The monetization of recovered Jewish assets

by Marc Masurovsky

The idea is not new and evolved at the end of WWII, when Allied forces and local resistance and partisan units stumbled on mountains of looted Jewish property, consisting of household goods, decorative objects (including furniture and textiles), musical instruments, libraries, works of art (paintings, works on paper, sculpture, etc.), precious stones and jewelry, precious metals, and financial instruments.

These recoveries across Central and Western Europe created an urgent need to identify who the despoiled owners were, find out if they were alive, if family members and relatives could be identified and located to claim the property. This part of the story is well-known as it involves civilian and military efforts to oversee the collection, identification, and repatriation of this found property with a view to its restitution to rightful owners. These procedures were mostly carried out in zones of Europe not occupied or dominated by Soviet military and civilian authorities.

The burdensome aspect of the mission as outlined above soon proved to be too much for the agencies responsible for overseeing this massive task of identification, cataloguing and shipping of recovered Jewish property. In order to make this problem go away, why not sell it all off? The question was reasonable in light of the chaos and confusion reigning in recently-liberated European countries, the desire of survivors to get on with their lives, and the need for governments to rehabilitate their destroyed nations and stimulate the economy by whatever means possible.

If one were to sell off this property, who would administer the process? Who would receive the funds? In what capacity? The answer was fairly simple: if the property was known to have come from Jewish owners, whether or not they could be identified, then Jewish organizations would oversee the sale of these assets and redistribute the proceeds to those who needed the funds most—survivors and their families who were dispossessed of everything that they owned.

The monetization of looted Jewish property recovered by Allied forces started in earnest in mid-1946 after the Paris Reparations Conference where Jewish organizations and agencies would oversee the disposition of recovered Jewish property for the benefit of surviving Jewish communities and their members. It was one thing to sell household goods, clothes, linens, furniture, musical instruments with no apparent artistic value, books and jewelry. But what about works of art and artistic objects with market value that belonged to collectors, dealers and businesses steeped in the art world of the interwar years? Should they be treated as bulk items regardless of who owned them and what importance or value they held? For efficiency’s sake, it was cost-effective to presume the owners dead, which eliminated the onerous and time-consuming task of actually finding them so they could collect their recovered property.

Governments got in on the act, especially in Western Europe—the Netherlands, Belgium, and France—where public sales were held from the late 1940s to the mid-1950s during which more than 100,000 works of art and objects were sold off, a number of which were traceable to victims of Nazi persecution. Local government officials sometimes concocted elaborate schemes by which to divert thousands of works of art from Allied-run depots under the pretext that their owners had not been identified, label them as “heirless property” and sell them through a network of auction houses and businesses in Europe and the United States, the proceeds of which would benefit the organizations and individuals overseeing this effort as well as local public agencies and the victims’ heirs and relatives. The architect of one such a scheme, denounced by the US Department of State, was Dr. Philip Auerbach, a Bavarian official whose portfolio included reparations and restitution of looted Jewish property.

Since then, the physical restitution of individual art objects to their rightful owners has coexisted somewhat uncomfortably with the pressure exerted by Jewish groups to treat these objects as “wholesale items” to be disposed of expeditiously for the benefit of Holocaust survivors and their kin.

Over time, this duality in treatment of recovered Jewish property looted by the Nazis has shaped the cross-generational debate on restitution of looted art vs. reparations. The end result of this duality has been a general indifference across Jewish communities towards repeated efforts by individuals and entities to recover their looted cultural property once it was identified in a particular location. Since the 1950s, the absence of support and lack of empathy towards individual claimants seeking the return of their looted art has been nothing short of astounding.

One can only speculate that unsuccessful claims filed against current possessors of looted Jewish cultural property might have had more positive outcomes had Jewish groups and communities lent their active and vocal support to these claimants as part of a general movement to seek justice and closure for crimes committed against Jews during the Nazi era.

865 kilos of art flown into Barcelona

by Marc Masurovsky

There are historical documents that tend to capture the imagination and leave us dangling for answers and solutions. However, archives can be fickle, in that they are structured like labyrinths of clues, false leads, erroneous analyses and deductions, amongst which one finds pure gems. You just have to endure the pain of hitting your head against a brick wall one too many times until, at the last minute, when you are ready to throw in the towel, you read a document with a throw-away sentence or paragraph on page 20 and you have that aha moment. Yes!

Nothing like that has occurred so far—no aha moment—with the contents of a very strange headless document, unsigned and hiding in plain sight (others have already read it, but they seemed unable to digest it in any meaningful way!). This 11-sentence long document was drafted on 19 March 1945, with a handwritten indication that the intelligence actually dates to the period of 16-28 February 1945.

It speaks of 865 kilos or 1907 pounds (a truckload) of “objets d’art and pictures which have recently arrived in Barcelona on the Lufthansa airline in two consignments. The rest of the cargo was destined for the Ministry of Foreign Affairs in Madrid courtesy of the Spanish Ambassador to Berlin, Ginès Vidal y Saura.

Apparently, another plane flew in carrying “5 crates of religious objets d’art” which were “consigned to the German Embassy in Madrid, courtesy of the German Reich." When the rats abandon ship, they usually take their loot with them or whatever they can grab at the last minute and leave Dodge City, in this case, Berlin, en route to “freedom” in Franco Spain.

This very brief raw intelligence note was tucked into a folder of the Roberts Commission (Record Group 239) regarding goings-on in Spain during WWII. The Roberts Commission collected raw information from US, British and other Allied agencies about the illicit movement of art works and objects as well as their handlers across Axis-occupied Europe flowing into so-called “neutral countries” like Spain and perhaps even ending up in the United States.

The preceding document was a report dated 20 August 1945 from the Art Unit of OSS to a member of the Blockade Division at the Foreign Economic Administration regarding art smuggling “in the Iberian peninsula.” The following document was handwritten by Theodore (Ted) Rousseau, Jr. (1912-1973), one of the key members of the MFA&A squad in Western Europe.  His jottings pertained to Lufthansa cargo flights landing in Barcelona in February 1945. One of them—dated 10 February 1945—contained unknown cargo. The others were filled with mail, newspapers and spare parts for Lufthansa planes.

And that’s it.

In order to confirm if this document related to an authentic, verifiable event, one would have to follow the trail in the bowels of the records of the OSS (Office of Strategic Services/Record Group 226) for Spain in 1945 and a deeper dive into the Roberts Commission records (Record Group 239) since not all of its records were digitized. There’s no other way. That requires a series of trips to the National Archives, College Park MD, where the OSS records and those of the Roberts Commission are kept.

If the document relates to an actual verifiable event, the prospect of nearly 1 ton of works and objects of art arriving in Barcelona in February 1945 is a symbolic reflection of the extent to which Franco Spain was used as a transit or destination point for looted art coming in from all over Europe.

Happy hunting!

Other relevant digital sources:

“The factual list of Nazis protected by Spain”

« Ginès Vidal y Saura, embajador español en Berlín y excelentísimo ordinario de arte expoliado por los Nazis »

Nazi looted property in the United States in the 1930s

by Marc Masurovsky

Adolf Hitler and his National Socialist movement came to power in Germany on 30 January 1933. The subsequent Nazi era lasted until May 9, 1945, when the National Socialist Third Reich signed an unconditional surrender to the combined Allied military forces which brought an end to a six-year global military conflict known as the Second World War (1939-1945).

In the winter of 1933, there were at least 400 American companies and businesses operating inside Nazi Germany, most of which were subsidiaries of American-based corporations. There were also American-based banks and financial firms as well as businesses displaying, buying and selling art objects. For Americans, Hitler’s coming to power was but a hiccup, for otherwise it was business as usual. For the Jews of Germany and for American Jews, Hitler’s arrival was cause for concern and rightly so.

America’s borders remained open as well as Germany’s. Therefore trade relations between the US and Germany were maintained even if the political checkerboard had changed radically and Germany’s priorities were rooted in a deeply racialist, white supremacist and antisemitic ideology.

The first expropriations of Jewish property began several months after the Nazis took power. The first forced sales accompanied these expropriations in the form of auctions taking place across Germany. Items sold included everything that one could find in a Jewish household, including art objects, precious metals like gold and silver, furniture and decorative objects.

Tourists continued to flock into Germany, despite the economic depression that was engulfing the US, but those who had deeper pockets than the average working person could still afford to “have a good time” in Germany. Tourists usually bring back souvenirs so it’s no surprise if some of the more enterprising ones attended auctions where Jewish property was being sold willy-nilly.

Art collections were being sold under duress. Their owners were persecuted for being Jewish, deprived of an income and therefore forced to sell their belongings in order to fund their exit from Nazi Germany. Their property was dispersed among the local population but it was also acquired by foreign visitors who had a special interest in the art objects and the decorative pieces offered for sale. This illegal outflow of Jewish property reverberated inevitably into the countries of origin of these foreign buyers who returned home with their acquisitions.

As a growing number of Jewish collectors and dealers were being forced out of their professions and obliged to sell their inventories, gallerists and dealers in neighboring countries and the United States saw their demise as a business opportunity for them to acquire at depressed prices items of value which could then be resold for a hefty profit in due course.

Likewise, German art dealers, collectors, museum curators and art historians who had established productive relationships with their counterparts in the US crossed the Atlantic in search of good deals, especially Old Master paintings, on behalf of their wealthy clients. The lines were continually blurred between American and German art world personalities owing to their symbiotic business and scholarly relationships. The same can be said about American university professors and researchers who continued to exchange data and research with their German colleagues and even fostered exchange programs that saw American students and professors spending time on German university campuses after Hitler’s rise to power.

As the years progressed and the ensuing repression intensified against Jews in Germany, an exponential mass of high-value tangible assets changed hands from Jewish to non-Jewish ownership through a pseudo-legal process known as “Aryanization,” a direct result of anti-Jewish laws being enforced to the letter by Nazi administrators. Corporate boards were purged of their Jewish members, while business continued to flow between American subsidiaries, their German clients and the Nazi State. Profit before people. A well-known adage that witnessed a perverse application in the antisemitic German world.

By the late 1930s, Germany had brazenly announced its true colors: territorial expansion and elimination of Jews from all walks of life. Genocide was around the corner. Faced with an appeasement-oriented world that wanted to keep Hitler at bay without antagonizing him, Nazi Germany took it as an invitation and absorbed its neighbor, Austria, in an “Anschluss” in early March 1938, followed a year later by a so-called “police action” against Czechoslovakia which resulted in the disappearance of that country and its replacement with a "Protectorate of Bohemia and Moravia." Similarly, Austria became Germany’s new province of Ostmark.

If one surveys the New York auction world as of the mid-1930s, one is likely to read about objects coming out of privately-owned Jewish collections which were subjected to seizure and forced sales. German dealers and collectors, specializing mostly in 20th century art, emigrated to the United States bringing with them parts of their inventories which, if scrutinized properly, would have revealed the presence of objects acquired from Jewish collectors and artists who were subjected to duress and forced to sell, or that they had acquired at “Jew auctions.” These objects in turn were displayed in New York galleries and other American cities with few questions asked about provenance. We call it willful ignorance.

Lastly, American businessmen were accustomed to travel to European art fairs and pick up merchandise for their businesses back home and they would sign trade agreements with local European partners including German ones. The Leipzig trade fair, for instance, was flagged by the US Treasury Department as an international event which was suspected of offering for sale expropriated Jewish household goods, including textiles (rugs and wall hangings). This is just one of many instances of how easy it was for foreign businessmen to acquire property displaced from Jewish owners without their consent.

Jewelry was the easiest commodity to move from one border to the next due to its small size. As Jewish jewelers and precious stone brokers were put out of business, their inventories were cast wide on the market and often ended up across the ocean. Although extremely difficult to trace back to original owners, these luxury items were dispersed in urban centers along the East Coast of the US.

In summary, art, decorative objects, jewelry and textiles were some of the many categories of objects which made their way to the United States in the 1930s, unbeknownst to the buyers who had no idea that they had once belonged to a Jewish owner suffering under the Nazi yoke and forced to sell them in order to stay alive. But for how long?

A brief overview of the art trade between New York and Latin America between 1940-1945

by Marc Masurovsky

The United States entered the Second World War after the Japanese surprise attack on Pearl Harbor on the morning of 7 December 1941. Up to that point, it had remained ostensibly neutral, American companies continued to operate through their subsidiaries in Axis-occupied Europe and Nazi Germany.

When the US first entered the global conflict in late 1941, its primary focus was on Japan and its military campaigns against the Pacific Islands and the Asian mainland, with China taking the brunt of its assault in what appeared to be a systematic attempt to eradicate the local Chinese population and deprive it of its cultural heritage.

The art market has demonstrated time and time again how impervious it is to mass unrest, domestic and international conflicts, including all-out war. Trade between the Western Hemisphere was effectively hampered with the European continent and the US’ closest ally, the United Kingdom. A naval blockade was established in the north Atlantic, whose purpose was to screen maritime shipping lanes in order to prevent the Axis from engaging in economic and commercial ventures as well as exporting agents and military assets.

How did this affect the New York art trade? It must have put a crimp in its style, of that there is no doubt. But one of the hallmarks of a successful art business is to continually expand and strengthen its rolodex of clients, regardless of where they might be based.

Based on US postal censorship intercepts which have been publicly available for decades at the National Archives in College Park, Maryland, one can paint a clearer picture of how New York art galleries benefited from the new conditions brought about by global war.

In short, New York galleries and collectors were in regular contact throughout the war, from 1940 to 1945 and beyond with galleries, collectors and dealers in 12 Latin American countries and two island nations (Curaçao and Cuba). The Latin American countries included from north to south:

Mexico, Costa Rica, Colombia, Venezuela, Ecuador, Peru, Bolivia, Chile, Argentina, Uruguay, Paraguay and Brazil.

While New York galleries and collectors had a very difficult time doing business directly with their contacts on the European continent, those Latin American countries and islands served as transit areas and willing intermediaries for their transactions. And so, Cuba, Argentina, Brazil, Venezuela and Mexico were the chosen transit points for works and objects of art streaming out of Europe to be traded locally and/or shipped to the United States for display and sale.

It is impossible to assess the total volume of objects that flowed out of Europe into Latin America and from there to the United States, but some gallerists like the Koenigsbergs who were based in Buenos Aires (Argentina) and Mexico City (Mexico) did a bustling business, with shipments of hundreds of objects arriving into Mexico City at a time. Local auction houses were more than happy to disperse these European objects as there was a willing clientele avid to purchase them.