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Nazi Plunder and Spoliation in Belgium

Discussions on the Holocaust and 20th Century War Crimes. Note that Holocaust denial is not allowed.
Hosted by David Thompson.

Nazi Plunder and Spoliation in Belgium

Postby David Thompson on 02 Aug 2003 08:26

One subject rarely discussed in this section of the forum is economic war crimes. On the off-chance that some of our readers might be interested in the field, here is the prosecution case against the Nazi pillage and spoliation policy in occupied Belgium, taken from the Proceedings of the International Military Tribunal (IMT), vol. 5, available on-line at The Avalon Project of the Yale School of Law, at:

http://www.yale.edu/lawweb/avalon/imt/proc/v5menu.htm

and vol. 6, available from the same site at:

http://www.yale.edu/lawweb/avalon/imt/proc/v6menu.htm

From vol. 5:

M. HENRY DELPECH (Assistant Prosecutor for the French Republic): Mr. President, Gentlemen, I have the honor of presenting to the Tribunal a statement on the economic plundering of Belgium.

As early as 1940 the National Socialist leaders intended to invade Belgium, Holland, and northern France. They knew that they should find there raw materials, equipment, and the factories which would enable them to increase their war potential.

As soon as Belgium had been occupied, the German military administration did its best to reap the maximum benefit. To this end the German leaders took a series of measures to block all existing resources and to seize all means of payment. Important supplies built up during the years 1936 to 1938 were the object of enormous requisitions. The machines and equipment of numerous enterprises were dismantled and sent to Germany, bringing about the closing down of numerous factories and in many sectors an enforced consolidation. Given the highly industrial character of this country, the occupying authorities imposed, under threats of various kinds, a very heavy tribute upon Belgian industries. Nor was agriculture spared.

The third part of the French economic expose deals with a study of all these measures. This will be the subject of four chapters.

Chapter I deals with the German seizure of the means of payment. The second chapter will be devoted to clandestine purchases and an account of the black market. Chapter 3 will deal with purchases of apparent regularity while the fourth chapter will concern impressment.

In a fifth chapter the acquisition of Belgian investments in foreign concerns will be presented to the Tribunal, before concluding and emphasizing the effect of the German intrusion on the public health. Finally, a few remarks will be presented concerning the conduct of the Germans after they had annexed the Grand Duchy of Luxembourg.

Chapter 1, German seizure of means of payment.

To enslave the country from an economic point of view, the most simple procedure Was to secure the possession of the greater part of the means of payment and to make impossible the export of currency and valuables of all kinds.

There is an ordinance of 17 June 1940 which forbids the export of currency and valuables of all kinds. This ordinance was published in the Verordnungsblatt for Belgium, Northern France, and Luxembourg and will hereafter be called by its usual abbreviated form VOBEL. This ordinance was published in VOBEL, Number 3, and

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was submitted under Document Number RF-99. In the VOBEL of the same day appeared a notice dated 9 May 1940, which regulated the issuing of Reichskreditkasse notes to provide the occupation troops with legal tender. By this means the Germans made possible the buying, without supplying any equivalent, all they desired in a country abounding with products of all kinds, without the inhabitants being able to protect their possessions against the invader. The occupier used, in addition, three other methods for securing the greater part of the means of payment. These three methods were: The creation of an issuing bank, the imposition of war tribute under the pretext of maintaining occupation troops, and the working of a system of clearing to their profit alone. These measures will be fully dealt with in three sections which now follow.

Establishment of an issuing bank.

As soon as they arrived in Belgium the Germans -established an office for supervising banks, which was entrusted at the same time with the control of the National Bank of Belgium. This was ordered on 14 June 1940-VOBEL, Number 2, which is submitted as Document Number RF-141.

At this time the directorate of the National Bank of Belgium was outside the occupied territories; but the amount of notes on hand would have been insufficient to insure normal circulation, as a great number of Belgians had fled before the invasion, taking with them a large quantity of paper money. These are, at least, the reasons which the Germans put forward for establishing an issuing bank by the ordinance of 27 June 1940, published in VOBEL, Numbers 4 and 5, which I submit as Document Number RF-142. By virtue of this last ordinance, 27 June 1940, the new issuing bank with a capital of 150 million Belgian francs, 20 percent of which had been issued in coin, received the monopoly for issuing paper money in Belgian francs. As a matter of fact, the National Bank of Belgium no longer had the right to issue money. The cover of the issuing bank was not represented by a gold balance but:

1) by credits from discount operations and loans granted in conformity with Article 8 of the new statutes;
2) monies owed to the National Bank of Belgium, as well as coin which was in circulation for the account of the public treasury;
3) finally, the third means of cover-foreign currency and francs, particularly German money, including Reichskreditkasse notes as well as assets at the Reichsbank, at the Office of Compensation for the Reich, and the Reichskreditkasse.

The German Commissioner who had been appointed by a decree of 26 June 1940
became the controller of the issuing bank-decree

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of 26 June 1940, published in VOBEL, Number 3, Page 88, and submitted as Document Number RF-143.

After the return to Belgium of the directors of the National Bank, on 10 July 1940, an agreement between this bank and the new issuing bank was effected by the nomination of the head of the new issuing bank to the position of director of the National Bank of Belgium.

The issuing bank proceeded to put out a large amount of notes, so much so that on 8 May 1940 the currency in circulation amounted to 29,800 million Belgian francs. On 29 December 1943 it amounted to 83,200 million Belgian francs, and on 31 August 1944 it was 100,200 million Belgian francs, that is to say, an increase of 236 percent.

The issuing bank functioned; but not without certain difficulties, either with the military command, its own staff, or with the National Bank of Belgium. Actually, besides its function of issuing, the new bank had as a principal function operations relating to postal orders and to currency, as well as operations with German authorities, notably as concerned the occupation indemnity and, above all, clearing.
The National Bank of Belgium lost its right to issue paper money but resumed its traditional operations for private as well as state accounts, particularly transactions on the open market.

These data, Gentlemen, are corroborated by the final report of the German military administration in Belgium, ninth part, dealing with currency and finance. This final report of the German military administration in Belgium was discovered by the United States Army, and it is a document to which we shall refer many times. It is Document Number ECH-5 and is submitted to the Tribunal as Exhibit Number RF-144.

The ninth part, which is of interest here, was written by three chiefs of the administration section of Brussels: Wetter, Hofrichter, and Jost. In spite of the establishment of the issuing bank, Reichskreditkasse notes were valid in Belgium until August 1942; but it was the National Bank of Belgium that was obliged to absorb these notes in September 1944, and on account of this, Belgian economy suffered a loss of 3,567 million Belgian francs. This number is given by Wetter in the foregoing report, Page 112, the excerpt of the report being submitted as Document Number RF-145.

Moreover, from information given by the Belgian Government, the issuing bank had in hand at the moment of liberation of the territory a sum totalling 644 million in Reichskreditkasse notes; and further, it had assets in a transfer account of 12 million Reichsmark on the books of the Reichskreditkasse, that is to say, a total loss

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of 656 million Belgian francs-the figure given in a report of the Belgian Government, which is submitted as Document Number RF- 146.

Occupation costs.

Let us now take the occupation costs. Article 49 of the Hague Convention stipulates that if the occupier makes a levy in money, it will be only for the needs of the army of occupation or for the administration of the territory. The occupier can, therefore, impose a tax for the maintenance of his army; but this must not exceed the effective force strictly necessary. On the other hand, the words "needs of the army of occupation" do not mean the expenses of armament and equipment but solely the costs of billeting, food, and normal pay, which excludes, in all cases, luxury expenses.

Moreover, Article 52 authorizes the occupying authority to exact, for the use of its army, requisitions in kind and in service on the express condition that they shall be proportionate to the resources of the country and that they should not involve the population with the obligation to take part in military operations against their own country. The same Article 52 stipulates, moreover, that levies in kind will be, as far as possible, paid in cash.

Consequently the Germans exacted a monthly indemnity of 1,000 million up to August 1941. On that date the indemnity was increased to 1,500 million per month. By the end of August 1944, the payments under that designation totaled 67,000 million Belgian francs. This number cannot be contested by the Defense, since in the report quoted, Pages 103 and following, the said Wetter wrote in June 1944 that the total sum of Belgian francs paid for the army of occupation was 64,181 million-the passage in the report is submitted as Document Number RF-147.

But this sum of 64,000 million was completely disproportionate to the needs of the occupying army. This is shown in the report of Wetter, in a passage which is submitted as Exhibit Number RF-148. On Page 245 of this report it is said that on 17 January 1941 the general who was Commander-in-Chief in Belgium had asked the High Command of the Army if the indemnity covered only the expenses of occupation. This point of view was not accepted by the commanding general, who, by order of 29 October 1941, specified that the indemnity of occupation was to be used not only for the needs of the occupying army but also for those of the operating armies. Moreover, on Page 11 of the original German text of the same report it is written-and I shall read to the Tribunal an excerpt which will be found in the document book under Document Number RF-149, the second paragraph:

"As the increase in the expenses of the Wehrmacht made it clear that it would be impossible to manage with this amount,

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the military administration demanded that the calculation of the occupation costs should be straightened out by deducting all expenses foreign to the occupation proper. This concerned especially the larger purchases of all kinds which the military services made in Belgium, such as horses, motor vehicles, equipment, all of which was designated for other territories and was written off as occupation costs.

"By a decision of the Delegate for the Four Year Plan, dated 11 June 1941, the financing of other than true occupation costs was to be met by clearing. To comply with this decree, beginning in July 1941, the administration of the military commander ordered a monthly report to be rendered of all expenses other than those required for the occupation but which so far had been paid under the account of occupation costs, in order to have these expenses refunded through clearing. Thanks to this, large sums could be recovered and put into the account of occupation costs."

Before concluding the examination of this point concerning war tribute, that tribute called occupation costs, it is necessary to point out that the Germans had already demanded, by the decree of 17 December 1940, submitted as Document Number RF-150, that the costs of billeting their troops should be charged to Belgium. Owing to this, the country had to meet expenses totalling 5,900 million francs, which went for billeting German troops, costs of installation, supplies, and furniture.

In his report Wetter writes on Page 104-the excerpt submitted as Document Number RF-147-that at the end of June 1944 the Belgian payments for billeting troops totalled 5,423 million francs.

Clearing.
We now come to the third part of German plundering-clearing. The issuing of Reichskreditkasse notes and the war tribute, called "occupation costs," were not sufficient for Germany. Her leaders created a system of clearing which enabled them to procure, unduly, means of payment totalling 62,200 million Belgian francs.

As soon as they arrived in Belgium, by the decrees of 10 July, 2 August, and 5 December, 1940-which appear in the document book under the Numbers RF-151, RF-152, and RF-153-the Germans specified:

1) That all payments on debts of people resident in Belgium to their creditors in Germany had to be paid into an account called the "Deutsche Verrechnungskasse, Berlin." This was an open account on the books of the National Bank of Belgium in Brussels, an account kept in belgas in spite of the prohibition on currency of 17 June 1940, the prohibition to which I have already referred concerning the blocking of means of payment in the country.

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By the decision of 4 August 1940, it was moreover prescribed that the carrying out of clearing would henceforth no longer be entrusted to the National Bank of Belgium but to the issuing bank in Brussels, which, as I have already had the honor of pointing out, had been established by the occupying power and was under their absolute control.

2) The Germans laid down a second measure whereby all debtors resident in the Reich should pay their Belgian creditors by way of the open account at the issuing bank in Brussels, at the following rate of exchange; 100 belgas to 40 marks, that is to say, I mark for 12.50 Belgian francs. These arrangements, moreover, were extended to the countries occupied by Germany with a view to facilitating their operations in those countries; they were even extended to certain neutral countries by various similar decrees appearing in the ordinance book.

The mission of the issuing bank in Brussels consisted, therefore, on the one hand, of receiving payments from all persons or agencies established in Belgium which had foreign engagements and, on the other hand, to pay those persons or agencies established in Belgium which had foreign credit. In other words, every time an exporter delivered goods to an importer of another country which belonged to the clearing system, it was the issuing bank which settled the invoice and which entered as equivalent, in the ledgers, a corresponding credit at the Deutsche Verrechnungskasse in Berlin-the German Clearing Institute in Berlin. In the case of imports, the inverse procedure was followed.

In fact, under the German direction, this system functioned to the detriment of the Belgian community which, at the moment of the liberation, was creditor in clearing to the extent of 62,665 million Belgian francs. It was the National Bank of Belgium which had been forced to make advances to the issuing bank to balance the account of the German Clearing Institute. A large number of operations made through clearing had no commercial character whatever but were purely and simply military and political expenses. From information given by the Belgian Government, the clearing operations could be summarized in the following manner -and I take the figures from a report of the Belgian Government previously cited, which has been presented as Document Number RF-146: Of the total transactions, 93 percent were Belgium-German clearing operations; merchandise amounted to 93 percent, and services 91 percent.

If one considers the part taken respectively by merchandise, services, or capital, one obtains a very significant picture. The

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entire clearing transactions of Belgium with foreign countries totalled, on 2 September 1944, the sum of 61,636 million Belgian francs, of which 57,298 million were for Belgium-German operations, 4,000 million only with France, 1,000 million with the Netherlands, and 929 million with other countries. It is only in the sector of goods and services that the want of equilibrium is apparent due in large measure to requisitions of property and services made by Germany for her own account. It is known that the so-called exports affected especially metals and metal products, machines, and textile products, nine-tenths of which were seized by the Reich, which made itself thereby guilty of real spoliation.

As to the transfer of capital, during the first period of the occupation it was particularly intense. It concerned the forced realization of Belgian capital in foreign countries, as well as the forced cession to German groups of Belgian assets blocked in Germany. No effective compensation was given in exchange. The transfers made for services were principally for payments for Belgian labor in foreign countries.

The credit balance of these services on 2 September 1944 is as follows, in Belgian francs: Total clearing operations dealing with services, 20,016 million-that is to say, for payment of labor 73 percent of the total. For Germany alone, 18,227 million-that is, 72 percent of the total amount. For France only 1,621 million Belgian francs-that is to say, a very small part. Not content with requisitioning workers for forced labor in Germany or in the occupied territories, the Germans compelled Belgium to bear the financial burden and imposed it either through the liquidation of the transferred savings in clearing or by the remittance of Belgian notes to the Directorate of the Reich Bank in Berlin for payment of workers in national currency:

THE PRESIDENT: Do you think it is necessary to go into these clearing operations again? In each case of the various countries which have been dealt with, the same clearing operations have taken place, have they not? Then perhaps it is really unnecessary to do it over again for Belgium.

M. DELPECH: Very well, Your Honor. At all events, the Germans recognized the fact, and the figures taken from the report previously cited support the conclusions of our statement.

Before ending this chapter concerning German seizure of the means of payment, it is fitting that the attention of the Tribunal be brought to the order of 22 July 1940, by which the Germans fixed the rate of the Belgian franc at 8 Reichspfennig, that is to say 12.50 francs per mark; and in the forementioned
report Wetter

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writes concerning this matter, on Pages 37 and 38, a passage which I ask the Tribunal's permission to read and which is in the document book as Document Number RF-158.

"The de facto maintenance of the pre-war parity was moreover of considerable political importance because a large group of the population would have considered a sharp devaluation or a repeated change of parity as a maneuver of exploitation."

The following observation in connection with this conception must be made: The occupiers had no need in Belgium to decree, with the view of promoting their economic exploitation, that the Belgian franc should have a lesser value when, as a matter of fact - contrary to what occurred in France-they had, at the moment they entered Belgium, instituted new currency over which they had the control.

Lastly, let us mention that Germany obliged the Vichy Government to deliver 221,730 kilos of gold amounting, at the 1939 value, to 9,500 million francs; but as France had returned this gold to the Bank of Belgium, this question will be treated under the economic exploitation of. France.

Recapitulation.

To sum up, the means of payment seized by the army of occupation may be seen from the following figures:

Reichskreditkasse notes, 3,567 million; various bills and accounts on the books of the Reichskreditkasse, 656 million; war tribute under the pretext of occupation costs, 67,000 million; to which may be added the credit balance of clearing 62,665 million; total (in Belgian francs), 133,838 million. The Germans thus seized no less than 130,000 million Belgian francs, which they used for outwardly regular purchases, for payment of their requisitions, and to make clandestine purchases on the black market.

These so-called purchases and requisitions will be treated in the following chapters.

Chapter 2, clandestine purchases, black market.

As in all the other occupied territories, the Germans organized a black market in Belgium as early as October 1941.

According to a secret report on the black market, called "Final Report of the Control Office of the Military Commander in Belgium and in the North of France, Concerning the Legalized Emptying of the Black Market in Belgium and in the North of France," a report covering the period from 13 March 1942 to 31 May 1943-Exhibit Number RP-159 (Document Number ECH-7) in the document book-the reasons given by the Germans for this organization of the black market are three in number:

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1) To check competition on the black market between various German buyers;

2) to make the best use of the Belgian resources for the purposes of German war economy;

3) to do away with the pressure exercised on the general standard of prices and by this to avoid all danger of inflation which would result in endangering German currency itself.

This same report tells us, Pages 3 and following, that an actual administrative organization was set up by the Germans for carrying out this policy. The bookkeeping was done by the Clearing Institute of the Wehrmacht, which combined all the operations in its books. The direction of purchases was regulated by a central organization, the name of which changed as the years went by and which had a certain number of organizations subordinate to it, particularly a whole series of purchasing offices. The central organization was set up in accordance with the decree of the military commander in Belgium, dated 20 February 1942. It was formed on the 13th of the following March; and as soon as it was created it received special directives from the delegate of the Reich Marshal, Defendant Goering. This delegate was Lieutenant Colonel Veltjens, of whom we spoke this morning.

This organization was only established to co-ordinate the legalization and direction of the black market, as had been determined upon, 'and planned following conferences between the Commissioner General and the Military Commander of Belgium with the Chief of the Armament Inspection. According to the terms of that agreement, which reinforced a declaration of 16 February 1942 emanating from the Reich Minister for Economics, the aim was to drain the black market and in accordance with directives, in a legal form, with the main idea of safeguarding the supply requirements of the German Reich.
This organization had its offices in Brussels. The purchases themselves were regulated by a certain number of specialized offices, the list of which is given on Page 5 of the forementioned report. These organisms received their orders from the Rohstoffhandelsgesellsehaft, which has already been mentioned at the beginning of the statement on the economic exploitation of Western Europe. The role of Roges was very important in the organization of the black market. In effect it was four-fold:

1) The purchasing directives, once the authorization had been given by the central office in Brussels, were transmitted by Roges to the proper purchasing office.

2) The delivery of goods bought and marked for the Reich were made through Roges which took charge of their distribution in Germany.

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3) Roges financed the operations.

4) It was Roges which was entrusted with paying the difference between the rate of purchase-generally very high because of the black market rate-and the fixed official rate of sale on the German domestic market. The difference was covered by an equalizing fund, supplied from the occupation costs account, to which the Reich Minister of Finance put sums at the disposal of Roges through the channel of the Ministry of Armament.

The forementioned report furnishes a complete series of interesting particulars on the functioning of the central organization itself. It is interesting to note that the central office in Brussels was instructed by order of the Military Commander in Belgium, dated 3 November 1942, to have a branch at Lille set up for the north of France. At the same time, the Brussels office was authorized to instruct its branch office at Lille. In the document book, under Document Number RF-160, a final report of the Lille office is mentioned. This report, drawn up on 20 May 1943, gives a whole series of interesting particulars on the functioning of this organization.

THE PRESIDENT: It is 5 o'clock now. M. Delpech, I think it would be the wish of the Tribunal, if it were possible, for you to omit any parts of this document which are on precisely the same principles with those which have already been submitted to us in connection with the other countries. If you could, I think that would be convenient for the Tribunal. Of course, if there are any essential differences. in the treatment of Belgium then, no doubt, you would draw our attention to them.

M. DELPECH: Certainly, Your Honor.
[The Tribunal adjourned until 22 January 1946 at 1000 hours.].

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