the German Chargé ( Thomsen ) to the Chief of the Division of European Affairs ( Moffat )

My Dear Mr. Moffat: Pursuant to our conversation on Saturday, August 12, concerning the transfer of inheritances from Germany to beneficiaries of American citizenship in the United States, I wish to comment briefly on the following points, which were mentioned by you besides the issue involved in principle:

1. As a matter of principle, only such inheritances can be transferred to the United States, to which the claim has arisen after the introduction of foreign exchange control in Germany, i. e. the 4th of August, 1931.

Exceptions, however, will he made in the following two cases:

When and if transfer in instalments had already commenced before August 4, 1931, the full amount of the inheritance not yet transferred shall be transferred in order to prevent a discrimination against the heirs on account of introduction of foreign exchange control in the meantime.
If the beneficiary furnishes proof that the nontransfer of the inheritance prior to the introduction of foreign exchange control was due to circumstances not attributable to him, the inheritance may also be transferred. A case falling within this category exists if the settlement proceedings before the Probate Court were not completed by that time; furthermore, if the provisions of the testator’s will precluded the transfer prior to that date. It will, however, be considered as a circumstance attributable to the beneficiary if the transfer of the inheritance was refrained from on the ground that for particular economic conditions (f. i. low prices for real estate) the liquidation of the inheritance was considered as inadvisable at that time.

2. As a rule, the income accruing from the inheritance up to the time of the transfer of the capital shall also be transferred. If the heir decides, however, to leave his property in Germany until further determination on his part (as f. i. in cases in which the inheritance consists of real estate), he will be treated like any other person making an investment in Germany, i. e. the income has to be transmitted to the “Konversionskasse fuer deutsche Auslandsschulden” with the permission of the proper Foreign Exchange Office (Devisenstelle). In cases in which it seems advisable for economic reasons that the inheritance should remain in Germany, exceptions from this rule will be granted both with regard to the future transfer of the capital and with regard to the transfer of the proceeds thereof.

3. The statement made by me on December 16, 1938, under instructions of my Government, comprises only the transfer of estates from Germany to America and vice versa on the basis of reciprocity. Therefore, under the present ruling no inheritance can be transferred to an American national residing in a foreign country other than the United States.

[Page 595]

4. I have requested information concerning the transfer of inheritances to such American citizens who were domiciled in Germany at the death of the testator and subsequently took up residence in the United States.

Concerning the more general complaints of American citizens about the methods of transfer of inheritances from Germany to the American beneficiaries, I have acquainted my government with your remarks and conclusions and hope to be able to return to the argument shortly. I may, however, under instructions of my government, suggest that the American Embassy in Berlin furnishes the Auswaertiges Amt as soon as feasible with a complete list of cases in which transfer of inheritances to American citizens was stopped, withheld or denied, including such cases as mentioned above under 1–4.

Believe me [etc.]

H. Thomsen