XII. Disposition of Heirless Assets, 1946-1963

The May 1946 negotiations at Washington that resulted in the Allied-Swiss Accord ended without the Allies providing in the text of the agreement a way to deal with the assets of victims of Nazi actions who had died without heirs. There were ample reasons to believe that Swiss banks and insurance companies held the assets of many Jewish and non-Jewish victims. Moreover, it was believed by many Jewish organizations and the Allies that the other neutrals would not have significant amounts of heirless assets. Unlike other neutrals, Switzerland was an important financial center with strict bank secrecy laws and a strong convertible currency. Switzerland introduced bank secrecy in part to counter Nazi efforts to block or trace capital outflows from Germany into Swiss banks. In the 1930s it made sense for any European who feared political unrest, confiscation, or war to protect family assets by placing them in Switzerland.

The Allies, in negotiating German property questions with neutrals, intended to make heirless assets available to those who survived Nazi atrocities via "class action" provisions in bilateral and multilateral treaties. The first such negotiation was with the Swiss. As it was not possible to include in the text of the Washington Accord a provision on heirless assets because of Swiss opposition, the Allies decided to use an exchange of letters as a mechanism for obtaining a commitment from the Swiss.

On May 25, 1946, Walter Stucki, chief of the Swiss delegation, addressed a letter on heirless assets to the three Allied delegations negotiating the Washington Accord. In his letter, Stucki confirmed that the Swiss Government would "examine sympathetically the question of seeking means whereby they might put at the disposal of the three Allied Governments, for the purpose of relief and rehabilitation, the proceeds of property found in Switzerland which belongs to victims who, by reason of violations by the late German Government, had died without heirs."

On June 24, 1946, Acting Secretary of State Acheson responded to the Swiss note, noting that, under Article 8 of the Paris Reparations Agreement, certain sums were set aside for the rehabilitation and resettlement of non-repatriable victims of German action. Moreover, under paragraph C of Article 8, the "governments of neutral countries shall be requested to make available for this purpose¼ assets in such countries of victims of Nazi action who have since died and left no heirs." In his note, the Acting Secretary requested that Switzerland take the necessary action to make available such assets to the Intergovernmental Committee on Refugees. The letter also noted that a "considerable proportion of such foreign holdings by persons of such category were located in Switzerland, " and concluded by expressing appreciation for the statement that the Swiss government would examine this question sympathetically.

Thus, the Swiss Government, in its May 25 letter, made a clear moral commitment to make the proceeds of heirless assets available to refugee organizations. However, this commitment was not a treaty obligation, spelled out in the text of the Allied-Swiss Accord. The issue of heirless assets, therefore, differed from the related issue of Switzerland’s commitment in the Accord to make an advance out of the proceeds of Germans assets of up to 50 million Swiss francs to the IRO. The Swiss never took any steps to fulfill this moral commitment.

(Author’s Note: It may be useful to review the similarities and differences between heirless assets and persecutees assets. Neither category was mentioned in the text of the Washington Allied-Swiss Accord, but both were discussed during the negotiations of 1946 and 1952. The heirless assets issue pertained to victims from all parts of Europe who died as a consequence of Nazi action. (The Allies estimated that 95 percent of the victims of Nazi action were Jews.) If a German citizen died without heirs, his or her assets fell into the category of heirless assets, and the Swiss were obligated to identify them. The "persecutees" were those who survived, but could not obtain immediate access to their assets in Switzerland because they were placed in the category of "Germans in Germany," i.e., German citizens, despite Nazi action depriving them of citizenship. The United States attempted in 1949 to get the Swiss to unblock the assets of persecutees, but the Swiss, British, and French Governments opposed this step. The Swiss proposed that the problem of most persecutees could readily be solved by releasing all assets valued at less than 10,000 Swiss francs, many of which were in Swiss banks. At the time, the Allies were reluctant to agree to this proposal, presumably because the majority of these property owners were not persecutees.)

A. Five-Power Conference on Reparation for Non-Repatriables, June 1946

The Five-Power Conference on Reparation for Non-Repatriables agreed informally on June 14, 1946, to recommend to their governments that heirless assets in their countries be made available for the relief and rehabilitation of non-repatriable victims of German action. The signatories to the agreement were the United States, France, the United Kingdom, Czechoslovakia, and Yugoslavia (the latter two with a reservation). The agreement gave the French Government responsibility for approaching the neutral countries to request their cooperation in making available heirless assets. Accordingly, the French provided a note to the Swiss Government on August 20, 1946. The Swiss responded on September 11, 1946, that they were studying the matter sympathetically and conducting an investigation into the number and amounts of heirless estates. The French also had follow-up discussions with the Swiss. The Swiss took no action on heirless assets until they enacted laws in 1962 and 1963, effective September 1, 1963, which required Swiss financial institutions to report to the competent Swiss authority assets that belonged or were believed to belong to persecutees who had not been in touch with the institution since April 9, 1945.

B. U.S. Domestic Arena, 1947-1951

The focus of American action in the immediate postwar period was to assure that the United States met its commitment to make available heirless assets for relief and rehabilitation. This commitment required a change in State laws, particularly those of New York, the country’s leading financial center. Governor Thomas E. Dewey’s staff initially opposed enactment of any legislation on the ground that the Federal government, through its power to take possession of enemy property, would be in a better position to act in this field. However, the Office of Alien Property was opposed to vesting heirless assets that originally belonged to non-resident aliens of countries formerly occupied by Germany.

On March 6, 1947, Acting Secretary of State Acheson wrote Governor Dewey to request that he consider legislation that would assure that heirless assets in New York could be directed to the Intergovernmental Committee on Refugees, in accordance with the June 14, 1946, agreement. Acheson provided comprehensive background information for this request.

Following Acheson’s letter, Federal and State officials met in Albany on March 8, and reviewed how to assist non-repatriable victims of Nazi action within the framework of New York’s Abandoned Property Law. Contrary to original expectations, the New York legislature placed a requirement that such assets had to be dormant for at least 15 years before becoming available to State and Federal governments for refugees, i.e., not before 1954 and too late to be of much use to victims urgently requiring assistance. On March 13 Assistant Secretary of State Hilldring wrote the State Legislature to request that the period of dormancy be reduced to seven years.

In this period, the State Department also sought to support action in Congress on heirless assets located in the United States and seized by the Office of Alien Property. Such assets were frozen, pursuant to the 1917 Trading With the Enemy Act, on June 14, 1941, when the President froze the assets of certain designated foreign nations and their nationals, including Germany and its citizens, a fair number of whom were Jews. After World War II, the U.S. Government was to return the property of Holocaust victims to the survivors or their heirs, pursuant to Sections 9 and 12 of the Act. All German and Japanese assets had been seized or "vested" by the U.S. Alien Property Custodian in June 1945 under Executive Order 9567. During the war, financial assets owned by enemy-country citizens had been subject only to freezing controls of the Treasury Department while property useful to the war effort had actually been vested. Under the Executive Order, the United States retained control of German and Japanese property and financial assets without paying compensation to the former owners. There was, however, widespread Congressional support for the return of seized assets owned by Nazi victims.

In 1946 the Alien Property Custodian had $390-430 million in enemy property under its supervision (including properties from other Axis powers in addition to Germany and Japan). This amount eventually reached $900 million. Anything in excess of $495 million of this amount was turned over to the War Claims Fund to pay a variety of claims (e.g., American prisoners of war, U.S. owners of property sequestered by enemy powers, other war damage losses).

In August 1946 Congress enacted an amendment to Section 32 of the Trading With the Enemy Act (Public Law 671), which permitted the return of seized assets to certain victims of racial, political, or religious persecution who would otherwise had been ineligible because of enemy citizenship. Since the 1946 law did not deal with the problem of those victims who had died heirless, the State Department supported legislation (S. 2764), which would turn over heirless assets of persecuted persons to organizations that would assist surviving persecutees. In a June 9, 1948, letter to Senator John S. Cooper, State Department Counselor, Charles E. Bohlen supported such legislation, but the legislation failed in the House because of the press of time. Other similar bills were introduced in 1949 in the 81st Congress. This effort also failed, despite bipartisan and Truman administration support.

The Report on the proposed Senate bill (S. 603) from the 81st Congress explained in detail the background to the 1949 legislation. The 1949 Senate Report acknowledged that it would be difficult to estimate accurately the value of the seized assets in the United States that were heirless, but estimated the amount would not be large¾ "a few hundred thousand dollars." The Senate bill set an upper limit of $3 million which could be returned out of vested property. The Report cited "competent observers" who suggested that the amounts would range between $500,000 and $2 million. The Report also connected S. 603 with the ongoing negotiations with Switzerland:

"It is generally recognized that the largest depositories for the assets of deceased minority victims are Switzerland and the United States. As a signatory to the aforementioned Paris reparations accords, the United States has made representations toward effective implementation of these agreements with respect to the Swiss deposits. … In response to such representations, however, the Swiss and other governmental representatives have reportedly pointed to the inactivity of the United States with respect to those heirless assets within its borders, as a basis for their own continued inactivity. Thus, the proposed amendment will lend needed support to the State Department in that office’s efforts to secure effective enforcement of international agreements."

 

C. U.S. Action on Heirless Assets, 1953-1963

Although the House bill related to S. 603 on heirless assets died in the Rules Committee in 1950, a new bill appeared in the 83d Congress, again as an amendment to Section 32 of the Trading with the Enemy Act. The amendment was approved on August 23, 1954, as Public Law 626. 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. The amended Section set an upper limit of $3 million on the total amount of property that could be turned over to charitable organizations. Pursuant thereto, the President issued Executive Order 10587 designating the Jewish Restitution Successor Organization (JRSO) of New York as "successors in interest." By the closing date of August 24, 1955, approximately 11,000 JRSO claims had been filed. By June 30, 1957, 9,000 claims were withdrawn or closed, leaving a balance of approximately 2,000 claims.

In May 1957 Representative Isidore Dollinger introduced H.R. 7830 providing a lump-sum payment to the JRSO of $1 million. The State Department supported H.R. 7830 but the Bureau of the Budget did not. Seymour J. Rubin (who had been on the State Department negotiating team in the late 1940s, but since then had as an attorney represented persecutee interests) appeared before the House Committee on Interstate and Foreign Commerce to testify in favor of H.R. 7830 and for providing $1 million. He emphasized in his testimony the difficult burden of producing sufficient proof, due to the circumstances of the Holocaust, to meet the statutory requirements.

This attempt to settle the matter via H.R. 7830 failed, and another attempt was made in the 1960s. In August 1961 hearings on these claims were held in the House under Oren Harris, Chairman of the Interstate and Foreign Commerce Committee. On August 1, 1961, Deputy Attorney General Byron R. White wrote Chairman Harris to support H.R. 5028, which would amend Section 32 of the Trading With the Enemy Act to reduce the limit from the $3 million allowed in 1954 to $500,000. White noted that, of the numerous claims filed by the Jewish Restitution Successor Organization, there were no more than about 500 that were able to satisfy the difficult standards of proof of ownership required by the 1954 amendment. Moreover, the total of such claims would involve approximately $500,000. White supported H.R. 5028 because it would allow rapid settlement by means of a lump sum payment to the JRSO In a July 28 letter to Chairman Harris, Assistant Secretary of State Brooks Hays also supported H.R. 5028.

In a July 28, 1961, letter to Representative Peter F. Mack of the House Interstate and Foreign Commerce Committee, Monroe Goldwater, President of the JRSO, also supported H.R. 5028. Goldwater wrote that approval of the lump sum payment would be the most expedient method for assuring that heirless assets could be rapidly provided to Jewish victims and pointed out that "the processing of individual claims, case by case, is an impossible task. There still remain thousands of claims, many of them small in amount. A number of claims involve complicated facts, and hearings on them would consume more time of the Government and the JRSO than the amounts involved would warrant." Goldwater also referred to support from Senator John F. Kennedy for an identical bill in the Senate.

Shortly thereafter, the bill became law (Public Law 87-846, October 22, 1962). On February 26, 1963, President Kennedy issued Executive Order 11087 which provided for the $500,000 lump sum payment to the JRSO out of the War Claims Fund. Recently contentions have arisen regarding Nazi gold flows into the United States, possibly through Swiss-owned banks operating in the United States. This could not be examined due to the timing of this report and the lack of available information, but this is an important area for further examination. In addition there have been contentions concerning the disappearance and denial of insurance claims. This likewise is an area that should be examined.

D. International Arena, 1947- 1951

In the immediate postwar period, there is some evidence that U.S., French, and Swiss authorities were exchanging information on matters relating to the identification and disposition of heirless assets, but the contacts appear to have been infrequent and at a low level.

The United States appeared to give priority throughout the immediate postwar period to the problems relating to the Swiss commitment to advance up to 50 million Swiss francs to the IRO and to the related issue of liquidating German external assets in Switzerland. The issue of persecutees was an agenda item in the May-June 1949 Allied-Swiss conference on the Swiss Accord, but never discussed. The issue of heirless assets was not on the agenda , but it did occasionally appear in formal discussions, as in the case of the Swiss-Polish Agreement of June 1949.

On April 28, 1949, an official of the World Jewish Congress wrote the State Department’s Acting Legal Adviser to request that the heirless assets issue be raised at the May-June 1949 Allied-Swiss conference. Responding on May 31 Assistant Secretary of State for Economic Affairs Willard Thorp described the State Department position:

"With relation to the question of heirless assets,¼ the Department does not consider this to be a subject properly within the scope of the proposed discussions. However, the Department is mindful of the problem; and if the time should be opportune, the Department will make another approach to the Swiss, joined by the British and French if possible, collateral to but during the current negotiations."

The issue of heirless assets was not raised at the conference, which was devoted to issues connected with implementation of the 1946 Allied-Swiss Accord. Moreover, the Allies presumed that the liquidation of German external assets in Switzerland would eventually yield 500 million Swiss francs, of which 250 million Swiss francs or about $58 million would accrue to the Allies. Among Allied diplomats, the $58 million was probably seen at the time as significantly greater than what might be found among the heirless assets in Swiss banks.

The discovery of heirless assets did not appear to have a high priority among senior State Department officials. This was evident in a September 1, 1949, letter from Assistant Secretary of Congressional Relations Ernest A. Gross to Senator J. Howard McGrath of Rhode Island. Senator McGrath had asked why the Allies, during the May-June 1949 negotiations with Switzerland, had not asked the Swiss Government to advance another $3.5 million for the International Refugee Organization. The Senator also asked about action on heirless assets. Assistant Secretary Gross replied that there had not been enough time to raise the issue of heirless assets, but that the Allies would shortly be making a request to the Swiss on the $3.5 million.

E. U.S. Démarche on the Swiss-Polish Agreement

The lack of Swiss action on heirless assets caused Jewish organizations in the United States and elsewhere to raise this matter directly with the Swiss Government. These discussions, which took place in July 1949 in Bern, received encouragement and support from the U.S. and other Allied Governments. The main issues in these private discussions involved finding a way to penetrate Swiss bank secrecy in a manner that would enable the identification of heirless assets as well as establishing whether Switzerland or the country of the decedent had a right to dispose of such assets. Another concern among Jewish groups was that the Swiss Bankers’ Association had established rules for proving ownership of bank accounts that made it virtually impossible for surviving family members of Nazi victims to file claims.

These discussions were inconclusive and were affected by later press reports of a secret Swiss-Polish agreement on the disposition of heirless assets in Switzerland of Polish origin (concluded on June 25, 1949). This agreement allowed the Polish state to acquire the assets in Switzerland of deceased Polish citizens without heirs; these assets could then be used to pay Swiss claims against Poland. Upon learning of the Swiss-Polish agreement, the State Department instructed the U.S. Legation in Bern to transmit a note to the Swiss expressing U.S. concern. The Legation’s December 20, 1949, note indicated that such an agreement would be inconsistent with the declarations previously made by Swiss officials regarding the disposition of heirless assets found in Switzerland. In addition to the U.S. démarche, the British and French Governments also expressed concern. The United States sent a second note on March 21, 1950. The Swiss response of April 26, 1950, rejected Allied arguments and indicated that Switzerland needed more information on unclaimed assets before making any decisions. By 1975 Switzerland transferred to Poland 480,000 Swiss francs in fulfillment of Swiss obligations under the 1949 agreement with Poland.

F. Swiss Estimates of the Value of Heirless Assets of Germans

Although the Swiss Government had blocked liquidation since 1946, Swiss authorities were meticulous in their obligation to record the ownership and value of German assets located in Switzerland, an obligation stipulated under the May 1946 Washington Accord. Indeed, the Swiss had periodically provided the U.S. Legation in Bern with brief inventories of the value of German assets in Switzerland. One such inventory, dated February 5, 1948, indicated that the total value of German assets falling under the Washington Accord was 398 million Swiss francs ($93 million).

This inventory sum of 398 million Swiss francs was the total amount of German assets falling under the May 1946 Accord and subject to liquidation, but the Counselor for Economic Affairs at the U.S. Legation in Bern reported that Swiss authorities carried the category of "unidentified" assets in their inventory of German property. This category was about 86 million Swiss francs in 1946. Referring to the "1946 census" of German assets, then valued at 420 million Swiss francs, the Counselor wrote: "It is understood that about SF 86 millions of those assets have been unidentified as to ownership."

G. Allied-Swiss Conference at Bern, March-April 1951

On March 5, 1951, the Allies resumed discussions with the Swiss in Bern on the 1946 Washington Accord. As of April 10, the question of heirless assets had not been raised, but the United States intended to raise it once other issues had been resolved, notably the compensation issue.

On April 20 agreement was finally reached on the critical compensation issue, and the Allies could turn to other issues relating to the liquidation of German assets in Switzerland, such as heirless assets and the assets of persecutees. On May 21 the Swiss delegation reported that German property in Switzerland, which had been blocked by the Swiss authorities, did not include heirless assets. State Department officials reacted skeptically and instructed the U.S. delegation to include the issue in the revised agreement:

"Inconceivable that every Ger account in Switz has shown some activity since 1939 which wld appear to be only true basis for supposing that there are no heirless accounts in Switz. Nevertheless suggest that you accept Swiss statement at face value but insist on inclusion in agreement Swiss commitment that if during process of liquidation, heirless assets are discovered (presumably through inability to effect payment compensation) proceeds in Swiss francs or assets not be credited to pool but rather turned over to Allies for distribution in accordance with purpose stated in exchange of subsidiary letters in 1946."

 

H. Allied-Swiss Agreement on the Liquidation of German Property in Switzerland, August 28, 1952

As in the May 1946 Washington Accord, the August 28, 1952, agreement between the Allies and Switzerland relegated the heirless assets issue to an exchange of notes (this time published with the treaty). On August 28 the Allies sent a note to the Chief of the Swiss delegation in Bern, calling his attention to the fact that the Swiss-German agreement did not contain "any provision for the exemption of the assets of heirless Nazi victims from the provisions of the agreement respecting contributions and determining the disposition of such assets." The Allies accepted the omission in view of the Swiss statement during the discussions that there were "no such assets in Switzerland." The note concluded with the Allied request that "if any such assets should be discovered in the future, the Swiss Government will give sympathetic consideration to the application of such assets for relief and rehabilitation of victims of Nazi actions."

In response, the Swiss acknowledged receipt of the note and expressed their agreement with its contents, thus renewing their 1946 commitment to take action on heirless assets should such assets be discovered in future. Although the Swiss made no commitment regarding discovery, the expectation among State Department officials was that the process of liquidation would lead to the discovery of heirless assets.

I. Impact of the German-Swiss Agreement, August 26, 1952

The German-Swiss agreement of August 26, 1952, explicitly exempted the assets of German Holocaust victims from its liquidation and contribution requirement that German owners of property in Switzerland pay one-third of the value of their assets to the German Government before the Swiss release would release the property. (Swiss authorities would collect this "contribution.") Holocaust victims and persecutees were exempt from the contribution requirement, while most other Germans were not. Thus, the assets of persecutees and other Nazi victims could be released by the Swiss authorities immediately upon application. The victims, their proxies, or the executors of their estates had to request this exemption in writing from the Swiss authorities.

The agreement provided a choice to German asset owners who were not Holocaust victims or persecutees of taking immediate possession of their assets in Switzerland and paying (or "contributing") one-third of the value of their assets to Germany, or having their assets liquidated and receiving the full value in German money. In the latter case they would be liable for taxes and penalties to the German Government. In either case Swiss authorities would have to contact the German asset owners or their proxies. German owners or proxies had two months in which to make a declaration of intent. Presumably the failure of an asset owner to make a declaration would have been evidence that the owner was deceased and his assets were heirless. The assets of Germans who failed to make a declaration would become available to the Federal Republic of Germany for financing its 121.5 million Swiss franc payment to Switzerland. (Swiss banks provided a credit to make it possible for Germany to pay Switzerland immediately the 121.5 million francs owed under that agreement.) Moreover, as the August 1952 agreement applied only to assets in Switzerland of Germans in the Federal Republic, the assets of persons whose last address was in East Germany remained under Swiss control.

The 1952 German-Swiss agreement provided for the total exemption from the liquidation and contribution requirements of all assets valued at 10,000 Swiss francs or less. According to Swiss Government estimates during 1952, 15,000 persons held assets of less than 10,000 Swiss francs, amounting to a total of 26 million Swiss francs. As in the case of Holocaust victim assets, the assets of small account holders could be released immediately without the owners being subject to the requirement of contributing one-third of the value to the German authorities. Based on a February 1952 text of a German-Allied agreement on this point, however, the small account owners would have had to apply for the release of their assets, or their assets would be "sold and the proceeds paid into a special account in favor of the German Federal Government."

In 1958 the Swiss Government reported on the implementation of the agreement with Germany with respect to the release or liquidation of German assets in Switzerland. The Swiss authorities acknowledged that the total amount of German assets blocked in Switzerland and falling under the May 1946 agreement had by the mid-1950s appreciated in value to 697 million Swiss francs ($162 million); this amount compares with the estimated 398 million francs ($93 million) (before the exemption of property valued at less than 10,000 Swiss francs and the property of Nazi victims) discussed during the 1951-1952 negotiations.

Of the 697 million Swiss francs, 100 million francs ($23 million) were exempt from the contribution requirement of the 1952 agreement because they involved assets of less than 10,000 Swiss francs or because of "individual grounds." (Nazi victims were excluded from the contribution requirement, and assets valued between 10,000 and 15,000 Swiss francs were partially exempt. These 100 million in assets had been blocked under the May 1946 Accord.) The procedures for handling these small accounts may have allowed heirless assets to remain undiscovered: the 100 million Swiss francs would have included victim assets only if the deceased victims had survivors or proxies who could file applications requesting release of the assets. If there were no survivors, the banks or financial intermediaries holding such assets would be responsible for informing the Swiss authorities of the dormant or heirless status of certain accounts.

According to the Swiss Government’s 1958 report, Swiss authorities liquidated the assets of 489 German owners, whose assets upon liquidation were valued at 9.3 million Swiss francs ($2.2 million). It is unclear if the assets were liquidated because the owners or their heirs failed to apply, or because the owners preferred receiving their assets in German money via the compensation arrangements contained in the agreements. The 9.3 million Swiss francs in liquidated assets compares to 588 million Swiss francs ($137 million) in assets which were returned to their German owners without liquidation. Germans who obtained control over their Swiss assets were required to make a "contribution" to the German Government in Swiss francs equal to one-third of the asset’s value; asset owners in this category paid 183 million Swiss francs to the Swiss authorities who later transferred this amount to the German Government.

J. Heirless Assets, 1952- 1963

Between 1953, when the agreements went into effect, until 1959, U.S. officials appeared to take no action on heirless assets. There was no follow-up to determine the disposition of unidentified German assets in Switzerland, nor any follow-up on the 1946 and 1952 exchange of letters regarding heirless assets.

In the spring of 1959, the Swiss Federal Council accepted a proposed law on heirless assets, but the Swiss Bankers Association opposed enactment of any such law on the ground that the situation was both minor and capable of being handled under existing Swiss law. Seymour Rubin reported that "for the first time a spontaneous movement in favor of a solution seems to exist within the Swiss Federal Council and the Swiss Administration." He urged the State Department to coordinate with the United Kingdom and France to encourage Swiss action on the draft law. On December 8, in response to Rubin’s letter, the Department sent instructions to the Embassy in Bern.

On January 29, 1960, the Embassy’s First Secretary for Political Affairs raised the matter with a legal officer in the Swiss Federal Political Department. The First Secretary reported the remarks of the Swiss officer: The Swiss Government was still studying the matter; some Swiss bankers continued to oppose revising bank secrecy laws necessary to identifying the heirless assets; Swiss officials saw numerous bureaucratic obstacles to dealing with heirless assets (e.g., administrative expenses, the possibility that the heirs might one day actually appear); direct U.S. intervention in this matter would be counter-productive; and the Swiss would be more sympathetic to U.S. concerns in the matter of heirless assets if the United States would resolve a pending custodial conflict.

The State Department responded to the Embassy that, given the remarks of the Swiss official, it appeared that "the prospects of early action by the Swiss Government are not bright." The Department also dismissed the Swiss legal officer’s other arguments for non-action as excuses and pointed out that Germany, Austria, the United Kingdom, and the United States had managed to find such assets. The Department’s response noted:

"In view of Switzerland’s unique position as an international banker and safe haven in Europe, it is considered unlikely that heirless assets do not exist in that country. It has been eight years since the Swiss announced a willingness to assist in this program, yet nothing has been done, and based on past experience, it is considered unlikely that the Swiss will voluntarily take any action."

Rejecting the Embassy’s suggestion to move cautiously and wait until May before raising the matter again, the Department instructed the Embassy to review the Swiss action on heirless assets again with Swiss officials and report promptly. The Embassy responded by noting that Swiss officials remained reluctant to discuss details of the heirless assets issue, but sent a note to Swiss officials on the matter on June 1, 1960.

On July 6, 1960, the Swiss responded by questioning the existence of the August 28, 1952, exchange of letters. Referring to the May 25, 1946, exchange, the Swiss asserted that this exchange placed them under no specific obligation to take any action. The Swiss note implied that the possible amounts of the heirless assets which might be found did not seem to warrant the "important changes in Swiss law" that would be required.

The Embassy in Bern opined that "nothing short of massive and persistent pressure by the Three Allied Powers will hasten the glacial pace at which [the Swiss] are proceeding." The Embassy suggested coordinating with the British and French and avoiding any further formal exchanges with the Swiss for an indefinite period. The Department appeared to stop pressing the Swiss for the next two years. However, during 1961, a number of newspaper articles on this subject (including a July 7 article in The New York Times) drew attention to the existence of heirless assets in Swiss banks.

In March 1962 the Swiss neared completion of the work on their heirless property law and planned to submit it to the June session of Parliament. The Swiss law, which came into effect on September 1, 1963, required all Swiss financial entities or persons to report any assets that belonged to any foreign nationals or stateless persons who had been persecuted for racial, religious, or political reasons. Reports were required in six months. The law stated that ten years from its enactment, 90 percent of any unclaimed assets would be placed in a special fund. At that time (1973), the Swiss Federal Council would decide on their disposition.

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