The basic authority for taking custody of property in Germany was contained in Joint Chief of Staff (JCS) Directive 1067/6, which directed the U.S. Zone Commander to “impound or block” certain specified categories of property, including those of the German Reich; the Nazi Party and affiliated organizations and their prominent members; and absentee owners of non-German nationality, including United Nations and neutral governments and individuals. The American Zone Commander was also required to impound all property that was transferred under duress or through wrongful acts of confiscation, disposition, or spoliation, and to block the relocation of works of art and cultural material of value or importance, regardless of its ownership. When the U.S. Army entered Germany in September 1944, provisions were made for the seizure of all categories of property, including that of the Nazi Party organization.
From November 25, 1944, through October 14, 1945, the Monuments, Fine Arts and Archives (MFAA) function was placed in the MFAA Branch of the Reparation, Deliveries and Restitution Division of the U.S. Group Control Council, Germany (USGCC). The seized property was turned over to the custody of the Office of Military Government, U.S. Zone (Germany) [OMGUS] when it became the successor to the USGCC on October 1, 1945. OMGUS was responsible for administering the U.S. zone of occupation and U.S. sector of Berlin, and for functioning as U.S. element of organizations comprising the Allied Control Authority, the name given to the four-power occupation control system.
On October 15, 1945, the MFAA function was transferred to the MFAA Section of the Restitution Branch, Economic Division (OMGUS). The MFAA Section was responsible for advising the Division Director on policies and procedures regarding restitution of identifiable looted works of art and cultural material to governments of the countries from which they were taken, and for disposing the remainder of unclaimed and unidentifiable material in collecting points and archival depots. The Section was also responsible for developing procedures for the Land Offices of Military Government (OMG) and OMGUS with respect to cooperation with representatives of formerly occupied countries in efforts to recover missing looted works of art and cultural material for which their countries had submitted claims; cooperation with other agencies in the recovery or identification of works of art wrongfully acquired by U.S. personnel; controlling collecting points and archival depots until they were transferred to German control or the contents were otherwise disposed of; and upon the request of German authorities, rendering assistance to German officials in connection with screening of inventories pertaining to the licensing of German art dealers and the preservation of structures of architectural or historical interest.
Seized works of art eventually came under the control of the Property Division. The Division, established in March 1948, was created as a result of reorganizing OMGUS functions relating to finance, the economy, transport, communications, restitution, reparations, decartelization, and property control into one unit. The primary responsibility of the Property Division was to formulate and implement policies required in the fields of property control, German external assets, internal and external restitution, and reparations. On March 1, 1948, the MFAA Section, along with the Restitution Branch became part of the Property Division, and in June 1948, when the Reparations and Restitution Branches merged, the MFAA Section became one of its sections.
The Reparations and Restitution Branch was responsible for advising the Division Director on all matters concerning reparations and restitution policies and procedures. The MFAA Section, due to the specialized nature of the work involved, had the peculiar status of being an almost autonomous body. Its responsibilities included locating and returning various cultural objects and property to the countries from which they were looted. It was also responsible for drafting and issuing appropriate directives and regulations. By October 31, 1948, all the restitution activities of the MFAA Section, with the exception of unusual individual cases, had been completed. On November 8, 1948, the non-restitution aspects of the MFAA Section were transferred to the Education and Cultural Relations Division.
The transition from military to civilian occupation administration was initiated by the Presidential appointment of the U.S. High Commissioner for Germany (HICOG), who assumed his duties on September 2, 1949. OMGUS organizations were progressively abolished and all functions transferred to HICOG organizations between June and September 1949. Upon the termination of the Property Division on July 1, 1949, the property control functions with respect to the liquidation of claims devolved on the Central German Property Control Agency in Munich. Its directorate was composed of the four Land Civilian Agency Heads in the U.S. zone. The Reparations and Restitution Branch also was dissolved on July 1, 1949. The transition was completed by September 21, 1949, the same day of the establishment of the Federal Republic of Germany. OMGUS was formally abolished on December 5, 1949. Most of the OMGUS records, including the records of the Property Division, were retired to an Army record center in Kansas City until they were accessioned into the National Archives in the early 1960s.
This part of the description is taken directly from the Background section of the M1949 descriptive pamphlet.