Germans received compensation for property taken from Jews, documents reveal

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In the 1980s the West German court found itself dealing with a hot potato. On paper, it was only a dispute over property, of the type that is common in every city and doesn’t make headlines. But behind the scenes lay a dramatic story: On one side was the family of Sigmund Felix, a Jew who was murdered in Treblinka. On the other side, the family of Helmut B?nsch, a Sudeten German who lived in a house stolen from Felix. The court was asked to decide which of them was the legal owner of the house in the city of Teplice in Czechoslovakia.

The city is located near the German border, in the Sudetenland region. Before World War II many of its inhabitants were “ethnic Germans” (Volksdeutsche), residents of German extraction who lived outside the borders of the homeland. Many in the city supported the Nazi rise to power in Germany in 1933, and rioted against the Jews in 1938. Later the local synagogue was also destroyed and the Jewish community was exterminated in the Holocaust. Jewish property was stolen from its legal owners by various means, and some were forced to sell it at a loss. Others were murdered even earlier. Those now benefiting from it were the new owners: ethnic Germans who bought it at a bargain price from the authorities.

In the aftermath of the war the ethnic Germans were expelled to Germany. Now the question was: Who is entitled to compensation for that property? The original Jewish owners, from whom it was stolen? Or the German owners, who obtained it because of “Aryanization” and were forced to part from it when they were expelled? Beginning in the 1950s, West Germany began to pay compensation. One side of the story is known to everyone: The compensation and reparations that the Germans gave and are still giving to the Jewish people for Germany’s crimes in the Holocaust. But another side is being sidelined to the margins of historical research: It turns out that at the same time that Germany was paying reparations, it was also paying compensation to a group that benefited from the Nazi wrongs in the Holocaust – those same “ethnic Germans” who took over Jewish property under Nazi rule.

City Hall in the Czech town of Teplice in Sudetenland. Many ethnic Germans in the town near the German border supported the rise of the Nazis to power – and benefitted from it. J, Wikimedia Commons

The compensation was paid to them in the context of Germany’s 1952 Equalization of Burdens Law, which was designed to compensate the Germans who lost their property after the end of the war when they were expelled from their countries to West Germany. Thanks to German bureaucracy, the situation became genuinely absurd: Both Germans and Jews could submit claims for the same property. Once as one from whom the Nazis had stolen property – and a second time as one who had benefited from that property.

A Kafkaesque situation

This complex story was recently researched by Dr. Iris Nachum of the history department at the Hebrew University of Jerusalem. Her study was based on an analysis of unusual archival material, most of which has never been examined until now: 55,000 files that were saved in the Equalization of Burdens Archive in the city of Bayreuth in Germany, which documents the compensation claims of the German expellees. “A large percentage of the claims are related to property for which both Jews and Germans claimed compensation,” says Nachum. “It’s really Kafkaesque.”

The file dealing with the house in Teplice is a fascinating case study. In the aftermath of the war B?nsch, the ethnic German, claimed compensation for the house that he had lost. He claimed to the authorities that he had purchased the house legally from the municipality of Teplice (Teplitz in German) in 1939. He said that the previous owner was in fact a Jew, but he had sold his house to the municipality after declaring bankruptcy and died in 1936, before the outbreak of World War II. The bottom line was that B?nsch claimed that his purchase was not a case of Aryanization, in other words, a forced transfer of Jewish property to non-Jewish ownership under the Nazi regime.

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Photos of the house in the Czech town of Teplice in Sudetenland, today and during the war. Equalization of Burdens Law, Iris Nachum

The authorities believed his version, although he presented no evidence to back it up, and he received compensation for the lost house. “Often those who checked those files and made the dry decisions were Germans who themselves had been expelled from their homes after the war,” explains Nachum. The file was apparently closed, until in 1970 someone else filed a request for compensation for exactly the same house. It was Leo Felix, the nephew of Sigmund Felix, the Jewish owner of the asset, who was murdered in the Holocaust. “Felix the nephew was shocked to discover the reason why his claim has been rejected,” says Nachum.

He was determined to prove that his uncle did not die in 1936, but was murdered in Treblinka in 1942, and that he didn’t sell the house due to financial difficulties, but was forced to give it up, in 1939, under the Nazi regime. The authorities asked the nephew to bring documents proving his contradictory version, but at the time the land registration papers were behind the Iron Curtain, in the hands of the communist Czechoslovakian authorities, who prevented any access to them. That’s how it turned out that the authorities preferred to believe the evidence of a German who had no proof – even when they knew that the truth was probably concealed in documents to which there was no access.

Truth uncovered

Felix’s nephew didn’t give in, and filed a claim in a West German court, where he was able to prove the truth. In the early 1980s the decision of the authorities was reversed and it was determined that B?nsch had lied. It turned out that his family bought the house at a bargain price from the municipality after it was stolen from Felix, who was sent to his death. Although B?nsch was required to return the compensation money, which was given to Felix, as Nachum testified, he was never punished for the injustice he had caused the family of a Jew who was murdered in the Holocaust.

German settlers move into their new house in Poland, 1939. Jewish property was stolen from its legal owners by various means, and some were forced to sell it at a loss. Others were murdered. German Federal Archive

Nachum’s discovery is of significance for historical research, since it turns out that concealed inside files that record the expulsion of the ethnic Germans is a great deal of material about Jews and the Holocaust. Nachum’s study also touches on moral, political and diplomatic questions, since nobody was held responsible for the fact that only after an exhausting process did some of the Jews succeed in receiving compensation for property stolen from them.

In many cases, it was difficult to impossible to prove that the property really was sold to Germans by force, and the authorities chose to believe them rather than the Jews. This tendency is also evident in the story of the German merchant Rudolf Laurer. The merchant demanded compensation for a brick factory he had owned in the city of Lovosice in Czechoslovakia, which was taken from him when he was expelled at the end of the war.

The city of Lovosice in Czechoslovakia. Here,too, Jewish property was claimed by ethnic Germans in a case that wound up in court. Aktron / Wikimedia Commons

In a declaration he signed he claimed that he had purchased the factory in 1938 from a company called “Reiser.” The authorities checked and found that the previous owner of the factory was a Jew named Paul Reiser, a resident of Prague. Laurer confirmed that, and claimed that he had transferred the full sum for the purchase of the factory to his bank account. As support for his version he even provided the testimony of another person, the bank manager. The authorities ruled that Laurer had purchased the factory before the Germans occupied Prague, in March 1939, and therefore the purchase was conducted legally, not in the context of Aryanization, granting Laurer the right to receive compensation for loss of the factory.

However, before the file was closed, there was a change in direction: Axel Reiser, Paul’s grandson, also filed a claim for compensation for the factory. He claimed that it was stolen from his grandfather in 1939, after the Nazi occupation of Prague, and that his grandfather was murdered in Auschwitz in 1944. Reiser’s claim was rejected at first: The authorities chose to believe Laurer, but Reiser didn’t give up. He hired a Czech lawyer who managed to get a copy of the factory’s property registry documents and to smuggle it out of the country. “The document spoke for itself. It was entitled: “Sales agreement, June 16, 1939, Rudolf Laurer.”

Now it was clear that Laurer had lied. He didn’t purchase the factory in 1938, but at a bargain price from the authorities, who stole it from its Jewish owner before he was murdered. In this case too the decision was reversed, and Reiser received the compensation. However, this time too there was no lawsuit filed against the German for lying, and he was not punished for the injustice he had caused to the family of the murdered Jew.

Ethnic German settlers in Austria in 1940. German Federal Archives

‘Prove you’re German’

A total of 8 million ethnic Germans fled or were expelled from Central and Eastern Europe to West Germany with the advance of the Red Army and the aftermath of the war. Many of them left their property behind. When the German legislators came to their assistance in 1952, it was done with the intention of enabling them to become integrated into West German society by providing monetary compensation for the property, homes, factories and other real estate they left behind. This, in spite of the fact that “They were among the main profiteers from the Nazi occupation and the theft of Jewish property in Central and Eastern Europe,” as Nachum describes it.

Officially, the German legislators wanted to prevent a situation in which compensation would be granted for property stolen from Jews. That is why the law specifically states that compensation would not be given for property obtained under the sponsorship of the Nazi dictatorship. In effect – as Nachum proved – the authorities chose in many cases to believe the false declarations of the Germans, and in other cases chose a lenient interpretation of “Aryanization.”

In 1956 the compensation law was applied to an additional group: From now on Jews who had lived alongside the ethnic Germans before the war could file claims for compensation for property stolen from them. That was the origin of an absurd situation in which two groups – those from whom the property was stolen and those who benefited from the theft – filed claims for compensation for the same stolen assets. But the demands made of the Jewish claimants were more stringent: Not only did the authorities demand that they present documents that were difficult to impossible to obtain at that time – for example, documents proving ownership of property – they were also forced to prove that they belonged to the “German people,” who had tried to rid themselves of Jews during the Nazi regime.

German settlers in Poland in 1940. German Federal Archives

“Many Holocaust survivors failed in this bizarre identification process,” says Nachum. She describes the entire process as “politically sensitive and in contradiction to the viewpoint that Jews belong to the Jewish people, and don’t have to prove otherwise,” in order to receive compensation for property stolen from them.

The study by Dr. Nachum, who is the deputy director of the Jacob Robinson Institute for the History of Individual and Collective Rights at the Hebrew University in Jerusalem, is now being published in advance of International Holocaust Remembrance Day that will be marked at the end of the month, and on the 70th Anniversary of the reparations agreement, which will be marked later in the year. In the coming years she is expected to continue to study the documents in the German archive, with funding from the German Alfred Landecker Foundation and the Israel Science Foundation. She describes what is still concealed there as “a gold mine.”