BANKING: Diamonds to the Enemy

Shocking headlines announced last week that Chase National Bank, the nation's biggest, had been indicted under the 26-year-old Trading with the Enemy Act. The details were less appalling. In 1940, under authority of the act, President Roosevelt froze the U.S. funds of all citizens of nations invaded by the Axis. Chase's alleged offense was that it had allowed a refugee Dutch diamond merchant named Leonard J. A. Smit* to withdraw $264,000 from his accounts. Smit, it was charged, had then proceeded to buy industrial diamonds for sale to Japan and Axis-dominated countries.

The...

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