6 Wall., 
 532). 
 
 63 
 
(11) As to rights of alien enemies resident in the 
 United States. 
 
 See Clarke v. Morey (1813) (10 Johns, 69); Seymour 
 v. Bailey (1872) (66 111., 288); Princess v. Moffett (1914) 
 (W. N., 379); Volkil v. Governors (1914) (2 I. R., 542); 
 Forrestier v. Bordman (1839) (1 Story, 43); Hallet v. 
 Jenks (1805) (3 Cranch, 210); Brown v. United States 
 (1814) (8 Cranch, 110); Case of Fries (1799) (9 Fed. 
 Cases No. 5126, pp. 830-832); Lockington v. Smith 
 (1819) (1 Peters Circ. Ct., 466, 472); In re Lockington, 
 Brightly, N. Dak. (Pa.), 269; Revised Statutes, sections 
 4067-4070; President's Proclamation of April 6, 1917, 
 as to alien enemies. 
 
 II. 
 
 ENGLISH CASES DURING THE PRESENT 
 EUROPEAN WAR. 
 
 A. How far under the English law English corpora- 
 tions controlled by German stockholders are to be regarded 
 as enemy, 
 
 Amorduct Manufacturing Co. v. Debries & Co. (84 
 L. J. (K. B.) 586; 112 L. T. 131; 31 T. L. R. 69; 59 S. J. 
 91); Rubber Co. v. Daimler Co. (C. A. (1915) 1 K. B. 
 893; 84 L. J. K. B. 926; 20 Com. Cas. 209; (1915) W. 
 N. 44; 59 S. J. 232); Daimler Co. v. The Continental 
 Tyre & Rubber Co. (H. L. (E) (1916) 2 A. C. 307; 85 
 L. J. (K. B.) 1333; 114 L. T. 1049; (1916) W. N. 269; 
 22 Com. Cas. 32; 32 T. L. R. 624; 60 S. J. 602); In re 
 Hilches Ex parte Muhesa Rubber Plantations (Ltd.) (C. 
 A. (1917) 1 K. B. 48; 86 L. J. (K. B.) 204; (1916) H. B. R. 
 160; 115 L. T. 490; 33 T. L. R. 28). See also Societe 
 Anonyme Beige des Mines d' Aljustrel v. Anglo-Belgian 
 Agency (July 30, 1915) (31 T. L. R. 624). 
 
 B. What constitutes trading with the enemy? 
 
 Moss v. Donohoe (J. C. 32 T. L. R. 343). It is trad- 
 ing with the enemy to order from an American company 
 with a branch in Rotterdam gin which the defendant 
 
 64 
 
knew was sent by such branch to Hamburg, Germany, 
 for bottling. 
 
 The Panariellos (85 L. J. (P.) 112; 114 L. T. 670; 
 32 T. L. R. 459; 60 S. J. 427). A British subject dis- 
 patched goods after the outbreak of war and with know- 
 ledge of it from a foreign port for delivery as directed by 
 an enemy firm and for their benefit. 
 
 Held, that this constituted trading with the enemy 
 and the goods were forfeit. 
 
 Stephen M. Weld & Co. v. Fruhling Goshen (1916) 
 (W. N. 187; 32 T. L. R. 469). The plaintiffs were part- 
 ners in a German firm and a draft for a part of the profits 
 of the German firm was drawn and accepted before war 
 began by the defendants. The draft was paid over to 
 the plaintiffs, an American firm, after war was declared 
 and the defendants refused payment. 
 
 Judgment for the defendants, it being a transfer on 
 behalf of an enemy. 
 
 In re Aramayo Francke Mines (Ltd.) (C. A. (1917) 
 ICh. 451; 86 L.J. (Ch.) 225; 116 L.T. 54; (1917) W.N. 
 36; 33 T. L. R. 176). When a corporation incorporated 
 in England and doing business in Bolivia for the benefit 
 of the allies attempts, in order to avoid taxes, to transfer 
 the assets to a corporation incorporated in Switzerland, 
 the court held that an order should be made appointing 
 a controller under the trading with the enemy act to 
 prohibit that action. 
 
 C. What constitutes trading for the benefit of the 
 enemy ? 
 
 Rex v. Kupfer (1915) (2 K. B. 321). Kupfer in 
 England made payments to an English bank to be 
 transmitted to a Dutch house to which it was proved 
 Kupfer had been indebted before the war. 
 
 Held, this was a payment for the benefit of the 
 enemy. 
 
 D. Trading with branches of enemy concerns in 
 allied territory. 
 
 Wolf v. Carr, Parker & Co. (Apr. 29, 1915) (31 T. L. 
 R. 407). 
 
 65 
 
E. Contracts of insurance. 
 
 W. L. Ingle v. Mannheim Insurance Co., (1915) (1 
 K. B. 227; 84 L. J. (K. B.) 491; 112 L. T. 510). A suit 
 may be maintained against a branch of an alien enemy 
 insurance company situated in England on a policy issued 
 before the war. The loss occurred subsequently and a 
 claim to recover such a loss is not a "transaction with the 
 enemy." 
 
 F. Appointment of a custodian and distribution of 
 the assets and details of administration under the pecu- 
 liar provisions of the English trading with the enemy act. 
 
 Stevenson & Sons (Ltd.) v. Aktiengesellschaft (C. A. 
 115 L. T. 594; 33 T. L. R. 84; C. A. (1917) 1 K. B. 842; 
 32 T. L. R. 84; 61 S. J. 146). The plaintiffs, an English 
 company, were, at the outbreak of the war between 
 England and Germany, sole agents in England for the 
 defendants, a German company. There was also a 
 partnership relation between the two. 
 
 Held, that both agency and partnership were ter- 
 minated at the outbreak of war, and that the determina- 
 tion as to what should be done with that portion of the 
 plaintiff's assets which should belong to the German 
 partners was one for Parliament to determine. 
 
 On appeal, held, that lower court was right in regard 
 to the agency and partnership and that the enemy part- 
 ner was entitled to a share of the profits made after the 
 dissolution by the English corporation carrying on the 
 business with the aid of the enemy partners' capital. 
 
 In re Kastner & Co., Auto-Piano Co. v. Kastner & Co. 
 (1917) (1 Ch., 390; 86 L. J. (Ch.), 235; 116 L. T., 62; 
 (1917) W. N., 15; 33 T. L. R., 149.) Schmidtz v. Van der 
 Veen & Co. (84 L. J. (K. B.), 861; 112 L. T., 991; 31 
 T. L. R., 214.) In re W. Hagelberg Aktiengesellschaft 
 (1916), 2 Ch., 503; (1916) W. N., 335. In re Fried 
 Krupp Aktien-Gesellschaft, (1916) 2 Ch., 194; 114 L. T., 
 1026; (1916) W. N., 234; 32 T. L. R., 553; (1917) W. N., 
 171. 
 
 (a) Right of a custodian of a corporation to vote 
 the shares. 
 
 66 
 
In re R. Pharaon et Fils, C. A.; (1916) 1 Ch.,1; 
 85 L. J. (Ch.), 68; (1915) H. B. R., 232; 113 L. T., 1138; 
 (1915) W. N., 340; 32 T. L. R., 47. 
 
 A custodian in whom are vested shares in an English 
 company, formerly belonging to an enemy, may vote the 
 shares as if he was himself the stockholder. 
 
 (b) Right of alien enemy to vote his shares. 
 
 Robson v. Premier Oil & Pipe Line Co., C. A. (1915), 
 2 Ch. 124; 84 L. J. (Ch.), 629; 118 L. T., 523. 
 
 G. During a state of war an alien enemy may not 
 vote shares held in English company, but right of voting is 
 suspended until after war. 
 
 (a) Right of alien enemy to sue and be sued. 
 
 Mercedes Daimler Motor Co. v. Maudsley Motor 
 Co. (32 R. P. C. 149; (1915) W. N. 54; 31 T. L. R. 178). 
 
 Two companies sued as coplaintiffs for patent in- 
 fringement. Agreement between them provided British 
 company had sole right to sue for infringement and could 
 join alien enemy as coplaintiff on certain notice. 
 
 Held, will of the alien enemy not relevant, and Brit- 
 ish company had right to sue alone. 
 ■ Turn & Taxis v. Moffett (1915) (1 Ch. 58; 84 L. J. 
 (Ch.) 220; 112 L.T. 114). 
 
 An alien enemy's wife residing and duly registered 
 in England may sue upon her individual rights. 
 
 Halsey et al. v. Lowenfeld (1915) (W. N. 400; 32 
 T. L. R. 1). 
 
 Held, that an action might be brought against an 
 alien enemy on a lease for rent occurring after commence- 
 ment of war. 
 
 Vokl.u. Governors (1914) (2 L. R. 543); Porter v. 
 Friendenberg et al.. C. A. (1915) (1 K. B. 857; 84 L. J. 
 K. B. 1001; 20 Com. Cas. 189). 
 
 Alien enemy can not sue unless within the realm by 
 license of the King. He may be sued in the King's 
 courts. 
 
 J. B. Rombach Baden Clock Co. v. Gent & Son 
 (84 L. J. (K. B.), 1558; 31 T. L. R., 492). 
 
 67 
 
On dissolution of a partnership in England between 
 a naturalized British subject and alien enemies, the for- 
 mer being appointed receiver, it was held the latter could 
 sue for partnership debts which defendants could not 
 withhold as payments to the enemy. Ex parte Bouss- 
 macher (1806) (13 Ves., 71), and Mercedes Daimler 
 Motor Co. v. Mandslay Motor Co. (1915) (31 T. L. R.) 
 followed. 
 
 (b) Stay of suit due to outbreak of war. 
 Robinson & Co. v. Mannheim Continental Insurance 
 
 Co. (1915) (1 K. B., 155; 84 L. J. (K. B.), 238; 20 Com. 
 Cas., 125); In re Mary, Duchess of Sutherland, et al. v. 
 Burna et al. (C. A. 31 L. T. R., 394). Commencement of 
 war does not give right to have action stayed when 
 brought before by British plaintiffs against a German 
 insurance company. 
 
 (c) Internment of alien enemy plaintiff. 
 Schaffenius v. Goldberg (C. A. (1915) W. N. 386; 
 
 32 L. T. R., 133). Internment of alien enemy plaintiff 
 did not affect his right to prosecute an action brought 
 by him as registered alien before internment. 
 
 (d) Right of appeal. 
 
 Porter v. Freudenberg (C. A. (1915), 1 J. B., 857; 
 84 L. J. (K. B.), 1001; 20 Com. Cas., 189); Orenstein & 
 Koppel v. Egyptian Phosphate Co. Ct. Sess. (Sc.) (1915 
 S. C. 55) ; A. A. F. in Berlin Chem. Works v. Levinstein 
 (C. A. 84 L. J. (Ch.), 842; 32 R. P. C, 140; 112 L. T. 
 R., 963). Alien enemy plaintiff in action commenced 
 before war has no right of appeal which is stayed until 
 conclusion of peace. 
 
 Welsbach Light Co. of Australasia (Ltd.) v. Common- 
 wealth of Australia and Attorney General of Australia 
 (J. C. 33 T. L. R., 332). The Attorney General of Aus- 
 tralia, acting under the trading with the enemy act, made 
 a declaration that the petitioners were carried on for 
 the benefit of enemies and succeeded in bringing the 
 business to a standstill. They brought action against 
 him denying his allegation and alleging that his act was 
 
 68 
 
ultra vires. A demurrer was sustained and the appeal to 
 His Majesty in council denied. 
 
 H. All executory contracts become invalid on breaking 
 out of war. 
 
 Arnold Karberg & Co. v. Blythe, Green, Jourdan & 
 Co. (C. A. 60 S. J., 156) ; Duncan Fox & Co. v. Schrempft 
 & Co. (C. A. (1915) 3 K. B., 355; 84 L. J. (K. B.), 2206; 
 20 Com. Cas., 337; 113 L. T., 600); Grey (Edward) & Co. 
 v. Tolme & Runge (31 T. L. R., 551); In re Shipton, 
 Anderson & Co. (Div. Ct. (1915), 3 K. B., 676; 84 L. J. 
 (K. B.), 2137; (1915) W. N., 304; 31 T. L. R., 598); 
 Stevenson v. Aktien Gesselschaft (1916) (1 K. B., 763); 
 Distington Hematite Iron Co. v. Possehl & Co. (1916), 
 (1K.B.,811;85L.J.(K.B.),919;(1916)W.N.,117;32T.L. 
 R. 349). A contract between an English company and 
 a German firm provided that the German firm was to 
 take a certain quantity of pig iron yearly, but upon 
 failure to do so would incur no liability other than the 
 loss of control of the output. The vendor agreed that 
 the purchaser should be considered as its sole agent. It 
 was held that as this contract involved a continuing 
 effort on both sides, it was dissolved, and not merely 
 suspended, on the outbreak of war. 
 
 Zinc Corporation Ld. »..Hirsh (C. A. (1916), 1 K. B., 
 541; 85 L. J.; K. B., 565; 21 Com. Cas., 273; 114 L. T., 
 222; (1916), W. N., 11; 32 T. L. R., 232). The plaintiffs, 
 an English company, made a continuing contract to sell 
 to a German company the entire production of zinc 
 concentrates from their mine in Australia. The contract 
 contained a prohibition against the plaintiffs selling to 
 anyone else, and further enumerated various causes 
 which were stipulated as reasons for a failure to deliver 
 the concentrates. War was not specified as a cause of 
 suspension. 
 
 It was held that if war was construed as a cause of 
 suspension of delivery, it would result in a construc- 
 tion of the contract as still existing, with the result that 
 the prohibition upon the plaintiffs against selling to any 
 but the German purchaser would be operative, and that 
 
 69 
 
therefore it was for the public good to consider the cancel- 
 lation of the contract as having occurred from the out- 
 break/pf^the^war. 
 
 I. Agency. 
 
 Tingley v. Muller (C. A. (1917), W. N., 180; 116 
 L. T. 482; 33 T. L. R., 369; 61 S. J., 478). A contract 
 for the sale of land was entered into between an English 
 purchaser and a German resident in England and a de- 
 posit paid. The vendor left for Germany, becoming an 
 alien enemy, but left a power of attorney in an English 
 solicitor to complete the sale. Held, that the power of 
 attorney was not revoked by the vendor becoming an 
 alien enemy. 
 
 Maxwell v. Grunhert (C. A., 31; T. L. R., 79). An 
 agent in England of an alien enemy principal is not en- 
 titled to bring an action for a decree that he is entitled 
 to called debts and for appointment of a receiver. 
 
 J. Goods, wares, and merchandise. 
 
 King v. Oppenheimer (1915) (2 K. B., 755). Held, 
 that certain transfers made from lithograph stones in 
 Germany were goods, wares, and merchandise. 
 
 K. Enemy property. 
 
 In re Bankfur Handel & Co. (1915) (1 ch., 848; 84 
 L. J. (Ch.) 435; 113 L. T., 228). A debtor to an alien 
 enemy is not a person who holds or manages for or on 
 behalf of an enemy any property. 
 
 L. Contracts of allied subjects. 
 
 Kreglinger & Co. v. Cohen & Co. (21 T. L. R., 592); 
 Wolf & Sons v. Carr et al. (C. A. (1915), W. N., 195; 31 
 T. L. R., 407). Held, that plaintiffs, allied subjects, 
 could not sue for breach of contract made before the war 
 with persons who became alien enemies at outbreak of 
 war and repudiated such contracts as same became illegal 
 at outbreak of war. 
 
 70 
 
National Bank of Commerce 
 in New York 
 
 ORGANIZED 1S39 
 
 President 
 James S. Alexander 
 
 Vice-Presidents 
 R. G. Hutchins. Jr. Stevenson E. Ward 
 
 Herbert P. Howell John E. Rovensky 
 
 J. Howard Ardrey Guy Emerson 
 
 Cashier 
 Far is R. Russell 
 
 Assistant Cashiers 
 A. J. Oxenham A. F. Broderick 
 
 William M. St. John Everett E. Risley 
 
 Louis A. Keidel H. P. Barrand 
 
 A. F. Maxwell Richard W. Saunders 
 
 John J. Keenan H. W. Schrader 
 
 Gaston L. Ghegan R. E. Stack 
 
 Auditor Manager Foreign Department 
 
 A. F. Johnson Franz Meyer 
 
 Statement of Condition 
 
 September 11, 1917 
 
 RESOURCES 
 
 Loans and Discounts - $242,940,542.18 
 U. S. Bonds Borrowed - 1,480,000.00 
 U. S. Certificates of Indebtedness - - 10.430,000.00 
 Other Bonds, Securities, etc. - 24,504,979.28 
 Banking House - 2,000.000.00 
 Due from Banks and Bankers - - - 11,999,927.78 
 Cash, Exchanges and due from Federal Re- 
 serve Bank 72,247,424.89 
 
 Customers' Liability under Letters of Credit, 
 
 Acceptances, etc. ----- 39,646,874.13 
 
 Interest Accrued ----- 991.615.98 
 
 $406,241,364.24 
 
 LIABILITIES 
 
 Capital, Surplus and Undivided Profits - - $ 45,864,385.99 
 
 Deposits 317,544,135.74 
 
 Letters of Credit and Acceptances - - 36,613,943.18 
 
 Unearned Discount ----- 1,498,899.33 
 
 Other Liabilities 4.720,000.00 
 
 $406,241,364.24 
 
I 
 
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