The Chase Wants to Know

The world's biggest bank. Chase National of N. Y., last week was embarked upon an attempt to solve U. S. bankers' most annoying headache: who controls the U. S. funds of Dutch, Danish, Norwegian, Belgian, Latvian and other Russian and Nazi victims? The assets of ten such countries have already been "frozen" here by U. S. decree (estimated total on ice: around $3,000,000,000) and can be transferred only by license from the U. S. Treasury, via the Federal Reserve Bank. But even the Treasury's say-so does not free a U. S. private banker from the legal consequences of making a mistaken payment. With diplomats, refugees and foreign clients hounding and threatening them daily, U. S. bankers have lost much sleep. The Chase's solution: to seek a court decision in a test case.

When asked to pay out foreign funds, U. S. bankers are twice shy. Their first burns were inflicted by the Russian Revolution. The multifarious lawsuits that grew out of Soviet expropriations have piled up more interest costs and legal fees than the original claims, yet a great many of them remain unsolved after twenty-three years. But the potential legal complications after World War II make the Russian claims look like a law schoolboy's homework.

Most tangled problems concern the Dutch, who have around $700,000,000 of dollar assets in the U. S. When The Netherlands' Queen Wilhelmina escaped to London, the Dutch financial empire apparently escaped with her. Under a decree of May 24, 1940, The Royal Netherlands Government "temporarily residing in London" expropriated for the duration all Dutch assets outside of The Netherlands proper belonging to corporations and individuals still in occupied territory on May 15. The U. S. took "official cognizance of" this decree, recognized Wilhelmina's Government in exile and her duly accredited Minister in Washington, Dr. Alexander Loudon.

But this careful wording did not satisfy twice-shy U. S. banks. What if after paying out funds held for Dutch banks and corporations, they were later called to account by accredited officers still in The Netherlands? What if there were a frankly anti-Wilhelmina Dutch Government after the war, plus a new U. S. Government ready to deal with new governments abroad? What if it could be proved that the acts of a refugee head of state, without her Parliament's consent, were null and void?

In its test the Chase asked the N. Y. Supreme Court to pick for it the proper claimant among: 1) The Dutch Bankierskantoor Albert Graef, which has on deposit with Chase National securities (market value, almost $300,000) for its own and for its customers' accounts; 2) Dutch Minister Alexander Loudon who, as Wilhelmina's accredited U. S. representative, claims all Dutch assets in the U. S. for the duration; 3) two U. S. residents for whom Bankierskantoor held securities valued at $84,000 and who, feeling queasy about ever recovering in Holland, attached what ever assets in the U. S. they could discover (these two claimants happen to be famed German-born, British-naturalized stage and movie horror-star Conrad Veidt and German refugee-banker Eduard Wallach); 4) John Doe and Richard Roe, unknowns representing a London Dutch-Commission-in-Exile, set up by Wilhelmina to deal with expropriation problems; 5) John Poe and Jane Poe, phony names representing any other Bankierskantoor customers who might conceivably bring future claims.

Whether the Chase will be told whose instructions to honor is another matter. Under the New York Civil Practice Act, a "stakeholder" for property can ask the Court to pick the proper claimant only if it can produce bona fide rival claims. Before the Court will consider the case, the rival claimants may settle privately, or simply decide not to press their claims. All the Chase can do is wait and pray.

Bankers also looked for relief last week to the U. S. Congress. Before the Senate Committee on Banking & Currency was a bill designed to free U. S. banks from future suits over the disposition of frozen foreign government funds. If and when the case and the law go through, bankers and their lawyers will rest easier.

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