IO Files: SD/A/C.1/261
Memorandum Prepared in the Department of State
Compensation for Property Losses of Palestine Refugees
The attached memorandum indicates the present thinking of the Department on the question of compensation for property losses sustained by Palestine Refugees.
As suggested in the memorandum it would facilitate the carrying out of the contemplated United Nations program if the Survey Mission could
- 1.
- Consult with appropriate Israeli officials with a view to obtaining as soon as possible a survey of refugee property in Israel, with an estimate of its value.
- 2.
- Consult with such private or official persons in Arab countries as might be able to assist in connection with an estimate of the value of refugee property in Israel.
- 3.
- Consult with other appropriate persons, particularly including UNRPR and its component organizations, in order to obtain recommendations for possible procedures for receiving and evaluating refugee claims for loss or damage to property.
compensation
I. Principle of Compensation
The General Assembly, in its resolution of December 11, 1948, laid down the following principle of compensation for the Palestine refugees:
“11. Resolves that the refugees wishing to return to their homes and live at peace with their neighbors should be permitted to do so at the earliest practicable date, and that compensation should be paid for the property of those choosing not to return and for loss of or damage to property which, under principles of international law or in equity, should be made good by the Governments or authorities responsible;”
The general principle of compensation thus enunciated should continue to be adhered to. However, due to developments in 1948, the principle should be made to apply to those who do not choose or are unable to return to their homes, including those who, although repatriated, do not have their property restored. The resolution is regarded as being equally applicable to bona fide refugees, whether Arab or Jewish. There were relatively few Jews resident in Palestine who fled from their homes as a result of the hostilities, but some claims in this category are to be anticipated.
In the same resolution the Palestine Conciliation Commission was instructed to facilitate the payment of compensation. No progress was made due to the lack of a basis for political negotiations between the parties. It is now felt, however, that the United Nations, through the Survey Group and such appropriate authority as may be designated by the General Assembly should carry this work forward. The refugees for the most part were not nationals of any Arab state at the time they lost their property and did not enjoy diplomatic protection of such states, and consequently no state derived any rights, legal or equitable, from loss or damage to refugee property. Consequently it seems to be a task for the United Nations, by negotiation, to take steps to protect their interests, and not that of the Arab government.
The Israeli Government has consistently accepted the principle of compensation, but has always linked with this the assertion that it has war claims against the Arab States by virtue of the alleged fact that the war was caused by Arab aggression. We consider that any war claims by Israel are in an entirely different category from compensation for refugee property and should not be treated as counterclaims or as in any way related to this obligation.
[Page 1364]Compensation should be made on the basis of the property losses actually incurred by the refugees. It is not contemplated that more than a fraction of these losses will be actually compensated, nor that a full and complete evaluation of these properties should be attempted. However, this should be the basis in theory and as far as possible in practice.
Most of the property losses can probably be compensated by means of a lump sum payment into the fund for development projects for resettlement. This would be on the theory that most of the refugees lost no more than they would receive when resettled, i.e., living quarters, land, tools, etc.
On the other hand, there should be some kind of prorata compensation to individuals who lost property in excess of the bare essentials. A possible formula would be that if it were determined for example that two-thirds of the losses were in bare essentials, two-thirds of the compensation could be paid into the resettlement fund. The other third would then be available for proration among persons whose losses were more substantial.
II. Determination of Compensation and Distribution of Amount Paid
According to the foregoing principles, it will be necessary, in due course, to receive and evaluate individual claims of refugees. The survey group might undertake a preliminary exploration of this problem, giving consideration to its feasibility and the type of procedure under the proposed Agent-General which would be most effective.
However, the determination of claims would not necessarily be a prerequisite to the negotiating by the appropriate United Nations Authority of a preliminary lump sum award by Israel. Such an agreement might have a proviso that if the amount paid proved less than a stipulated proportion of the finally approved claims, the matter would be reopened for adjustment.
Steps should be taken to obtain an estimate of property losses to be used as a negotiating basis. This estimate might be obtained through a survey of property held by the Israeli Custodian of Absentee Property. If the cooperation of the Israeli Government could be obtained this should make the general task easier and might make it possible for the Survey Mission to make a beginning. The question should at least be discussed with the Israeli Government with a view to obtaining its cooperation, but if such cooperation were refused, the Economic Survey Mission could so report. Of course, such a survey could not indicate all property losses. For example, most losses of personal property, aside from bank accounts, would not be shown.
Attempts should also be made to obtain such information through private and official persons in the Arab states who might be in a position [Page 1365] to give an estimate of the property involved. The possible source of such information might be Mr. Sami Hadawi, a former official of the Palestine Government connected with land taxation and now employed in Palestine by the Jordan Government in a similar capacity. Mr. Hadawi is understood to have saved records which he compiled while a member of the Palestine Government. He can be reached through the American Legation in Amman.
While Israel’s payment will undoubtedly be less than the actual property losses, no reason is seen for her claim to limit compensation to “lands abandoned and previously cultivated.” Such property appears to be in no different case from residential and business property, and personal property.