Home / Contents


Implementation of Restitution Policy in Europe

Victims' assets were restituted to countries and organizations, not individuals.

United States authorities generally restituted those victims' assets that came under U.S. control to the national government of their country of origin or to international relief or successor organizations, rather than to the individual owner or heir. This was a pragmatic but flawed solution to the idealistic aim of returning stolen assets to individuals.

"External restitution," as it was known, refers to the process whereby U.S. authorities returned certain categories of assets--cultural property, securities, machinery, heavy agricultural and industrial equipment, locomotives, rolling stock, barges, transportation equipment, and communication and power equipment--found in Germany or Austria to the governments of the countries from which they were stolen. Assets were restituted once the country of origin could be identified, and missions sent by other governments helped to identify assets that were subject to restitution. In cases where assets were restituted in this manner, the recipient government bore the responsibility to locate the rightful owner and to restitute the property turned over to it by U.S. authorities. The Commission has found no evidence that the United States monitored the recipient countries' compliance with these responsibilities.

Currencies were returned to the government of issue. One anomaly in the external restitution process involved currencies. Currencies that appeared to have been seized by Germany in defeated countries were returned to the government of issue rather than to the country from which they were seized. In most cases it was impossible to establish whether currencies were looted or acquired legitimately from a country before or during the period of German occupation. This policy precluded the restitution of this type of asset to individual victims or successor organizations because, by definition, any currency could be restituted to the government of issue.

There were two exceptions to this broad policy: first, the Soviet Union received Hungarian, Romanian, Bulgarian, and Finnish currencies; and second, the currency held in the Melmer account of looted victims' assets recovered from the Merkers mine was turned over to the Inter-Governmental Committee on Refugees (IGCR).

Victims' assets were turned over to humanitarian organizations. In cases where assets were restituted or released to successor or relief organizations, individual concerns were not ignored; they were, however, subordinated to collective needs. Property that was identified as having been looted from Jews or Jewish communal institutions, but was heirless and unclaimed, was released to the Jewish Restitution Successor Organization (JRSO). The JRSO was the only successor organization designated by U.S. authorities to claim heirless Jewish property.

The United States, as a signatory to the Paris Reparations Agreement (January 1946), turned over all captured "non-monetary" gold in its possession to an agency known successively as the Inter-Governmental Committee on Refugees (IGCR), the Preparatory Commission for the International Refugee Organization (PCIRO), and, finally, the International Refugee Organization (IRO). A general humanitarian impulse, intersecting with fiscal concerns noted by the Department of State, influenced the American decision to adopt a broad definition of "non-monetary" gold as valuable personal property (other than cultural property) that had been looted by the Nazis and was unidentifiable, so that the IGCR might amass the sums necessary to address the needs of refugees and displaced persons. These decisions channeled needed funds to the refugee organization and also had the effect of decreasing the financial burden on the United States of supporting the refugees.

German officials were entrusted with restitution responsibilities.

U.S. officials repeatedly emphasized that in Germany the administration of restitution to victims ("internal restitution") should be handled by Germans. This policy caused delays in restitution to individual claimants. Not surprisingly, many Germans who "owned" property that might have been looted hesitated before acceding to claims brought against "their" property. By the end of the war, victims' assets permeated the German economy. The first Länder (German state) representatives charged with drafting restitution legislation knew as early as 1946 that such laws would prove unpopular and refused to enact measures that reflected the U.S. Government's insistence on a presumption of duress (i.e., U.S. authorities presumed that any transfer of property from persecutees from September 15, 1935 to May 8, 1945 was done under duress). In 1949, German "owners" sought to delay proceedings evidently because they believed the severity of the law would soon be mitigated after the establishment of the Federal Republic of Germany in May of that year. Many German citizens affected by the laws believed that the U.S. Military Government would ultimately amend them, so they undertook efforts to delay any restitution. Some Germans in possession of Aryanized property waited until the last possible moment to respond to restitution notices and then requested postponements of hearings.

In addition, some German restitution officials formerly had served the defeated Reich; U.S. authorities relied on the problematic denazification process to identify them. American Property Division officers in Bavaria and Baden-Württemberg noted in 1949 that there was resistance to restitution laws. American officials were aware that cases involving influential people were being postponed and that the restitution program might follow along the lines of denazification--the more prolonged the procedure, the more favorable the decision for the person in possession of Aryanized property. Procedural obstacles and the dragging out of the restitution process forced some claimants to settle for less than they were due and discouraged others from seeking restitution at all.

Strict deadlines created a narrow window for claims and some victims' assets were therefore transferred to Germany and Austria.

United States Military Law 59, promulgated in November 1947, provided the legal basis for internal restitution. The law enabled persecutees to demand the return of property that had been transferred during the Nazi regime. It also defined the procedure for implementing the restitution of identifiable property in the U.S. Zone in Germany. Military Law 59 promised "full and speedy" recovery, but the regulations adopted by the Office of Property Control undercut both. Strict adherence to the December 31, 1948 deadline for filing petitions for restitution (extended to May 1, 1949 for incomplete submissions) together with the lengthy, cumbersome and expensive procedures prevented many rightful owners from asserting their rights. United States officials consistently endeavored to wrap up operations as quickly as they could--sometimes to the detriment of the restitution process. The U.S. Military Government placed the burden of initiating and proving claims on the victims and their heirs, who were struggling to survive and rebuild their shattered lives. The last of the collecting points was closed in 1952 and unrestituted assets, including identifiable cultural property of known national origin, were transferred to the governments of Germany and Austria. Some of these objects were later found to belong to victims.

Austrian officials were entrusted with restitution responsibilities.

Austria held a unique position in the postwar period. In signing the Moscow Declaration (November 1, 1943) the Allies stated their intention to regard Austria as the "first free country to fall victim to Hitlerite aggression," and to "see re-established a free and independent Austria." They declared, however, that Austria--despite its status as a "liberated" nation--still had "a responsibility, which she cannot evade, for participation in the war" at the side of Nazi Germany. Because of the Moscow Declaration, Austria held a very ambiguous postwar status as both a victim and a victimizer.

"Internal restitution" efforts in Austria differed from those in Germany. In Germany, American officials initially directed internal restitution, but in Austria a new democratically elected government was responsible for enacting and implementing internal restitution policy. The Austrian government began to pass legislation concerning internal restitution soon after the end of the war, but it was created piecemeal and took years to complete. Although the Allied powers maintained a supervisory role they entrusted Austrian bureaucrats, many of whom had served the German Reich, with the task of restituting victims' assets that had been Aryanized while Austria was a part of the Reich (1938-1945).

The Allies also sought to ensure that Austria fulfilled its obligation to return property looted from victims as the occupation ended. They could, by unanimous consent, annul legislation passed by the Austrian parliament. In the early 1950s, for example, when the Austrian parliament attempted to weaken certain aspects of the restitution legislation (allowing Aryanizers to reclaim enterprises already restituted, for instance), the Allied Commission objected. The Austrian parliament, therefore, never enacted this "Reacquisition Law," as it was known.

Austrian authorities were directed to return property to former owners, or grant compensation when restitution was "impossible." Austrian control over the slow and restrictive restitution process impeded the return of assets to victims.

Political considerations impeded the restitution process.

Cold War political considerations that first became paramount in the late 1940s sometimes resulted in inconsistent restitution policy. A great deal of cultural property was restituted to the Soviet Union, but there were cases where cultural property was not returned to Eastern bloc countries. The decisions to place artworks that clearly came from Hungary in trust with the Austrians and not to return library collections and cultural objects to the Baltic states are examples of this. The fact that Hungary, Romania and Bulgaria were former Axis countries and that treaties between them and the U.S. were not concluded for several years delayed restitution substantially.

Problems at central collecting points and government warehouses impeded identification of victims' assets.

Military and civilian guards were not always able to prevent the theft of victims' assets from temporary repositories and central collecting points. The U.S. armed forces had strict and sensible regulations against theft, but security at some facilities was lax or unavailable at times. Because property control officers did not always take detailed inventories, it was impossible for them to determine the extent of theft. Inventory and valuation of assets at central collecting points differed from facility to facility and were hindered by the lack of appointed experts to review asset collections. Troop redeployment, supply shortages, damaged facilities and lack of transportation also resulted in collections that were left unguarded and unprotected.

The huge amount of assets in Germany overwhelmed the skeletal staff charged with their protection. The Monuments, Fine Arts & Archives (MFA&A) section of the U.S. Army, charged with locating and preserving cultural property, was particularly understaffed. The Office of Military Government for Germany, United States (OMGUS) was forced to rely on German civilians to do much of the accounting and sorting of assets. More consistent and thorough inventories would have made restitution more practicable and would have facilitated more precise valuation of looted assets.

Better policy implementation in Germany and Austria would have prevented identifiable victims' assets from being stored in disorganized and poorly secured military warehouses and facilities where they were occasionally subject to theft and requisitioning by U.S. servicemen and civilian employees. The 1945 "Gold Train" episode--in which American troops captured a train loaded with assets taken largely from the Hungarian Jewish community--shows in concrete terms some of the effects of inadequate personnel, inadequate security and a lack of command sensitivity to the restitution of victims' assets.

Home / Contents