Alexander Mitchell Palmer - Alien Property Custodian

Alien Property Custodian

Leaving Congress in March 1915, Palmer decided to leave public office. When Wilson offered him a lifetime position on the Court of Claims, he at first accepted, but then arranged for a postponement so he could continue serving on the Democratic National Committee. His attachment to party affairs eventually forced him to withdraw from consideration for a judicial post. He sought other positions without success while continuing to fight for control of patronage positions in Pennsylvania. He worked for the Wilson in the 1916 elections, but Pennsylvania voted Republican as usual.

He proved out of step with the public mood when, after the sinking of the Lusitania in May 1915, he offered reporters his opinion that "the entire nation should not be asked to suffer" to avenge the deaths of passengers who had ignored warnings not to travel on ships that carried munitions.

"The war power is of necessity an inherent power in every sovereign nation. It is the power of self-reservation and that power has no limits other than the extent of the emergency."

Following the declaration of war in April 1917, Palmer took every opportunity to shed his Quaker reputation, volunteering to "carry a gun as a private" if necessary or to "work in any capacity without compensation." He chaired his local draft board for a time, while Herbert Hoover, head of the new Food Administration refused to appoint him to a post in his agency. In October, he accepted an appointment from Wilson as Alien Property Custodian an office he held from October 22, 1917 until March 4, 1919. A wartime agency, the Custodian had responsibility for the seizure, administration, and sometimes the sale of enemy property in the United States. Palmer's background in law and banking qualified him for the position, along with his party loyalty and intimate knowledge of political patronage.

The size of the assets the Custodian controlled only became clear over the next year. Late in 1918, Palmer reported he was managing almost 30,000 trusts with assets worth half a billion dollars. He estimated that another 9,000 trusts worth $300,000,000 dollars awaited evaluation. Many of the enterprises in question produced materials significant to the war effort, such as medicines, glycerin for explosives, charcoal for gas masks. Others ranged from mines to brewing to newspaper publishing. Palmer built a team of professionals with banking expertise as well as an investigative bureau to track down well-hidden assets. Below the top-level positions, he distributed jobs as patronage. For example, he appointed one of his fellow members of the Democratic National Committee to serve as counsel for a textile company and another the vice-president of a shipping line. Always thinking like a politician, he made sure his group's efforts were well publicized.

In September 1918, Palmer testified at hearings held by the U.S. Senate's Overman Committee that the United States Brewers Association (USBA) and the rest of the overwhelmingly German liquor industry harbored pro-German sentiments. He stated that "German brewers of America, in association with the United States Brewers' Association" had attempted "to buy a great newspaper" and "control the government of State and Nation", had generally been "unpatriotic", and had "pro-German sympathies".

As Alien Property Custodian, Palmer campaigned successfully to have his powers to dispose of assets by sale increased to counter Germany's long-term plan to conquer the world by industrial expansion even after the war. Even after Germany's surrender, Palmer continued the campaign to make American industry independent of German ownership, with major sales in the metals industry in the spring of 1919, for example. He offered his rationale in a speech to an audience of lawyers: "The war power is of necessity an inherent power in every sovereign nation. It is the power of self-reservation and that power has no limits other than the extent of the emergency."