Holocaust Property Restitution

 

Reality Check

 

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The Story:

 

â Crux of the matter: Read 1. and skip to  12. – 18.

â To get full perspective: Read from 1. on

 

 

1.  Our concern here is the suit of the heirs of S against Germany asking for the restitution of two adjacent apartment house lots (the buildings were destroyed in the war and a Berlin Office of Criminal Investigations building stands there now) located in Berlin (at the time of the proceedings in the American Sector). The properties were disposed of in 1936 at forced auctions (court supervised foreclosure). The relevant circumstances pertaining to both properties were identical in substance. The ORG declined to order restitution. This court being the highest instance, its opinion is the definitive last word on this matter: by definition there is no better justification for its decision than the one it offered. The short of it Skip to 12.

 

2.  As set forth in the court’s opinion its decision hinged in effect on the question: was the persecution of S, which wasn’t in doubt, the cause for the forced auctions? If the answer is no, no restitution.

 

3.  For starters, the court in business matters an ignoramus, indulges in second-guessing a gifted businessman: reasoning nonsensically that the real estate properties “were useless” to S as of 1929 because they were highly mortgaged.  Considering that S financed in 1927 the purchase of the properties with even higher debt, as the court itself computes elsewhere in its decision, its failure to recognize that S was by no means of the opinion that high debt made the properties “useless” is more than a bit disgusting. (high-debt-leveraged acquisition of real estate aims at the extraordinary lucrative benefits of long term price appreciation – ask Donald Trump!)

 

4.  The court believes that its opinion, that S had no reason to want to keep the properties, gains further credence by the fact that in 1929 S signed contracts giving a prospective buyer the option to buy the properties within a year. The court is however oblivious to the fact that said contracts were signed a few months before the catastrophic stock market crash of 1929 at a time that the great depression of the early 1930s was already rearing its ugly head at the economy’s horizon for the astute to see. In other words, considering a precautionary sale of real estate (to be replaced later at a lower price) at that time was, if anything, a stroke of genius. In the event, the buyer couldn’t complete the purchase and the options expired. But, S got to keep the substantial down payments, as perusing the contracts on file with the land registry reveals; for S a very lucrative and probably not an entirely unexpected alternative to a sale.

 

5.  But wait! The mortgages! Could S afford them? After Hitler’s “Power Grab” S stopped quarterly amortization payments on certain mortgages (but continued all interest payments so that no increase in debt occurred) as the court puts it “suddenly” in the summer of 1933. To which the court added in its opinion the factual observation: that up to this time S did make all payments “without reproach” (i.e. also during the bottom years of the worst depression in living memory, a performance only relatively few could match) and besides, so says the court, he could have continued to do so had he so wished.

 

6.  So, what the court is telling us is that S stopped the amortization payments even though he could have continued payment, because, as it ignorantly presumes, the properties were of no use to him as an investment per se (having evidently never heard that city real estate values and income tend to appreciate over time). And since stopping the amortization payments for that alleged reason eventually led to the forced auctions in 1936 the court reasons that the forced auctions weren’t the result of Nazi persecution but purely a business decision.

 

7.  In Germany the depression bottomed in 1932, even as real estate values remained depressed for several more years; now was the right time to buy real estate, just as 1929 was the right time to sell. Thus, in the case of S, the court’s conjecture that he still wanted from purely a businessman’s point of view to sell in 1932 and the years thereafter the properties he didn’t sell in 1929, is inadmissible; even more so since his liquidity was handsomely boosted by cashing in so nicely on the option contracts as described and thus managing in effect to eat his cake and still have it.

 

8.  S was Jewish. Thus, one would rather have expected the court to assume that the advent of the Third Reich in 1933 was neither good for his safety nor his psychological or occupational well being. Considering the circumstances up to then as described, one would rather think it was Hitler’s “Power Grab” and what it wrought that was the more than likely reason S stopped “suddenly” in the summer of that year the amortization payments: hence, the forced auctions being the result of Nazi racial policies. Since the court gives us the opinion that the properties were of  no use to S since 1929 one would have expected it to say that in 1933 S stopped  “at long last” those payments, instead of saying “suddenly”—which after all means unexpectedly i.e. without a previously discernable reason—and thus contradicting itself. A Freudian slip if there ever was one: exposing the court’s dishonesty.

 

9.  Clearly, the reporting Judge penning the court’s opinion refused to accept the inescapably obvious. To wit: In 1932 S took out on each of his properties a so called house-rent-tax relief-mortgage. This additional debt, the opinion states, meant “a further deterioration” of the respective properties’ finances, thus creating the impression that this was the last straw that broke the camel’s back. Or differently stated, for those judges on the court who initially had doubts about the proposed rather stretched causality chain 1929 -1936, or indeed the validity of the proposition that the alleged motives for wanting to sell in 1929 need still apply in 1933 and beyond, this alleged  deterioration” of 1932 was the gap-bridging link: establishing seemingly accumulating debt as a new “purely economic motivation” for wanting to sell. Thus leading to acceptance of the premise that one way or another the properties “were of no use” to S.

 

10. The catch is that the reporting judge availed himself of a brazenly blatant lie standing the facts on their head. The possibility of error is out of the question.

 

11. So, what is the story behind those house-rent-tax relief-mortgages?  In 1932 the German Reich treasury was direly strapped for cash. In order to raise cash in a hurry a law was passed on the Finance Ministry’s behest. The purpose of the law was to create for property owners a tax revenues bolstering incentive. Specifically the law covered apartment houses. At that time, by the provisions of the so-called, house-rent-tax law (a piece of emergency fiscal legislation of the 1920s) than in place and envisaged to remain in force until 1940, a substantial amount of a property’s yearly rents income was taxed away. The house-rent-tax relief law passed in 1932 created the said tax-relief mortgages. Accordingly, the owner of an apartment house could go to his bank (only premium rated customers needed to apply, as in those troubled days the banks were rather selective with credits) and take out on his property a house-rent-tax relief-mortgage equalling 3-years worth of the assessed house-rent-tax. The money would go from the bank straight to the Treasury as a tax prepayment by which the property was relieved of 8-years worth of the house-rents-tax thus effecting a better than 60% saving of a onerous tax. From documents filed with the land registry, at whose files the courts took a good look, one could easily calculate that in the case of S the savings achieved were some 50.000 Reichmarks for each of his properties; substantial amounts in those days; by taking on 30,000.-RM in mortgage debt S got rid of 80,000.-RM in tax debt on each of his properties. Even most school children wouldn’t have trouble figuring out, what the court pretended not to be able to, that such a transaction was no “deterioration” but a vastly advantageous one.

 

12. Towards the end of 1934, after getting into serious trouble with the Nazis, S had to flee Germany with his family in fear of his life. Thus, having no choice, S transferred the management of the properties, which he until then managed personally, to the DKH, a commercial credit company. After the war the DKH was party to the restitution proceedings as opponent of the restitution (in case of restitution it could be made liable for income from the properties it kept for itself) nevertheless it didn’t occur to it to deny the undeniable. So, in it’s filing at the Kammergericht (German court below) it described the 1932 mortgaging of the properties with house-rent-tax relief-mortgages as effecting a substantial improvement in the properties finances, and supplied the arithmetic: showing that after interest and amortization payments on the mortgages additional income of some 5000.-RM yearly for each of the properties was achieved, due to taxes saved. Tidy sums of money at the time (almost 20% of the yearly rents income). The Kammergericht repeated this arithmetic as supplied by the DKH in its summation of the facts of the case but ignoring them in the outlandish opinion it offered to justify its restitution rejecting decision. In the ORG instance the DKH repeated in its filing the above tax relief arithmetic.

 

13. Let’s assume that the reporting judge didn’t bother to take a look at the concisely and simply worded text of the house-rent-tax-relief Law (easily available to anybody to this day) or at the corresponding documents on file with the land registry. But, he couldn’t have failed to read, the lower court’s contested decision which was the subject of his deliberations, or filings pertaining to same filed with him directly. So there is no way that the reporting judge didn’t know full well that he was lying: as he wrote into the ORG opinion that taking up the house-rent-tax relief-mortgage led to a “deterioration” of the properties’ financial situation; to boot, referring to the mortgages throughout deceptively as “Abgeltugshypotheken” instead of using the right term “Ablösungshypotheken” as the lower courts did.

 

14. The court’s opinion is replete with untenable assumptions, bizarre reasoning and falsehoods which we may want, for the sake of argument, ascribe to error or even deem acceptable. But these don’t really matter. What matters is that crude absolutely incontrovertible lie. Why the lie? The reporting judge realized, that even if one was initially disposed to accept the at best shaky proposition that the properties were “of no use” to S,  the majority of the judges on the court wouldn’t accept a denial of restitution if they realized that through the house-rent-tax relief-mortgages a vast improvement in the income situation of the properties took place: as of 1932, at the latest, there wouldn’t have been a basis anymore for them to say that the properties were “of no use” to S.  Thus the lie was essential to the decision. Even more, the reporting judge knew that his colleagues wouldn’t approve a rejection of restitution if he just would have ignored the tax-relief-mortgages as the lower court did. Unmistakably, a 1932 “deterioration” of finances needed to be fabricated to overcome the other judges’ reservations.

 

15. The bottom line: The ORG decisions in question are the product of judicial fraud. Which is as much as saying that neither the Law nor the objective facts of the case were such as to support a decision denying restitution.

 

16. Facilitated by this perversion of justice Germany—the state that robbed and murdered— inherited the victims of its crimes.

 

17. As the legal aspects of the case were thus sufficiently clarified, it was and is Germany’s moral as well as legal obligation to turn over the properties to their rightful owners as envisaged by law; laws are there to be obeyed, judicial enforcement not being a precondition for their validity.

 

1. Kings 21.:

Thus saith the LORD, Hast thou killed, and also taken possession?  Thus saith the LORD, In the place where dogs licked the blood of Naboth shall dogs lick thy blood.

 

18. S’s remaining heir is still waiting for Germany, which lays claim to being a “different” Germany, to see the light.