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Confiscation of Property

CONFISCATION OF PROPERTY

CONFISCATION OF PROPERTY has occurred in the United States during wartime, ever since the revolutionary war. As a means of financing hostilities against England, the Continental Congress declared in 1776 that the property of Loyalists was subject to seizure. By the end of 1781, every state had passed a confiscation act, and Loyalists had lost property worth millions of pounds. Article V of the Definitive Treaty of Peace (1783) provided that Congress would urge the states to compensate former owners whose property had been seized, but only South Carolina responded to this plea. With the United States itself refusing to provide compensation, the British Parliament ultimately indemnified a large number of Loyalists in an amount exceeding £3 million.

During the Civil War, both the North and the South confiscated property. The Confederacy's scheme, adopted in 1861, required all northern debts to be paid to the government in return for bonds. Designed essentially to produce revenue, it was not successful. The North's use of confiscation, culminating in the Emancipation Proclamation, effective 1 January 1863, was directed primarily toward the liberation of slaves. The slaveholders' losses incurred because of freed slaves has been estimated at $2 billion. The total value of confiscated nonhuman property, though greater in the South than in the North, was not large by modern standards, and some property was returned after the war.

World War I and World War II witnessed a revival of property seizure as an instrument of policy. Departing from its general policy of not disturbing alien-owned property in time of war, Congress enacted the Trading with the Enemy Act on 6 October 1917. This statute created the Office of Alien Property Custodian, which took over and operated in trust about $700 million of enemy-owned or enemy-controlled property. After the war, Congress decided to return most of this property, and in 1935 the office was abolished. Under the above statutory scheme, property had not actually been confiscated but merely "frozen" for return or other use upon termination of hostilities.

A similar approach was taken during World War II, when Congress amended the original Trading with the Enemy Act and reestablished the Office of the Alien Property Custodian. Enemy property worth millions of dollars was frozen once again. After the war, Congress enacted the War Claims acts of 1948 and 1962, under which German and Japanese property held in trust by the United States was vested and used to satisfy in part the war claims of U.S. citizens. Using the former enemy property in this fashion did not constitute confiscation, since it was done pursuant to the Potsdam Agreement of 1945 and the Paris Reparation Agreement of 1946, with respect to Germany, and pursuant to the Treaty of Peace of 8 September 1951, with respect to Japan.

During the postwar period, the United States continued the policy of freezing rather than vesting alien property in the absence of special agreement. Title V of the International Claims Settlement Act of 1949 (as amended on 16 October 1964) allowed certain claims of U.S. citizens against Cuba. It contained provisions for vesting Cuban assets that the United States had frozen previously in retaliation for Cuba's confiscation of more than $1.8 billion of American-owned property in Cuba. Congress amended the act again on 19 October 1965, deleting the vesting provisions and there by preserving the policy of the United States against taking foreign property without adequate compensation. To support U.S. national security and foreign policy goals since 1962, the Office of Foreign Assets Control has frozen—but has not vested—foreign assets of various countries, organizations supporting terrorism, and international traffickers in narcotics.

BIBLIOGRAPHY

Domke, Martin. The Control of Alien Property: Supplement to Trading with the Enemy in World War II. New York: Central Book, 1947.

Hyman, Harold M. A More Perfect Union: The Impact of the Civil War and Reconstruction on the Constitution. Boston: Houghton Mifflin, 1975.

Lucie, Patricia M. L. "Confiscation: Constitutional Crossroads." Civil War History 32, no. 4 (Dec. 1977): 307–321.

Martin, W. F., and J. R. Clark. American Policy Relative to Alien Property. Washington, D.C.: GPO, 1926.

Norton, Mary Beth. The British-Americans: The Loyalist Exiles in England, 1774–1789. Boston: Little, Brown, 1972.

Randall, J. G. The Civil War and Reconstruction. 2d rev. ed. Boston: Little, Brown, 1973.

Schwab, John Christopher. The Confederate States of America 1861–1865: A Financial and Industrial History of the South during the Civil War. New York: B. Franklin, 1968.

Van Tyne, Claude Halstead. The Loyalists in the American Revolution. New York: B. Franklin, 1970.

Richard B.Lillich

See alsoProperty .

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