Compensation for Victims of Nazism in and from Austria:
A Never Ending Story
A Never Ending Story
Lecture, University of Minnesota, Minneapolis, September 20, 2004 (Center for Austrian Studies; Center for Holocaust and Genocide Studies)
- Preliminary remarks
- Steps towards restitution in kind
- The Restitution Acts
- What was restituted?
- The State Treaty of 1955 and its consequences for compensation
- The agreement with the Federal Republic of Germany - "Abkommen von Bad Kreuznach"
- From the sixties to the nineties
- The Agreement of Washington in 2001
- Summary
1. Preliminary remarks
At the end of the war, April/May 1945, the re-founded Republic of Austria was confronted with a lot of problems resulting from the National Socialist period and dominating the daily work of the government. There was not enough food available for the population, important parts of the industries as well as bridges and railway tracks were damaged. It was a provisional state government, built by representatives of the political parties, under Chancellor Karl Renner which had to deal with all these problems and furthermore handle the question what to do with the former National Socialists, about 700.000. The government was only recognised by the Soviet occupation power for her zone, therefore all governmental measures were restricted to the east of Austria. It took all of the summer of 1945 to overcome the danger of a division of Austria. In autumn the recognition of the Renner government and administration by the western Allies and the following national elections in November made nation wide action possible with the beginning of 1946.
2. Steps towards restitution in kind
Until 1946 there was no clear conception at all about how if at all assets plundered by the Nazis were to be returned. The social democrats and communists proposed the creation of a "restitution fund": only needy victims of the Nazis would have received payments; the original owners would have received no restitution. Thus the proposal ignored the right of property for the victims of National Socialist lootings, most of them Jews. It took primarily allied influence and motives of foreign policy to drop that plan.
The decision to establish a restitution system as well as the later conflicts around that system took place in a web consisting of the following aspects:
- The interests of the political parties, mainly socialdemocrats and conservatives in government, lay on gaining the maximum of votes like in any other representative democratic system. In the special post-war situation and the years after that meant winning over the votes of former National Socialists respectively their family members, friends and sympathizers. Victims of National Socialism living in Austria were far less, around 7.000 to 10.000 Jews, and some thousand people persecuted for political, national or other reasons. Their votes were not able to decide any elections.
- The absolute priority of each Austrian government 1945-1955 - the reaching of the state treaty on the best possible conditions, and
- connected to 2. the acitivities and demands of the Allies, especially the western Allies, led by the United States.
The post-war leading politicians made every effort to underline Austrias status as a victim. They were afraid that Austria held co-responsible would be forced to pay reparations or would get a State Treaty on less favorable conditions. Therefore they avoided every wording which could be used as a hint on Austrias responsibility. In the politicians' opinion any payments of compensation for losses suffered during the National Socialist period could be interpreted as a confession of Austrian guilt. They refused to concede any such payments before the signing of the State Treaty in 1955.
According to that logic Austrian restitution measures were restricted to restitution in kind - that is, only what was there and could be found and identified could be returned to the former owner.
The peace treaties with the former satellite States of the Third "Reich" had articles forcing the States to return looted or confiscated property as well as to pay compensation. The first drafts of the Austrian State Treaty had similar passages and thus made it clear that the Allies would not accept any "restitution fund" instead of restitution to the individual former owner.
At last the Soviet policy of confiscating on a large scale the German property in their zone built the decisive factor for the Austrian government to set the first steps to real restitution measures: In January 1943 in London the allied powers had declared their intention to declare nul and void all forced property transactions in occupied Europe. When first discussed the Austrian government had refused to take the principles of that Declaration in London into the Austrian law system because this would open up the door for restitution claims. In the Spring 1946 when the Soviet confiscation policy became more forceful than ever the Austrian government tried to stop these confiscations by the argument that German property in Austria was former Austrian property looted by the Third "Reich" and therefore according to the declaration of London that looting was nul and void and therefore the decisions of Potsdam giving the Allies the right on German Property in their zone could not be applied to that property in Austria. To strengthen that point of view the Austrian parliament passed the "Nichtigkeitsgesetz", an act which in principle followed the London Declaration. That act failed to reach its purpose - it could not stop the Soviet confiscations -, but it represented the first step to the realization of restitution measures.
3. The Restitution Acts
Between 1947 and 1949 the Austrian parliament passed seven Restitution Acts, each one applying on special cases of expropriated property. The proceedings in the more important areas were based on civil law and otherwise on administrative law. This necessarily put the victim in the position of plaintiff, applicant and complainant. Even if this may have been an unavoidable technical necessity after this kind of upheaval, it meant that as a result the victims had to suffer serious inadvantageous consequences.
In July 1946 the First Restitution Act was passed. It only covered property which had been expropriated by an act of authority and was now in the hands of the State. Nine months later, in February 1947, the Second Restitution Act was passed, which standardised the restitution of property which had fallen to the Republic as a result of the Nazi-prohibition or war-crimes law. On the same day parliament passed the Third Restitution Act, which was the key one for the victims of Nazism and also the most politically controversial one. It created the legal basis for the reclaiming of property that had not been subject to expropriation by an act of authority or was not in the hands of public bodies. The Third Restitution Act limited the extent to which claims for restitution could be inherited. The justification given for this problematic limitation was that no "restitution profiteers" should be created. Instead property for which only very remote heirs existed should be made available to successor organisations. It would be their task to compensate people to whom expropriated property could not be returned because it could not be traced or no longer existed. But in reality the successor organisations created according to the State Treaty payed lump sums to formerly persecuted people independent of any losses of property.
Even the drafts of the Third Restitution Act were challenged by business interest groups. Their main argument was that restitution introduced uncertainty into the economy and should therefore be limited as far as possible. This line was pursued in the course of subsequent legislation up to the 1960s and to a large extent led to delays in the legislative process. It was the western Allies, in particular the US, who continued to push for the restitution of expropriated property. In the end between 1947 and 1949 four further Restitution Acts were passed. They concerned a broad range of issues - from the restitution of expropriated trade marks and patents to company names which had been changed or deleted.
It is generally true that the seven Restitution Acts did largely fulfil the intended objective - the restitution of expropriated property. Difficulties arose however in the judgements of the Restitution Commissions, acting under the terms of the Third Restitution Act. In the early phase of restitution proceedings (late 1947 to early 1948) rulings tended to interpret the legal provisions in favour of the applicant for restitution but by the early 1950s an increasingly restrictive attitude to the victims of Nazism is evident. That went sort of parallel with the political climate tending more and more to the re-integration of former National Socialists on one hand and connected to it efforts of the parliamentary parties for amendments of the Third Restitution Law in favour of the "aryanizers". All these efforts were prohibited by the western Allies, especially the US, in hinting on the drafts of the state treaty and pointing out that any worsening of the restitution law would violate the principles of the Declaration of London 1943.
Some of the terms which the Third Restitution Law had left undefined were interpreted to the disadvantage of the applicants for restitution and led to decisions that had not been intended by legislature. An example of this is the phrase " the purchase price which had been obtained for free disposal" (zur freien Verfügung erlangter Kaufpreis). In many cases the decision of the restitution commissions went against the clear intention of the lawmakers, as now payments that had never actually reached the "injured owner" (e.g. payments into blocked accounts) were to be seen as being at their "free disposal". In consequence the applicant had to pay back a price he oder she in reality had never got and in that way had to sort of buy back expropriated property. On the other hand, the restitution commissions did interpret the term "expropriation of property" (Vermögensentziehung) very broadly, which was in favour of restitution applicants.
No restitution act was passed for expropriated tenancy and leasehold rights. After several draft laws, some which were even introduced into parliament as government bills, this was thwarted by the resistance of business organisations and the Ministry of Trade and Reconstruction, as well as for reasons of party-politics. The failure to restore expropriated tenancy and leasehold rights is also a clear case of the non-fulfilment of the 1955 State Treaty. Only with the amendment act to the National Fund in 2001 was a lump-sum payment made in settlement of tenancy and leasehold rights.
Likewise there were no restitution acts for copyright and licensee rights or for concessions - even though this had been envisaged in the Third Restitution Act.
One of the greatest problems lay in the application deadlines. These were, albeit against the will of the Federal Law Office or the Finanzlandesdirektion [Provincial Financial Directorates] repeatedly extended. But it is questionable whether all those affected by the extensions received notification in good time. As a whole, the injured owners had in every case more than the three years that the ABGB [the general civil code] envisages for contesting a contract that has been drawn up on the basis of a threat. However, the deadlines were clearly shorter than the 30-year period that the general civil code envisages for contesting an illegal or unethical contract.
In an overall analysis of the procedures of the restitution commission which mainly dealt with cases of the Third Restitution Law revealed no general tendency to drag cases out or to deny legal rights. The fact that many proceedings were nevertheless very time-consuming is partly due to the longer duration of the legal cases involving investigation - inherent in private legal disputes with the right of appeal. It is also related in part to the specific cirmumstances of post-war history. With the results of the analyses done by the Historical Commision you have to keep in mind that most of the important sources do not exist any more because in the second half of the 1980s the restitution files in the Vienna Provincial Court for the years 1947 to 1955 were officialy destroyed. That was probably done without political intentions, just out of a deplorable lack of understanding or if you like stupidity. As soon as the Documentation Centre of Austrian Resistance came to know of the destroying it protested and that way the remaining files could be saved.
For implementing the First and Second Restitution Acts the responsibility lay with the Provincial Financial Directorates. Most of the Austrian Jews had lived in Vienna and the provinces of Lower Austria and Burgenland. Therefore in most cases the responsible authority was the Financial Directorate of Vienna, Lower Austria and Burgenland, which was completely understaffed in relation to its workload and whose structure was quite inadequate. At the beginning, all the authorities were surprised by the high number of restitution applications. This can be ascribed to a gross underestimation of the extent of expropriation which had taken place. Bearing in mind the fact that many cases remained open for years, the settlement of cases under the First Restitution Act was as a whole predominantly positive: 77% of all restitution applications were granted; 15.5% were rejected. The remainder were withdrawn or transferred. However it generally can be said that the files show the Vienna FLD to have shown mistrust towards Jewish restitution applicants.
4. What was restituted?
The main limiting factor of the Austrian restitution laws lay in their restriction on identifiable, still existing property and the denying of any compensation for lost or destroyed property. That gave immobile property a strong advantage. Real estate therefore was the central category of restituted property. It was easy to trace in the Austrian real estate registers. Out of all the confiscated real estate covered by a sample of selected Viennese districts, 68,6 % was completely returned, 1 % incompletely, in 19,7% of the cases examined proceedings had been started but no restitution of property took place and in 10,7 % the real-estate registry showed no evidence of any restitution at all - in these cases there may however have been an out of court settlement. The ratio of restitution depended on the character of the "aryanizer" as well: Where the "aryanizer" was a private person this ratio fell to 54.4%, where it was a business it was 32%. Whereas in 40.6% of the cases of confiscation by a business no restitution is documented in the real-estate registry, for private "aryanizers" this is only true for 11.2%. A survey of Jewish real-estate ownership in Burgenland came to largely similar results.
In comparison to real estate, the restitution of companies and businesses was less important in the implementation of restitution legislation. A survey of cases dealt with by the Vienna restitution commission (which because of source limitations cannot be taken as representative) showed that in 18.1% of the cases surveyed companies were the objects of restitution. In the application of the First and Second Restitution Acts, companies played no role worthy of mention. In view of the incompleteness of existant sources and evaluation problems referred to elsewhere, no overall comparison of the value of "aryanized" enterprises and those of businesses returned after 1945 can be made. Mostly big or medium sized firms were restituted. The majority of the small businesses were liquidated after March 1938, in the whole three quaters of all "aryanized" businesses were liquidated. In 1945 the in nazi-terminology "winding-up proceeds" were still on the accounts of the Vienna Chief Finance President, which were then administered and converted into Schilling accounts by the Provincial Finance Directorates of Vienna, Lower Austria and Burgenland. In the view of the Finance Ministry, these proceeds were legally still the property of the Jewish businessmen concerned, and could therefore in the case of a claim be paid back directly on the basis of the First Restitution Act, provided that the proceeds could still be assigned to their business. But seen on a larger scale the majority of the owners of liquidated businesses could get nothing after the war. Compensation for lost business furniture was payed in the late fifties, compensation for the liquidated businesses themselves will be possible as soon as the Compensation Fund ("Entschädigungsfonds") negotiated in the year 2001 will start its payments, a date which cannot be foreseen right now.
The least chance of restitution for mobile property was as long as it did not belong to any famous collections of art or library. Objects of art, furniture, things for everyday use could not be found again after 1945 and therefore were not object of restitution proceedings. How could a survivor of a concentration camp tell where the furniture of his flat went at the auction by the Gestapo? In reality if you buy some beautiful old piece of glass in Vienna - how can you tell whom it might have belonged before 1938? That is a question I sometimes ask myself since I am collecting not too expensive old pieces on a small scale.
For certain categories of property no restitution acts exist. The most important category restitution was deniyed were rented appartments and flats. In Vienna only more than 50.000 flats were "aryanized" and never returned to their former inhabitants. At that point it is necessary to stress that the position of the tenant of a rented appartment was quite a strong one according to Austrian law, even similar to that of an owner. Someone returning from the concentration camp or a country of exile could go to the house he or she had lived before the persecution and look up at the windows where perhaps his or her own curtains still were hanging. But there was no possibility to get the flat back. And since there were not enough flats available in Vienna at that time and since the survivors of the Shoah mostly had no money they could not easily afford or even get another flat. Some of them lived in crowded survivors homes of the Jewish community for years. Though three drafts for a restitution act for rented appartments and business locations reached the parliament the national council refused to vote in favour of such a restitution act. The proceeding of such an act would have evicted thousands of former National Socialists respectivly people having had profit of the eviction of the Jewish tenants. The political parties were not ready to risk losing these votes at the general elections and therefore parliament never passed that act. In 2001 according to the negotiations of Washington the National Fund Law was amended and former tenants can get a lump sum payment as compensation for the loss of leaseholds.
No restitution act was passed for copyrights, for trade licenses and bank and pharmacist's franchises. Compensation for these property damages could be asked for by the Entschädigungsfonds of 2001.
5. The State Treaty of 1955 and its consequences for compensation
In 1946 the first American drafts for the Austrian State Treaty had already included articles on restitution and compensation. Until 1949 the two main articles were definitly negotiated after the Austrian Republic had succeeded in eliminating the passages on her duty to pay compensation for not restituted property. Article 26 of the Treaty finally signed in 1955 contains the Austrian obligation to restitution of all traceable confiscated property. Property not claimed was to be collected and used in favour of victims of National Socialism. If Austria should pay any compensation this should be in the same amount as she compensates war related damages of her population.
The Austrian government did not pay much attention to that article thinking its obligations were fulfilled by the seven restitution acts. The western signatory States led by the USA did not share the Austrian point of view but demanded compensation for property categories which were not dealt with by the restitution acts. There the Americans partly made use of the catalogue of not fulfilled wishes the Committee for Jewish Claims on Austria had presented during its negotiations with Austria from 1953 to 1955. These talks had ended with Austria's promise to establish a relief fund for Austrian victims of National Socialism living abroad which passed the parliament in the beginning of 1956. The negotiations on Article 26 of the State Treaty took three years and ended in an exchange of notes in 1959.
According to the allied pressure during these negotiations the following measures were introduced into the Austrian legal system:
- 1958 a legal settlement for compensation for claims arising from life insurance policies was made. These policies had been expropriated from their policy-holders in a manner which involved the insurer having to pay the German "Reich". Only a few people registered claims on the basis of this law and their compensation was only partial.
- 1959 the Austrian side promised to establish a Settlement Fund (Abgeltungsfonds) which envisaged compensation for expropriated assets in bank accounts, securities, cash, mortgage claims and for the means that were used to meet Nazi discriminatory taxes. It took two more years until the Settlement Fund Act passed parliament. The law provided no norms for the actual criteria of compensation payments. There was no legal right to compensation. Maximum payments were envisaged and the total amount of 6 Million US-dollars was not sufficient to cover all damage.
- The Austrian side conceded pension payments for former Austrian civil servants of provinces and cities/villages.
In fulfilment of Austria's obligation under Article 26 paragraph 2 of the State Treaty collection points were established in 1957. They had to collect those assets that could not be or were not reclaimed or which remained without heirs. They had to effect the restitution claim, realising the value of the property and ultimatly distributed the proceeds to victims of Nazism in Austria. There were two collection points: collection point A was responsible for registering property whose owners had been members of the Jewish Community on 31 december 1937, and collection point B for the unclaimed property of other persecuted people, beyond them those having been persecuted as Jews without being member of the Jewish religion any more. In total the collection points raised 326,157,203,40 Austrian Schilling. The value of heirless property was thus more than ten times the 25 mill. Austrian Schilling that the federal ministry of finance had assumed as its maximum value at the beginning of the 1950s. Not least because of this dramatic underestimate of heirless assets the Jewish Community had been granted a loan of 5 mill. ATS in 1950 instead of the requested ATS 25 mill.
The Catholic Church used Article 26 for raising her own compensation claims. The following negotiations resulted in an agreement between Austria and Holy See in Rome. Similar agreements werde concluded with the protestant church and the Old Catholic Church. The Jewish Community was awarded a single payment of ATS 30 mill. for the destruction of devotional items as well as an annual payment of ATS 900,000 and the assumption by the state of the cost of 23 employees (with the ATS 5 mill. that the Jewish Community had received as a loan in 1950 deducted).
6. The agreement with the Federal Republic of Germany - "Abkommen von Bad Kreuznach"
The German occupation of Austria had widespread economic consequences as well. In the State Treaty all the German property in Austria was awarded to Austria subject to payments to the Soviet Union for that property. The western Allies had already handed over former German foreign assets to the control of the Austrian administration in 1946. The State Treaty however obliged Austria to waive any claims on the Federal Republic of Germany. To solve the resulting rather complicated situation between Austria and Western Gemany an agreement was concluded in 1957. All along during the negotiations the Austrian side asked for a German payment for the compensation of National Socialist crimes done in Austria. That was according to the Austrian point of view which saw the main responsibility for National Socialism on the side of Germany. The Federal Republic of Germany at first refuted that request stating that Austria had her own responsibility for those crimes on Austrian soil. When later on a series of western European States formulated similar requests, among them even Italy as a former ally of the German "Reich", the Federal Republic negotiated agreements with these States, even with Italy. Now she could not any longer refuse to negotiate that problems with Austria as well. At last the so called "Abkommen von Bad Kreuznach" (agreement of Bad Kreuznach) was concluded in november 1961. Western Germany payed 95 m. DM for compensation measures for victims of National Socialism, a similar sum for the payment of pensions, out of which Austria at last payed the pensions of the years 1938-1945, which had not been payed yet. A third part of the agreement dealt with support for ethnic Germans living in Austria since 1945. In the whole Germany contributed about 50 % to the Austrian measures according to the agreement. These were far reaching amendments of the Victims Welfare Act, for instance compensation payments for times of internment or imprisonment, for times having lived underground, and so on. Since some of these compensation of the Victims Welfare Act were reserved for Austrian citizens only a new Aid Fund was established paying lump sums for compensating losses of income and of the forced end of the formal education. And at last Germany contributed to the Settlement Fund Austria had agreed to establish in 1959. That came because Austrian organizations of victims of National Socialism living in Austria had hindered that act being passed by parliament since they thought most money out of the Settlement Fund would go abroad and were afraid that their members in Austria would end empty handed.
7. From the sixties to the nineties
In the second half of the sixties the ministry of finance drafted a law in favour of those people who had had to restitute property. But the ministry of foreign affairs warned because of the damage to Austria's international reputation such a law could cause.
Ten years later a committee for discussing matters of compensation ("Entschädigungsausschuss") was set up by the council of ministries. The discussions resulted in a new doting of the Aid Fund which payed lump sums to needy victims of National Socialism without regard to their present citizenship.
Again ten years later research of a younger generation of historians as well as the debate on the wartimepast of Kurt Waldheim, former Secretary General of the United Nations, 1986-1992 Federal President of Austria, led to a new understanding of Austrias own National Socialist past. Finally in 1991 the Federal Chancellor Franz Vranitzky declared as the first Austrian post-war politician that Austria had a co-responsibility for the National Socialist crimes. In 1995 a National Fund was established which for the first time gave lump sum payments to all still surviving victims of National Socialist persecution - Jews, Roma and Sintis, politically, nationally, religiously persecuted as well as people having been persecuted for their sexual orientation, for being mentally or physically handicapped or for not being socially adapted.
8. The Agreement of Washington in 2001
In January 2001 the USA, the Republic of Austria, Jewish organisations and lawyers representing "class actions" agreed on a bundle of Austrian measures for victims of National Socialism. One part of these measures has been realised in the meantime - an amendment to the National Fund, granting compensation for the loss of rented appartments, rented business premises, things of daily use and personal valuables. Social laws got improved in favour of the victims. And the Entschädigungsfondsgesetz - the compensation fund act - should close the still existing gaps in restitution. But until now it did not start work since there is no "Rechtsfrieden" in the USA, since there still are proceedings of restitution claims pending in American courts. Therefore Austria refuses to start payments. In the meantime the potential claimants get older and older.
In that point of view compensation in Austria really is a never ending story.
The story of compensation for forced labour has started only a few years ago but has almost come to an end meanwhile. Most of the payments are done, the "Versöhnungsfonds" (Reconciliation Fund) is closing down again.
9. Summary
In the whole Austria payed a lot for National Socialist related losses. But there were a lot of different laws and funds which gave more or less but never compensated the entire amount of the losses. People had no right to that payments but had to raise claims, sometimes felt like beggars asking for almons. It was very difficult for former Austrians now living abroad to stay informed what claims could be raised according to what law and when. Internationally Austria had the image of a country having participated in National Socialism but denying any responsibility and therefore had to be forced by the Allies or international pressure to each one of the laws or funds in favour of the victims of National Socialism, most of them Jews. And that image more or less paralleled the real situation in Austria. Therefore the total amount of Austrias accomplishments always came out of focus.
The Historical Commission often was asked for a "balance sheet" between lost assets and restituted/compensated assets. However, if a serious scholarly procedure is adopted, such a balance cannot be drawn up. The amount of assets confiscated cannot be enumerated. Nor can the sum of restitution and compensation be given an even approximately accurate monetary value.
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