The opinion
SKELTON, Judge (dissenting):
This case is a classic example of a German cloaking operation. It is characterized by long years of careful planning, extraordinary foresight, devotion to detail, and the complete cooperation of those who participated in the plan. From the beginning, the Germans counted on the gullibility of Americans, their tendency to forgive and forget, and their sense of justice and fair play, for the success of the undertaking. It now appears that after all of these years the teutonic faith in these typically American traits was well-founded and that their meticulously planned and executed cloaking scheme is about to bear fruit. I cannot in good conscience be a party to it.
The record is so voluminous that it is impossible for me to comment on all the facts in the case. Our able Trial Commissioner, Lloyd Fletcher, has set forth most of the facts in his opinion and findings of fact, containing 81 printed pages, and I will rely on them for the most part, although I differ with many of the conclusions made by him from the facts. This is especially true as to his ultimate conclusion that the plaintiffs are entitled to recover $22,227,483.15, in addition to the sum of $1,041,360 heretofore paid to them, from the United States. The commissioner was confronted with a monumental task, especially with most of the witnesses having knowledge of the facts being dead and other evidence being unobtainable at the time of trial. He discharged his duties in a conscientious and commendable way, and was forthright in his opinion when he said:
* * i am charged with the duty of resolving the polar positions taken by the parties. I have done so to the best of my ability and without any really deep-seated conviction that I am right. * * *
Most of my differences with the commissioner’s opinion and findings of fact are with reference to the findings and conclusions based thereon after August 1, 1939, the date E. K. Halbach acquired legal title to 1,200 additional shares of GDC stock, which gave him control of the company. (See finding 62.) Prior to that date, there is not much dispute about most of the facts nor the inferences to be drawn therefrom. There are some exceptions, of course, which will be discussed later. The majority has, for the most part, adopted the opinion and findings of the commissioner as the opinion of the court.
The plaintiffs have objected to the consideration of any facts prior to the time Halbach acquired control of GDC and have referred to such events as *577 “ancient history.” This objection is ill-founded. The history of the company and its relationship and connections with I. G. Farben (Farben) from the beginning up to the date of vesting in 1942 must be looked to in order to understand how the beneficial ownership of GDC was cloaked for Farben, and how the plaintiffs (especially Halbach) were involved in the plan.
We start with the formation of GDC in 1925 as a New York Corporation by H. A. Metz & Co. (the U. S. sales representative of German Hoechst), Kut-troff, Pickhardt & Company, Inc. (the U. S. sales representative of German Badische) and Grasselli Dyestuff Corporation (later to become known as General Aniline & Film Corporation (GAF)). The incorporation was taken care of by H. A. Metz, a vertrauensmann (a trusted representative) of German Hoechst. Each of the three German companies were allotted 2,000 shares of GDC and Metz was the first president and later the majority stockholder. Thus, it may be seen that in the beginning the company was completely German from every standpoint, except its incorporation in New York.
Ernest K. Halbach had been a long time employee of Kuttroff, Pickhardt & Company prior to the time GDC was organized. He became an employee, stockholder, and director of GDC soon after it was formed. He originally purchased 500 of its shares of stock. He was invited to become a stockholder and a member of the original executive committee at the request of the German company Badische.
It should be pointed out that late in 1925 the three leading chemical and dyestuffs manufacturers in Germany, Bayer, Badische, and Hoechst combined their companies to form the I. G. Farben cartel. The wealth and influence of this cartel in Germany and around the world was so tremendous that it became the mainstay of Hitler and his Nazi government. It is doubtful if Hitler could have embarked on his program of world conquest in the second World War without its help. About nine months after GDC was formed, all its stockholders (including Halbach) executed option agreements, without consideration, on their stock to I. G. Farben. In brief, these options provided that Farben, on demand, could acquire all the stock at a price of $100 per share, plus six percent interest, and that the stock certificates would be held in escrow by Farben’s designee. In my opinion, the beneficial ownership of all the GDC stock in excess of $100 per share plus six percent passed to Far-ben at that time, where it remained until it was vested by the APC in 1942.
In the meantime, GDC became the exclusive importer and sales organization of Farben in the United States.
In 1931, H. A. Metz, the majority stockholder of GDC at that time sold his 4,100 shares to D. A. Schmitz, the brother of Hermann Schmitz, who was the chief executive officer of Farben. These shares were subject to Farben’s option, were endorsed in blank, and deposited in escrow with Farben’s New York attorneys, Briesen & Schrenk. The trial commissioner found that D. A. Schmitz was a principal vertrauensmann of Farben, and, through his brother, was at all relevant times controlled by Far-ben.
In passing, it should be noted that H. A. Metz was a former Congressman from New York who, during World War I had his dyestuffs stocks in a sales company seized by our government on the ground that it belonged to his supplier Hoechst in Germany. After the war the property was ordered returned to him by a court judgment because at that time under the provisions of Section 2 of the Trading With the Enemy Act, the APC lacked power to seize the American assets of an enemy when the enemy had placed them in a neutral or American company in exchange for its shares. See, Behn, Meyer & Co. v. Miller, 266 U.S. 457 , 45 S.Ct. 165 , 69 L.Ed. 374 (1925); and Hamburg-American Line Terminal & Navigation Co. v. United States, 277 U.S. 138 , 48 S.Ct. 470 , 72 L.Ed. 822 *578 (1928). Metz, in return for his expenses, after recovering his shares of stock “placed them again” at the disposal of (German) Hoechst, along with certain patents of Hoechst he had bought from the APC. This incident was cited by Farben on July 24, 1939, in its request to the Reich Ministry of Economics entitled “Measures to protect the stock-holdings of our foreign sales companies” for permission to cut all legal’ 'ties between Farben and the stockholders and place the companies in the hands of trusted persons who would, if the occasion required it, do as Metz had done. (See finding 49.) This was the pattern for Farben’s cloaking operations in the United States and around the world. We will now see how the plan unfolded and worked with respect to the cloaking of GDC.
There is no question but what H. A. Metz was holding his 4,100 majority controlling shares of GDC for the absolute control of the company by Farben. His sale of these shares to D. A. Schmitz did not change this situation. Schmitz held the stock as a nominee of Farben.
D. A. Schmitz formed a holding company named The Marion Company (Marion) on November 25, 1931, for the purpose of holding options on the stock of GDC and other Farben-controlled companies. On June 23, 1933, the original options held by Farben on all the GDC stock were cancelled and new options of the same tenor ($100 per share plus 6 percent) were obtained in favor of Marion from all the GDC stockholders (including Halbach), without consideration either for Farben’s cancellation of its options or for the new ones to Marion. All the stock was held by Farben’s New York lawyers, Briesen & Schrenk. At the same time, Marion obtained similar options from other companies, including Chemnyco, Inc. To complete the picture, Marion’s shares were optioned to Greut-ert, a Swiss bank, which held them for the benefit of Farben. The net effect of the whole transaction was to remove Far-ben’s name from the options in this country and to substitute that of Marion therefor, but Farben ultimately remained in control of GDC and could take over the shares and the company any time it wished.
The above arrangement continued until 1938 when the options Marion held on GDC stock were cancelled without consideration, although the book value was considerably more than $100 per share. In August 1938, all of the shareholders (including Halbach) of GDC executed the same type of options in favor of Chemnyco without consideration. The shares were endorsed in blank and deposited with Briesen & Schrenk, Far-ben’s attorneys in New York. The Marion Company was insolvent and formally dissolved June 28, 1939. All its assets were delivered to Chemnyco which assumed its debts and liabilities. This changeover was made to eliminate prominent German names like Schmitz, Duis-berg and vom Rath, who were connected by family relationships with Farben. Chemnyco was as much under option to Greutert as was Marion and was thereby controlled by Farben, but it did not outwardly appear to be connected with Far-ben.
A word more should be said about Chemnyco. It was originally founded in 1930 by Dr. Wilfrid Greif under the name of U. S. & Transatlantic Service Corporation. Dr. Greif was the personal representative of Farben in the United States. In 1931, the name of the company was changed to Chemnyco. The company was a service organization designed to replace Dr. Greif as the representative of Farben in the United States. It was supported by annual retainers from Farben (from $84,000 to $195,000) and by Kalle & Co. and Greutert for lesser amounts. It was controlled by Far-ben.
It is clear that these transactions involving Farben, Marion, Chemnyco, and Greutert could have no meaningful purpose except to carry out a preconceived cloaking scheme by concealing the ownership and control of GDC by Farben. Before these events took place, Farben had the beneficial ownership of the com *579 pany, and after they occurred it still had such ownership and could take over at any time. It is obvious that Farben was engaging in a clever and complicated cloaking scheme to hide its interest and control of GDC. Furthermore, it is significant that the stockholders of the company (including Halbacb) were cooperating to the fullest extent.
In the meantime, war clouds began to gather on the horizons of Europe and it appeared that another World War was imminent. The Germans, who were madly preparing for the coming holocaust, had learned many lessons from World War I in the field of economic warfare. They remembered how enemy property was seized in the United States, and, where possible, was sold or otherwise disposed of to the detriment of Germany. They realized, too, that the Trading With the Enemy Act in existence during the first World War would no doubt be amended and that even though the beneficial ownership of American property might be in Germany with legal title in a corporation in a neutral country or in America, there would probably not be another successful “H. A. Metz case,” as described above. By this time, they had concluded that the Americans had become educated in economic warfare and had learned the “tricks of the trade” just as the Germans had, and that to protect their investments and properties in this country, they would have to go further and do a better cloaking job than they had done in World War I. Meetings and discussions were had from time to time in Germany by Farben and German officials about cloaking.
Cloaking operations had long been the practice of Farben as is shown by the foregoing cloaking of GDC stock. At first, it may have been engaged in for tax and foreign exchange reasons. As war became imminent, its purpose was to protect its properties in foreign countries from seizure in case of war by concealing its interests in property abroad. This became the official policy of the German government on September 28, 1938.
On that date, when Germany invaded Sudetenland, the German Minister of Economic Affairs issued a decree to the German Collectors of Internal Revenue, authorizing the cloaking of German firms abroad as follows:
Within the last few days applications were submitted to me concerning assignments or transfers to neutral trustees of German assets located in countries which in case of war may be expected to be enemy territory.
Since it is not possible to predict the development of the international situation with certainty, I authorize you herewith to grant such applications subject to the following directives: The transfer of assets (stock, shares, share certificates, export claims, stocks of goods, etc.) to residents of countries which may be expected to remain neutral may be authorized for each individual if a reassignment to the German owner remains possible at all times (p. 2). Of course, licenses may only be issued to reliable German firms, which may be trusted not to avail themselves under any circumstances of this opportunity to transfer property illegally to foreign countries or to leave their foreign assets abroad for periods longer than is usual. To illustrate, the assignment of export claims must not result in having the proceeds delivered to the Reichsbank at a date later than is usual, except for unavoidable delays such as in the case, e. g., of an export claim against England which is collected from Zurich and then remitted from there to Berlin.
In issuing licenses it shall be stated explicitly that they are issued as an “exception” and that, also in the interest of the applicant, strict secrecy must be observed toward any individual not concerned with such measures.
The issuance of the licenses does in no way imply that I am convinced that such measures are necessary at the present moment. On the other hand, *580 I, for my part, do not want to be responsible for the loss of German assets which certain firms by utilizing their business connections might be able to safeguard a loss which might be incurred as a result of the denial of such applications if and when contrary to expectations international complications should arise. I further request to handle the issuance of licenses (p. 3) in such a way--that the firms will not gain the impression that the Reich Minister of Economics considers such measures necessary.
By Order
(sgd. L(andwehr) (sgd.) M(ueller) September 24
[Tr. 2038-39-40 — Deft’s Ex. 146.]
Dr. Gustav Sehlotterer, a high official of the Reich Ministry of Economics, beginning in 1935 and at all times relevant to this case, testified that the above decree was issued because there was a danger of war as early as September 1938, and that firms and individuals approached his ministry who wanted something done toward protecting German assets and firms located abroad. When asked:
“Was I. G. Farben one of these firms?”
His answer was:
“Yes.” [Tr. 2032]
He further testified that in 1938 or early 1939, Farben had applied for permission to cloak General Aniline & Film (GAF). When asked whether at that time Farben officials had discussed GDC, he quoted them as saying:
We cannot operate with a company in America which shows German ownership. We must operate with Americans for the reason of the current boycott of the German firms and German merchandise.
He said further:
Whether an application was made, I cannot remember. I have the feeling that rather this had happened previously. [Tr. 2036.]
In describing what was meant by cloaking, he said :
That a German firm operating abroad does not appear on the outside as a German firm but as a Swiss firm, a Dutch firm, an English firm or an American firm, depending on the location. In other words, that the German owner or shareholder or partner disappears from the register and his place is taken by a foreign person or firm as owner or part-owner, or shareholder. [Tr. 2033.]
He further testified that the person who takes the share is described as a “confidant” or a “trustee.” He further described cloaking as meaning:
Putting assets in foreign countries into the names of trustees who would act for I. G. Farben in this case or any other Germany [sic] company, as trustees always act, having legal title but the beneficial ownership would be in the I. G. Farben, * * *. [Emphasis supplied.] [Tr. 2065.]
He also asserted that the Ministry of Economics, in cloaking operations, always stressed the importance of making sure that the original rights would be reinstated and that corresponding agreements would be made, and assurances to that effect were required of the firms involved. Most of the assurances were oral, because the firms insisted on protecting their “partners” abroad from any sort of danger, and one danger was that any written document might come to light and show that their trustees abroad had lied. For these reasons, strictly legal ties were cut and oral secret agreements were relied on for the return to previous conditions after the end of the war. [See Tr. 2111-2116.] He pointed out that American citizens in America would qualify as trustees for German firms. [Tr. 2130-31.]
With further reference to the cloaking of GDC, Dr. Sehlotterer testified as follows:
Q. Would you please explain it the way you wanted us to understand it?
*581 A. The General Aniline was the subject of a written application made by I. G. Farben. I. G. Farben submitted an application to us and negotiated with us about it, in order to make a certain cloaking construction and to get our approval for it. General Dyestuff, as far as I remember, did not make such an application; in any case, not with me and I do not remember it. Generally speaking, I seem to remember more nearly that such cloaking in that sense had already been put into effect long ago.
Q. Then, in that situation, no specific application would have been required, is that correct?
A. Yes. In the case of General Aniline, the intent was to cloak a firm, whereas, in the case of General Dyestuff, so far as I remember, such cloaking had already been carried out. [Emphasis supplied.] [Tr. 2061-62.]
He testified further along this line as follows:
* * * I do not remember having heard anything about I. G. Farben making an application with regard to General Dyestuff dealing with options or changes or cloaking, and in the course of the year 1939, I did not hear anything about any changes. In considering myself as the agency within the Reich Ministry of Economic giving authorizations, the General Dyestuff did not exist for me in that capacity. * * * [A]nd I know only that in 193IS or 1939, they had told me once or on some occasion that this is a company that we dominate. What I mean is that I was not approached for any licenses or anything of that nature. [Emphasis supplied.] [Tr. 2136-37]
Dr. Schlotterer said that just prior to and at the time of the war, the greatest need of the German government in foreign funds was in English pounds and American dollars. [Tr. 2017.] These were obtained through German exports.
Consequently, German-controlled sales companies in foreign countries were of the utmost importance. Consequently, it was the policy of the Reich not to allow the sale of such sales companies. [GDC was a German-controlled sales company.] [See Tr. 2094, 2098.] He distinguished between investments abroad and sales organizations that produced foreign exchange. He testified generally that no sales organization was ever liquidated. [Tr. 2096.] When asked specifically about Farben, we find the following testimony :
Q. To your knowledge, Dr. Schlotterer, did I. G. Farben ever liquidate any one of its foreign sales organizations ?
A. I never heard of such thing. [Emphasis supplied.] [Tr. 2097.]
He further testified that if firms like Farben wanted to liquidate one of its companies abroad in 1938 and 1939, it was not given a free hand, but would have to apply for a license like General Aniline did. [Tr. 2081-82.] Furthermore, in case of a sale or liquidation of assets, including options, the proceeds had to be surrendered to the Reichsbank. [Tr. 2108.] He further declared that no cloaked participation of Farben was ever liquidated or sold outright once it had been cloaked. [Tr. 2109.] He pointed out that an outright sale was a liquidation, but that selling had nothing to do with cloaking, saying:
* * * When you cloak, you do not sell and when you sell, you do not cloak. [Tr. 2065.]
In commenting on the opposition of the Reich Foreign Organization to cloaking, he said in a signed statement dated December 8, 1948:
* K * * * * The objections of the Foreign Organization were met by the argument that cloakings which were well-contrived and prepared long beforehand, would not necessarily come to light. The I. G., [Farben] of all firms, had pointed out that the middlemen were trustworthy old business friends of the *582 I. G. and would stick to the agreements even without any legally binding contracts. * * * [Emphasis supplied.] [Tr. 2063, 2098-99 — Deft’s Ex. 163 at 16.]
Dr. Schlotterer was asked questions about information contained in the official files of the Revenue Service of the German government about GDC, which was exhibited to him at the trial, and which was dated July 14, 1939, he said:
It states here that the shares are secure in the hands through option agreements. Then it says the shares are being held by people who are in the confidence of the I. G. This would make this company under control and domination of I. G. Farben, under the legal aspects of the situation prevailing at that time and according to that, it should have been registered as a foreign company being controlled by a German Company. [Emphasis supplied.] [Tr. 2024-25, 2031-32 — Deft’s Ex. 107.]
He was asked the further question that assuming the facts stated in the report to be true, did they not indicate that Farben exercised perhaps some economic influence over GDC but did not exercise management control or ownership of that corporation? He answered:
I see only from the report that it says in here that the shares are safeguarded by ownership agreements and that the shares are held by confidants of the “I. G." and that the shareholders of the General Dyestuff administer the shares in the interest of I. G. Farben. That is what it says here. [Emphasis supplied.] [Tr. 2126.]
Schlotterer was interrogated about another undated report of the German Revenue Office concerning GDC. He was asked, assuming the information in the report was on file in the Revenue Office as was indicated by the report, would GDC have to be registered with the Reichsbank as an asset of I. G. Farben? He said:
Yes, but here it says that all participation is surely in the hands of the I. G. Farben through option contracts. This would be considered as dominated by I. G. Farben, and an option is an asset and I would say, I believe that if it is true what is said here, then this firm would be subject to registration with the Reichsbank. [Emphasis supplied.] [Tr. 2022-23 — Deft’s Ex. 108.]
The decree of the Reich Ministry of Economics of September 28, 1938, authorizing the cloaking of German firms abroad, quoted above, was cancelled on October 12, 1938, except for individual meritorious cases. As to them, it was kept in force. This cancellation was due to the Munich agreement allowing the Germans to keep Sudetenland which they had invaded and conquered. [Tr. 2039 —Deft’s Ex. 148.] This cancellation, except for individual exceptional cases, remained in effect until September 9, 1939, when it was reissued in more detailed form, as will be shown below. But individual cloakings were allowed between October 12, 1938, and September 9, 1938. [Gee Tr. 2041.]
The Book of Participation of Farben was introduced at the trial of this case. This important evidence showed the ownership and control of Farben’s companies around the world. This book showed that GDC was a 100 percent Farben-owned eonsortial participation. This meant that all of the stock was held in the name of trustees for the benefit of Farben. [Deft’s Ex. 168, Item 311 — Tr. 2163, 2274-75, 2303, 2342-44.] This was a highly secret book that was kept by the Central Committee of Farben’s Managing Board of Directors and was stored in a special container at night. It was dated December 1938, and was constantly kept up-to-date with pen and ink notations. This record was devastating to plaintiffs’ case, and, in my opinion, was not given the weight and consideration by the court that it required. The plaintiffs argued that it was not kept up-to-date. This is too slender a reed upon which to dismiss such important evidence. The witness Hans Piotrowski testified he kept the book up to date *583 with handwritten entries until August 1939. [Tr. 2152.] When Piotrowski went into the army at that time, the book was kept up-to-date by one Willi Dagne according to the witness Hoyer. [Tr. 2268.] Changes were made in pen and ink and when a new edition was issued, the changes would appear in typed form. Hoyer testified that if changes had been made in GDC stock, they would have been noted in the book. The evidence shows that the book was kept up-to-date through November 1939, because in that month American I. G. Chemical Corporation merged with its subsidiaries and its name was changed to GAF, and this change is shown by an entry in this book. [Deft’s Ex. 168, Item 310.] As can be seen, the effect of this evidence is to show that GDC was in the hands of Farben’s trustee in December 1938, and that this state of affairs continued without change until at least November 1939, which was long after Halbach acquired legal title to a majority of GDC’s stock on August 1, 1939. In other words, it shows that even after Halbach bought his stock on that date, he was holding the beneficial ownership for Farben, even though Farben’s alter ego, the Chem-nyco, had professed to cancel its options running to Farben on or about August 1, 1939, as will be shown below.
In the meantime, in April 1939, a newcomer, Dr. Armin V. St. George, joined Halbach’s group by buying 160 shares of Chemnyco stock, which was the controlling interest in the company. He later sold these shares to the officers and directors of the company. However, he later bought shares of GDC at the invitation of Halbach, and his heirs are plaintiffs herein.
In June 1938, the Marion Company exercised its option on the GDC shares of Adolph Kuttroff, deceased, and sold them to Walter Duisberg, a son of one of Farben’s founders, and Halbach. Hal-bach’s shares were subject to the option of Marion, and Duisberg, who as a new shareholder, signed an option agreement with Chemnyco on June 9, 1938.
On June 1, 1939, a voting trust agreement was signed by Halbach and the other stockholders of GDC which provided that D. A. Schmitz, the nominee of Farben as to his controlling 4,100 shares, Duisberg and Halbach would be the voting trustees. This agreement, although signed, never became effective. It is significant only because it was signed.
Farben made use of trusted representatives ,pr men of confidence called ver-trauensmann to carry on its work. This is shown by finding 33 as follows :
33. In its business activities abroad, Farben made widespread use of trusted representatives or so-called men of confidence. In the German language, the word vertrauensmann is used to describe such a trusted representative. Farben had many such trusted representatives in this country upon whom it could rely to protect Farben’s United States business interests. Prominent among them were H. A. Metz, first president and majority stockholder of GDC; Wilfrid Greif, Farben’s official United States representative until 1936; D. A. Schmitz, brother of Farben’s highest official, see finding 22; Walter Duisberg, son of a Farben founder; William vom Rath, likewise the son of a Farben founder; Rudolph Ilgner, nephew of Hermann and D. A. Schmitz and brother of the head of Farben’s Central Finance Office; and finally, but most importantly from the standpoint of this litigation, Ernest K. Halbach, who in 1930 became GDC’s president and in 1939 its majority stockholder.
With the rapidly developing signs of an approaching war, Farben’s GDC stock nominee, D. A. Schmitz, and its other vertrauensmann Rudolph Hutz, W. P. Pickhardt, and E. K. Halbach, together with Chemnyco and Farben, in my opinion, decided on the final and ultimate cloaking act with reference to GDC. This plan was for Schmitz to convey legal title to his 4,100 shares to the GDC corporation, Hutz would convey 500 shares to it, and Pickhardt 300 shares, *584 for $100 per share. (The shares had a book value of at least four times that amount.) This was done on or about August 1, 1939. At the same time, Chemnyco cancelled its options on all the stock without consideration, which meant that it gave up its right to purchase for $600,000 stock having a book value in excess of $2,850,000 without receiving anything for it. This whole transaction can truly be said to have a “piscatorial odor.” Businessmen in their right minds, and more especially astute and knowledgeable Germans, such as we have here, would not enter into a deal of this kind and throw away two and one-fourth million dollars in the book value of the stock, to say nothing of its actual value, without some promise or agreement to recover it sometime in the future.
When GDC received this stock, it sold 1,200 shares to Halbach, 900 shares to Duisberg, and 100 shares each to GDC’s employees Rudolph Lenz, H. Walford Martin, and Percy Kuttroff, keeping 2,-000 shares in the GDC treasury. The shares were sold for $100 each. After this transaction, Halbach had 2,100 shares, was president, and was the majority shareholder. He had absolute power to control the company. All the shares were taken out of the hands of Farben’s escrow holders and delivered to the purchasers.
No application was made by Farben to the German Ministry of Economics to make this sale and no permission was given to it by such Ministry to dispose of these shares or to cancel the options held by Chemnyco for the benefit of Far-ben. This was required by German law if this was a bona fide sale and cancellation of the Farben options and all of its beneficial interest in GDC. If the transaction was merely additional cloaking of the already cloaked GDC by the addition of the “ultimate” act in the cloaking process, namely, the cutting off of all outward legal ties, without disturbing the beneficial ownership, which I think was the case, it is conceivable that no permit was required. This was true because the company had long ago been cloaked by Farben, as shown above.
During the summer of 1939, Duisberg was consulting with Farben in Germany and was in contact with D. A. Schmitz by telephone. There is no doubt in my mind but the foregoing plan to transfer control to Halbach, etc., was concocted by him and Farben while he was in Europe. Hutz was also in Germany at this time. Consequently, the sale of GDC stock to Duisberg and Hutz was not completed until September and November 1939, respectively, although Halbach and the others had made their purchases on August 1, 1939.
As a part of the transaction in which Halbach gained control of the company, as described above, he and all of the other stockholders were required to sign a stockholder’s agreement, dated July 27, 1939, which granted GDC an option to buy at $100 per share plus six percent interest from the date of the last dividend, all the shares of any stockholder who desired to sell, or who died, or who ceased to be an employee, director or officer of GDC. This was signed by all the stockholders, including three employees not listed above named Lennart Swenson, Anthony T. Wingender, and J. Robert Bonnar, each of whom bought 10 shares for $100 per share, and including Dr. St. George, Henry E. Herrmann, an employee who bought 20 shares in January 1941, and George A. LaVallee, a non-employee who bought 50 shares in December 1941, and who became a director of GDC. Duisberg and Dr. St. George were excused from certain provisions of the agreement, since they were not employees, officers, or directors of GDC and by special agreement were allowed to keep their shares until death or until they decided to sell, at which time the option in favor of GDC would become operative. Next to Halbach, Duisberg owned the largest number of shares after these transactions were completed. There were two stock dividends in 1940 and 1941 which increased the shares of each stockholder by two and one-fourth times, approximately. After these divi *585 dends, Duisberg owned 2,475 shares. He sold 500 shares to GDC in August 1941, and offered to sell the rest in December 1941, but the Treasury blocked the sale. GDC was willing to purchase the shares.
At the trial, the witness, Karl F. Milde, Assistant Treasurer of GAF, testified that in the original planning of the 1939 transactions, Schmitz intended to transfer the controlling interest in GDC to Duisberg but Halbach objected, and such control was then transferred to Hal-bach. This indicates, of course, that Schmitz, who was holding the shares as the nominee of Farben and for its benefit, was not as much interested in making a sale as he was in making sure that the control was placed in the hands of someone who would be responsible to Farben. Milde also testified that he and other officials of GAF assumed that Schmitz was a nominee for Farben and that a similar nomineeship would continue after Halbach and Duisberg acquired Schmitz’s stock, and I am convinced that it did.
When D. A. Schmitz transferred his controlling shares to Halbach and Duis-berg and resigned as a director and chairman of the board of GDC, he gave as his reason that he felt there was a conflict of interest since he was president of GAF. However, this will not stand the light of day, because he had held these positions for eight years and it is not logical that he would suddenly become so ethical. On the other hand, it is obvious that he was participating in a plan, no doubt on instructions from Far-ben, to further cloak the shares of GDC by transferring them to a Farben ver-trauensmann, such as Halbach, and cut all legal ties with Farben in order to make the cloaking complete. This would obviate a seizure of the shares by the United States in case of war. Furthermore, this plan would be in accord with the German government decree to be issued on September 9, 1939, the contents of which were no doubt known to Far-ben well in advance of that date. Farben was of such importance to Germany’s economy that it was, to all intents and purposes, a part of the government. Its officers had long conferred with the Ministry of Economics about cloaking activities, and it is logical to assume that it knew of the impending decree before it was issued. If it could transfer the GDC shares before the issuance of the decree, it could always argue, as the plaintiffs do here, that the transfer was not made in compliance with the decree. This line of reasoning has been effective because the commissioner found that the decree was prospective in its application and did not apply to the transfer of Schmitz’s stock to Halbach, et al. However, the transfer to Duisberg was not made until September 1939, and that to Hutz in November 1939. So it could be said that the whole transaction took place about the time the September 9, 1939, decree was issued. That decree was issued when Germany invaded Poland, and it was assumed that another World War would ensue. It was urgent that German properties abroad be fully cloaked to prevent their seizure by foreign governments, and at this point in time this could only be done by cutting all legal ties with companies abroad. The September 9, 1939, top secret cloaking decree was as follows:
In view of the present international situation, it will be necessary that companies and enterprises abroad which, in accordance with the provisions of RE ((General Order)) 152/36, are subject to German Foreign Exchange Control, be cloaked. It is a matter of urgent concern that these companies be seasonably and effectively cloaked so that they will be able to continue to serve, so far as possible, as strongpoints of German trade. The transformation which these companies will have to undergo will be made for the ultimate purpose of giving them the appearance of foreign enterprises whose independence can he conclusively shown. It must be expected that companies unable to prove their independence from Germany will encounter difficulties and be unable to fulfill their functions. In many cases it will *586 therefore be advisable to abandon preexisting, formalized, legal ties with their German parent companies if the parent’s actual control, ensured by other means, remains strong enough to safeguard its interests. Accordingly, it seems inadvisable to exercise control directly through foreign trustees who, e. g., hold a majority of shares in trust for a German company because of the danger that the trustee will be questioned under oath about the nature of his interest in this property.
•X- * * -X- * *
The actual influence upon the foreign firm established as a result of the transformation will be secured by effective safeguards both with respect to the personnel and in the economic sphere. Accordingly, special attention will be paid to the selection of individuals for appointment as managers of these foreign firms. It is appropriate that this selection of personnel, which as a rule will be of foreign nationality, should be left to the discretion of the German firms. I request, however, that in each case you emphatically advise the firms that they will be held responsible if a poor choice on their part should result in prejudice not only to their own interests but also to those of the German national and war economies. Of course, the companies are required to see to it that no Jewish foreigner be employed by any German firm that is to be cloaked.
-X- * * * * *
The cloaked firms are also subject to the provisions of RE ((General Order)) 152/36 to the extent that the German parent-company actually continues to be in a position to exercise control over the assets of the foreign company. This actual control is to be ensured by selection of personnel and so far as possible is to be reinforced by the actual arrangements pursuant to which business is done with the foreign company. I attach the greatest importance to the request that shipments be billed in such form that the payment for goods exported will be received in full at the earliest usual date; and that value for goods imported into Germany be paid in the customary manner. Any manipulation of trade transactions for the purpose of accumulating, in a foreign company, profits which are not required for its operation will be prosecuted as economic sabotage. * * * [Emphasis in original.]
It will be noted that the decree emphasized that in many cases it would be advisable to abandon pre-existing, formalized leagl ties with their German parent companies, if the parent’s actual control, ensured by other means, remains strong enough to safeguard its interests. It is also of particular interest that the decree provided:
Accordingly, it seems inadvisable to exercise control directly through foreign trustees who, e. g., hold a majority of shares in trust for a German company because of the danger that the trustee will be questioned under oath about the nature of his interest in this property.
The transaction between Halbach, et al., and Farben’s nominee, Schmitz, and Chemnyco (under option to Farben) from August 1 to November 1939, complied with the provisions of this decree one hundred percent. It would be difficult to state how such compliance could have been any more complete.
A letter from Farben to the Reich Ministry of Economics dated in November 1939, showed how the cloaking operation was working, as follows:
In individual cases there are persons in our service who possess the citizenship of an enemy country. In many cases the gentlemen concerned are Germans by birth who, having worked for many years abroad, have acquired a foreign citizenship. As you know, the setup of our sales companies located abroad is so arranged as to make them appear to be national enterprises of the countries concerned. Trusted persons acting in a fiduciary capacity appear officially as the capital holders. *587 In some cases these are gentlemen who possess a foreign citizenship. For the purpose of making the cloaking of these companies complete, we have attached special importance to entrusting such gentlemen with this function. These gentlemen are to continue to act for us in neutral countries in the interest of our export trade. Separation from them would not only mean a not inconsiderable setback for our export trade, but it would also be dangerous in the present situation to dismiss these gentlemen who are familiar with the structure of our sales organization, since this would expose us to the risk that they might employ their knowledge to our disadvantage. We explicitly emphasize that we shall, of course, retain in our service only such gentlemen possessing a foreign citizenship whose reliability is beyond doubt. [Emphasis supplied.]
The italicized portions of the above letter are especially significant. They describe the GDC situation perfectly. If they had mentioned GDC as the company involved and Halbach and Duisberg as the “trusted persons acting in a fiduciary capacity” who “appear officially as the capital holders” and who had been entrusted with this function “for the purpose of making the cloaking of [this company] * * * complete,” they would have described the GDC cloaking procedure used in this case with perfect exactness. I think we are justified in inferring that Farben was referring to the cloaking of GDC, as well as other companies, and to Halbach and Duisberg and others as its trusted representatives, who, although having legal title to the stock, were acting in a fiduciary capacity and holding it for Farben.
The commissioner correctly concluded that Farben had the beneficial ownership of GDC prior to the transfer of the controlling shares to Halbach on August 1, 1939. In this connection, he said:
There can be little doubt at this point in time that Farben continued to have the power to take direct control of GDC whenever Farben’s management might desire to do so.
At oral argument of this case, plaintiff’s counsel, for all practical purposes, admitted that GDC was being held by trustees for Farben’s benefit up to December 1938, as shown by Farben’s secret book of participation. He, of course, argued that the book was not kept up-to-date after that date and the situation changed when Halbach got control on August 1, 1939. The commissioner has sustained him in this argument. I do not agree. The evidence shows the book of participation was kept up-to-date at least until November 1939, and no change was shown as to GDC or as to Farben’s beneficial ownership of its stock up to that date, as shown above.
In order for the GDC cloaking plan to work after Halbach got control, there had to be a secret agreement between Farben and Halbach that he would return the control of the company to Far-ben after the war. The plaintiffs say there is no evidence, written or otherwise, of such an agreement. Of course, in this kind of a cloaking operation, there would never be any written document containing the agreement, as secrecy is the cornerstone of the plan. The principal actors who made such an agreement would not likely reveal it, and in this case they were all dead at the time of trial. In this situation, a court is justified in looking to the facts to determine whether the existence of such an agreement can be established by inference. In my opinion, the principal facts in this case compel the inference that such a secret agreement did exist.
The plaintiffs argue that Halbach would not make such an agreement because he was a loyal American citizen. His loyalty has nothing to do with it. H. A. Metz had been a member of Congress and was a loyal citizen during World War I, yet he returned APC-seized property to the Germans after the war, even though Germany lost the war. In Halbach’s case, any loyalty to the United States would not have kept him from
*588 returning the control of GDC to Farben whether Germany won or lost the war. However, if Germany had won World War II, it is inconceivable that Halbach could have resisted the pressure from Farben to return its property, regardless of his loyalty to the United States. To demonstrate his loyalty to the United States, the plaintiffs emphasize his high position with the War Production Board as if he were a member of that Board. Actually, he was only a member of an advisory committee to the Dye and Textile Branch of the War Production Board. After all, he was an American citizen and the least that he could do in time of war was to serve on an advisory committee in an industry to which he had devoted his entire life and in which he was an expert. This did not interfere with his role in Farben’s cloaking activities with respect to GDC.
Halbach was not nearly the paragon of virtue and forthrightness that the plaintiffs have pictured him. The art of concealment, both in business as well as in his private affairs, seem to have been his specialty. This is shown by his participation in the cloaking of GDC for Farben from the founding of the company in 1926 up through December 1938, by admission of the plaintiffs, and up to August 1, 1939, as found by the commissioner, and up to the time of vesting in 1942, in my opinion. During all this time he secretly held the beneficial control, along with others, of the company as a trustee for Farben. In addition, he held stock in Consolidated Dyestuffs Corporation, Ltd. (CDC), a Canadian corporation, as the nominee of Farben. The commissioner found that CDC “was always owned or controlled by Farben.” The commissioner further found:
* * * There is little doubt that Hal-bach was aware of the Farben arrangements to conceal its control of CDC. * * *
Halbach also applied the practice of concealment to his personal income tax returns. Beginning in 1934, he listed his salary in his income tax returns and then listed a separate item as “Income from foreign interests” which ranged upward from $30,000 in 1934 to $47,500 in 1941. His base salary from GDC was $52,500 in 1941. When questioned about this, he said that the Revenue Act of 1934 authorized the Internal Revenue Service to make public the compensation of corporate executives and he did not want the public to know how much he was making. The facts do not show whether or not he was also concealing the amount of his bonus payments each year from his other officers and stockholders. It is somewhat significant that the next highest bonus paid was only $2,500. The commissioner found:
It was clearly improper for Halbach thus to disguise his GDC annual bonus to the end that, for purposes of public disclosure, his total GDC compensation would appear less than it actually was. * * *
His actions in this regard were not only improper, but also circumvented and violated the law by his filing income tax returns that contained false statements regarding the source of his income, to say nothing of causing the non-observance of the 1934 Act relating to public disclosure of income by the IRS. Of course, Halbach’s actions in this regard do not govern the outcome of the case before us and is only mentioned to show the lengths to which he would go, and did go, in cloaking and concealment activities if his purpose was thereby served.
Halbach showed his willingness to serve Farben, and perhaps Germany itself, by making a trip to Milan in January 1940. He was asked to make the trip by Koehler and von Szilvinyi, who were high officials of Farben. Hallbach said later that he met with these officials of Farben for six days (January 22-28) for the purpose of planning how they could break the British Blockade of Germany by shipping goods from that country to the United States via Siberia. Plans were perfected along this line at *589 the meeting. Also, a secret code was agreed upon whereby Farben and Hal-bach could communicate with each other in secret. Here we have concealment again, which was of course no stranger to Halbach. Of course, Halbach was aiding Germany’s economy by this plan to help its export program and break the British Blockade. Also, this meeting was held and these plans were made at a time when Germany had invaded Sudetenland and Poland and was in the process of exterminating millions of Jews as Auschwitz and millions more at Dachau, Buchenwald, Stalag, and other Nazi concentration camps in Germany, Austria, and Poland. 1 These events did not deter Halbach in his efforts to aid Germany’s export program and thereby provide it with much needed foreign exchange, which would, in turn, assist it in its program of invasion, conquest, and war.
In my opinion, the transfer of control of GDC to Halbach on August 1, 1939, and the other transactions which occurred on or about the same time did not change Farben’s beneficial ownership of the company. All that was changed was the transfer of the legal title to the stock to the extent of $100 per share plus six percent interest, together with the method by which Farben could later regain control. Of course, Halbach was the key to the whole situation. By reason of the GDC stockholder’s agreements, he could take over all the stock of the employees at any time by firing them, although he did not need their stock for control, as he already had control. He could transfer this control to Farben at any time. The stock of the non-employees could be acquired if they died or wished to sell. His own stock, before and after the creation of his family trust, was subject to the agreement. He was still in control of the company after the trust was created. The trial commissioner found “There can be no question on this record that, even after the creation of the family trust, Halbach, continued to exercise de facto control of GDC.” The net effect of the whole arrangement was simply a transfer of Chemnyco’s options, which it held for Farben, to GDC, which was controlled by Halbach, and then to Halbach, to hold for Farben. Farben gambled on Halbach’s loyalty to it, as shown by the fact that he had never done anything against its interests, not to mention his trusteeship of his GDC stock for Far-ben’s benefit since the company was founded, and other services. It also counted on Halbach’s living until the war was over. Of course, Halbach was in the enviable position of “having his cake and eating it, too.” If Germany won the war, he could simply return the control of GDC, be reimbursed at $100 per share plus six percent, and occupy a high place in Farben’s hierarchy. If Germany lost the war, which it did, he could, along with his associates, claim ownership of the legal title to the shares at $100 per share plus six percent, as well as the beneficial ownership of the company (worth $2,250,000 when he acquired control) which beneficial ownership they neither bought nor paid for, and which is exactly what they are doing in this case.
Much has been said by the plaintiffs about two stock dividends declared after Halbach got control as indicating that he and the other stockholders had complete legal and beneficial control of the company. I do not believe this proves anything one way or the other. This was a normal practice for a profitable business. It reduced the surplus of the *590 company. If this surplus had been allowed to accumulate without dividends, it would have looked like a suspicious build-up for Farben, and this is the last thing Halbach and Farben wanted. Of course, Halbach may have gone further in issuing the dividends than Farben desired, and in so doing may have operated “fast and loose” with Farben’s property, but, after all, Farben had put him in charge and he had a certain amount of authority. At that point, Farben could not do anything about it without revealing the complete GDC cloaking scheme. The evidence shows that the interest of the stockholders increased 2^4 times by these stock dividends. This only meant that they would eventually be paid for 2% times more shares at $100 per share plus six percent than they would have been paid before the dividends were declared. This did not affect Farben’s right to eventually control the company, even though its book value might or might not be somewhat less.
It should be remembered that after the transfer of stock of GDC in the summer of 1969, Duisberg was the second largest stockholder in the company and Dr. St. George was the third largest. If Hal-bach had died, these two would have controlled the company. This actually meant that Duisberg would have controlled it (for Farben) because past experiences with Dr. St. George showed that he would do whatever Halbach or Duisberg wanted him to do about GDC and Chemnyeo.
On December 7, 1941, the United States was plunged into a struggle to the death with the Axis powers by reason of the murderous attack by the Japanese on Pearl Harbor. The most cunning, the most ruthless, the most powerful, the most unscrupulous of our enemies was Nazi Germany. It had built the most powerful war machine the world had ever known. With madman Hitler at its head, it was bent on world conquest, founded on invasion of other countries, murder, robbery, and extermination of whole populations. Not only did the Nazis have a powerful war machine, but also an economic warfare program such as had never been known before. A part of this economic warfare system was the world-wide cartel of Farben, of which GDC had long been an integral part. In the sphere of economic warfare, the Nazis had no peer. They were past masters at cloaking, deception, false pretense and misrepresentation. Faced with this kind of an enemy and these practices in economic warfare, the United States began to investigate all German-owned or controlled companies. In June 1942, the Secretary of the Treasury issued a document called “Administration of the Wartime Financial and Property Controls of the U. S. Government.” This publication discusses in detail the methods used by the Axis powers in economic warfare. We find the following on page 30 with reference to GDC:
A much more common technique of control was the use of options. For example, the stock of General Dyestuff Corporation (organized under the laws of Delaware) was owned by two American citizens but was subject to an option held by Chemnyeo, Inc., which in turn was nominally owned by American citizens, but was incorporated and functioned as a service agency for I. G. Farbenindustrie in the United States.
On June 30, 1942, Leo T. Crowley, APC issued vesting order No. 33, vesting all of the capital stock of GDC, in pertinent parts as follows:
* * * [T]he undersigned, finding upon investigation that the property hereinafter described is the property of Nationals of a Foreign Country designated in Executive Order No. 8389, as amended, as defined therein, and that the action herein taken is in the public interest, hereby directs that such property including any and all interest therein shall be and the same hereby is vested in the Alien Property Custodian, to be held, used, administered, liquidated, sold or otherwise dealt with in the interest of *591 and for the benefit of the United States; such property being described as follows:
All outstanding shares of the capital stock of General Dyestuff Corporation (a New York corporation), * * * [Deft’s Ex. A.]
This order was never revoked or changed in any way. Later the Attorney General succeeded the APC. He consolidated GAF and GDC and sold both companies on March 9, 1965, to a group of underwriters. The plaintiffs or their respective predecessors in interest filed suit in a United States District Court for the proceeds of the sale of the GDC portion of the stock. This suit was settled in 1945 by paying each of the parties, except St. George, $100 per share plus six percent from the date of the last dividend. In 1951 a settlement was made with St. George’s widow for $365 per share. The total amount of these payments was $1,041,360.
On October 22, 1962, an amendment to the Trading With the Enemy Act was enacted as Section 41(a) Pub.L. No. 88-490 (Codified in Title 50 U.S.C. App. as Section 42(a)) conferring jurisdiction on this court “Notwithstanding any statute of limitation, lapse of time, any prior decision by any court of the United States, or any compromise, release or assignment to the Alien Property Custodian” to hear, determine and render judgment against the United States for the proceeds of the sale of property vested under vesting order No. 33 relating to certificate numbers 104 to 121, inclusive, 125, 126, 128 to 134, inclusive, and 137 to 139, inclusive. 2
Thereafter, the plaintiffs filed this suit, claiming they are the beneficial owners of GDC as well as the legal title owners of the stock for which they have already been paid. In effect, they sue here for the amount the United States received from the sale of the beneficial ownership of the GDC stock over and above the $100 per share plus six percent interest from the date of the last dividend paid to all but Mrs. St. George, who was paid $365 per share plus the six percent. She sues for the excess of such beneficial ownership above the $365 per share paid to her. Plaintiffs also claim they are entitled to interest on the total amount received by the United States from the date of the sale. The commissioner has concluded that the plaintiffs are entitled to recover $22,227,483.15, but has denied their claim for interest.
The Law of the Case
In my opinion, there is no question but what the plaintiffs and their predecessors in title had legal title to the GDC shares of stock to the extent of $100 per share, plus six percent interest since the date of the last dividend. The plaintiffs have been paid for the legal title to this stock by the settlements heretofore made. The only property we are concerned with here is the beneficial ownership of GDC above the amounts heretofore paid, as aforesaid, which included the right to eventually control the company.
The commissioner has correctly stated that under Section 9(a) of the Trading With the Enemy Act the claimant’s burden in a case to recover vested property is to show that he was not an enemy, the ally of an enemy, or the agent of either, and that he owned his property beneficially without taint, citing Societe Internationale Pour Participations Industrielles Et Commerciales v. Rogers, 357 U.S. 197 , 78 S.Ct. 1087 , 2 L.Ed.2d 1255 (1958); von Clemm v. Smith, 255 F. Supp. 353 (S.D.N.Y.1965), aff’d, 363 F. 2d 19 (2d Cir., 1966); and Feller v. Brownell, 201 F.2d 670 (3d Cir., 1953). All parties agree that the plaintiffs have this burden in this case. The question is, have they discharged this burden?
The plaintiffs are not enemies as defined in the Act because of citizenship *592 or residence, as they were all Americans and resided in the United States. They were not enemies or allies of an enemy by reason of being an officer, official agent, or agency of the German government. Therefore, they cannot be denied recovery here on the ground that they were enemies as defined in the Act.
However, the plaintiffs have a long way to go in order to recover in this case. They have the burden of proving that (1) they were the beneficial owners of the company; (2) they were not holding such ownership as fiduciaries for the benefit of Farben; and (3) their ownership was not “tainted” by cloaking or other connections with Farben or Germany. If they have failed to prove the first proposition, which I think is the case, we do not have to reach the second and third.
I have demonstrated in a discussion of the facts that Farben had the beneficial ownership of GDC up to the time of vesting in 1942. Plaintiff has admitted that this was true up to December 1938. The commissioner found this to be true up to August 1, 1939, and the plaintiffs admit that they did not except to this finding and they are therefore bound by it. The sale to GDC on August 1, 1939, of the controlling shares, which were, in turn, transferred to Halbach, Duisberg, and St. George, plus the cancellation without consideration of Chemnyco’s options, did not change the situation. The options were, in effect, renewed by the stockholders’ agreements with GDC which Hal-bach controlled as a Farben vertrauens-mann for the benefit of Farben. The evidence shows that under the laws of Germany, Farben had to apply to the Reich Ministry of Economics for permission to sell its beneficial ownership in GDC. The plaintiffs did not prove that Farben ever made such an application nor that it ever got permission for the sale, nor that it ever reported any sale as required by German law. Consequently, plaintiffs have wholly failed to discharge their burden of proving a sale of the beneficial ownership of the company. We started out with the agreement of all parties that Farben had the beneficial ownership of GDC, as shown by the option agreements, at least up to August 1, 1939. As was stated in Feller v. McGrath, 106 F.S.upp. 147, 154 (W.D.Pa.1952), aff’d sub nom. Feller v. Brownell, 201 F.2d 670 (3d Cir., 1953), cert. denied, 346 U.S. 831 , 74 S.Ct. 24 , 98 L.Ed. 355 :
* * * An agreement once proved is presumed to continue until the contrary is established, * * *. [Id. at 154.]
The plaintiffs never proved that the agreements in the options were ever really cancelled or changed in substance. They were merely transferred to GDC and ultimately to Halbach. For the plaintiffs to prevail they had to prove that the beneficial ownership was sold to them and for a consideration. This they have failed to do. All that plaintiffs have proven is that the bare legal title to the stock was sold to them, but that is not enough. Besides, they have already been paid for such bare legal title.
The case of Feller v. McGrath, swpra, is in many respects on all fours with the case before us. There a German firm in the United States was cloaked to hide its German beneficial ownership upon the approach of war. The legal title to its shares of stock was transferred to Feller, an American citizen, who, like Halbach in our ease, performed valuable services for the United States during the war. Also, there was a voting trust agreement that was never put into operation, as here. There, as here, no written agreement was made for the return of the property after the war. The company in Germany relied on Feller’s inferred oral promise to return the property after the war. The court pointed out, as I have done here, that a license had to be obtained from the German government before the beneficial ownership of the company could be sold, and there was no proof that this was ever done. There was no specific evidence that an agreement to conceal the property was *593 ever made either in writing or verbally, but the existence of such an agreement was inferred fom the facts. The Court said in this regard:
* * * There is no direct evidence that this agreement to conceal was entered into at a specific time and place, or that it was written or verbal; but the existence of such an agreement is to be inferred from the testimony * * * [and from the other evidence, as contracts, negotiations and circumstances], [Emphasis supplied.] [Id. at 151.]
The court went on to say that even if the agreement to conceal was not established, the facts and circumstances still showed that the German company was the beneficial owner of the stock even though Feller held the legal title to it. The court pointed out that the burden was on the plaintiff to show he had the full beneficial ownership and all that he had proved was that he had bare legal title to the stock, which was not enough. That is exactly the situation here.
In my opinion, the facts are stronger for the government in our case than they were in that case. In any event, that decision is decisively against the plaintiffs here.
Accordingly, plaintiffs are not entitled to recover. See Manufacturers Trust Co. v. Kennedy, 291 F.2d 460 (2d Cir., 1961); La Due & Co. v. Rogers, 259 F.2d 905 (7th Cir., 1958), cert. denied, 359 U.S. 911 , 79 S.Ct. 588 , 3 L.Ed.2d 575 (1959); Draeger Shipping Co. v. Crowley, 55 F.Supp. 906 (S.D.N.Y.1944); and Bank of Philippine Islands v. Rogers, 108 U.S.App.D.C. 179 , 281 F.2d 12 (1959), aff’g 165 F.Supp. 100 (D.D.C. 1958). It might be argued that the minority stockholders should be treated differently to Halbach and Duisberg. (Duisberg is not a party to this suit.) It is true that there is a difference between the minority stockholders and Halbach as far as knowingly participating in the cloaking of GDC for the benefit of Farben is concerned, as shown above and as will be discussed below. Nevertheless, no distinction can be made between their position and that of Halbach in connection with the beneficial ownership of the company. This is obviously true, because the facts show that the exclusive beneficial ownership was in Far-ben, and, consequently, it could not be in any of the plaintiffs or their predecessors at the same time.
In view of the foregoing, it is not necessary to reach the questions of whether plaintiffs were holding the beneficial ownership of GDC as fiduciaries for Far-ben or whether their ownership was tainted by cloaking for Farben, as indicated above. However, I have concluded that these points should be briefly discussed with reference to the Halbach claim.
The commissioner found, in effect, that Halbach and his associates were holding the beneficial ownership of GDC as fiduciaries for Farben up to August 1, 1939, when he said that up to that date Farben could have taken over the company any time it chose to do so. The plaintiffs have agreed to this fact by admittedly failing to except to this finding. Also, Farben’s book of participation showed that GDC was 100 percent in the hands of its trustees in December 1938, and no changes were ever shown in the book, although the last entry was made therein in November 1939. As has been pointed out above, the transfer of the control of Schmitz, et al., to Halbach, et al., from August 1 to November 1939, and the cancellation of Farben’s options by Chemnyco without any consideration, was nothing more than a further cloaking operation of the company. A requisite of this arrangement was the contemporaneous stockholders’ agreements whereby Halbach could take over their shares at any time in the name of GDC for $100 per share plus six percent. He was always in a position to turn the control over to Farben. The commissioner has stated that Farben had no legal right to force Halbach to return control to it. In my opinion, this is immaterial. The ultimate act of cloaking by cutting all legal ties was in accord with Germany’s *594 final cloaking scheme, and it did not depend on the enforcement of any legal obligations for its success. Farben had other means of assuring the return of the control of GDC to it, which, in this case, was obviously a secret agreement with Halbach. All of this being true, the conclusion is inescapable that Halbach was holding the beneficial ownership of the company as a fiduciary for the benefit of Farben. Under these circumstances, Halbach’s heirs are not entitled to judgment. See Kaname Fujino v. Clark, 172 F.2d 384, 385 (9th Cir., 1949); Farmers’ Loan & Trust Co. v. Hicks, 9 F.2d 848, 853 (2d Cir., 1925), cert. denied, 269 U.S. 583 , 46 S.Ct. 120 , 70 L.Ed. 424 ; Central Hanover Bank & Trust Co. v. Markham, 68 F.Supp. 829, 831 (S.D.N.Y.1946); Keppelmann v. Keppelmann, 91 N.J.Eq. 67, 108 A. 432 (1919), cert. denied sub nom. Keppelmann v. Palmer, 252 U.S. 581 , 40 S.Ct. 392 , 64 L.Ed. 727 (1920); Cordero v. Brownell, 211 F.2d 90 (2d Cir., 1954); and Feller v. McGrath, supra. In Keppelmann v. Palmer, supra, the court said:
-» * * phe manifest purpose of Congress was that the statute should operate, not only upon property the legal title to which is in the alien, but on all property held for him, or for his benefit, whether the legal title be in him or in the person who holds it for his benefit. * * • * [Emphasis supplied.] [91 N.J.Eq. at 69, 108 A. at 433 .]
The above was quoted with approval by the court in Central Hanover Bank & Trust Co. v. Markham, supra, 68 F.Supp. at 831 . In Public Administrator of New York County v. McGrath, 104 F.Supp. 834 (S.D.N.Y.1952), the court said:
* * * His [plaintiff’s] initial contention is that his citizenship as fiduciary rather than the citizenship of the beneficiaries determines the capacity to sue. I reject the argument on the authority of Farmers Loan & Trust Co. v. Hicks, * * *; Central Hanover Bank & Trust Co. v. Markham * * *. [Id. at 836.]
In Cordero v. United States, 111 F.Supp. 556 (S.D.N.Y.1953), aff’d sub nom. Cordero v. Brownell, 211 F.2d 90 (2d Cir., 1954), the court held:
Were the concern of the Trading With the Enemy Act with bare legal title, there would be merit to the plaintiff’s theory. However, the language of the Act itself, particularly Sections 5(b) and 7(c), and the judicial interpretations all lead to the conclusion that the status of the beneficial owners is crucial. [Cases omitted.] As a fiduciary and nothing more, plaintiff may not recover when the persons to be benefitted by a return of the property are enemies within the Act. [Cases omitted.] [Id. at 558.]
Based on these authorities, it is clear that Halbach’s heirs cannot recover because he was holding the beneficial ownership of GDC as a fiduciary for enemy national Farben.
Another reason why the heirs of Hal-bach cannot recover is the fact that he was “enemy tainted” by his participation in Farben’s cloaking of GDC and by his holding the beneficial ownership of the company as a fiduciary for Farben. The commissioner has stated, and the plaintiffs have agreed, that “if their ownership was in any way ‘enemy tainted’ by cloaking or similar devices, they are not entitled to recover.” While the defendant argues that all of the plaintiffs are enemy tainted, and there is a good deal of support in the record for such an argument, I have concluded that this opprobrium is only applicable to Halbach. The “enemy taint” doctrine was developed by the courts and was first announced by the Supreme Court in Clark v. Uebersee Finanz-Korp., 332 U.S, 480, 68 S.Ct. 174 , 92 L.Ed. 88 (1947). In that case a Swiss corporation sued to recover property that had been vested by the APC under Section 5(b) of the Act. The case went to the Supreme Court on the pleadings. The court said that even though a corporation was incorporated in a neutral country and did no business in an enemy country, it might still be af *595 fected by enemy taint if its stockholders were enemy nationals. Later on, the case was tried and it developed that the stock of the company was registered in the name of Fritz von Opel, a citizen of neutral Liechtenstein, but his parents who resided in Germany had the beneficial and controlling interest in the stock. The district court denied recovery to the plaintiff corporation Uebersee because it was tainted by the enemy status of its beneficial stockholders. Uebersee Finanz-Korp. v. Clark, 82 F.Supp. 602 (D.D.C.1949), aff’d sub nom. Uebersee Finanz-Korp. v. McGrath, 88 U.S.App.D.C. 182 , 191 F.2d 327 (1951), aff’d, 343 U.S. 205 , 72 S.Ct. 618 , 96 L.Ed. 888 (1952). The Supreme Court said:
* *' * As construed by this Court in Clark v. Uebersee Finanz-Korp., A.G., supra, [ 332 U.S. 480 , 68 S.Ct. 174 , 92 L.Ed. 88 ] § 2 included in the word “enemy” all corporations affected with an “enemy taint.” Since we find petitioner to be so affected because of the direct and indirect control and domination by an enemy national, Wilhelm von Opel, petitioner cannot recover under § 9(a). [ 343 U.S. at 212 , 72 S.Ct. at 621 .]
The enemy taint doctrine was applied to an individual, namely, Fritz von Opel, the registered owner of the stock in neutral Liechtenstein in the Uebersee cases, in yet another case which denied him recovery because he was infected with enemy taint. Uebersee Finanz-Korp. v. Brownell, 133 F.Supp. 615 (D.D.C.1955), aff’d sub nom. Von Opel v. Brownell, 100 U.S.App.D.C. 341 , 244 F.2d 789 (1957), cert. denied, 355 U.S. 878 , 78 S.Ct. 141 , 2 L.Ed.2d 108 . See also, Rusche v. Brownell, 136 F.Supp. 835, 845 (D.D.C. 1955), aff’d, 100 U.S.App.D.C. 334 , 244 F.2d 782, 783 (1957), and von Clemm v. Smith, 255 F.Supp. 353 (S.D.N.Y.1965), aff’d, 363 F.2d 19 (2d Cir., 1966). Under this doctrine, neither a corporation nor an individual can recover vested property if infected with enemy taint.
It seems quite clear from the facts in this case, which will not be repeated again here, that Halbach was infected with enemy taint and, consequently, his heirs cannot recover in this suit.
The plaintiffs have sued for interest since the date of the sale, I do not reach that question since I would deny them any recovery on the main suit. I would also deny defendant’s counterclaim for money already paid to plaintiffs, as they had bare legal title to the stock, which entitled them to the money paid to them for same.
The case has been a difficult one, especially for the government because most of the people who knew about the controlling events were dead and the transactions took place so many years ago. Under these circumstances, government counsel has done a good job. Plaintiffs have likewise been represented by able counsel who have worked diligently on the case. Both parties have filed excellent briefs that have been of great help to the court.
Based on the whole record, I would deny plaintiffs any recovery and would dismiss their petition. I would also deny defendant’s counterclaim.
NICHOLS, Judge, joins in the foregoing dissenting opinion.
APPENDIX
Pertinent provisions of Sections 2, 7 (c), 9(a), and 42(a) of the Trading With the Enemy Act, as amended, 50 U.S.C. App. § 1 et seq. Section 2 of the Trading With the Enemy Act defines an enemy as:
(a) Any individual, partnership, or other body of individuals, of any nationality, resident within the territory (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 business within such territory, and any corporation incorporated 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.
*596 (b) The government of any nation with which the United States is at war, or any political or municipal subdivision thereof, or any officer, official, agent, or agency thereof.
(c) Such other individuals, or body or class of individuals, 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 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 “enemy.” 1
§ 7(c) * * * The sole relief and remedy of any person having any claim to any money or other property heretofore or hereafter conveyed, transferred, assigned, delivered, or paid over to the Alien Property Custodian, or required so to be, or seized by him shall be that provided by the terms of this Act [sections 1-6, 7-39 and 41-44 of this Appendix], and in the event of sale or other disposition of such property by the Alien Property Custodian, shall be limited to and enforced against the net proceeds received therefrom and held by the Alien Property Custodian or by the Treasurer of the United States. * * *
§ 9(a) Any person not an enemy or ally of enemy claiming * * * title in any * * * property which may have been conveyed * * * to the Alien Property Custodian or seized by him hereunder * * * may file with the said custodian a notice of his claim * * *. [S]aid claimant may institute a suit in equity * * * to establish the * * * title * * * so claimed, and if so established the court shall order the * * * delivery to said claimant of the * * * property so held * * * Provided 2 * * * the Alien Property Custodian or any successor officer, or agency may sell such property * * * at any time prior to the entry of final judgment in such suit. * * * The net proceeds of any such sale shall be deposited in a special account established in the Treasury, and shall be held in trust by the Secretary of the Treasury pending the entry of final judgment in such suit. Any recovery of any claimant in any such suit in respect of the property * * * so sold shall be satisfied from the net proceeds of such sale unless such claimant * * * files with the court an election to waive all claims to the net proceeds * * * and to claim just compensation instead. * * *
§ 42(a) 3 Notwithstanding any statute of limitation, lapse of time, any prior decision by any court of the United States, or any compromise, release or assignment to the Alien Property Custodian, jurisdiction is hereby conferred upon the United States Court of Claims to hear, determine, and render judgment upon the claims against the United States for the proceeds received by the United States from the sale of the property vested under the provisions of the Trading With the Enemy Act * * * by vesting order numbered 33 relating to certificate numbers 104 to 121, inclusive, 125, 126, 128 to 134, inclusive, and 137 to 139, inclusive. * * *
. I. G. Farben was a full partner of Hitler in the program to liquidate the Jews. It developed the Zyklon-B crystals which produced the deadly gas used in the gas chambers to exterminate millions of human beings. Its participation in this program of mass murder was deliberate, calculated, and intentional, as shown by the foregoing and by the fact that it planned and constructed a chemical plant near the infamous camp at Auschwitz for the specific purpose of using slave labor as long as the victims were able to work, See “The Rise and Fall of the Third Reich” (1960) by William L. Sliirer at 664-65, 968, 972; and “The Tragedy of Nazi Germany” (1969) by Peter Phillips at 161-63.
. It will be noted that nothing was ever paid to Duisberg when the settlement was made with the others in 1945, and his certificate number is not included in the above statute. He was not authorized to be a party to this suit in person or by his successor in interest.
. An ally of an enemy is defined in identical terms substituting the clause “of any nation which is an ally of a nation with which the United States is at war” for “any nation with which the United States is at war.”
. Proviso added in 1962, Pub.L. No. 87-846.
. This section was enacted on October 22, 1962, as section 41(a), Pub.L. No. 87-846, and amended August 26, 1964, Pub.L. No. 88 — 490. However, it was codified in Title 50 U.S.C.App. as section 42(a), and is so referred to herein.