French masterpieces for sale in postwar Germany

by Marc Masurovsky

From a business standpoint, art dealers do not run charities. They buy, sell, trade works and objects of art to make money, and, hopefully, lots of it. The dealer’s instinct is—you guessed it—to look for opportunities, expand networks of informants and clients, make deals, and jump on them before the competition does. As a result, the oftentimes legendary rivalries that arise between art dealers shape and transform the art world as well as the business of art. Every now and then, their acquisitions and sales influence the taste of current and future generations. A thrilling wave to ride but one that comes with a heavy price.

For those dealers who are willing to go all the way, they may assign ethics and History to a backseat in order to unleash their thirst for acquiring unique, expensive and (maybe) transformative objects wherever they can be found hopefully at a low enough price. During the Nazi era (1933-1945), dealers made a pact with the Devil by ignoring the heinous nature of hate-based political systems rising across the European continent and elsewhere. They saw how the discriminatory policies unfurled by the New Nazi/Fascist Order could generate immense opportunities for them as a result of the involuntary disgorgement of valuable works of art on the art market by the victims of Nazi/Fascist violence and persecution.

The dealers, collectors, agents, cultural officials and brokers who invested themselves in acquiring and selling Nazi victims’ cultural property did so willingly, eyes open and focused on the prize. And it so happens that even dealers who fell victim to the rapacity of Nazis’ covetous seizure of their inventories between 1933 and 1945 also saw opportunities for themselves and their colleagues as the genocidal dust of the Nazi-driven Holocaust was barely settling across war-torn Europe. Even if their desire to acquire such works might have been guided by the best of intentions…as art dealers.

To wit, Paul Rosenberg, an iconic figure of the international art world in Europe and the United States, had a keen visionary eye for high-quality art. He exercised his skills with brilliance on both sides of the Atlantic. On December 12, 1946, Rosenberg penned a two-page proposal to the Foreign Division of the US Treasury Department in Washington, DC, regarding the disposition of works of art located in the US zone of occupation of Germany (viz., Bavaria) which belonged to impoverished collectors. Here are the relevant portions:

“There are, in Germany, many great art collections…which include internationally famous French paintings…there might be a possibility that the owners of these paintings, due to lack of funds, might be interested in selling their collections. [Some] are celebrated masterpieces…We, as art dealers, are interested in these pictures…If this is possible, many of these great masterpieces would be acquired..by American collectors and…be donated to American museums or artistic institutions, thereby adding to their greatness.”

The “we” refers to a group of art dealers and their galleries based in New York who shared Rosenberg’s feelings and agreed to contact the US government and encourage the US military occupation authorities in Germany to enact policies that would loosen up export restrictions from the former war zone and allow art dealers and collectors to resume business as usual. The desire to “liberate” heaps of cultural objects from the shackles of Allied military policy and (re)fuel the engine of the international art market appears to be the main motivator behind this proposal. It is unclear whether this proposal was accepted, but it would not have sat well with American cultural officials who were working around the clock in Washington and in liberated Europe to ensure that art collections and individual objects located in liberated areas would be prioritized for restitution and not be offered for sale.

 In June 1946, the celebrated Roberts Commission committed harakiri and put itself out of business, confident that, to a large extent (although the proof for this has always been elusive) its leaders opined that very little looted art had entered the United States.  Before doing so, almost to legitimize its own demise, the Roberts Commission had successfully revoked Treasury Directive TD 51072, a key instrument in the fight against illegal imports of looted property into the United States. The directive was issued on June 8, 1944, two days after D-Day, under sections 3(a) and 5(b) of the Trade with the Enemy Act. Its aim was to restrict the importation into the US of any art object with a value exceeding 5000 dollars or is of artistic, historic and scholarly interest irrespective of monetary value.” The method of restriction was sequestration of objects falling under the aegis of the Directive. The Roberts Commission's job was to review the documentation accompanying these sequestered objects and either approve or refuse their release under a license issued by Treasury.

It should come as no surprise that Paul Rosenberg's proposal came at a time when some parts of the US government were no longer focused on restituting victims' property but on returning to business as usual as quickly as possible even if it meant releasing art objects from Europe into the United States with no filters and no way of vetting imports for evidence of loot.

Source:

Paul Rosenberg to Foreign Department, US Treasury Department, Washington, DC, 12 December 1946, 2 pages, Enclosure III, Box 28, Lot 62D4 (Ardelia Hall files), RG59, NACP, College Park, MD.

Pondering “flight assets”-Fluchtgut

by Marc Masurovsky

Not to be flip, but “flight assets” is an odd expression. Its more appropriate use applies to aviation, airplanes, anything related to a state of being in the air, hopefully in a steel structure with wings, a tail and engines.

Assets that fly…

Assets don’t leave by themselves. They require human conveyance. And the implication is that they have to cross a border, otherwise why would they be “flight assets”?

The question then becomes: where are they coming from and where are they headed?

Assets can consist of very different elements, but the word connotes value. If we are speaking in historical terms, the expression has been almost exclusively applied to the Nazi era, from 1933 to 1945.

The word “flight” also embodies the notion of “fleeing," of running away from something terrible, something that is sure to cause the owner great harm and distress. Assets fleeing? Well, they have no soul so they cannot “flee”, but they can be made to cross a border quickly in the context of a distressing set of circumstances for their owner.

In 1933 Europe and subsequent years, there were valid reasons to flee from National Socialist Germany. We do not know the exact numbers but before Hitler came to power there were those who smelled something rotten taking hold of the body politic in the dying Weimar Republic. And they left with more than their shirt and coat on their backs. So, the expression “flight assets” does not apply to them.

Come January 30, 1933, the situation changed dramatically. An anti-Semitic, racialist government had just reached the pinnacle of political power in Germany. It took some time to enforce nationwide an ideological program that was meant to exclude entire swaths of the populace. In the chaos that ensued and enveloped millions of lives, those born in the Jewish faith and those virulently and explicitly opposed to the Nazi movement, felt the noose tightening around their necks. If you had the means to flee, you did so. If you had valuables that you wanted to place in a safe place, you packed them and shipped them to a safe destination. In 1930s Europe, there were a fair number of places that were considered safe. Switzerland was one of them. It’s next door to Germany, its financial institutions welcomed all kinds of assets. The newly-established Banking Secrecy Laws made it possible to cloak one’s identity away from prying eyes.

We have now framed the contours of “flight assets” as they apply to valuables belonging to people in distress, fearing for their safety and well-being, aware of the restrictions preventing them from functioning as empowered citizens of a country-Germany-that is now denying them the right to earn their livelihood and live a good life as Germans. They are of Jewish descent, the victims of a virulent anti-Semitic program that aims to rid the new Germany of “Jewish influence”, whatever that might entail, but in the initial years after Hitler’s ascent to power, hundreds of thousands of German citizens of the Jewish faith wondered what lay in wait for them.

For those who sought asylum elsewhere, like in Switzerland, they needed to survive. Fired from their jobs, losing their homes, forced to sell belongings at any price, they secured some valuable assets and shipped them abroad where they would use them as sources of badly-needed income until they could relocate and live in relative peace, restart their broken lives.

These German citizens of Jewish descent were fleeing a desperate and threatening environment to their persons. Are the valuables that they sold in Switzerland to support themselves to be considered as “flight assets”? In other words, had they not been threatened by the New Order/Neue Ordnung in Nazi Germany, would they have shipped those valuables abroad, including to Switzerland, not as long-term investments, but as short-term fungible assets to be realized so as to sustain the equivalent of a subsistence wage while reflecting on an uncertain future? Doubtless, the answer is negative. “Flight assets” are short-term fungible assets whose realization helped the owners to survive.

So, here’s the rub: there are many people, especially in the art world and in government circles in European countries and even in North America, who honestly believe that persecution stops when the fleeing refugee crosses the border into some kind of nirvana. There is this notion that “flight assets” do not exist because the refugee sells them without any immediate pressure from the authority that propelled her to flee in the first place. Hence, there is no reason why a valuable, in this case, a work of art, should be returned to the person who sold it as a “flight asset” because she did not have a gun pointed at her head in order to sell it.

To that assertion, one might respond: would she have sold the painting in the first place had she not been forced to flee to such a haven as Switzerland? Would she have fled in the first place, had there been no immediate threat to her person? The same argument, by the way, applies to all neighboring countries—Denmark, the Netherlands, Belgium, France, even the United Kingdom, Austria (for a short time only), the United States? Canada? What about Italy? And Spain? And Portugal? Anywhere?

Let’s suppose that our Jewish refugee shipped in an understandable panic several valuable works of art, expensive jewelry, stocks and bonds, bearer shares, and other fungible goods, to the United States. She was able to make her way west with the little that she could carry with her. If she left right after Hitler’s rise to power, she would have been able to take more than the clothes on her person and a suitcase packed with goodies. But that did not last long. Soon thereafter, crates were stuck in freight forwarding houses on orders from Reich authorities, bank accounts were frozen, excessive levies were imposed on departing German citizens. One had to resort to very creative scenarios to send out “flight assets” to foreign havens. Scenarios that often involved accomplices, non-Jewish accomplices. In many instances, these go-betweens, if motivated by lucre, could earn significant sums helping to smuggle these “flight assets” into safe havens outside of Nazi Germany.

What if our refugee sold her “flight assets” once she reached New York, Boston, or even Toronto, or Montreal? Would we still consider these assets as “flight assets” and therefore restitutable? If we are faithful to the definition that we laid out above, it does not really matter where those “flight assets” ended up because it does not alter the circumstances under which they were shipped in the first place.

If we decide that “flight assets” belong in the same category as “duress” and “forced sales,” we are obligated to consider them as items subject to restitution or compensation for the same reason as assets sold under “duress” in Nazi Germany or in territories occupied or annexed by the Third Reich.

Last but not least, price should have nothing to do with the realization of a “flight asset” or a sale under “duress” at a “forced sale” and cannot be used as a reason for denying restitution to the aggrieved party seeking the return of the “flight asset.” It is the circumstance under which the asset is sold which should determine whether or not this asset should be restituted to the person or her family, obligated to sell it in order to survive.

In the constantly contentious debate over restitution of Nazi looted art, a “flight asset” is a fungible asset which has been shipped across state borders to a safe place by an individual under severe distress in her place of residence whose government has imposed threatening, discriminatory, restrictive measures upon her as a result of her faith and beliefs. This dire state of affairs has compelled this individual to seek refuge outside the borders of her native land and to use whatever valuables she was able to ship or transfer to her new home as a short-term source of revenue to allow her to survive until she figured out what her next move would be.

Switzerland is not the only country that received “flight assets.” That thought is absurd through and through. The “flight asset” could end up anywhere, and could be sold anywhere as long as it served the purpose of providing critical means of subsistence to the persecuted owner.