740.00113 European War 1939/1070
The Ambassador in the United Kingdom (Winant) to the Secretary of State
[Received September 15.]
Sir: I have the honor to refer to the Department’s instruction 2913 of July 13, 1943,77 asking the Embassy to submit its views as to measures which might be taken to invalidate the forced transfers of property belonging to Jewish residents in Tunisia described in BOC airgram 60 of June 15, 1943, from Algiers. In accordance with the Department’s instruction, the Embassy has consulted officials of the British Foreign Office and Trading with the Enemy Department.
Since the question of invalidating forced transfers of Jewish property in Tunisia is related to the broader problem of invalidating Axis acts of dispossession in all the occupied countries of Europe, the following discussion deals both with the general issues and with their application to Tunisia. This discussion, of course, presumes the liberation of the occupied countries because effective action to invalidate forced transfers will in most cases be possible only after liberation. The general policy to be followed has already been outlined in the Inter-Allied Declaration of January 5, 1943, but important policy decisions remain to be made in the application of the Declaration to concrete cases.
The Inter-Allied Declaration of January 5, 1943, refers to transfers of property, rights and interests located in occupied territory or belonging to persons resident in such territory. The terms of the Declaration are sufficiently broad to cover any transfer during the period of occupation but are obviously meant to apply more specifically to transfers made directly or indirectly at the behest and for the benefit of the enemy, that is, to transfers which can be described as forms of looting, spoliation or economic and financial [Page 288] penetration. However, all forms of looting are covered, regardless of the type of property or any cloak of legality or any compensation, partial or complete.
The British officials consulted tended immediately to take the view that although the Declaration covers all forms of looting or forced transfers of property, it will not be practicable to do something about each and every case and that the various types of cases should be studied to determine what action is feasible and where the responsibility for action lies. Although the British officials consulted agree personally with many of the points of view expressed below, the following discussion does not represent the official British position which has not yet been formulated. Where British officials have expressed views similar to those outlined below, this is indicated at the appropriate points in the text. Further information respecting British views will be sent subsequently when available.
The following discussion analyses the types of cases likely to arise in accordance with (a) the kind of property involved, (b) its location. The location of the property will in large part determine where the responsibility for action to invalidate Axis property transfers lies.
I. Identifiable and Traceable Property
The simplest cases and those to which the Declaration is most obviously applicable are those involving identifiable and traceable property. It will be convenient to divide transfers of such property into the following categories: (1) cases where the property subjected to seizure or transfer has remained inside the country (or possessions) in which it previously resided; (2) cases where the property has been taken outside the original country (or possessions).
(A) Property Remaining in Same Country.
Where the property involved is fixed, as in the case of real estate, or relatively immovable as in the case of buildings, it will, of course, have remained in the same location. Some movable property such as railway cars, automotive vehicles, refrigerators and the like may likewise have remained in the same location (even though seized and temporarily used by Axis occupying authorities as individuals) or, if moved, may not have been taken outside the country (or possessions, as in the case of French North and West Africa). In these cases the property involved will by virtue of its physical location be under the jurisdiction of the same Government, or at least country, as before. (This assumes that the Government supplanting the Axis occupation authorities is a Government of the same country as before, i.e., that the country continues to exist in more or less the same form as before. Boundary changes may, of course, occur and complicate the situation somewhat.)
[Page 289]In all cases of dispossession where the property remains under the jurisdiction of the same Government or country, the question of return of such property to the rightful owners is properly the concern of the Government in question. The Allied Governments in London and the French National Committee have all indicated adherence to the Inter-Allied Declaration and are, therefore, obligated to implement its terms as regards property under their jurisdiction. Once the occupied territories are liberated and national Governments are re-established in each of these countries, it is to be expected that they will adopt whatever measures are necessary and feasible to carry out the aims of the Declaration. This view appears to be in accord with views expressed by the British officials consulted.
French North Africa presents a special case, Property which has been removed from North Africa to Metropolitan France, is for the time being outside the control of the French authorities in North Africa. However, it may, after the liberation of France, come within the jurisdiction of the Government which is then established in France. This Government may or may not regard itself bound by the act of the French National Committee in adhering to the Declaration but will, it is hoped, adopt measures in accordance therewith.
The houses and other quarters mentioned in BOC airgram 60 as requisitioned or seized by the Axis occupation authorities in Tunisia presumably come within this general category of property. In many of these cases the question of actual transfer of title may not have arisen. The occupying authorities simply took possession temporarily. Following their departure possession was presumably restored to the original occupants or owners. Many of these cases may come under the Hague Convention.78 Some of the movable property such as the railway cars, motor cars, other vehicles, refrigerators, radios, firearms and the like reported in BOC airgram 60 to have been requisitioned or seized in Tunisia may still be in North Africa and, therefore, also belong in this general category. The furniture, fixtures, rugs, hangings etc. likewise reported to have been seized are in most instances probably not traceable or not indentifiable with sufficient certainty to belong in this category.
(B) Property Taken Outside the Original Country.
Many identifiable movable articles seized by Axis individuals in Tunisia appear to have been shipped to Continental Europe. Except in those instances where the property is recovered in Metropolitan France, it will therefore be outside the jurisdiction of the French [Page 290] authorities even after all France is liberated. Restoration of the property and implementation of the Declaration will thus require action by more than one country.
Three cases may be distinguished: (1) those in which the property is located in enemy or enemy-allied territory; (2) those in which it is located in a neutral country; (3) those in which it is located in an Allied country now in enemy occupation.
In the first case, it seems that the return of the property will have to be made the subject of special arrangements with Allied occupation authorities or with whatever governments are later formed in those countries.
The second case appears to present the most difficult problems of all. In the absence of any special arrangements it seems that the individuals’ suits would have to be brought in the law courts of the neutral countries. The outcome would be uncertain, particularly in cases where the property had changed hands several times. On the other hand, if the neutral countries were asked to undertake, by treaty or otherwise, to direct their courts in such cases the question would arise how far other countries, for example the United States and Great Britain, were ready to take similar steps. We think that, as a preliminary step, it is advisable to examine the legal systems of the neutral countries concerned from the point of view of cases involving the Declaration. These views respecting the problem of the neutrals are shared by some of the British officials concerned.
The neutrals will also constitute a problem as regards titles to property such as shares in industrial concerns. It is known that German interests have acquired share holdings in many business enterprises located in occupied countries. As (or just before) the German forces are driven out of these countries, the new German holders of such shares may attempt to disguise the German ownership by transferring title to neutral names or may attempt to sell such shares to neutral buyers (who have already been warned against such purchasers by the Declaration). One of the problems confronting the Governments of newly liberated territories will be that of deciding who has proper title in cases where title transfers occurred during the German occupation and of uncovering any hidden German interest where it exists.
The third case involves cooperation between the parties to the Declaration. Effective action to return property looted by the Axis may require more than an undertaking not to recognize the validity of transfers by the Axis. This is true quite apart from the question what executive or legislative action could be taken to assure that courts will refuse to regard Axis transfers as valid.
We think it will be advisable to set up some form of international commission to facilitate the adjustments required in the first and [Page 291] third categories and avoid the confusion likely to arise if each piece of property involved is made the subject of separate negotiations.
It may also be advisable to turn over to some kind of international body the problem of untangling title to corporate industrial properties located in the occupied countries where the Germans have made efforts during the occupation to acquire title in whole or part and possibly also to hide such title before liberation of the country. While this untangling may be regarded by (some of) the Governments of liberated countries as a domestic prerogative, it seems to us advantageous to attempt to get some uniformity of practice in this way. The question of uncovering any German title to industrial and commercial property is involved, not only in the problem of restoring property to original owners under the Declaration but also in connection with the sequestration of enemy property to meet claims against the enemy for war damage. While certain British officials agree in general as to the desirability of an international commission for handling problems of this kind, no detailed opinions have yet been expressed as to the precise duties and functions of such a commission.
(C) Compensation for Damage to Property.
The houses and other quarters requisitioned or seized by the Axis in Tunisia were apparently in most instances taken over without compensation of any kind for tenancy or at least without adequate compensation. Moreover, in many cases considerable damage appears to have been done to the properties. These losses represent in a sense property transfers to the Axis but they probably cannot usefully be regarded as transfers of the type envisaged in the Declaration since the problem involved is not return of the properties but compensation for the losses suffered.
Conceivably compensation could be demanded in the first instance from the enemy after defeat. It seems more likely, however, that the Governments of liberated areas will establish means for granting compensation to their nationals or persons under their jurisdiction for war losses and seek recompense later from the enemy, if at all. This, however, involves the general question of reparations which is beyond the scope of this discussion. The kinds of losses for which Governments of liberated areas will provide compensation and the extent of the compensation are presumably matters for local determination.
In the case of movable articles seized by the Germans, the articles when located may likewise be found damaged or deteriorated. The question of whether compensation is to be paid for such damage and by whom will be a difficult one. The return of the articles is a matter clearly coming under the Declaration and one on which the signatory [Page 292] Governments have committed themselves. The same is not necessarily true as regards the question of compensation for damage or deterioration. Where the articles have not been taken outside the jurisdiction of the original country of residence, the problem is again one for local determination. Where the articles have been taken away to another country, the country in which they come to rest, if a signatory to the Declaration, can probably be regarded as having partial responsibility for return of the articles; but whether the recipient country can be regarded as having any responsibility for damage is highly problematical. The person responsible for the damage may not, for example, be within the jurisdiction of the recipient country. Here again the question of reparations is involved.
II. Non-Identifiable and Untraceable Property
Articles seized by the Germans or Italians in Tunisia which cannot be traced or identified present a case of forced property transfer where the remedy of the Declaration, namely invalidation of the transfer, cannot be applied. Loss of such articles will presumably have to be treated like other cases of occupation or war damage where the recompense, if any, must come from the local Government or enemy. Representatives of the Allied Governments in London on the Sub-Committee on Axis Acts of Dispossession have several times mentioned informally and unofficially the possibility of obtaining recompense from Germany in the shape simply of some useful physical object, not necessarily of the same kind as the article originally looted by the Germans. This is evidently regarded by some of these people as far better than financial reparations or the promise thereof. It involves almost a form of inverse looting of Germany to recompense the individuals in occupied countries who suffered losses as a result of the original German looting. Any compensation for unfair losses imposed on individual Germans in this process would have to be taken care of, if at all, by the German Government. It should be emphasized that this viewpoint is strictly unofficial, and so far as can be determined here at present, simply the personal opinion of a number of individual officials. It is put forward by these individuals, not as a proposal, but simply as a tentative suggestion for discussion.
III. Capital Levies, Fines, and Other Impositions
One of the difficult problems raised by BOC–60 is the treatment of the property transfers resulting from the fines and levies imposed on the Jewish community. BOC–60 points out that the Jewish community was compelled to supply and support laborers for the occupying authority and to care for Jewish refugees and that to meet these expenses the community imposed a 10% to 15% capital levy totalling 60,000,000 francs upon its members who mortgaged or sold property [Page 293] to raise the necessary funds. To meet an additional 20,000,000 franc bomb damage levy the Jewish community was compelled to resort to an 8% loan from the Caisse Fonciere, a semi-official institution which took mortgages on Jewish property as security. In addition, a fine of 3,000,000 francs was imposed on the community for absenteeism on the part of forced Jewish labor and was met by the sale of jewels and other property belonging to individual members of the community. These are all property transfers resulting indirectly from Axis action, but they are not transfers made directly and in the first instance under Axis pressure. The British officials consulted appeared to be divided on the question of whether or not transfers of this type can properly be regarded as subject to the Declaration. The view was expressed that the Axis action consisted of imposition of a fine (which is itself a transfer of property, i.e., currency) but that the Jewish individuals who mortgaged or sold property did so merely as one means of raising the necessary funds and that these transfers, while the direct consequence of the fine, are not transfers of the type envisaged by the Declaration or at least are not transfers which can feasibly be declared invalid under the Declaration. The British officials pointed out that individual Jews may have sold property to other Jews or friends in order to obtain the necessary cash resources and that to declare such transfers invalid would simply create further difficulties and injustices. It was also suggested that this type of action by the enemy is related to occupation levies such as that imposed on the French and paid for through advances from the Bank of France. Occupation levies while also a property transfer of sorts do not, it was claimed, give rise to transfers or specific pieces of property which can be invalidated and do not, therefore, represent a problem properly coming under the Declaration. On the other hand, it was argued, that a fine of this type may simply be a thinly disguised form of looting and that under such circumstances the precise mechanism used should not be allowed to circumvent the aims of the Declaration.
It was agreed that in the case of the Tunisian fines under discussion the mortgages placed on Jewish properties were probably in most instances (and certainly in the case of the Caisse Fonciere) made out to persons or firms still under the jurisdiction of North African authorities. The problem was, therefore, regarded primarily as one for the local government. It was pointed out that the most obvious first step was to declare a moratorium on the mortgages involved—at least those made out to the Caisse Fonciere—as has apparently been done. (In cases where moratoria of this kind threaten the solvency of the banking institutions involved further steps would of course be necessary). This gives the local Government the time necessary to make final decisions respecting the action to be taken about these various forms of dispossession.
[Page 294]The foregoing discussion deals with two broad categories of cases coming within the scope of the Declaration: first, cases where the responsibility for action lies wholly or primarily with a single Government, that is, cases where the property has remained within territory under the jurisdiction of that Government; second, cases where international action is involved because the property has been moved into territory under the jurisdiction of another Government.
Measures for invalidating property transfers in the first category can only be devised after examination of the relevant laws in each Allied country concerned. (See Interim Report of Inter-Allied Sub-Committee on Axis Acts of Dispossession79). Suggestions for concrete measures for invalidation in these cases can probably best be made by each of the Governments concerned, possibly after consultation with other interested Governments.
Measures for invalidating property transfers in the second category involve jurisdictional and legal problems. We feel therefore that the creation of an international commission would be helpful in such cases and could achieve a closer approximation to uniformity of treatment for essentially similar cases than would otherwise be attainable.
These questions will no doubt be considered by the Committee composed of Finance Ministers of Allied Governments, representatives of appropriate British authorities and of the Soviet Union, China and the Dominions when it takes up the final report of the Sub-Committee on Axis Acts of Dispossession, which will probably be presented within the next three months. We shall appreciate a statement of the Department’s views before the main committee meets.80
Respectfully yours,
First Secretary of Embassy
- See footnote 64, p. 280.↩
- For text of convention respecting the laws and customs of war on land, signed at The Hague, October 18, 1907, see Foreign Relations, 1907, pt. 2, p. 1204, or Department of State Treaty Series No. 539, or 36 Stat. (pt. 2) 2277.↩
- Copy of this Report was transmitted to the Department by the Ambassador in the United Kingdom in his despatch No. 9758, June 24, 1943, not printed.↩
- In a memorandum of March 13, 1944, to the Division of Communications and Records, Mr. Harold R. Spiegel of the Liberated Areas Division stated: “The inquiry in this despatch no longer needs an answer for the reason that the contemplated meeting of the Allied Finance Ministers in London has not been held and, as far as known, it will not be held.” (740.00113 EW 1939/1070)↩