| U.S. and Allied Efforts To Recover and Restore Gold and Other Assets Stolen or Hidden by Germany During World War II |
V. Five-Power Conference on Reparation for Non-Repatriable Victims of Germany, June 1946
Article 8 of the January 1946 Agreement of the Paris Reparations Conference had provided, inter alia, that the United States, the United Kingdom, France, Czechoslovakia, and Yugoslavia consult with the Intergovernmental Committee on Refugees (IGCR) to work out a means to allocate a share of reparation for the non-repatriable victims of Nazi crimes. In light of Article 8, the President of the Reparations Conference suggested that the Director of the IGCR call a meeting of France, the United Kingdom, the United States, Czechoslovakia, and Yugoslavia for March 1946 to confer on implementing Article 8. Accordingly, the Director of the IGCR wrote a letter to those governments on January 24, 1946. The British resisted the proposal, but the United States continued to press for an early conference, seeing merit in moving as swiftly as possible given the immensity of the problem facing the occupying powers in dealing with the displaced victims of the Nazis.
In early April the Department of State gained the impression that the French Government hoped to convene the meeting on Article 8 in early May at Paris. On May 9, 1946, the State Department announced the appointment of Professor Eli Ginzberg of Columbia University as the U.S. representative to the forthcoming conference on non-repatriable victims of German action. The announcement included the statement that the United States considered the first $25 million realized from the liquidation of German assets in neutral countries should be made available to speed the work of rehabilitating and resettling the non-repatriable victims. Ginzberg, who was loaned to the State Department by the War Department where he had been serving as special assistant to the Surgeon General of the United States, was joined on the U.S. delegation by Irwin Mason and Jacob Kaplan of the State Department.
As the time approached for the U.S. delegation to leave for Paris, neither a final date nor venue had been decided as the British continued their delaying tactics. One British approach appeared to be an attempt to tie the Article 8 talks to the London UN Conference on Refugees (an event that had run into many delays) by suggesting that the talks be shifted to London to take place just after the UN conference. Ignoring another attempt to shift the talks (this time to New York), the U.S. delegation left for London on May 13, with the intention of bringing pressure to bear on both the French and British to get on with the Article 8 process.
Upon arrival in London, Ginzberg learned that the French had taken no further action to host the talks. However, the British undertook to host "exploratory talks" attended by representatives of the five governments involved. While the British attempted to turn the talks to substantive matters, the United States insisted that the delegations limit discussion to procedural issues and that the conference itself be held in Paris as originally planned. In reporting to Washington, Ginzberg characterized the British tactics as dilatory and the attitude of the other participants as passive to the point of negativism. Nonetheless a consensus developed for holding the conference in Paris on June 11.
During a 2-week hiatus between the exploratory talks and the convening of the conference, the U.S. delegation embarked on a series of separate exchanges with the participants aimed at formulating an agreement in principle before the formal negotiations began. Starting with Yugoslavia, the U.S. delegate noted that for the purposes of the Article 8 negotiations, the United States could agree that a strict interpretation of the Agreement of the Reparations Conference would exclude dissidents as beneficiaries of the reparation regime. A less important issue centered on the IGCR and the fact that Yugoslavia was not a member. In the end, Yugoslavia appeared willing to find a formula for working with the IGCR without joining.
Once Yugoslavia appeared satisfied on the dissident issue and other minor ones, Czechoslovakia had little problem in proceeding. The Czechs had no problem with IGCR, since Article 8 provided for the administration of the funding for non-repatriables by the Committee. France proved only a temporary problem, since French negotiators had gained the impression during the UN Conference that the moneys acquired in accordance with Article 8 would be used as the initial working capital for the new International Relief Organization. Ginzberg asserted that the French approach would delay the allocation of Article 8 assets to non-repatriables and was wholly inconsistent with the language and the intent of the article. By the conclusion of Ginzberg’s preliminary talks with the French, it appeared likely that they would proceed in accordance with U.S. views, leaving only the United Kingdom as a serious obstacle to a successful conference.
C. Tentative U.S.-U.K. Agreement
The United States and the United Kingdom differed on the rapidity with which refugee relief should be integrated into the UN system; Ginzberg recognized, however, that the underlying British concern centered on a reluctance to make funds readily available for Jewish resettlement in Palestine. To confront the issue, Ginzberg wrote his British counterpart, Hector McNeil, Parliamentary Under Secretary of State, Foreign Office, that the United States agreed with the British contention (advanced by Foreign Minister Bevin) that the group most eligible for relief funds comprised those who suffered most from Nazi terror. Triage of this fashion would ensure that the limited sums available would make a real contribution to the resettlement of the neediest rather than be dissipated over a much larger group. Ginzberg then referred to the just concluded Allied-Swiss talks as strong evidence of the common concern for early action in providing relief to the non-repatriables and to the Allied request for a Swiss down payment of $25 million from the revenues to be realized from the liquidation of Nazi assets.
Ginzberg then moved to outline a prospective agreement that would provide for Five-Power allocation of $25 million to "appropriate public and private field organizations." The conference would develop specific directives to govern the expenditure of the non-monetary gold that had not yet been liquidated by the IGCR as the administering agency. The specific programs that fell under the first allocation, from the U.S. perspective were the resettlement of eligible Jewish children in Palestine, assistance for the resettlement in the various countries of their choice of indigent refugees, a specialized medical rehabilitation program to facilitate the occupational readjustment of immigrants, and a specific allocation for non-Jewish eligibles to facilitate their resettlement. Ginzberg concluded his letter with a statement that the United States would support an outcome identical or close to the above and hoped that the United Kingdom could do the same.
McNeil responded that the United Kingdom would be willing to associate itself with the U.S. proposals advanced by Ginzberg except the suggestion providing for a children’s resettlement scheme for Palestine. McNeil noted that 600 child immigrants per month would be too high but that he would seek the Foreign Minister’s approval for a figure closer to 250. Ginzberg had not mentioned a number for child immigrants in his letter to the McNeil, but he had referred to 600 in separate conversations with representatives of the IGCR who in turn passed the number to the British Government. Ginzberg concluded that there was little to gain through debating the scale of the program at this stage of the negotiations and asked the Jewish Agency for Palestine not to approach the IGCR with proposals for resettlement numbers in Palestine until mid summer. While McNeil promised to seek written confirmation that 250 children could be resettled in Palestine under the proposed agreement, the U.S. delegation received no new information on the matter before the conference convened.
Following additional exchanges with the participating powers and concerned international organizations, Ginzberg summed up the situation in a second letter to McNeil. Ginzberg wrote that the United States, France, Czechoslovakia, and Yugoslavia appeared satisfied with the draft agreement. Moreover, the just-concluded Allied-Swiss talks in Washington provided that the Swiss would shortly make available to the Allies up to 50 million Swiss francs for the rehabilitation and resettlement of non-repatriable victims of German action. Under these circumstances, Ginzberg hoped that the British could join with the other participants and accept the proposed language designed to meet Five-Power obligations under the Paris Agreement.
After additional exchanges with the participating delegations and the IGCR, the U.S. delegation drafted a basic agreement and submitted it to the French Government as the conference host. After recommending slight changes in allocations among the groups of non-repatriables, the French approved the draft agreement and agreed to cosponsor the draft when the conference convened. Upon receiving a copy, McNeil responded that subject to "drafting changes," he would instruct the U.K. delegate to the conference to accept the agreement.
Despite McNeil’s assurance, the U.K. delegate told Ginzberg that the draft agreement was unsatisfactory shortly after the conference opened. As an alternative the British proposed that Article 8 money be made available for "government sponsored and approved" schemes of resettlement. The U.S. delegation strongly rejected the suggestion, stressing that Article 8 did not envisage governments as the implementing agents for refugee programs. To avoid an impasse, the U.K. delegate undertook to review the draft agreement paragraph-by-paragraph with his U.S. counterparts. Aside from several inconsequential matters of form, British problems centered on the draft’s reference to the Jewish Agency for Palestine. Ginzberg undertook to deal with British problems by deleting any reference to the Jewish Agency and the American Jewish Joint Distribution Committee in the agreement. For their part, the British agreed to designate both as appropriate field organizations in the annexed Letter of Instruction to the Director of the IGCR. With these changes accepted by all parties, negotiations were concluded and the agreement signed at Paris on June 14, 1946.
The agreement essentially provided a practical plan for allocating the reparation envisaged in Article 8 of the Final Agreement of the Paris Reparations Conference. The Preamble reiterated the Paris Conference’s reference to "the sum of $25 million having been made available by the Allied Governments as a priority on the proceeds of the liquidation of German assets in Neutral Countries." Since the conference participants had received no further amplification of that language, a consensus was reached to continue to consider the entire $25 million as a priority, thus justifying use of the same language as in the Reparations Agreement.
On another key issue, the Preamble made clear that the IGCR will distribute the funds to "appropriate public and private field organizations" thus establishing a basic administrative structure for the delivery of relief and resettlement funds. Ginzberg pointed out that, although the word "practicable" appeared in the Preamble and throughout the text of the agreement, there was no discussion of the term even by the British.
Paragraph A began with the statement that it was the unanimous view of the Five Powers that funds becoming available under Article 8 of the Reparations Agreement be used "not for the compensation of individual victims but for the rehabilitation and resettlement of persons in the eligible classes." The paragraph defined the eligible group based on statistical data from the U.S. occupying forces and the IGCR. The available data indicated beyond any reasonable doubt that the overwhelming majority of eligible persons were Jewish. Paragraph A also referred to the need to give priority to the resettlement of Jewish children, a carryover from the draft language worked out by Ginzberg in his efforts to arrive at a compromise in his preliminary exchanges with the British.
However, in recognition that a small minority of non-Jews fell into the eligible category, Paragraph B set aside the sum of $2.5 million as well as 5 percent of the heirless funds garnered by Allied governments for administration on behalf of that group by the IGCR. Non-Jewish eligibles were very narrowly defined by the paragraph as those who could prove that they were persecuted for religious, political, or racial reasons and who did not wish to return to their countries of origin (including Germany and Austria). The broader category of non-Jewish victims of Nazi concentration camp victims was specifically excluded by the new agreement at the demand of the Yugoslavs and Czechs who were anxious to avoid the inclusion of dissidents in the eligible group.
Paragraph C addressed the question of limits on spending per individual and other administrative issues. Paragraph D authorized the IGCR to add to the $25 million sum all non-monetary gold found in Germany and to take appropriate steps to liquidate such assets for as high a return as possible. In Paragraph E the conference appointed the French government as an agent of the Five Powers to request the neutral powers to make available all assets of victims of Nazi actions who died without heirs. These heirless funds were to be made available to the IGCR for distribution to the appropriate field agencies for the rehabilitation and resettlement of eligible persons under the agreement. If further representations became necessary, the United States and the United Kingdom would join France in representing the Five Powers. Paragraph F addressed currency and exchange rate issues as they related to funds collected for Article 8 purposes. Paragraph G concluded the agreement by charging the Director of the IGCR with the responsibility of carrying out the provisions of the agreement on behalf of the Five Powers. To assist in that effort, the agreement provided for a Letter of Instructions to be transmitted by the French providing the terms of the IGCR’s responsibility.
The Czech and Yugoslav delegations insisted on appending a statement asserting that their governments retained the right to claim heirless assets as provided in international law despite their acceptance of the language in Paragraph E of the agreement.
The second annex provided the text of the Letter of Instructions to the Director of the IGCR. Among the substantive points covered was the designation of the American Jewish Joint Distribution Committee and the Jewish Agency of Palestine as the "appropriate field organizations" referred to in the covering Five-Power Agreement. Additional points provided the IGCR with authority to certify to the neutral powers that heirless funds as well as other moneys provided were to be used for practicable rehabilitation and resettlement programs. The IGCR Director was vested with the authority to distribute all money and other assets from all sources foreseen in the governing agreements. The authority to liquidate non-monetary gold was made explicit in the text. The Director was further given the responsibility for selecting field organizations for providing assistance and resettlement to eligible non-Jewish victims of Nazi action. The remainder of the letter and its attachments went into detail on questions of interpreting eligibility principles, auditing responsibilities, and other matters such as the transfer of the same responsibilities and rights to successor refugee organizations.