A reproduction of a work by German painter Franz Marc titled "Landscape with Horses" is seen during a press conference on the discovery of more than 1,400 paintings in Munich. (Christof Stache/AFP PHOTO)

In 2011, German investigators found more than 1,400 pieces of art, some by famous painters such as Henri Matisse and Pablo Picasso, in the Munich home of Cornelius Gurlitt, a discovery that was made public only this week with a German news report. Gurlitt's father had been an art collector during World War II, when much of Europe's art was confiscated by the Nazis or otherwise went missing. The Munich trove is historic in its own right but is also part of the continent's seven-decade rediscovery of an artistic heritage that is still recovering from the Nazis' efforts to wipe it out.

To understand the complex, fascinating and often dark history of how so much great art disappeared under Nazi rule, and what it means that this art is now coming back, I talked by phone with Anne-Marie O'Connor. A Jerusalem-based journalist, O'Connor is the author of the nonfiction Nazi art-theft saga "The Lady in Gold: The Extraordinary Tale of Gustav Klimt's Masterpiece, Portrait of Adele Bloch-Bauer." Our interview has been edited lightly for clarity.

How common is this sort of thing?

This is absolutely unprecedented, this discovery. There is more stolen art that is out there somewhere. Twenty percent of the great art of Europe was stolen by the Nazis in World War II, so there are tens of thousands of pieces that are still outstanding. And there are art registries that list some of it. Stolen art is known to be out there in private hands, but this kind of cache of nearly 1,500 works is really just unprecedented. It's a huge collection -- it has Picasso, Renoir, Max Beckmann. Some of the paintings have warrants, apparently -- outstanding requests to find them.

Wow, 20 percent of Europe's great art was stolen?

Those are the estimates from the National Archives' Greg Bradsher, who for a long time was their Holocaust expert. How did they estimate that? Probably partly from the art that has been recovered. A lot of this was fairly well documented by the Germans. So a huge amount was stolen, and not all of it has been recovered. Of the art that has resurfaced, some of it has been in national museums and public places. And people began to get some of these collections back. Around 2006, the Dutch authorities returned an enormous collection of pieces. So the restitutions were somewhat belated in many cases, which is why we've heard so much news about them in the last couple of decades. To find this collection, concealed, so many years after is really unusual.

Take me back to World War II. How did all of this art end up getting stolen?

Okay, so, Adolf Hitler was a failed art student in Vienna. He wasn't a talented artist, and he was rejected by the arts academies, but he considered himself an arbitrator of art. So after he came to power, he began to exercise influence in the [then-raging] culture war. In 1937, Nazi Germany under his leadership put together an enormous show called the "Show of Degenerate Art" [in the original German, "Entartete Kunst"]. Hitler and the Nazi leadership pulled off of museum walls thousands of pieces of art that were considered "degenerate," and exhibited them in Berlin. Some of the pieces that were just recovered were in that show. It was basically all modernist. Hitler and the Nazis didn't like Picasso, didn't like Matisse. They liked very conventional art. So this "degenerate art show" helped to identify which artists were considered verboten by the Nazi leadership.

So they stole all this art just to put it in a single art show?

They went from museum to museum, and they took these paintings off the walls. They seized thousands of paintings that they'd deemed degenerate.

Why would people go to a show of art they weren't supposed to look at?

Right. [Laughs] That's exactly what happened. They had very racist slogans in the show about "Jewish art" and "negroid culture" and so on. This is a very famous show, the 1937 degenerate art show. As a result, in any country under Nazi control, all of this art was [deemed] "degenerate." When the Nazis went into Austria, they had already determined the most important Austrian artist living at that time, Oskar Kokoschka, to be a degenerate. In the end, maybe 400 of his works were seized. And there were Kokoschka works that were in this collection that was just discovered.

Throughout Europe, "degenerate" artists were considered valueless. And the Nazis sold the works off, in some cases to dealers -- that's how some of these paintings ended up in this collection. People bought these pieces for nothing. Really important artworks they could buy for very little. Even important Nazi leaders like Baldur von Schirach, the head of the Nazi Youth who became the Nazi governor of Vienna, bought degenerate art on the sly because he had modernist tastes and he liked it. So it wasn't just dealers who bought it, but [also] Nazis who discreetly built collections.

So that would be how several hundreds of these paintings got into this trove of close to 1,500. The rest of the paintings apparently were sold under duress by fleeing Jewish families who had big art collections and didn't have very much time to sell them. Under many art-restitution laws, like the laws in Austria, selling under duress for lower prices no longer gives the buyer the right to legal ownership.

So it sounds like what happened is that, in just a few years of Nazi rule, a huge proportion of the modernist art in Europe changed hands very rapidly, sometimes under duress and sometimes with prices artificially lowered by Nazi politics, and not always paperwork to track it.

It's true. The dealers who bought this art from Hildebrandt Gurlitt, the art collector who had the recently seized collection and who was investigated for tax fraud, defended themselves by saying, "Look, it's really common, lots of art changed hands during World War Two, these kinds of works are in the art market." That's true. But, for them to buy to buy this knowing there were provenance gaps --

What's a provenance gap?

A provenance gap is where you don't know where a painting had been in, let's say, between 1933 and about 1948. In the old days, people would buy those paintings and often got a deal, and they were sold privately. Nowadays, you're supposed to be diligent about finding out where those paintings were.

Is that because the implication is that if you don't know, it probably changed hands under nefarious circumstances?

It probably changed hands under the Nazis, yes. Or it was even just stolen.

Has there been a taboo developing, since World War II, against buying art that changed hands under the Nazis, which means the original owner probably had it taken or was forced to sell it below value? Or is that taboo much newer?

Oh, it's much newer, since the 1990s. We're kind of in an age of restitution right now because the restitution laws for art, in Europe, are being strengthened. Austria changed its [law] in 1998 and strengthened it in 2009, and there's since been a wave of claims. So you have a situation in Europe where the laws are strengthening and where people are less tolerant of stolen art being hung on museum walls, and they're less tolerant of explanations like "I bought in good faith" or "I didn't know."

At this point, there are art registries that you can pay to check the history of a painting. And some people and museums are using that to trace the backgrounds of their paintings so they won't get caught in an embarrassing scandal.

So let's say you're an art dealer and you have a painting that you know has some connection to the Nazis, either because they stole it outright from the original owner or because the Holocaust forced original Jewish owners to sell it way below value. What do you do?

I was in a museum not too long ago that was checking its inventory, and they had looked through their paintings and realized that a very valuable painting had been stolen by the Nazis. So they went to the heirs and offered them money, though at a lower price than it would've gotten it at auction. The museum would've had to have given the painting to the heirs if they'd wanted it, but the heirs were happy with the offer and were content to leave it in a public place. I'm sure it was millions. Maybe if it'd gone to Christie's it would've have gotten more, but once a painting is sold at auction it disappears from public view.

This kind of thing is happening more. Museums are becoming proactive about going to heirs to make settlements, to avoid negative publicity and to keep the painting. Because they know that ultimately, if there's a contentious dispute, they might have to hand it over and it would be sold at auction and vanish.

Think about the paintings by Gustav Klimt, demand for which rose in the 1990s. Austrian museums have had to return a dozen paintings by Klimt. The least valuable one was worth $40 million at auction. That's the collection they were most proud of. And these were very contentious cases because they had ignored the plaintiffs. It was very difficult for people to get their paintings back at this point, so the museums ignored them, didn't return their phone calls, didn't return their letters. So the heirs became increasingly angry.

But now that there's more awareness in the art world, it's easier to have negotiations and civil discussion from the start, rather than have it go on for 10 years and everyone is furious.

Let's talk about these private collections that pop up decades later, after getting seized by Nazis or changing hands under Nazi rule. How common is that, to unearth these big troves?

One this big isn't very common at all. People thought this collection had been destroyed; Gurlitt senior had told people it'd been destroyed in the fire bombing of Dresden [in 1945]. What's more common is small, private collections. There was a very valuable collection that was found in the apartment of the widow of a Nazi propagandist, who had collected modernist paintings with the help of von Schirach. It was a collection of five Klimt paintings. One of them, which had belonged to a cousin of Joseph Pulitzer, was sold to the sister of the Qatari emir for $120 million. Now, this has not become public, it just happened a few weeks ago. The holders of the collection established a foundation and said that there's only one painting in dispute now, which they're negotiating about with the owner. And everyone was wondering what would happen when this collection became public because of the disputed paintings in it.

What's the process been like of tracking down this art?

Well, you know, the Germans kept very good records. After the war, some of these records were locked away and were unavailable. But ultimately many of them have surfaced, in places like the National Archives or in state archives in Austria or other places. They're voluminous, just millions of pages. The information is now available so there's a cadre of attorneys and art history experts that make it their business to track down all these paintings. They're hired by auction houses to make sure they're not selling stolen art but they're also hired by rightful heirs to press their claims. So there's actually a big professional group of people around this, around finding and appraising stolen art.

Does this ever become political in Europe? Politics in Germany, as well as Switzerland and Austria, can certainly get touchy sometimes when it comes to confronting their Nazi-era histories. Does it get sucked up into larger political issues?

In Austria, certainly, it can play into right-wing politics. The Freedom Party established a political coalition when a lot of restitution was happening and resisted more restitution, saying enough had already been done.

What does it mean for our understanding of modernist art when these new troves get discovered, or when someone finds a new Gustav Klimt in someone's attic? Does that change how we think about the artist and their work or is it just "here's a new painting"?

It really depends on the painting. For Klimt it was very specific, his portraits were of intellectual Jewish women from the families that collected his art, a lot of whom were Jewish. Very little was known about Klimt before the art restitution began. But this big discovery of Klimt works was more than just a restitution of art, it was a restitution of history. It revealed a lot about Klimt and a lot about the turn-of-the-century Viennese cultural world that had been unknown.

This history mostly didn't come to light until the art restitution. The families had been driven into exile, the paintings had been stolen but were still in Austrian museums. And the Austrians didn't really wish to call attention to this history because it was a difficult subject for them since they had driven these people off and stolen their art.

Is there any chance that, in these 1,400-plus paintings that were just seized, there's something that could change how art historians think about modernist art? It seems like such a huge chunk of modernist art, it seems like it would have to.

I actually think that the biggest impact is going to be on the art market, not on art history. What happens with Nazi loot is that most paintings of this stature are usually consider patrimony by countries that have them -- they're locked up in museums like the Mona Lisa in the Louvre, they don't take it into the art market because they're considered too important to the cultural heritage of the countries that produced them.

But when you have a discovery like this, suddenly masterpieces can become free agents in the art world. This very valuable art, valuable culturally as well as financially, may now become available on the global market. That will have a huge impact.

How long will we be feeling the impact, in the art world, of a discovery of this magnitude?

It depends on how long it takes them to go through these and determine the heirs. In many cases of Nazi-looted art nowadays, the paintings are sold because there are just too many heirs and they don't have a unanimous opinion on what to do with them. If you look at the Klimt collection that went on sale at Christie's in 2006, it was four paintings, but it was four very important paintings. It set the record auction at that time. I think that will happen fairly soon since there's pressure now that the find has been publicly revealed. It will have a huge impact on the art market and on valuations. We're going to see a new wave of art-buying.

So it could actually drive prices up?

This could be a huge art-market sensation, I'm sure auction houses are already preparing for this. Houses like Christie's actually have provenance and restitution specialists, experts who deal with this. And I'm sure they're on top of it.

If I own a Marc Chagall painting, and if they reveal that there are a bunch of his works in this trove in Munich, does my painting go up in value because there's more attention on the artist? Or does it go down in value because, as in most markets, an increase in supply means that prices go down?

[The work would be] more valuable, though it depends on the painter. Whatever your family paid for the painting back in whatever, that was then. But there is at least one Chagall in this discovery, and it'll probably be sold at auction. It's very unusual to have a Chagall available, so the price is going to be stratospheric, and that will ultimately raise the price of your painting. And I think that's true of other artists, too.

You said earlier that there are estimates of how much art went missing. Should we expect more discoveries in the future or are we near the end of that process?

The estimates vary for how much art is still outstanding, but it's in the tens of thousands of pieces. Some of the art was destroyed during World War II, but very little. So yes, we're going to see a lot more of it.

There is a gray market for stolen art. Wealthy people sell it to one another so it never becomes public and it never goes to auction. Some of this art is in the gray market, but eventually someone will die and some heir will want to sell it and that's how it will get back into public. But, yes, tens of thousands of pieces, at least.