Docket No. 2049.
UNITED STATES OF AMERICA
on behalf of
Louis Friedman, individually and as Administrator of the Estates of Samuel Friedman and Solomon Friedman, Deceased, Etta Friedman, Philip Friedman, and Rachel (Ray) Friedman,
Claimants,
v.
GERMANY.
PARKER, Umpire, rendered the decision of the Commission.
This case is before the Umpire for decision on a certificate of the National Commissioners[a] certifying their disagreement.
This claim is put forward on behalf of the two brothers, the half-sister, the stepmother, and the estate of the father of Samuel Friedman, who was lost with the Lusitania, on which he had embarked as a second-cabin passenger, and also on behalf of his estate. His body was never identified. It is claimed that he had with him on the Lusitania personal property, all of which was lost, consisting of (1) about $30,000 in cash, (2) jewelry and clothing of the value of about $2,000, and (3) 50,000 gross of chatons (rhinestones), first valued by claimants at $10,000 and later valued by them at from $17,500 to $20,000.
Louis Friedman, the elder brother of the Lusitania decedent, was appointed, has qualified, and is acting as administrator of the estate of that decedent, who died intestate, and also administrator of the estate of their father, who died intestate prior to November 19, 1917. Many of the important issues of fact are supported solely by the testimony of this claimant, Louis Friedman, who with the decedent and their father composed the mercantile firm of Friedman & Company. The Commission has not been given the benefit of the testimony of the other claimants, Philip, Rachel, and Etta Friedman, who with decedent and his brother Louis and their father were all members of the same household. To numerous interrogatories propounded to the claimant Louis Friedman he has answered in substance that he does not remember and his records have been destroyed. He has failed satisfactorily to account for the loss of those records. He states that prior to the decedent’s death the entire office staff of Friedman & Company consisted of a bookkeeper and an accountant, the latter not being a regular employee. That accountant is dead, and this claimant can not remember the given name and address of the bookkeeper and has no knowledge of her whereabouts. In this state of the record the testimony of Louis Friedman must be carefully scrutinized and weighed.
So far as disclosed by the record no one knows that the decedent had with him when be[sic, he] boarded the Lusitania any considerable funds either in cash, drafts, letters of credit, travelers’ checks, or in other form. No one from his own knowledge has testified that the decedent had at that time or ever had so large a sum as $30,000. No one has undertaken to state the source from which the decedent drew the funds alleged to have been lost of the form in which he carried them.
The claimant Louis Friedman, in response to interrogatories propounded to him, has delved somewhat into the business career of himself, the decedent, and their father and attempted to establish decedent as a man of means. According to his narrative it appears that the father, Solomon Friedman, a native of Austria, who, it seems, was by occupation a cloakmaker, emigrated to the United States in January, 1900, and through naturalization became a citizen of the United States on July 20, 1906. His oldest child, a daughter named Paulina, never became an American national and died in 1919. His three sons, Louis, Samuel, and Philip, then minors residing with him, as well as his second wife, Etta Friedman, a native of Poland and a claimant herein, all became American citizens through his naturalization, while Rachel (his daughter by the second marriage) was born an American national.
It appears from the record that the importing firm of Friedman & Company was formed in New York City early in the year 1910. At that time Solomon Friedman, the father, was 49 or 50, Louis 24, and Samuel between 22 and 23 years of age. The claimant Louis Friedman testifies in substance that from the time of its formation until the death of his brother Samuel this firm was compose of his father, his brother Samuel, and himself, that it embarked in business with a capital of about $45,000, of which Louis – who was then 24 years old – contributed about two-thirds and his father and brother Samuel about one-sixth each, and that it was understood that the business was owned equally by Louis and Samuel. While the father apparently assisted in the conduct of the business to some extent, while he had contributed about one-sixth of the original capital, and while he was a member of the firm, the business was, according to the testimony of Louis, “owned” by the two brothers equally, although Samuel had contributed only one-sixth of the original capital.
Passing by the extraordinary nature of this partnership, it appears, according to the testimony of the claimant Louis Friedman, that the earnings of the firm in 1910 were $20,000, in 1911 $40,000, and from 1912 to 1914 inclusive $60,000 per annum. The father, his second wife, Etta, and his four children, Louis, Philip, Samuel, and Rachel, lived together as members of one household, to the maintenance of which Louis and Samuel each contributed about $200 per month and in addition “bought whatever was necessary in the way of clothes, etc., for the family”. Louis states that the living expenses of himself and Samuel were each about $7,500 per annum and that the income of each from the firm’s business for the years 1912, 1913, and 1914 was about $30,000 per annum. It would seem, therefore, that after paying all partnership and personal expenses their net incomes and capital gains each year were considerable, if the testimony of Louis can be credited. The claimant testifies that he had no personal bank account but deposited his funds with those of the firm in The State Bank in New York City. Samuel devoted his entire time to the firm’s business. Louis and Samuel were brothers, members of the same household, equal partners in business, and in daily contact, yet Louis does not know whether or not Samuel ever had a personal bank account or whether, like Louis, he left his shares of the firm’s net earnings with the firm’s funds in The State Bank, or where, how, or when he invested them, or how he converted his investments, if any, into cash before embarking on the Lusitania.
As to the $30,000 in cash which it is claimed was lost with Samuel on the Lusitania, Louis testifies that Samuel drew $5,000 from the firm’s account (although no record is offered in support of this statement), but he does not know where the remaining $25,000 came from. Neither does he know in what form his brother carried these funds “but believes it was partly in the form of travelers’ checks”. While Samuel died May 7, 1915, no steps were taken to administer his estate until Louis was appointed administrator January 16, 1917. Thereafter, in March, 1917, inquiry was made from institutions from which Samuel would probably have procured travelers’ checks, had he procured any at all, and all of these institutions answered that no checks had been issued to him. If Louis had had reason to believe that his brother had taken with him documents in any form calling for large sums of money recoverable in the event of the destruction of such documents, it is reasonable to assume that he would have sought to trace those funds and have taken measures to recover them immediately following his brother’s death and while the transactions were fresh in the minds of all concerned, rather than have waited for nearly two years before instituting any inquiries whatsoever. The vice-president of the firm’s bank stated in January, 1925, that Samuel kept no personal account with this bank; that the bank’s ledgers and memorandum books up to December, 1915, had been destroyed, and that he has no recollection of any withdrawals of the firm’s funds by Samuel prior to his sailing on the Lusitania. If inquiry had been made at that bank within a reasonable time following Samuel’s death, as would have been natural had a large amount of money been withdrawn and lost, the facts would then have been developed and would probably now be recalled.
Notwithstanding the large earnings claimed for the firm and for the brothers Louis and Samuel, Louis can not remember that the firm or its individual members made any income-tax returns for either of the years 1913 or 1914.
In an affidavit executed by Louis on March 8, 1924, he stated that as administrator “he has been unable to find any assets belonging to the Estate of Samuel Friedman”. In the absence of such assets no transfer tax was payable to the State of New York, the home of the decedent and the claimants. In a deposition made by this same claimant on January 20, 1925, he stated that at the time of the death of his brother Samuel the firm’s assets were of the value of about $35,000 and that Samuel’s interest therein was $17,500. Such conflicts in the testimony given at different times by this claimant tend strongly to discredit him. According to the later testimony the value of the firm’s assets in May, 1915, was $10,000 less than when the partnership was formed early in 1910, which would not seem to indicate that the business was a prosperous and growing one.
A substantial amount is claimed for loss of jewelry and clothing. Notwithstanding the close family and business relations and the daily contact between the two brothers, Louis does not know where, where, or from whom his brother Samuel acquired the jewelry or the wardrobe claimed to have been lost.
Another item claimed is the value of 50,000 gross of chatons (rhinestones), first placed at $10,000 and later valued at from $17,500 to $20,000. While this claim is put forward by Louis Friedman as administrator of the estate of his deceased brother, he testifies that these rhinestones were taken by his brother from the firm’s stock, and there is no suggestion that the decedent paid the firm for them. But for the purposes of this opinion no importance will be attached to the ownership of the stones alleged to have been lost. Samples of those stones were submitted as exhibits to the testimony of the claimant Louis Friedman. Fifty thousand gross would equal 7,200,000 stones. The claimant states that these rhinestones were wrapped in tissue paper and packed in small envelopes, each envelope containing ten gross, which would require 5,000 envelopes. These samples, which vary somewhat in size, were submitted to the Director of the Bureau of Standards of the Department of Commerce of the United States, whose report is before this Commission. From this report it appears that the weight of 50,000 gross of the smaller samples wrapped and placed in envelopes would be not less than 780 pounds and of the larger samples not more than 1,000 pounds and that if equal numbers of the smaller and larger samples were used the weight would be between 870 and 920 pounds. The claimant testifies that his brother carried these rhinestones as part of his personal baggage. At one time he testified that they were “distributed through several trunks”. In a later deposition he testifies that his brother had two trunks and several handbags. The Cunard Steam Ship Company, however, has a record of the delivery of only one trunk belonging to Samuel Friedman to the Lusitania in May, 1915. That trunk was delivered to the steamship company by the Brazzello Express Company and was stored in the hold of the steamer. Three other members of the decedent’s household now living, all claimants herein, must have had some knowledge of his personal effects and the number of pieces of baggage which he took with him, but their testimony is not offered. Five thousand envelopes containing 900 pounds of rhinestones packed in one trunk, or even two trunks and several handbags, would have left little room for the wardrobe for the vale of which claim is made.
The claimant Louis Friedman testifies in substance that it was the practice of the firm to take out inland and ocean insurance on shipments of rhinestones before the British Consulate at New York because “it would have been impossible for Samuel Friedman to have obtained permission from the British Consul to import into England merchandise of Austrian origin”. The clear implication is that the decedent was undertaking to smuggle these rhinestones into England on a British steamer. Yet in his later testimony this claimant states that when these rhinestones were shipped from Austria their ultimate destination was New York, that they were not intended for reshipment to England, and that claimant knows of no law or regulations of Great Britain which would have prevented these rhinestones from being shipped from the United States to England. It follows, therefore, that the reason first assigned by this claimant in undertaking to account for his brother carrying, on a British vessel, at a time when Great Britain was at war, a shipment of 900 pounds of rhinestones, variously valued at from $10,000 to $20,000, unprotected by insurance, notwithstanding the custom of the firm to insure such shipments, had no existence in fact, and that the decedent’s departure from the firm’s established practice remains unaccounted for.
When requested in an interrogatory propounded by the German Agent to produce invoices, manifests, or bills of lading covering the shipment from Austria to New York of the rhinestones alleged to have been lost with the Lusitania, this claimant answered that his records were destroyed but that he was endeavoring to get copies by “writing to the various manufacturers in Czecho Slavakia[1] with whom the firm of Friedman & Co. did business in 1913, 1914, and 1915”. When he was later called upon the produce these letters and replies thereto he produced one letter only, written December 22, 1924, and this contains no request for shipments made to Friedman & Company. If any reply has been received to this letter it has not been incorporated in this record.
Claims before this Commission are asserted not by individuals but by the Government of the United States, on its own behalf or on behalf of its nationals, against the Government of Germany. The latter has a right to assume that no claim will be put forward that does not bear the impress of good faith and fair dealing on the part of the claimant. In the protection of the national honor the United States will refuse actively to espouse claims of its nationals who have failed frankly and fully to lay before it all of the facts in connection therewith. It is, however, the general practice of the American Agent to submit to the Commission for its consideration and decision, particularly in claims growing out of the sinking of the Lusitania, all cases prepared by claimants and their private counsel falling within its jurisdiction, and such submission does not imply that in the opinion of the American Agent the particular claim is worthy of espousal by the Government of the United States. When, as in this instance, a claim unworthy of espousal by the United States in the form presented comes before this Commission it will not hesitate to dismiss it. The Umpire holds that the claimants herein have failed to discharge the burden resting upon them to prove their case.
The Umpire is authorized to say that, while, with numerous other claims growing out of the sinking of the Lusitania, this case has been certified to the Umpire for decision, both National Commissioners agree that no other disposition could properly be made of it.
Applying the rules announced in the previous decisions of this Commission to the facts as disclosed by the record herein, the Commission decrees that under the Treaty of Berlin of August 25, 1921, and in accordance with its terms the Government of Germany is not obligated to pay to the Government of the United States any amount on behalf of the claimants herein or any of them.
Done at Washington April 2, 1925.
EDWIN B. PARKER,
Umpire.
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[a] Dated March 25, 1925.
53281°–25—-39
[1] The official English language spelling of the new country was Czecho-Slovakia from 1918 – 1920, and Czechoslovakia after 1920. Prior to 1918 and during the time of the Lusitania sinking Czecho-Slovakia was part of the empire of Austria-Hungary.
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