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Implementation of Restitution Policy in the United States
Claims procedures for restitution were flawed.
The Alien Property Custodian prolonged adjudications. Pursuant to a series of Executive Orders issued in 1941 and 1942, any property within the United States owned or controlled by a designated enemy country or national thereof could be transferred or vested in the Alien Property Custodian (operating within the Executive Office of the President), as the Custodian deemed necessary for the national interest. No exception was made for assets belonging to foreign nationals who were victims of the Holocaust. After the war, and until April 1955, a Holocaust victim could file a claim for the return of property taken by the Alien Property Custodian. Because of the expense and difficulty in filing, as well as for other reasons, many victims did not submit claims before the deadline and therefore did not recover their frozen assets. Others did not recover the full value of their assets.
In the treatment of a claimant as victim there appears to have been no noticeable relaxation of applicable rules or procedures. In some cases, the process was sufficiently prolonged that the initial claimant died while the claim was still pending. In those circumstances, the Alien Property Custodian conducted additional investigations of each heir and cases that might have been on the brink of conclusion were further delayed. In 1953, a Senate Judiciary Subcommittee delving into the activities of the Office of Alien Property (OAP) sharply criticized the agency for lack of good business practices in the way it conducted its own affairs and handled the assets under its control. The report particularly singled out the "inefficient and dilatory" manner in which claims were processed. Of approximately 15,000 title claims only about 6,000 had been processed. The average length for resolving a claim in 1952 was 46.6 months and the average over the entire period was 31.7 months.
Victims' assets may have been used to pay U.S. war claims. During the war assets of some Holocaust victims were caught up in the freezing mechanisms of the U.S. Treasury Department. Although clear distinctions were drawn between foreign nationals considered enemies and those considered non-enemies, among enemy assets no distinction could be drawn between victims and perpetrators until after the war. In 1946, special provisions were made for the return of vested property to those who had been persecuted during the war. After 1946, when German and Japanese assets were vested, a special effort was made not to vest the assets of those who had been persecuted. Nevertheless, compensation for U.S. assets lost in Europe took precedence over compensation for foreign-owned assets frozen in the United States. Congress regarded frozen German assets as a source from which to pay U.S. war claims for damages suffered by American businesses and individuals. The U.S. War Claims Commission received more than $200 million from liquidated German and Japanese assets. Thus, U.S. war claims were paid in part by German assets that likely included victims' assets.
Restitution efforts of recipient countries were not monitored.
There is evidence that the United States assumed that its western allies to which it restituted looted assets would return those assets to their rightful individual owners (or the heirs of those owners). There is little contemporaneous documentation of efforts by the recipient countries to effect individual restitution and no documentation that the United States monitored the process. None of the national historical commissions consulted by the Commission reported having found evidence of inventories of assets received by their governments from the United States, or of agreements with the United States to effect individual restitution.
Duty was assessed on victims' assets.
The International Refugee Organization of the United Nations was required to pay customs duties of at least $120,000 between 1949 and 1952 on assets brought into the United States to be sold for the benefit of refugees, thereby reducing the funds available to care for those displaced persons.
The $500,000 lump sum settlement of Office of Alien Property claims was inadequate.
Attempts by representatives of victims to achieve a settlement of heirless Office of Alien Property claims began in 1948. At that time, legislation was introduced that valued those claims at $3 million based on extensive research into OAP records by the Jewish Restitution Successor Organization (JRSO), the organization responsible for material claims on behalf of Jewish victims and their heirs. This legislation met with resistance. It was not until October 1962 that Congress amended the Trading with the Enemy Act to authorize the payment of $500,000 out of the War Claims Fund to the JRSO. According to former officials, the JRSO reluctantly accepted the $500,000 as a lump sum settlement of all claims it made for unclaimed property vested in the Office of Alien Property.
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