Note on Effect of Denazification upon Property Rights in Germany

Abstract

An important result of the denazification program as it has been conducted in the American occupation zone of Germany has been a considerable shift in the control of business enterprise. This shift was necessary if we were to eliminate Nazi control of the economy of the country. The accompanying abrogation of basic property rights was largely unforeseen and unintended, but it is laying the groundwork for serious legal problems, creating a situation where fraud and graft are certain to be widespread, and making it difficult to establish confidence in democratic legal processes in the minds of the German people. During the first few months of occupation Military Government centered its attention in the program of denazification of business primarily upon elimination of Nazi control from the banking system and the large corporations. It was realized by the end of the summer of 1945 that a complete program of denazification of business could not be carried out through direct action by the limited number of Military Government officers. As a result a law was put into effect by military authorities which placed upon the owners or managers of business enterprises the responsibility for seeing that Nazis were removed from any positions of control. The intention naturally was to shift to the German people the responsibility for removing Nazi controls in industry and to leave with Military Government personnel only the work of checking to see that the law was obeyed and of taking action where disobedience or evasion became apparent. Such a program was quite feasible in the larger business organizations where the elimination of a Nazi executive meant only that another employee moved up to take the position, although usually the top group of executives was so loaded with Nazis that a very minor employee had to be shifted suddenly into a position of responsibility. The greatest difficulty of the new program revealed itself in connection with the large number of small establishments such as bakeries, shoe-repair shops, groceries, clothing stores, etc. During a time of severe consumer-goods shortage Nazis at the head of even small businesses of this type were in positions of real importance and might well influence public opinion by judicious release of scarce items. But the fact that ownership, management, and technical skill were all combined in the person of the Nazi owner of the shop made it obvious that a policy of replacement of the owner by one of his employees was not the solution to the