News:

The National Gallery of Art in Washington announced it will return a pastel drawing by Pablo Picasso, “Head of a Woman,” to the heirs of a prominent German-Jewish banker who was persecuted by the Nazis.

The 1903 Blue Period pastel of a dark-haired, unsmiling woman — her identity is unknown — is one of at least 16 masterpieces that the banker Paul von Mendelssohn-Bartholdy sold in the months after the Nazis seized power and before his death in 1935.

A relative of the famous composer Felix Mendelssohn and the Enlightenment philosopher Moses Mendelssohn, Mendelssohn-Bartholdy was ousted from the Central Association of German Banks and Bankers in 1933 and from the board of the Reich Insurance Office in 1934. The family bank was “aryanised” — transferred to non-Jewish ownership — in 1938.

“Head of a Woman” was sold to the dealer Justin K. Thannhauser in 1934. The National Gallery of Art says it acquired the pastel as a donation in 2001.

The museum said it has decided to transfer ownership of the drawing in a settlement “to avoid the heavy toll of litigation.” The decision, it said, “does not constitute an acknowledgment of the merit or validity of the asserted claims.”

A representative for the heirs, who include the Berlin historian and political scientist Julius Schoeps, said there is no doubt that the work was sold as a result of persecution. Mendelssohn-Bartholdy was subjected to boycotts, land expropriations, and the loss of many of his positions, said John J. Byrne, the heirs’ Washington lawyer.

“By 1934, his income had plummeted to 14 percent of what it had been in 1932,” he said. “His alimony payments were double his income. That is someone selling under economic duress.”

In 2009, just as a trial was about to begin in federal court in Manhattan, two New York museums — the Solomon R. Guggenheim Museum and the Museum of Modern Art — reached settlements with the heirs on two other Picassos that Mendelssohn-Bartholdy sold to Thannhauser under similar circumstances.