740.00119 Potsdam/8–645

No. 1003
The President to the Deputy Military Governor, United States Zone in Germany (Clay)

Memorandum for General Clay

The heads of government today agreed to the following:

“Appropriate steps shall be taken by the Control Council to exercise control and the power of disposition over German owned external assets not already under the control of United Nations which have taken part in the war against Germany.”1

In order to carry out this agreement, you are directed to urge the Control Council to issue the attached draft decree, which would [Page 965]vest German external assets. I regard it as most urgent that steps be taken immediately to exercise control and the power of disposition over these assets.

Harry S. Truman
[Attachment2]

Law No. —

Vesting and Marshalling of German External Property3

preamble

In modern warfare and under conditions of totalitarian rule the instrumentalities of war include privately owned enterprises and funds, as well as official properties of the warring state.

Germany’s war of aggression was sustained, not only by controlling her domestic economy, but also by mobilizing her industrial and financial interests in foreign countries.

In order to promote and maintain international peace and collective security in the post-war world, it is necessary to eliminate Germany’s potential for war.

To do this it is essential to assume control of all German assets, wherever located, and to divest German ownership.

Therefore, by virtue of the Supreme Authority with respect to Germany arising from the Act of Surrender, May 7, 1945,4 and in accordance with Article XIII of the Statement by the Governments of the USA, the USSR, the UK and the provisional Government of the French Republic, adopted at Berlin by the Supreme Commanders on June 5, 1945,5 it is hereby Decreed:

article i

Establishment of German External Property Commission.

There is hereby established a German External Property Commission composed of representatives of the Powers occupying Germany, hereinafter referred to as the “Commission.” This Commission is created as a governmental agency with all the attributes, powers and immunities of the sovereign government for the purpose of carrying out the policies and provisions of this law both within and outside Germany.

[Page 966]

article ii

Vesting of External Property of Persons within Germany.

All the right, title and interest, legal and equitable, in or with respect to all property outside Germany, of all persons within Germany, is hereby vested in the Commission, Provided that this Article shall not affect the property of any individual within Germany.[:]

(a)
who is a citizen or subject of a foreign sovereign state other than Japan; or
(b)
who is part of the armed forces or civilian personnel of any Allied government.

article iii

Vesting of External Property of Persons outside Germany.

All the right, title and interest, legal and equitable, in or with respect to any property outside Germany, of any German citizen outside Germany and the branch of a corporation or other legal entity organized under the laws of Germany or having its principal place of business in Germany, and any legal entity which is owned or controlled from Germany, is hereby vested in the Commission. As used in this Article the term “German citizen” means individuals who

(a)
have had full rights of German citizenship under Reich law, at any time since January 1, 1942, and have been within any territory while such territory was under the control of the Reich Government, at any time since January 1, 1942; or
(b)
have been designated by the Commission to be German citizens for the purpose of this decree.

article iv

Compensation.

All persons whose right, title or interest in any property has been vested in accordance with this law shall be entitled to fair compensation in an amount and in a manner to be determined.

article v

Disposition of Property Vested under this Law.

The right, title and interest to all property, title to which has been vested in the Commission, under this law, or the proceeds of such property, shall be held by the Commission and disposed of pursuant to such further directives as the Allied Control Council or other appropriate authority may issue from time to time in order to accomplish the objectives set out in the Preamble.

[Page 967]

article vi

Additional Specific Powers of the Commission.

In order to effectuate the policies and provisions of this law and in addition to its general powers under Article I, the Commission’s specific powers shall include the power, acting through any agency that it may designate, or otherwise, and under such rules and regulations as it may prescribe, by means of instructions, licenses, or otherwise,

(a)
to do all acts which it deems necessary or appropriate to obtain possession or control over all property, the right, title or interest in which is vested in the Commission under this law;
(b)
to operate, control and otherwise exercise complete dominion over all such property, including the sale, liquidation or other disposal thereof;
(c)
to subpoena witnesses and to require the keeping of full records, the furnishing of full information, and the production or seizure of any books of account, records, contracts, letters, memoranda, or other papers, relating to any property affected by this law.

article vii

Exemptions.

This decree shall not apply to assets subject to the jurisdiction of the United Kingdom, the Union of Soviet Socialist Republics, the United States, France or any United Nation determined to be entitled to retain assets subject to its jurisdiction as a form of reparations or otherwise.

article viii

Definitions.

For the purpose of this law:

(a)
The term “person” shall include any natural person or collective persons and any juridical person or entity under public or private law having legal capacity to acquire, use, control or dispose of property or interests therein; and any government, including all political subdivisions, public corporations, agencies and instrumentalities thereof. Any juridical person or entity which is organized under the laws of, or has its principal place of business in Germany, shall be deemed to be a person within Germany within the meaning of Article II hereof.
(b)
The term “property” shall include all movable and immovable property and all legal, equitable, or economic rights and interests in or claims to such property, whether matured or not, and shall include, but shall not be limited to lands and buildings, goods, wares, merchandise, chattels, coin, bullion, currency, deposits, accounts or debts, claims, bills of lading, warehouse receipts, all kinds of financial instruments whether expressed in Reichsmarks or in any foreign [Page 968]currency, evidences of indebtedness or ownership of property, contracts, judgments, rights in or with respect to patents, copyrights, trademarks, etc., and in general, property of any nature whatsoever.
(c)
The term “Germany” shall mean the area constituting “Das Deutsch[e] Reich” as it existed on December 31, 1937.

article ix

Penalties.

Any person who violates any provision of this law or any regulations, instructions or directives issued hereunder or any person any of whose property is affected by this law who acts or attempts to act in derogation of the title or interest of the Commission under Articles II and III and any person who assists or conspires with any other person to commit such an act or violation shall, upon conviction, be liable to any lawful punishment as determined by the court. In addition to any penalty imposed by this Article, any person who is convicted hereunder shall forfeit his right to compensation under Article IV.

article x

Conflicting Laws Annulled.

All provisions of foregoing laws or decrees or parts thereof which are contradictory to any one of the provisions of this law or of any law or decree issued under the provisions of this law are herewith declared null and void.

  1. Document No. 1383, section ii , paragraph 18.
  2. Not attached to the source copy of document No. 1003, but clearly identified as the draft referred to (file No. 740.00119 (Potsdam)/7–3145).
  3. For the text of the law actually adopted (Allied Control Council Law No. 5, October 30, 1945), see United States Economic Policy Toward Germany (Washington, Government Printing Office, 1946; Department of State publication No. 2630), p. 88.
  4. Executive Agreement Series No. 502; 59 Stat. (2) 1857.
  5. Treaties and Other International Acts Series No. 1520; 60 Stat. (2) 1649.