DRAFT – OCTOBER 7, 1999

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Introduction

U.S. Restitution Policy

History Of The Gold Train

The Efforts Of The Hungarian Jewish Community To Reclaim The Gold Train Property

Appropriations Of The Gold Train Treasures By The U.S. Forces In Austria

The Auction Of The Gold Train Treasures

The Fate Of Paintings From The Gold Train

Conclusion

Endnotes

In May 1945, forces of the American Army seized a train in the town of Werfen, Austria containing valuables spirited out of Hungary by members of the pro-Nazi Hungarian government in an attempt to escape the advancing Soviet Army. This train – carrying gold, jewelry, art and other treasures confiscated from the Hungarian Jewish population – became known as the Gold Train.1 The story of the Gold Train provides both a comprehensive illustration of the questions that arose from the United States’ restitution policy and its implementation, and a mysterious example of one egregious failure to follow that policy.

The illustration is comprehensive in that it documents the consequences of the general policy decision to make restitution to governments and organizations rather than to individuals. In addition to the works of art, the Gold Train carried many other valuables – indeed, the whole gamut of moveable assets. The disposition of all of these assets was subject to this decision. (Top of Page)

The mystery of the Gold Train revolves around the fate of the works of art that fell into the hands of the American authorities when they captured the train in Austria. It is unique in that it describes an as yet unexplained departure from the general policy of returning cultural assets to the country of origin.

For complicated reasons, including Austria’s ambiguous status as a Nazi-occupied country, the vast array of treasures stored in its mines and castles, and its proximity to the growing Soviet sphere of influence, the conduct of the American forces occupying Austria was less disciplined than that of the American forces occupying Germany. There is, for example, documentary evidence that American forces in Austria misappropriated so-called "unidentifiable" property of Hungarian Jews found on the Gold Train while refusing to allow leaders of the Hungarian Jewish community access to the Gold Train to identify the property. High-ranking American officials took assets from the Gold Train for their own personal use and assets from the train were sold through the Army Exchange. There is also evidence that assets from the Gold Train were stolen outright. (Top of Page)

In addition, although the general American policy required restitution of cultural property to the country of origin, more than 1,100 works of art belonging to Hungarian Jews were eventually transferred to the custody of the Austrian government. Despite the pleas of the Hungarian Jewish community to return the contents of the Gold Train to their rightful owners, American forces, under their general policy of ceding such items to the designated refugee organization, transferred carloads of non-cultural property from the Gold Train to the United Nations International Refugee Organization (IRO) for disposal.

In the end, the treasures of the Gold Train, as with other identifiable valuables belonging to Holocaust victims, were so dispersed that restitution of these treasures, except perhaps the collection of paintings transferred to Austria, is now virtually impossible. (Top of Page)

I. U.S. RESTITUTION POLICY

The United States policy on restitution of the assets on the Gold Train was determined in part by the political status of Austria, the country in which the assets were seized, and in part by the nature of the assets themselves.

In 1946, the United States signed two international agreements that bore directly on the disposition of the Gold Train assets: the Final Act of the Paris Reparation Conference and the Five-Power Agreement for Non-Repatriable Victims of Germany. These agreements laid the basis for the creation of the Preparatory Committee for the International Refugee Organization (PCIRO) and permitted the sale of non-monetary gold and other ownerless property for the benefit of non-repatriable refugees.

The United States followed a different policy towards works of art and other cultural property of either religious, artistic, documentary, scholastic, or historic value. In accordance with longstanding international agreements, the United States adhered to the principle of restitution of such national cultural heritage to the country of origin. Within this principle there were no limitations based on a nation’s status – as former enemy, military ally, or neutral. The United States determined that "[i]dentifiable looted works of art and cultural material will be restituted to the governments of the countries from which they were taken."2 (Top of Page)

Reflecting this decision, the United States extended restitution of cultural property encountered in Germany and Austria to Italy, Hungary, Romania and Finland by an order issued by the State-War-Navy Coordinating Committee (SWNCC) on March 4, 1946. Pursuant to this order, property had to be "restored to the government of the country from which it was taken or acquired in any way…."3 (Top of Page)

The story of the Gold Train was summarized in a poignantly written report by the Central Board of Jews in Hungary to the State Department, on July 28, 1947:

The Central Board also referred to various reports available on the Gold Train:

According to the Central Board, the following assets were transported into the French Zone where they were seized by French troops in St. Anton:

On July 27, 1948 Secretary of State George C. Marshall described his own understanding of the fate of the Gold Train in a cable sent to the U.S. Legation in Budapest:

The U.S. forces removed the assets found on the Gold Train to storage facilities in Salzburg, Austria. The majority of the assets were stored in the Military Government Warehouse (also referred to as MG Warehouse or the Property Control Warehouse). The paintings from the Gold Train were stored elsewhere, according to undated notes from Ardelia Hall, the State Department’s Advisor for Restitution issues. Hall’s notes detail the storage of the Gold Train paintings:

The paintings stored in the Residenz were ignored and not inventoried until 1947, but the assets stored in the MG warehouse attracted the immediate attention of the American forces.

Marshall’s July 1948 cable described the assumptions that lay behind U.S. treatment of the assets on the Gold Train:

The U.S. Government and military authorities maintained that it was not possible to identify the ownership of the property on the Gold Train. The representatives of the Hungarian Jewish community and the Hungarian Government, however, vigorously protested otherwise. (Top of Page)

Leaders of the Hungarian Jewish community knew before the end of 1945 that United States troops had intercepted the Gold Train. On December 20, 1945, the Temporary Managing Committee of the Central Bureau of Hungarian Jews sent a letter acknowledging that fact to the U.S. Legation in Budapest. The Committee presented its version of the assets on the Gold Train:

The Committee noted that some looting of the train had taken place in Austria, but said that "the remainders of these valuables, namely 24 railway cars loaded with gold, jewels, etc. were surrendered to the American troops in Austria."11 The Committee argued "as these valuables were considered, even in terms of the Nazi-decrees, as Jewish deposits, they never ceased to be the undoubted property of their original owners."12 (Top of Page)

The Temporary Managing Committee sought support for its proposal that a delegation of the Central Bureau of Hungarian Jews negotiate the "delivery of the above cited values [sic]" from American Headquarters.13 In making its case for restitution, the Temporary Managing Committee relied not only on the history of the ownership of the train’s assets and America’s legal obligations to return them, but on a strong emotional appeal:

The U.S. officials nevertheless ignored the Hungarian Jewish proposal to send a delegation to review the property. (Top of Page)

On January 2, 1946, H.F. Arthur-Schoenfeld, the U.S. Envoy to Hungary, informed the State Department of the letter from the Temporary Managing Committee and reported that: "in conversation, on December 27, 1945, with the gentlemen who presented the letter, I told them the matter seemed to be one for the Hungarian Foreign Office."15

In July 1946, Nikolaus Nyaradi, the Hungarian Minister of Finance, visited Berlin in an attempt to convince American authorities not to dispose of the property found on the Gold Train. Nyaradi informed the U.S. authorities that about 200,000 Jews remained in Hungary and that the Hungarian government, in cooperation with Jewish organizations, had formed the Jewish Rehabilitation Agency.16 This initiative of the Hungarian government did not, however, change the opinion of the American authorities.

By 1947, it was well known in the international community that the U.S. government was planning to sell certain contents of the Gold Train at public auction. The proceeds of the auction were to be used for the benefit of the IRO. The leadership of the Hungarian Jewish community tried many times to convince the Americans not to auction their property but to return it to its rightful owners.

Their attempts began with a telegram from the Central Board of Jews in Hungary to the Department of State on February 21, 1947:

Instead of transferring the objects to the IRO, the Central Board requested "emphatically" that the U.S. Government place the "valuables abducted with so-called Golden Train" at the disposal of the lawful representative bodies of Hungarian Jewry.18 (Top of Page)

A second letter, sent in February to the U.S. Legation by the Central Board of Jews in Hungary and the Autonomous Orthodox Israelitic Religious Bodies, again appealed on humanitarian grounds for the return of the Gold Train property:

Hungarian Jewish leaders feared that an auction would create a bad precedent. They knew that some of the goods had been taken into the custody of French forces and worried that if the Americans auctioned the valuables found in Werfen, the French government would follow suit.20 Importantly, the letters emphasized that the property to be auctioned could be identified and traced to specific owners and heirs.21 The Central Board believed that the auction would violate U.S. restitution policy.

The United States ignored the pleas of the Hungarian Jewish community and eventually directed them to seek answers elsewhere. On May 19, 1947, the U.S. Legation to Hungary, in a reply to the Central Board, defended the decision to auction property from the Gold Train:

If the Central Board of Jews in Hungary had retained any hope of appealing this decision, it was dispelled when Secretary Marshall cabled the U.S. Legation on May 19, 1947 that:

This notification to Nyaradi would have been the first notification to the Hungarians of the United States’ decision.24 On May 29, Secretary Marshall cabled the U.S. Legation in Budapest that "action not necessary until additional inquiries made."25 (Top of Page)

Despite the position articulated by the U.S. Legation, Hungarian Jews refused to give up. In a letter dated July 28, 1947, the Central Board informed the U.S. State Department that they had not heard from French authorities about the fate of the assets captured by the French troops in Austria. They again asked the Americans to change their decision.26

The Central Board continued to argue that at least a portion of the assets were identifiable:

It requested permission from American authorities for representatives of the Special Commission of the Hungarian Ministry of Finance on the Restitution of Jewish Property to visit and examine the stored valuables. The Hungarians hoped that such an examination would start the process of restitution to Hungary of identifiable property.28

Once again, the United States refused their request. In a telegram that suggests a difference of opinion between U.S. representatives in Budapest and State Department officials in Washington, the U.S. Legation questioned U.S. policy stating that "after further reflection," the Legation

Despite these misgivings and the repeated requests of the Hungarians for reconsideration, certain contents of the Gold Train were auctioned in New York by the PCIRO in July 1948. The Department of State wrote to the U.S. Legation in Budapest explaining the U.S. position:

The letter informed the Legation that:

The decision of General Mark Clark, the Commanding General of U.S. Forces in Austria (USFA) in 1945 as to the "unidentifiability" of the train’s contents thus governed every subsequent decision on possible restitution of these assets to Hungary. When asked by the Hungarians, PCIRO officials said they could not revoke the Clark’s initial determination of the nature of the objects’ ownership. (Top of Page)

1. APPROPRIATIONS OF THE GOLD TRAIN TREASURES BY THE U.S. FORCES IN AUSTRIA

U.S. military personnel recognized from the beginning that the art and cultural property assets of the Gold Train were valuable and impressive and could be used in their offices and homes. On July 13, 1945, Major General Harry J. Collins, Commander of the 42^nd ("Rainbow") Division in western Austria received objects of "furniture and furnishing…supplied by Office of Property Control, Land Salzburg."32 Collins was given property for his headquarters identified as "U.S. Government Property (from Hungarian Train, Military Government Warehouse)" including "different objects made of onyx, 5 rugs and 8 paintings."33

General Collins also requisitioned valuables from the Gold Train for his home. An August 28, 1945 memo from one of Collins’ aides to the Property Control Officer in Salzburg made the following demand:

1. The General desires that all of the above listed items be of the very best quality and workmanship available in the land of Salzburg. He specifically told me to say that he intended to hold you responsible for securing these items."34

The Property Control Officer responded to this request by taking these items from the MG warehouse in which the Gold Train properties had been stored. Subsequent requisitions by Collins for Gold Train property included 12 silver candlesticks and 11 carpets;35 two rugs to decorate his railroad car;36 and 13 rugs for decoration of his villa, Maria Theresien Schloss.37 (Top of Page)

Nor was General Collins the only military official who used the Gold Train property for personal use. A "List of Material Loaned from Property Control Warehouse" prepared by the Property Control Office indicates that numerous high-ranking officers of the American Forces in Austria appropriated Hungarian Jewish treasures found on the Gold Train for the decoration of their residences. For example, General Laude received china, silverware and linen for his Salzburg home; General Hume received 18 rugs, table and silverware, table linen and glassware; General Howard received nine rugs, one silver set and 12 silver plates to decorate his Vienna apartment; and Brigadier General Linden received 10 rugs for his quarters on the von Trapp Estate. 38

As more American military families settled in Austria, the Property Control Officer expressed his concerns to the Repatriation, Deliveries and Restitution Division (RD & R Division). On March 8, 1946 he reported: "The problem arrival of families of military personnel in Austria in the near future, it is believed, will place heavy demands on certain of the property in the warehouse,"39 because he believed that "General Collins was interested in providing proper quarters and house furnishing for families of the military;" and to that end, the procurement of "proper" materials, meant that, "quite probably demands might be made upon property in the warehouse."40

Over time, Gold Train assets under U.S. custodianship in Austria also became

subject to appropriation for sale through Army Exchange stores. In early November 1945, a representative of the Office of the Army Exchange Service in Austria wrote to the Property Control Officer and the Legal Advisor of U.S. Allied Control for Austria (USACA) to request "that the merchandise now held in Salzburg in the custody of the Property Control Officer, USACA, from the WERFEN train be made available for purchase by the Army Exchange Service."41 To clarify the request, the Army Exchange specified "such merchandise is believed to consist of watches, alarm clocks, cameras, jewelry, etc., which would normally be sold through the PX’s."42 The Army Exchange Service added that it would make payment for these items based "on agreed prices."43 The Legal Division concluded "it [property from the train] may therefore, in the opinion of this Division, be disposed of accordingly."44 On November 19, 1945 the Chief of the Legal Division added that "the property which is the subject of the request by the Army Exchange Office is, as disclosed by our file, either captured enemy property, or property of a perishable nature, or both."45 (Top of Page)

This first attempt to dispose of Gold Train Property through the Army Exchange did not, however, succeed. The Chief of the RD & R Division challenged the conclusion of the Legal Division on the grounds that the "goods apparently are not perishable and it is believed there may be claims from original Hungarian owners for identifiable private property."46

Nevertheless, one year later, virtually the same plan was approved. On November 18, 1946, the Property Control Officer in Salzburg recommended that the Property Control Branch sell "the Werfen Train rugs and furs which are located in the Property Control Warehouse."47 The Officer defended his recommendation saying that "the property will lose a great part of its value if it is not disposed of within the next two or three months." Because it represented an asset of several thousand dollars the Property Control Officer in Salzburg wanted it to "be immediately disposed of."48 (Top of Page)

On November 29, 1946 the Chief of RD & R Division concurred with the recommendation to go forward with the sales:

The Army Exchange Service Procurement Division enthusiastically replied to this letter on December 22, 1946:

While the rugs, furs and fine clothing, originally belonging to Hungarian Jews, were appropriated for sale through the Army Exchange, their other clothes were distributed more freely. On March 6, 1946 a Property Control Officer at the Headquarters of USFA in Vienna neatly outlined the distinction between treatment of the better goods and the more regular goods:

In addition to requisitions by U.S. forces and sales through the Army Exchange, property on the Gold Train was also subject to outright theft. In one case, documented in October 1946, the Property Control Officer reported that two small suitcases of gold dust had disappeared from the MG warehouse. The Officer explained that "every apparent possibility for tracing the gold dust has been exhausted" and concluded that:

The numerous loans, sales, gifts and thefts of the property of the Gold Train hampered attempts to identify the ownership of the property. Further complicating matters, the property was repacked and the original containers and labels indicating country and names of owners were lost. (Top of Page)

V. THE AUCTION OF THE GOLD TRAIN TREASURES

General Clark’s 1945 determination that the Gold Train’s assets were unidentifiable as to owners and national origin and that restitution was therefore not feasible withstood challenges from the Hungarians, as well as from the U.S. Legation. In accordance with the Paris Conference and the Four Powers Agreement, the determination of "unidentifiability" opened the door for the transfer of Gold Train assets to the IRO for auction.

Ray C. Kramer, appointed in November of 1947 as the Chairman of the Advisory Liquidation Committee of the IRO, was responsible for the organization of the auction sales. The IRO also established a Merchandising Committee, which was charged with the preparation of two auctions. Mr. Kramer declared that:

Crates with Jewish property labeled "unidentifiable as to ownership" started to arrive at Staten Island in the middle of December of 1947 with the initial sales to take place at the Parke-Bernet Galleries in New York in June 1948. The New York Times reported: "In the first [auction], June 16 to 18, jewelry and diamonds will be offered, while in the second, June 20 to 25, silver, glass, china, and gold objects will be put up for bids."54 The Parke-Bernet staff divided the jewelry into 400 catalogue lots, with three to four pieces in each lot. Items in the jewelry sale included a large miscellaneous collection of unset diamonds along with other precious stones, pearls, gold and jeweled watches, and numerous pieces of Victorian jewelry.55 A month before the sales, The New York Times wrote that:

The exact content of the boxes shipped from Europe "were unknown until opened" at the warehouse in New York.57 The New York Times described the scene at the warehouse:

The warehouse also contained nearly 4,000 oriental rugs, as well as cameras, microscopes, tapestries, among thousands of other items.59 (Top of Page)

Press reports indicate that the auctions were successful. The New York Times reported that the June 22, 1948 sale exceeded expected revenues by 40 percent 60 and the week’s receipts totaled $152,850.61 The results were a triumph for Ray Kramer and the Advisory Liquidation Committee of the IRO who had designed the New York auction as an experiment to determine the best way to dispose of ownerless assets. (Top of Page)

James Rorimer, a Monuments, Fine Arts and Archives (MFA & A) officer, was in Austria in 1945 when the Gold Train was found by the American troops in Werfen. 62 Later he remembered:

For the next two years no attention was paid to Rorimer’s recommendation to send the items of artistic value to collecting points. Instead the paintings, without inventory, were placed in the MG Warehouse in Salzburg and forgotten.

In 1947, Evelyn Tucker, MFA & A representative in Austria, was informed about the existence of paintings in the MG Warehouse. On October 23, Tucker wrote in her monthly report:

Before Tucker was able to visit Salzburg, the Chief of the RD&R Division issued an order for release of the paintings. On November 5, 1947, he wrote: "You are authorized to release to the custody and control of Miss Eve Tucker, MFA&A representative of this Division approximately two hundred (200) paintings presently stored in the Military Government Warehouse in Salzburg."65 Identification of the paintings was limited to physical location and one short phrase describing the paintings as being "allegedly of Hungarian origin."66

Between November 6 and November 11, 1947, Evelyn Tucker made her visit to Salzburg. Upon returning to Vienna she reported:

In the MG warehouse Tucker found not 200, but 1,181 paintings, all of which were apparently of Hungarian origin. The 200 paintings mentioned in the November 5, 1947 instruction had not been found on the Gold Train but in the Castle Fischhorn, where the Nazis established a repository of artworks looted from Central Europe. In 1946 these paintings were removed from the Castle and combined with paintings from the Gold Train in the MG warehouse. (Top of Page)

The military authorities believed that none of the paintings was of significant value and treated them accordingly. Evelyn Tucker however, believed otherwise:

On January 5, 1949, the 1,181 paintings in the MG warehouse were transferred into the custody of the Federal Government of Austria pursuant to a document signed by the Chief of Property Control and Restitution Branch of the Headquarters of Zone Command Austria and by Joseph Reith, a minister of the Austrian Government.69 A January 1951 State Department document entitled: "Disposition of Art Objects and Scientific Works under USFA Control," explained the transfer:

In another document prepared on March 26, 1952 called "Confidential Security Information," and subtitled: "Hungarian Cultural Property in U.S. Custody," the State Department’s Ardelia Hall wrote:

No such detailed list of paintings was ever sent to Budapest. The last mention of the paintings was in the report of a meeting on June 3, 1953, when Dr. Otto Demus, the Chairman of the Federal Monuments Office of Austria (Bundesdenkmalamt), visited Washington and met with Ardelia Hall and George Freimarck of the Department of State. The Memorandum of Conversation states that:

In fact, there is no evidence that the United States government ever informed the Hungarians about the existence of the paintings.

Only one fully documented case of restitution of paintings from the Gold Train exists. On September 20, 1945 trustees for Mrs. Joli Gergely initiated a claim with the U.S. Legation in Switzerland for the return of their client’s property. They alleged that jewelry, linen, lace, clothes, silverware and paintings belonging to Mrs. Gergely had been loaded on the Gold Train. Her trustees explained that their client, a "non-aryan," left Hungary to escape persecution and took up residence in Switzerland some years before. Her husband remained in Hungary and died there.⁷³ Nikolaus von Csillaghy, a friend of the Gergely family, took care of their property.

On February 8, 1946 Mrs. Gergely’s trustees sent the American authorities a detailed list of their client’s property and the results of their investigation:

Although the Chief of RD & R Branch informed the Property Control Officer that "it is the opinion in this office that this property could be released to the individual concerned…,"75 the Property Control Officer replied that:

Despite the confusion, on February 2, 1948 the Property Control and Restitution Section of the Headquarters of the Zone Command of Austria returned four paintings and one icon to Mrs. Joli Gergely and three paintings to Mr. Nikolaus von Csillaghy.77 Thus, only eight of the 27 works in the luggage of Von Csillaghy/Gergely, seized on the Gold Train by U.S. forces in 1945, were ever found and returned. (Top of Page)

This report on the disposition of the assets of the Hungarian Jewish community captured by the U.S. forces with the Gold Train highlights some of the shortcomings in the restitution efforts of the American forces in Austria. These shortcomings included the designation of victims’ assets as "unidentifiable" and their restitution as "impracticable" when that was not necessarily the case; the appropriation of victims’ assets by American officers for personal use; the sale of victims’ assets through the Army Exchange; the unresponsiveness of the American forces to efforts by the Hungarian government and the Hungarian Jewish community to reclaim their assets; and the transfer of Hungarian paintings to the Austrian government. Responsibility for these actions does not rest exclusively with the American forces in Austria; in most cases, high-ranking officials in Washington sanctioned their decisions, and in the case of non-cultural assets, these decisions legitimately implemented enunciated policy.

But what purposes were served by these policies and decisions? Only part of the explanation can lie in post-war politics. While documentation shows that the decision to treat Austria as Nazi-occupied from March 1938 motivated leaving valuables hostage in Austria to be used in war claim negotiations, this should never have applied to cultural property, especially that of Nazi victims. Nor does the move toward communist domination of Hungary provide a total explanation. Until 1948, when the Hungarian restitution mission was expelled from the U.S. Zones in Germany and Austria, Hungary was actually treated better than some countries on the free side of the Iron Curtain.78

In the end, there may be no single explanation of why the property of the Hungarian Jewish community was so readily dispersed. But the fact remains that the application of several policies to the various assets aboard the Gold Train assured that the property was never returned to its rightful owners. (Top of Page)

Endnotes