840.48 Refugees/659: Telegram
The Chargé in the United Kingdom ( Johnson ) to the Secretary of State
[Received 3:06 p.m.]
763. From Myron Taylor. As I have previously indicated, one of the most important questions which will arise in connection with the negotiations with Germany will be that of the transfer or use of emigrants’ capital. Most countries are willing to receive some involuntary emigrants with capital but are unwilling to receive persons who may become a burden on the community.
This aspect of the problem will doubtless present difficulties. It is my understanding that since June of this year the German Government has prohibited the acquisition of emigrants’ sperrmark, that is, credit accounts in reichsmark left behind by emigrants in the German Central Bank. As matters now stand there is virtually a total prohibition against dealing in sperrmark, except for the fact that occasionally the German gold—diskont—bank may buy small quantities of emigrants’ sperrmark in Germany at a rate of 8% which involves a loss of 92% for the emigrant. In any event the sperrmark transactions have been employed only in rare cases of individual emigration.
In cases of emigration in numbers an attempt was made in 1936 and 1937 to organize a system of capital transfer known as the Altreu transfer system. The foreign currency required for this system was procured through a clearing arrangement with the relief remittances of Jewish organizations abroad and through the acquisition of the so-called rueckwanderer—devisen allowed to Germans living abroad, who wish to return to Germany. The foreign currency thus acquired was ceded to the Altreu, the gold diskont bank charging 100% on the official rate which covered the 50% premium to be paid to the returning German emigrant at a 50% profit in reichs. In actual fact, due to the heavy rush of prospective emigrants who wished to avail themselves of this transfer opportunity, the Altreu was closed down after a short time.
There remains only the Haavara transfer system for the transfer of capital from Germany to Palestine. Approximately 130,000,000 [Page 766] reichsmark of Jewish property has been transferred to Palestine at a loss of 5% originally which has gradually increased so that now the transfer loss is 50%. The system is designed to permit the purchase of German goods by Jewish consumers in Palestine on the basis of a sort of emigration and transfer contract between the German Government and the Jewish agency for Palestine. Unfortunately, beginning in February of this year, restrictions have been progressively imposed by the German Government so that at the present time the transfer concession of the Haavara is limited to a small number of goods of secondary importance. Negotiations are now under way between the Jewish agency and the German Government for the extension of the Haavara’s concession, but it is too soon to determine what the outcome will be.
It would seem therefore to be urgently necessary for the Intergovernmental Committee through its director, in the approach to the German Government on the whole refugee question to consider the organization of the liquidation of the property of potential involuntary emigrants in Germany including Austria, to persuade the German Government to make an initial contribution of foreign exchange which will facilitate the beginning of emigration and to make a permanent contribution of foreign exchange as a basis for the organized transfer of refugee capital on a reasonable footing. This is made all the more pressing because the Aryanization of Jewish businesses is being accelerated, which means that non-Aryan property is being taken over wholesale in exchange for so-called Goering bonds of uncertain value.
It may be necessary, in consequence, to establish or make use of a transfer office for the purpose of dealing with the claims of non-Aryan owners and insuring at the same time the financing and settlement abroad of involuntary emigrants. A sliding scale might be devised, small owners to receive cash and large owners part cash and part German Government bonds, upon the liquidation of their property. The part of the owner’s assets paid to the transfer office in German Treasury bonds might when the owner emigrates be converted into non-interest bearing German dollar funding bonds, say for 50% of the nominal value of the Treasury bonds, these bonds to be amortized by Germany in regular yearly installments over a period of 10 or 20 years.
In this connection I should like to suggest that instead of setting up a separate transfer agency it might be considered whether the Intergovernmental Committee might not avail itself of the Bank of International Settlements.
I am forwarding a detailed memorandum12 on the whole subject of transfer in tomorrow’s pouch. [Taylor.]
- Enclosure No. 4 to despatch dated August 13, not printed.↩