Restitution of Confiscated Property

Benjamin B. Ferencz

My administrative work in wrapping up the Office of the Chief of Counsel for War Crimes was almost over when my wife and I prepared to return home to a normal life. But I was unexpectedly recruited for a new assignment by a representative of the world’s leading Jewish organizations. Military Government law provided that properties seized by the Nazis in the U.S. zone of occupation should be returned to the rightful owners. If no owners or heirs could be found, the assets could be claimed by a charitable organization pledging to use the proceeds to benefit survivors of persecution. A consortium of prominent Jewish organizations formed the “Jewish Restitution Successor Organization” (JRSO) and they needed someone to set up and manage such a challenging endeavor. They didn’t really think anything much would come of it, and they were not prepared to invest their limited charitable funds into such an uncertain enterprise. Nevertheless, they felt it was their moral duty to try. They concluded that I was the right man to do the trying.

Before offering me the job, their representative, an American lawyer named Joel Fischer, came to Nuremberg from the office of the American Jewish Joint Distribution Committee, a respected philanthropic organization, then headquartered in Paris. Before he approached me, he wisely talked to my wife who was packing our bags to return to New York. The “Joint” wanted a two-year commitment. Gertrude, knowing my tempo and temperament, thought it would only take me a year to complete the assignment. Although she had eagerly joined me for our honeymoon in Germany in 1946, she never felt comfortable in Germany. Yet, the moral imperative of possibly being able to help Holocaust survivors (including some of her own relatives) could not be turned down. In August 1948, I accepted the job and designated myself the “Director-General” of the JRSO, knowing that Germans would be impressed by someone who was both a Director and a General. We did not imagine that ten years would pass from the time we left home before we could return to America—together with our four children, all born in Nuremberg. Some honeymoon!

The Military Government law under which the JRSO was to operate stipulated that all claims had to be filed by the end of 1948, only four months away. It seemed impossible, within that brief period of a few months, to get organized, find and train staff, and identify and claim all the properties that had been unlawfully seized. I promptly called on the U.S. Military Governor, General Lucius Clay, with a request to extend the deadline. The General’s main concern at that time was that Soviet troops might try to take over all of Berlin and possibly all of Germany. (U.S. personnel were required to keep provisions in the trunk of their cars at that time, in case emergency evacuation was ordered.) Clay explained that the sooner the restitution program was out of the way the better. He was, understandably, opposed to any extension.

I argued that a massive search-and-claim operation would require immediate cash for German staff and equipment, and it was not morally justifiable to ask Jewish charities to put up their scarce dollar resources to pay local German personnel when the outcome was so uncertain. I asked for a grant from “occupation funds” to enable me to meet the rigid goal set in the military law. He noted that the German currency, which the occupying allied forces used to pay their own local expenses in Germany, were all under combined control of the four victorious powers. He was sure that the Soviets would never agree to such a use since they didn’t believe in private ownership of property anyway. He doubted if the British or French would agree either, since they had not yet enacted similar restitution laws for their zones. It looked rather hopeless.

When confronting a hopeless situation, it is advisable to find a better solution. I turned to my fallback position. I promised Clay that I would do my very best to meet the short filing deadline if I were given the tools to do the job. I proposed that instead of the grant, which would not meet with quadripartite approval, that he give me a loan of German Marks from the U.S. share of occupation funds. That did not require the consent of the others, and I could repay the loan when restitution funds were recovered. He asked if that could be done legally. I replied that I had in my pocket a memorandum that said it could. The sizeable sum of one million marks was promptly advanced, and I raced away to get started.

Under supervision of a small cadre of refugee Jewish lawyers, German staff was hired and sent to scour every real-estate registry for every property transfer after 1933 by anyone with a name that sounded Jewish. Military Government law required persons who acquired Jewish property during the Hitler years to report the transfer. I requisitioned a large hall that had been used as a recreational center by Baltic nationals, many of whom had been Nazi collaborators. A large pool of JRSO typists worked 24 hours round the clock to hammer out the claims that poured in from the investigators in the field. On the final day of the deadline, at the final hours of the deadline, the JRSO packed full a U.S. Army Ambulance with over 163,000 claims that were rushed off to the official filing center. I was satisfied that nothing had been missed. I phoned General Clay to tell him that no extension was necessary. I think I gained his confidence on all restitution problems thereafter. I don’t think I gained many friends among the Balts.

There is a sequel to this story that occurred years later, but perhaps should be recited here. The million mark loan approved by General Clay, although a considerable sum at the time, was soon spent. Shortly thereafter, East Berlin and East Germany were politically severed from the West—the cold war was on. General Clay was replaced by a Harvard-trained lawyer named John J. McCloy.

McCloy’s assignment was to tie West Germany firmly into the fold of democratic nations. He recognized that what Germany did in the field of restitution would play an important role in her acceptance back into the family of nations. He was an important influence over German Chancellor Konrad Adenauer and others in the West German government in persuading them to go as far as possible to meet the compensation demands of Israel and Nazi victims. It was logical that I should turn to McCloy for help when I needed more funds for the JRSO.

I explained to McCloy that the money advanced by General Clay’s authority had already been spent in carrying out the complicated restitution mandates. I confessed that some money was coming in and was being distributed to the victims of Nazi persecution. I noted that concentration camp survivors still in Germany needed help desperately to enable them to move out of the Displaced Persons camps, a goal shared by both Germans and Americans. It would be politically and morally untenable, I argued, to give priority to the wrongdoers by returning borrowed funds to the now prospering German State while its victims remained in such desperate need. Agreeing, McCloy approved the loan to the JRSO of another million marks.

The same moral arguments prevailed yet again when the loan was renewed for 3 million marks. Then came a moment of truth and opportunity. Among the defendants convicted as war criminals in Nuremberg was the industrialist Alfried Krupp. He had been found guilty of seizure of foreign properties and inhumane treatment of concentration camp inmates as slave laborers. He was sentenced to forfeit all of his property, and to be imprisoned for 12 years. In 1958, as part of the overall humanitarian review of all of the Nuremberg sentences, Krupp’s sentence was reduced to time served, and all of his property was restored by order of McCloy. During my frequent contact with the High Commissioner, I resisted the pressures of the Jewish organization to try to influence McCloy’s clemency considerations. I respected McCloy and recognized that he was struggling with a difficult matter of personal conscience. Now I could no longer remain silent.

After McCloy’s Krupp clemency decision, I went to his office in Bonn with a request. I reminded him of the JSRO loans of three million marks to carry out restitution responsibilities. If he insisted, I would repay those loans in full. “But,” I said, “I think that would be morally wrong. It should not be the victims who bear the expense of recovering only a portion of what was stolen from them. It should be at the expense of the wrongdoers.” As he had just given back to a convicted war criminal assets worth probably more than three billion marks, I asked him to cancel the debt “owed” by the victims of Nazi persecution. McCloy listened somberly and paused. “Can I do that legally?” I replied, “I have a memo in my pocket that says you can.” McCloy looked up and said, “The debt is cancelled.”

Years later, when McCloy had passed his 90th birthday and was recording his memoirs, we were having lunch at the Harvard Club in New York and I reminded him of the JRSO debt cancellation story. The next day he phoned me from home and said, “Ben, you know I might have gone to jail for that!” “I know,” I replied, “but I would have gone with you.” We both laughed, knowing we had done the right thing.