A 1938 Nazi Law Forced Jews to Register Their Wealth—Making It Easier to Steal

The new law came mere weeks after the Anschluss, Nazi Germany’s annexation of Austria. On April 26, 1938, the “Decree for the Reporting of Jewish-Owned Property” issued by Hitler’s government took effect, requiring all Jews in both Germany and Austria to register any property or assets valued at more than 5,000 Reichsmarks (around $2,000 in American currency of the period, or $34,000 today). From furniture and paintings to life insurance and stocks, nothing was immune from the registry. By July 31 of that year, German finance officials had collected paperwork from some 700,000 Jewish citizens—7 billion Reichsmarks-worth of wealth ripe for state-sanctioned theft known as “aryanization.”

“Aryanization was essentially a gigantic, trans-European trafficking operation in stolen goods,” writes historian Götz Aly in Hitler’s Beneficiaries: Plunder, Racial War, and the Nazi Welfare State. As Nazi-occupied territory grew from Austria to Poland to more of Eastern Europe, so, too, did the number of Jewish families the Nazis could steal from. Jews had faced discrimination in Germany—and much of Europe—before the April 1938 edict, but that new law marked a turning point. One legal advisor for the Nazi Ministry of Economics deemed it the “forerunner to a complete and definitive removal of Jews from the German economy.”

When Adolf Hitler first came to power in 1933 thanks to the Enabling Act that gave him and his ministers all legislative control, the German economy was still reeling from the Great Depression. Hitler committed his government to two main economic policies: military armament and Autarky, or economic self-sufficiency. By promoting the use of German coal and putting taxes towards the military, Hitler steered his country towards a thriving economy. But even as the nation’s financial state recovered, he needed more money for the military, and so he created a fictional private enterprise to underwrite promissory notes, writes historian Aly. Somehow that fake money had to be made real so that various government entities, like the military, would actually have the capital to function without bringing down the economy, and that’s where Jewish wealth came to play.

Hitler espoused a virulent form of anti-Semitism that offered German citizens an enemy to rally around. He held Jews responsible for Germany’s military humiliation in World War I and also encouraged the belief that Jews grew wealthy through theft from Aryans. “The robbery part [of Hitler’s decree] is embedded in this ideology that these people are parasites who attach themselves to us, and they live by sucking our blood, and we are entitled to punish them and take it all back,” says Peter Hayes, professor emeritus of history and German at Northwestern University and the author of How Was It Possible? A Holocaust Reader.

What’s more, Nazi ideology held that Jews were particularly wealthy citizens of Germany, despite the reality that the majority of Jewish families fell somewhere in the middle class, Hayes says. Not only would the 1938 edict return wealth to non-Jewish citizens, whom Nazis considered to be the rightful owners, it would also encourage more Jews to leave the country, another of Hitler’s goals at that point. (The decision to pursue the wholesale extermination of Jews, known as the “Final Solution,” wouldn’t come for several more years, in late 1941.)

Following the April 1938 property registry, Jewish citizens faced an increasing number of economic laws that chipped away at their livelihood. They lost allowances and exemptions for having children, and were forced into the highest tax bracket regardless of their income, writes historian Martin Thurau. From there, many Jewish-owned firms were falsely charged with tax evasion going back to the 1920s, on which they were forced to pay arrears.

For those Jews with the means to leave the country, legally emigrating meant relinquishing 50 percent of one’s monetary assets, and then exchanging the rest of the remaining Reichsmarks for the currency of whatever country would be the final destination. “By late 1938, they were allowing Jews to keep only 8 percent of what their Reichsmarks were worth in the foreign country,” Hayes says—which only made it harder to find a safe haven, since the Jewish refugees couldn’t take any of their savings with them.

And to make matters more dire, where would they even emigrate to?

“The way I formulate this is, American immigration policy toward Jews was awful, except in comparison to every other nation on the globe,” Hayes says. While the U.S. placed ever stricter laws on immigration, limiting the number of Jews who could enter the country, Canada only took around 5,000 Jewish immigrants in total, and Britain only temporarily allowed greater numbers following the November 1938 Kristallnacht pogroms before returning to a postwar policy that excluded Jews.

Whether Jewish citizens stayed in Germany and Austria or left, they were doomed to lose much, if not all, their property. Just under half of those assets went directly to the German state. According to Hayes, in the national budget for 1938-1939, an entire 5 percent came solely from wealth confiscated from Jews. The rest of the assets went to non-Jewish citizens, in the form of houses, businesses and goods sold for vastly less than their value.

This left Jewish citizens without means of supporting themselves, without homes, and without any connection to their previous lives. As historian Lisa Silverman writes of the edict’s effect in Austria, “The failure of law to protect their property was one of the first steps toward the erasure of both the present and future identities of Austrian Jews.”

And ordinary citizens were more than willing to participate in the looting of Jewish property. “When the Nazis wipe out the Jewish inhabitants of a village in eastern Poland [later in the war], one of the first things they would do is distribute all the property to the locals,” Hayes says. “This was a way of winning popular support. It created a complicity between the occupiers and the occupied, and a common interest, and the Nazis exploited that.”

Business owners benefitted as much as private individuals. Companies like Neckermann, which sold mail-order goods and vacation packages, and Evonik, a manufacturing group formerly known as Degussa, bought businesses formerly owned by Jewish people. The ability to consolidate power made them leaders of their industries, and implicit partners with the Nazi government. Each of these transactions were legal, and many were meticulously recorded.

By the end of the war, around 6 million Jews had been murdered in the Holocaust. For the survivors, the challenges posed by returning to their homes varied from country to country. While France and Germany relied on their records to return property and make some form of reparations for businesses lost and assets seized over the course of decades, other countries proved more reluctant to offer restitution. In Austria, for example, “the government felt no obligation to compensate claimants” because the country considered itself a victim of Nazi Germany, writes Silverman. The Dutch government didn’t begin offering compensation for stocks stolen from Jewish citizens in World War II until 2000, after years of calls for investigations into the matter. The record is even worse for Eastern European countries like Poland, Romania and Hungary.

For Hayes, the lesson to be learned from the April 1938 law and all that followed is how deeply the anti-Semitic Nazi ideology penetrated different levels of society in countries across Europe. “It’s troubling to watch how they slowly tightened the screws on people, and the ways in which a state can make one’s life miserable and make you feel like you are up against this giant machine.”

But even more appalling, he says, is they way in which property was valued more highly than lives. “It is remarkable that the killing of people was the easy part of what the Nazis did,” Hayes says. “They could do it fast, they could do it cheap, but then they spent ages on the property, keeping records of it, processing it. It’s remarkable that people are easier to liquidate than property.”

Lorraine Boissoneault | | READ MORE

Lorraine Boissoneault is a contributing writer to SmithsonianMag.com covering history and archaeology. She has previously written for The Atlantic, Salon, Nautilus and others. She is also the author of The Last Voyageurs: Retracing La Salle's Journey Across America. Website: http://www.lboissoneault.com/