Heirless Assets

On June 14, 1941, pursuant to the Trading with the Enemy Act of 1917, President Roosevelt froze the assets of certain designated foreign nations and their nationals, including Germany and its citizens, a fair number of whom were Jews. Shortly after World War II, the U.S. Government returned the property of Holocaust victims to the survivors or their heirs, pursuant to sections 9 and 12 of the Act.

In 1946, the U.S. Alien Property Office had about $400 million in enemy property under its supervision (an amount eventually appreciating to $900 million), including financial assets of citizens who were also Nazi victims. Some $495 million of confiscated German and Japanese assets were turned over to the War Claims Fund for compensating U.S. citizens for various war-related losses and claims. Demonstrating its commitment to taking action as well as pressing other nations to do the same, the Truman Administration supported passage of a 1946 law which returned the assets of enemy citizens who were persecutees and who had survived the war.

However, the 1946 law did not deal with those Nazi victims who had died heirless. The lack of such a law had even become an issue in Allied-Swiss negotiations, with the Swiss citing the lack of U.S. action on heirless assets as a basis for their inactivity. In a side letter to the 1946 Washington Accord, the Swiss had made a commitment to examine "sympathetically" the transfer of heirless assets in Switzerland to the Allies for their use in providing assistance to stateless Nazi victims. From July 1946 until August 1952, the constant tension in U.S.-Swiss relations over implementation of the Washington Accord caused American negotiators to give only intermittent support to recovering the assets in Switzerland of Nazi victims who died without heirs. American officials were uncertain about the magnitude of such assets. In the negotiations leading up to the August 1952 agreements, State Department officials reacted skeptically to the Swiss assertion that there were no heirless assets remaining in Switzerland. The United States insisted on obtaining another Swiss commitment on heirless assets in the event that the Swiss discovered such assets in the future. In January 1960 the U.S. Embassy in Bern presented a demarche to the Swiss Government. The Swiss response was not encouraging and no further representations were made. However, three years later, a Swiss law came into effect requiring all Swiss financial entities or persons to report any assets that belonged to Nazi victims.

In 1954, after several failed attempts in previous years, the U.S. Congress amended the Trading with the Enemy Act to address the issue of heirless assets. A new Section 32(h) of the Act gave designated charitable successor organizations authority to receive heirless property to rehabilitate and resettle survivors of Nazi persecution. One such organization was the Jewish Restitution Successor Organization (JRSO).

Section 32(h) originally contained a $3 million limit on the amount given to successor organizations for distribution. This amount was based on an estimate supplied by the Office of Alien Property. By 1957, several thousand claims had been reviewed.

During Congressional hearings several years later, it was reported that only 500 claimants were able to satisfy the applicable standards of proof of ownership required by the amendment. Difficulty continued in meeting the strict standard and in 1962, Congress amended the statute, replacing the $3 million limit with a $500,000 lump sum, an amount designed to provide rapid settlement without requiring proof of specific claims. In 1963, President Kennedy issued Executive Order 11087, which provided the lump sum payment to the JRSO out of the War Claims Fund.

This preliminary report can only serve as a road map through the 15 million pages of official U.S. records on the largely untold and still unfinished story of World War II reparation and restitution. The whole story lies even deeper in the records of the U.S. Government as well as in the archives of other governments and institutions that we did not have time to pursue for this study, or to which we had no access at this time. Nevertheless, the picture presented here is comprehensive, detailed and revealing of a dimension of World War II too long ignored.

Source: The United States State Department
This document is in the public domain.

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