It also carries a note in its provenance listing that until recently, the painting had hung in the Brücke Museum in Berlin, since its purchase in 1980 for about $1.2 million.

Earlier this year, the picture was returned by the Berlin state senate to the heirs of its original owners, Alfred and Tekla Hess. The restitution was made on the grounds that the sale of the painting in the 1930s was prompted by their persecution as Jews by the Nazi regime.

Though restitutions are now common -- the New York fall auctions include several other multimillion-dollar paintings that have been restored to their original owners and subsequently put up for sale -- the case of Kirchner’s Berlin Street Scene has touched off an uproar in Germany.

Critics of the restitution, who include politicians as well as art professionals, have claimed that the painting did not in fact qualify as Nazi loot. They complain that the case was neither investigated in sufficient detail, nor given a proper public airing.

As it turns out, Berlin state culture secretary Thomas Fierl had received a letter from a German law firm in September 2004, requesting the restitution of Berlin Street Scene to Anita Halpin, a heir of the Hess family living in London. After two years of negotiation with the Hess heirs -- talks which were kept completely screened off from public attention -- the government announced it had transferred the painting to her and, in return, received a sum equal to the payment made for the work’s purchase in 1980 (€950,000). The transfer was announced in a press release dated July 27, 2006.

Since then, Flierl has been harshly criticized for his role in the case. Christoph Stölzl, member of the Christian Democrat opposition and former state culture secretary, has accused the Berlin government of negligence, saying that it surrendered museum property -- and part of Germany’s cultural heritage -- that was lawfully purchased in 1980, a move taken without researching the factual basis of the restitution claim.

Kirchner’s Berlin Street Scene, the critics say, was neither looted by the Nazis nor sold under duress at any time. Rather, the Hess family sold the painting because the family business was suffering financial difficulties in the worldwide economic depression in the 1930s. The sale, in that case, was made for purely economic reasons unrelated to their persecution as Jews.

Government officials, on the other hand, say the restitution was an act of historical justice, and one completely in keeping with prevailing practice regarding art lost by Jewish owners to confiscation, theft or forced sale during the Nazi period. Both under the Washington Principles -- guidelines adopted by 44 participating governments at the 1998 Washington Conference on Holocaust-Era Assets -- and under German restitution law, the Berlin state government was obliged to return the painting, whether it was acquired in good faith by the Brücke Museum or not. Perhaps more importantly, state officials say, the restitution resulted from a strong sense of moral obligation.

The painting’s contested history
Alfred Hess (1979-1931), a German shoe manufacturer and well-known collector of art by Expressionist painters like Kirchner, Erich Heckel, Max Pechstein and Karl Schmidt-Rottluff, was the original owner of Kirchner’s Berlin Street Scene. He died in 1931. His family, when fleeing from the Nazis in 1933, brought parts of the collection to Switzerland, where it was exhibited in major art museums in Zurich and Basel.

In 1936, seven paintings were sent back to Cologne for sale. Kirchner’s Berlin Street Scene was bought for 3,000 Reichmarks by the Frankfurt collector Carl Hagemann in 1936 or 1937. His widow later gave the painting as a present to Ernst Holzinger, former director of the Staedel museum in Frankfurt. Eventually, in 1980, the Brücke Museum Berlin acquired the painting for $1.2 million.

The core issue of the Kirchner case seems straightforward. Did the Hess family freely sell Berlin Street Scene to Claus Hagemann in the 1930s, or was the sale coerced? In the case of Berlin Street Scene, the evidence remains inconclusive.

For while it is clear that Hagemann, a respected collector of German Expressionist art in the ‘20s and ‘30s, had agreed to buy the painting for 3,000 Reichmarks -- a reasonable and even good price at the time -- it is not firmly established that the Hess family actually received the payment. And no receipt has been found.

Critics of the restitution, however, claim that evidence for the payment does exist in various letters. According to Wolfgang Henze of the Kirchner Archive in Switzerland, Kirchner himself wrote a letter expressing his satisfaction with Hagemann’s purchase of Berlin Street Scene. A second letter, this one written by the collector Arnold Budczies to Hagemann, says, "Congratulations on your new painting. I am sure you will enjoy this purchase, even though the price was very high."

For her part, Halpin released a statement through her New York attorney, David J. Roland, citing an affidavit of Apr. 1, 1958, in which Tekla Hess stated that she was coerced by two Gestapo agents in 1936 to have paintings from her family collection returned to Germany from Switzerland. The statement also cites a 1961 interview of Hans Hess, the couple’s son, at the German Embassy in London. The son reportedly affirmed the Gestapo’s threat to his mother and said she had no choice but to sell the works, often at prices below their market value, in order to have funds to live.

Was Kirchner’s Berlin Street Scene one of the paintings whose sale was coerced by the Gestapo? The evidence does not, in fact, prove that it was. What’s more, board members of the Brücke Museum point to various documents, including a letter written in 1953 by Tekla Hess to gallery owner Ferdinand Möller, which indicate that most of the works that had been sent back to Cologne from Switzerland were stored in the Cologne Art Association’s basement. If this is the case, the Brücke Museum board argues, coercion in the sale of these works seems unlikely. Had the Gestapo been interested in them, the board claimed at a press conference held at the museum last month, the works would have been confiscated as "degenerate" art instead of remaining in safe storage during the war.

The Tekla family has long been working to recover its art collection, which included 40 paintings and many more works on paper. A few years ago, the family claimed another Kirchner painting that had once been part of its collection, Potsdamer Platz, from the Neue Nationalgalerie in Berlin. However, a photograph was found showing the painting in the private home of an art collector in 1931, which was taken as proof that the work had actually been sold properly between private individuals without any undue Nazi influence. Therefore, the painting Potsdamer Platz was determined to be not subject to restitution.

Still another claim by the Teklas, concerning a work by August Macke, was rejected by the Swiss museum Kunsthaus Aargau in April 2006, after the museum determined that all the sales transactions regarding the work had been lawful and proper.

Restitution re-examined
The debate over the restitution of the Kirchner painting has continued up to this day. The unusual degree of passion is certainly due to the painting itself. Berlin Street Scene is strongly connected to Berlin by its subject matter, which vividly captures the German capital city’s atmosphere in 1913. The painting is considered one of Kirchner’s most important works, and was a cornerstone of the Brücke Museum’s Expressionist collection.

Though none of the parties to the dispute advocates any changes in Germany’s restitution laws, Christie’s speedy acquisition of Berlin Street Scene for auction has given rise to further suspicions -- especially after it was revealed that it was the auction house that had paid the €950,000 fee, acting as agent for Halpin.

The recent wave of restitution claims -- issues of merit aside -- are clearly fueled by the booming art market and its hunger for fresh masterpieces, according to arguments made by Ludwig von Pufendorf, chairman of the Brücke Museum board, and Martin Roth, general director of the Dresden State Art Collections, both of whom anticipate losing still more works in the future.

Roth has said that he suspected that secondary players like lawyers and art dealers are the driving force behind many new restitution claims, since as specialists they understand both the law and the art market and the windfall profits that can result in such cases.

Others have cautioned against such speculations, however. Hanno Rauterberg wrote in the weekly newspaper Die Zeit that the assumption that moral issues are being instrumentalized for commercial gain only cater to anti-Semitic clichés. And Roth, too, despite his criticism of recent restitutions, admitted that the question remains sensitive. After all, he said, German museums have had plenty of time to initiate their own solutions to this problem by identifying works in their collections with ambiguous histories, tracking down their original owners and negotiating restitutions more to their liking. For artworks of a special significance, Roth said, German museums should establish a special fund to regularly acquire such restitution works.

Adding to the irony of the case is the revelation that Anita Halpin is head of the Communist Party of Britain, and is on record as being opposed to both the state of Israel and inheritance. One argument in Germany even suggested that Fierl, a member of the East German communist party, may have been motivated to approve the restitution in order to "rob" a "capitalist" museum to help fund the movement!

The situation today
In late October, discussion began in the German parliament about the possibility of changes in the restitution process. One proposal would require a ten-year holding period before restituted works could be sold at auction. Another measure would establish a list of artworks of national importance that could not be sold outside the country.

As for the auction itself, time will tell soon enough. The Hess heirs have declared that nothing would make the family happier than to see Kirchner’s Berlin Street Scene return to the Brücke Museum in Berlin. Yet that result seems unlikely. Since museums in Germany are state institutions run by public funds, their budgets hardly allow the purchase of artworks at the top of this kind of market. Of course, it is always possible that a private collector, or group of collectors, could step in to save the day on Nov. 8, 2006. 

The debate over Berlin Street Scene shows a growing public uncertainty of the role that the profit motive should play in the moral universe of art restitutions. The Kirchner case suggests, however, that legal and moral aspects of restitution matters are inseparably intertwined, and that purely legal arguments are not always satisfactory. Eventually, regardless of where one stands in this specific case, the restitution must confirm to the goals laid down in the Washington Principles -- to achieve a fair and just solution.

ANNA BLUME HUTTENLAUCH is a lawyer.