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German External Assets

Volume 436: debated on Wednesday 30 April 1947

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Motion made, and Question proposed, "That this House do now adjourn."—[ Mr. Simmons.]

12.54 a.m.

I am not accustomed to reading speeches in this House, but, as this Debate will be reported in the foreign Press, I hope that I may be forgiven if I adhere closely to my typescript. Great Britain is today spending £120 million a year, including dollar resources we desperately need ourselves, to feed and rehabilitate the British zone in Germany. Fantastic as this is, it is even more fantastic when we consider that Germany invested many times this sum, before and during the war, in neutral countries. German assets in the Argentine and other South American countries, in Switzerland, in Sweden, in Spain and Portugal, amount to several million pounds, and if there is any justice in the world these great sums should be made available. It is the Germans abroad who today should be feeding their own compatriots in Germany, and not the British people, themselves impoverished by the war which those same Germans started.

May I take first the case of Argentina, in which German investments were heavily increased by transfers during the war and which amount today to at least £100 million? The Blue Book published in February, 1946, under the authority of the U.S.A. State Department, lists the names of the most prominent German industries in the Argentine which still remain in Nazi hands, such as, for example, I.G. Farben, Siemens-Schuckert, Tubos Mannesmann, Thyssen, and so on. It is quite true that, by the decree of 24th January this year, the Argentine Government has nationalised 60—a mere fraction—of the 393 officially listed German industrial concerns, but even then there appears to be no intention whatever of making the wealth thus secured available for the purchase by the British taxpayer of the Argentine food exports which are required for Germany. Are we expected to take the risk that the remaining 333 German industries and the German assets hidden in the Argentine may be left. under some form of cloaking, in the hands of the former Nazis or of some of their sympathisers, and made available to make preparations for World War III?

Let me quote once more from the U.S. Blue Book to which I have referred. This is what it says:
"In Argentina the Germans have constructed a complete duplicate of the economic structure for war which they had in Germany. They possess today … the economic organisation … which they need to provide a base for the reconstruction of German aggressive power. The industries essential to warfare.. exist in Argentina and are controlled by Germans."
What I hope the Minister may be able to tell us tonight is, where in these circumstances, do His Majesty's Government stand? After all, we agreed at Potsdam to take, in conjunction with the U.S.A. and Russia, all appropriate measures to uncover and liquidate such German assets. Are we now to understand that our need for Argentine exports is so great, and American business interests in the Argentine so powerful, that the Potsdam Resolutions are to be forgotten?

Now let me refer to Switzerland, in which capital at the disposal of the Nazis is also very large. In spite of the Potsdam Conference, Great Britain, U.S.A. and France signed an agreement with Switzerland in Washington on 25th May, 190, to the effect that only the assets in Switzerland which belonged to Germans or German concerns at present resident in Germany should be examined, and that only 50 per cent. of those assets should be placed at the disposal of the Control Commission as reparations. Thus all the assets of Germans or German companies which are residing in Switzerland itself and the assets in Switzerland belonging to Germans or German firms in other countries escape the control since it is only all German companies actually in Germany which are, under this agreement, being examined. In addition, it was decided that the task of locating and drawing up the list of these German possessions should be confided to the Swiss Compensation Office only and that the Allied Control Commission should have no right to investigate. But as a large part of the German assets had been registered—as in Sweden—under the names of foreign individuals or foreign non-German concerns it is of course very likely that the total of German assets listed by the Swiss Compensation Office only represents a very small part of the real figure.

The Swiss Compensation Office declared that German capital in Switzerland amounted to about £50 million, of which about £25 million should come under discussion and, since the Washington agreement provided that the ex-Allied nations should receive only 50 per cent. of this amount, the Allies may receive £12 million only. This is supposed to cover the value of 500 German industrial and trading concerns in Switzerland as well as all German bank accounts, art treasures and gold which has been looted from occupied territories and transferred to Switzerland by the Nazis. It is perhaps not surprising that evidence already indicates that most of the declarations made by the Germans have been false or incomplete. The Swiss Government have stated that one-half of the German assets in Switzerland which did not belong to Germans actually residing in Germany could not be handed over to the Allies for reparations purposes because this might deprive 70,000 Germans now living in Switzerland of their means of existence. But it has never been made clear how much of this capital belonged to the Germans residing in Switzerland and how much belonged to those Germans residing in the Argentine and other countries. I think one may well be permitted to ask why the Swiss Government has not taken the same steps as the Belgian Government, to examine bank accounts and the capital of those Swiss Germans and see what increments were improperly acquired from the Nazis in the course of the war.

What I hope the Minister will tell us is why His Majesty's Government signed such a very unsatisfactory agreement with Switzerland and Sweden It appears to be perfectly clear that a wholly unsatisfactory compromise was agreed to because the Swiss delegate refused to yield. In fact, the U.S. delegate has since expressed his dissatisfaction with the agreement, saying that no agreement could be satisfactory when some parties have refused to yield any points. It is also pertinent to inquire whether the agreement now being discussed with Portugal is going to be equally unsatisfactory, and what agreements we contemplate signing with Argentina and other countries of South America regarding these German assets. Recently the International Committee for the Study of European Questions have published a statement on the lines of what I have been saying tonight. This resulted in a semi-official reply from the Swiss Government to the effect that they are waiting for proof resulting from exAllied inquiries in Germany regarding the presence in Switzerland of dangerous and guilty Germans, that hitherto no such proof has reached them, and that they will wait until the end of this year.

I trust very much that His Majesty's Government will see that such particulars are forthcoming, for they must surely be aware that many well-known Nazis, such as for example the ex-German Ambassador to Spain and the ex-German Consul General to Switzerland, are living luxuriously and spending lavishly in Switzerland today. I was in Switzerland just before Easter and I asked very reputable Swiss people what the position was, and they said quite frankly that it is a fact that many well-known Nazis—I was even quoted their addresses and the registration numbers of their cars—are living luxuriously and spending lavishly in Switzerland today, which I maintain is a scandal of the first magnitude.

I suggest that British diplomacy today can apply itself to few tasks so urgent as the liquidation of these German external assets. It was partly because the Germans succeeded in 1919 in keeping their assets hidden abroad that they were able to rise again so rapidly to a dominant position and to prepare for the last war. A similar state appears to exist today. I say that the fact that the victorious Allied nations should be asked to use their own resources and, in our own case, to lower our own national standard of living, in order to buy goods for the Germans, is a most extraordinary state of affairs. But while German citizens and German organisations still retain huge sums in foreign countries, it is utterly indefensible. I hope the Minister will be able to make it clear to us tonight beyond all possible doubt that His Majesty's Government have done, axe doing and will continue to do everything in their power in close co-operation with our former Allies at least to mitigate what is an intolerable situation.

1.7 a.m.

The hon. Member asks why we have made such a bad bargain with Switzerland over these assets. Unfortunately the situation is that the law is all on the side of Switzerland. International law has always laid down that a country of origin cannot demand from another country the wealth taken into it by emigrés from that Government. When the Russians came to this country at the time of the revolution, the Bolsheviks demanded the money which they had taken out of Russia. We firmly refused to hand it over. When the Jews fled from Germany to this country and took their money with them, we firmly refused to hand it over, basing ourselves upon the international law that emigrés would always have their money protected in a country to which they had taken it. That, in international law, is unfortunately the position of the Germans in Switzerland. They are emigrés from the Military Government which we have established in Germany, and international law is unfortunately upon the side of the Swiss and the Argentines. Therefore, when we try to make arrangements with those countries, we can only take such terms as they will give us.

1.9 a.m.

When my hon. Friend and the Foreign Office are applying their minds further to the extremely interesting and important matter which has been raised by the hon. Member for Solihull (Mr. M. Lindsay), I wonder if they would also just take a look at the position in Mexico. I happened to be there a few months ago, and I was rather shocked to discover how very many extremely prominent and wealthy Nazi Germans were still at large and more or less in hiding in that country. Many hundreds of them had originally been on the United States black-list of undesirable Germans who were to be deported from Mexico and returned to Europe possibly for action and for trial, or at any rate for examination, but by some mysterious means that black-list was whittled down again and again until eventually only something like two dozen Germans were deported and the rest were able to go on living in great luxury and complete freedom in Mexico, largely, I am afraid, because they were able to bribe people very high up on the Mexican administration.

1.10 a.m.

Before my hon. Friend replies, I would raise two brief points. First, in the case of ex-German assets in Spain which have now been taken over and are being run under Allied supervision, are His Majesty's Government making quite certain that those assets, when they are in the form of companies or enterprises are being cleaned up, and that the pro-Fascist, pro-German or pro-Italian Spanish employees previously employed in those enterprises under German control have been removed from their jobs? I have particularly in mind a shipping concern which was bought up by the Germans during the war which is now under Allied control and about which there have been consistent complaints. The same Spanish employees put in by the Germans are being retained by the Allied Control. Secondly, I would like to ask whether the representations which I have been told by the Foreign Office have been made repeatedly for the expropriation of wanted German nationals from Spain have produced results in the recent past.

1.11 a.m.

I think it is clear from the short but extremely interesting Debate that we have had that the House is indebted to the hon. Member for Solihull (Mr. M. Lindsay) for not being deterred by the unusually hard work we have been having this evening from bringing up this matter on the Adjournment. I agree warmly with a substantial part of what he has said; in particular, with the principle he enunciated that by far the strongest moral claim to these assets goes to those countries which suffered crippling losses in defeating the Germans, and that of those countries, the strongest claim by far should go to those countries which are now out of their own pockets paying to keep Germany's body and soul together. I also endorse what the hon. Member has said about the security aspect of this problem. I endorse his remarks about 1919; in fact, before the war the Germans' economic penetration into the economies of several countries undoubtedly helped to build up their war potential and was of service to them a,t different times and in different countries throughout the war. And simply as a matter of security and of the future prospects of world peace, this is an important matter to which we must pay very careful attention.

Perhaps I may put the matter in perspective by going back and trying to dissect briefly the history of the German external assets problem. At Potsdam the occupying authorities were made responsible for marshalling and disposing of German external assets in countries other than the United Nations countries which had fought in the war. And at Potsdam also the reparations shares of the United States, the United Kingdom and France were determined as coming from the Western zone of Germany and from appropriate external German assets in countries not including Bulgaria, Finland, Hungary, Rumania and Eastern Austria. Soviet Russia renounced her claims to German external assets, except for those countries that I have listed.

The next step after that was the Paris Reparations Agreement in 1945, signed by 18 nations, which thereby established the Inter-Allied Reparations Agency and made themselves members of the Agency by that fact. The Agreement also stated the percentages of reparations due to each individual country and appointed the Big Three—the United Kingdom, the United States, and France—to negotiate agreements on behalf of the others with the neutral countries. These agreements were planned to eliminate German ownership and German control of overseas assets and to make the proceeds available to the group members of the I.A.R.A. The three big Powers were also made responsible for negotiating for the control of gold looted from occupied territories which was found in the ownership and control of neutral countries. So much for the history of the matter to put the remainder into perspective. The hon. Member made disparaging remarks on the Agreement with Switzerland.

The fact is that we are dealing with sovereign nations in this matter, nations which have their own ideas about the legal aspects of these things, and which have their own controls over German assets, and we have to make the best bargain we can. This Agreement, which was signed in May last year, laid down the following conditions: That the Swiss Government undertakes to liquidate property of every description owned or controlled by Germans in Germany; that they will make every effort with Allied assistance to uncover the camouflaging transactions which might hide the control and ownership of German nationals; that 50 per cent. of the proceeds go to the Allies and 50 per cent. to the claims of the Swiss themselves against Germany.

They also undertake that assets of German nationals repatriated to Germany should go into the pool. They also promise that all possible steps would be taken to prevent the resale of German interests in assets that have been liquidated. Finally, and this point was perhaps omitted by the hon. Member, they would pay 250 million Swiss francs in gold as restitution for looted gold in Swiss territory. That was not covered by the sum quoted by the hon. Member for the settlement concerned. The identification of the assets is proceeding and has been speeded up a great deal since the signing of the Agreement, and machinery has been set up now to carry out the Agreement in all its detail.

We have also concluded a very similar agreement with Sweden and the particular negotiations there resulted in an Agreement that after the deduction of Swedish claims the balance should go as follows: 75 million kroner to the reserve of, A.K.A., 150 millions to a special account in the Swedish Riksbank to finance purchases in Sweden or elsewhere for essential commodities for German economy—those particular funds will go where I think there is a strong moral case that they should go, to helping to finance essential imports into Germany—and 50 million kroner will go to the rehabilitation and resettlement of non-repatriable victims of German action. Those are the main details of the Swedish Agreement, which follows in detail the Swiss Agreement, and it was negotiated on the same principles. It had certain other quite favourable and useful sides to it, but I will not go into it in detail.

The hon. Member made an estimate of Argentine-German assets and I should like to be able to give a fair estimate of what they come to throughout the world, in Sweden, Switzerland and Latin America, but it is not possible to give any useful estimate of the total involved. I understand that even in this country, after eight years of controlling German assets, we cannot estimate what our Custodian of German Property holds in German assets. Nevertheless, I would give a very tentative estimate of those held in the European neutral countries, that the estimate might come to something over £70 million. But the £100 million which the hon. Member gave for the Argentine I cannot endorse. I would not like to give an estimate myself, nor could I endorse the figures of Nazi industries in the Argentine. Again it seemed larger than our estimate would be, from the strikingly detailed number of industries given. However in the general principles of what the hon. Member said I do not want to disagree at all. But there are these difficulties—

Those facts were taken from the United States Blue Book, which was the result of a very careful investigation by the United States.

I am sorry, but perhaps we have different definitions between us. I was defining industries, and perhaps we have come to different terms. As I said,. the main difficulty here is that we are dealing with sovereign countries. These sovereign countries have their own view of the legal aspects of this question, they have their own control over their German assets, and they have their own claims against Germany both on behalf of themselves and on behalf of their nationals. When the hon. Member says, "Why did we sign the agreement?" the straight answer is that we did it because it was the best bargain we could get.

I do not disguise the fact that I feel strongly that our moral claim to these assets is very strong indeed, but we have set up the machinery, we have played a leading part in this tripartite inter-Allied negotiating body and we have pressed, and will press, very strongly for our rights in this matter. The hon. Member for Brentford and Chiswick (Mr. F. NoelBaker) asked me for an assurance about Spain. In Spain and Portugal we are at the moment negotiating these agreements. I could not give a direct answer without notice to the particular point he raised, with which obviously the House will be in warm sympathy. I will undertake to look into it and let him know, if he will allow me, a little later. On the question of Mexico, again I cannot answer without notice, but perhaps I may communicate with my hon. Friend the Member for Maldon (Mr. Driberg) and let him know the position there.

In Latin America, by agreement between ourselves and the French, the United States are taking the main part in the negotiations. The matter is under constant review there. We are in constant touch with the United States Government and we are constantly asserting our claims.

I have tried to suggest to the House that in general we are not satisfied that our full moral claims to these assets are being met, but that we are keenly and conscientiously trying the best we can to make the fairest bargain we can in this matter.

Would the Minister deal with the point raised by the hon. Member for Solihull (Mr. M. Lindsay), which has been widely circulated and commented upon, that many prominent Nazis are still living in luxury in Switzerland and other formerly neutral countries?

We are trying in every way to get the repatriation of obnoxious Nazis not only from Switzerland but other neutral countries. It was part of the agreement we made with Sweden that they should speed up the repatriation of Nazis declared obnoxious. The final right of extradition is very jealously guarded by those countries themselves. We must remember that, while our views are made plain, they will have the final word in the matter.

Question put, and agreed to.

Adjourned accordingly at Twenty-three Minutes past One o'Clock.