Economic War Crimes: Plundering France

[David Thompson]

This excerpt from the IMT proceedings, vol. 5 [vol. 5 index at http://www.yale.edu/lawweb/avalon/imt/proc/v5menu.htm ; this segment at http://www.yale.edu/lawweb/avalon/imt/proc/01-19-46.htm ] is taken from the case of the French prosecutors against the IMT defendants. It illustrates the methods used by the German occupation authorities to plunder France in the 1940-1944 period. The particular prosecutor speaking here is M. Charles Gerthoffer:

When the invasion began the countries of Western Europe were glutted with products of every kind; but after 4 years of methodical looting and enslavement of production, these countries are ruined, and their entire population is physically weakened as the result of rigorous restrictions.

To achieve such results, the Germans used every method, particularly violence, trickery, and blackmail.

The purpose of the present statement will be to specify the main spoliations ordered by the German leaders in the countries of Western Europe and to show that they constitute, as far as they are concerned, War Crimes which come under the jurisdiction of the International Military Tribunal for major war criminals.

It is not possible to draw an exact balance sheet of the German looting and of the profit derived by them as the result of the enslavement of production in the occupied countries. On one hand, we do not have enough time; on the other hand, we find ourselves faced with actual impotence resulting from the secret nature of certain operations and the destruction of archives through acts of war or deliberate destruction at the time of the German rout.

Nevertheless, the documents now collected and the information gathered make it possible to give a minimum estimate of the extent of spoliation. However, I shall ask the Tribunal's permission to make three preliminary remarks:

1) The numerous acts of individual looting committed by the Germans will not be referred to by this presentation since they come under the competence of a different jurisdiction.

2) We shall only mention for the Record the incalculable, economic results of German atrocities, for instance, the financial loss experienced by the immediate relatives of breadwinners murdered, or the loss suffered by certain victims of ill-treatment, who are totally or partially, temporarily or permanently, incapacitated for work, or the damage resulting from the destruction of localities or buildings for the purpose of vengeance or intimidation.

3) Finally, gentlemen, we shall not discuss the damage resulting from purely military operations, which cannot be considered as economic results of War Crimes. When damage caused by military operations is referred to, some separate valuation will be necessary.

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With the permission of the Tribunal, I shall make a few general remarks on the economic looting of Western European occupied territories. Economic looting is to be understood as the removal of wealth of every kind, as well as the enslavement of the production of the various occupied countries.

To reach such results in countries which were generally highly industrialized and where numerous stocks of manufactured goods and abundant reserves of agricultural products existed, the German venture was faced with real difficulties.

At first, although the Germans had used this procedure to its maximum extent, requisitions were not adequate. In fact, they had to find the opportunities for ferreting out all sorts of things, which were sometimes hidden by the inhabitants, and on the other hand, they had to maintain for their own profit the economic activity of these countries.

The simplest way of becoming masters of the distribution of existing products and of production was to take possession of almost all means of payment and, if necessary, to Impose by force their distribution in exchange for products or services, at the same time combating the rise of prices.

Faced with starvation the populations were thus naturally forced to work directly or indirectly for the benefit of Germany.

The first part of this presentation will be divided into five chapters: 1) Seizure of currency by the Germans; 2) sequestering of the production of the occupied territories; 3) individual purchases, which should not be confused with individual acts of looting; 4) the black market, organized by and for the profit of Germany; 5) examination of the question of economic looting from the viewpoint of international law and in particular of the Hague Convention.

First chapter -- seizure of currency by the Germans:

To have at their disposal all means of payment, the Germans used almost the same methods in the various occupied countries. First, they took two principal measures. One was the issue of paper money, by ordinance of 9 May 1940, published on Page 69 of the Verordnungsblatt fur die besetzten französischen Gebiete, official German gazette, which will subsequently be referred to by its official abbreviation VOBIF, which I submit to the Tribunal as Document Number RF-93. This ordinance concerned Denmark and Norway; and on 19 May 1940 was rendered applicable to the occupied territories of Belgium, Holland, Luxembourg, and France.

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The Germans proceeded to issue bank notes of the Reichskreditkasse which were legal tender only in the respective occupied countries.

The Germans then took a second measure: The blocking of existing currency within the occupied countries as a result of the ordinance of 10 May 1940, published in VOBIF, Page 58, which I submit as Document Number RF-94. In regard to Holland these ordinances are those of 24 June, 14 August, 16 August, and 18 September 1940, which are submitted as Document Numbers RF-95, 96, 97, and 98. In regard to Belgium these ordinances are those of 17 June and 22 July 1940, submitted as Document Numbers RF-99 and 100.

These measures, notably the issuing of paper money, left exclusively to the whim of the Germans without any possible control on the part of the financial administrations of the occupied countries, were to serve, as we shall see, as powerful means of pressure to impose the payment of enormous war tributes under the pretext of maintaining occupation troops as well as alleged payment agreements known as "clearing," which functioned almost exclusively to the benefit of the occupying power.

The Germans thus procured for themselves, under false pretenses, means of payment from which they profited by realizing considerable sums for their sole benefit.

All agricultural and industrial products, raw materials, goods of every kind, or services, for which Germany apparently made regular payment by means of either notes of the Reichskreditkasse or by so-called clearing agreements or by war tributes known as indemnities for the maintenance of occupation troops, were exacted with full knowledge that no redemption would be forthcoming. Thus, we can be sure that, as a rule, such regulations were purely fictitious and were the most regularly used fraudulent procedure to effect the economic looting of the occupied countries of Western Europe.

These questions will be examined in a more exact manner later on. I shall limit myself for the moment to pointing out to the Tribunal that to effect the economic looting of the occupied countries with their own money, it was necessary that this money should preserve an appreciable purchasing power.

Therefore, the efforts of the Germans were directed toward stabilization of prices. A severe regulation prohibiting rises in prices was subsequently promulgated by several decrees -- VOBIF, Pages 8, 60, and 535, submitted as Document Number RF-101. Nevertheless, the application of such measures could not prevent economic laws from

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playing their part. The payment of excessive tributes, considering the resources of the invaded countries, could not but have as their primary result a continuous rise of prices. The leaders of the Reich were perfectly aware of the situation and watched very attentively the rise in prices, which they were attempting to moderate.

This we know principally from the secret reports of Hemmen, President of the Armistice Commission for German Economic Questions, which we will discuss when we examine the particular case of France.

Chapter 2 -- Sequestering of the production of the occupied countries:

When the Germans invaded the countries of Western Europe great disorder was created as the result. The population fled before the advance of the enemy. Industries were at a standstill. German troops guarded the factories and prevented anyone from entering.

I am not able to give you a list of the enterprises affected by this situation, since there was almost no exception.

Nevertheless, as an example, we win present to the Tribunal the original of one of the numerous posters exhibited in industrial plants in France. I submit this poster as Document Number RF-102. It is dated Paris, 28 June 1940. One text is in German, and the other is in French. Here is the French text:

"By order of General Field Marshal Göring, of 28 June 1940, the Generalluftzeugmeister took possession of this factory as trustee. Only persons having special permits from the Generalluftzeugmeister, Verbindungsstelle, Paris, may enter."

Hardly had the factories been occupied by the military when German technicians, at the heel of the troops, proceeded methodically to remove the best machines. It is revealed by a secret report of Colonel Hedler, dated December 1940 and emanating from the Economic Section of the OKW, Pages 77 and 78, that the removal of the best machines from the occupied territories was to be organized, in spite of the terms of Article 53 of the Hague Convention.

This document is submitted as Exhibit Number RF-103 (Document EC-84). On the other hand, immediately after the invasion, the working population, their resources being exhausted, naturally gravitated around these factories in the hope of securing 'their means of subsistence. Problems of an identical nature arose in all the occupied countries: to stop the looting of machinery, which was taking place at an alarming rate; and to keep the workers employed.

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The Germans for their part forced the factories to resume work under the pretext of assuring subsistence to the population. The ordinance of 20 May 1940, published in the VOBIF, Page 31, which we submit as Document Number RF-104, applicable to the Netherlands, Belgium, Luxembourg, and France, orders that work should be resumed in all enterprises and industries of food supply and agriculture. The same text provided for the appointment of temporary administrators in case of absence of the directors or in other cases of emergency.

THE PRESIDENT: Are there any objections to breaking off?

[The Tribunal adjourned until 21 January 1946 at 1000 hours.]

519

The Avalon Project at the Yale Law School
Nuremberg Trial Proceedings Vol. 5


THIRTY- NINTH DAY
Monday, 21 January 1946

Morning Session

M. GERTHOFFER: Mr. President, Your Honors, at the end of the last session I had the honor of beginning the account of the French Prosecution on the economic pillage. In the first chapter I had indicated to you succinctly how the Germans had become masters of the means of payment in the occupied countries by imposing war tributes under the pretext of maintaining their army of occupation and by imposing so-called clearing agreements, functioning to their benefit almost exclusively.

In a second chapter, entitled "Sequestering of Production in the Occupied Territories," I had the honor of expounding to you that, after the invasion, the factories were under military guard and that German technicians proceeded to transfer the best machines to the Reich; that the working population, having come to the end of their resources, grouped themselves around the factories to ask for subsidies; and, finally, that the Germans had ordered the resumption of work and had reserved for themselves the right to designate provisional administrators to direct the enterprises.

At the same time, the Germans exercised pressure over the rulers of the occupied countries and over the industrialists to bring the factories back to productivity. In certain cases they themselves placed provisional German administrators in charge and insinuated that the factories would be utilized for the needs of the occupied populations.

On the whole, to avoid unemployment and to maintain their means of production, the industrialists, little by little, resumed their work, endeavoring to specialize in the manufacture of objects destined for the civilian populations.

Resorting to various means of pressure, the Germans imposed the manufacture of defensive armaments and then progressively of offensive armaments. They requisitioned certain enterprises, shut down those which they did not consider essential, distributed the raw materials themselves, and placed controllers in the factories.

The German control and seizure continually expanded in conformity with secret directives given by the Defendant Göring, himself, as can be seen in a document dated 2 August 1940, discovered by the Army of the United States, which bears the Document Number EC-137, and which I place before the Tribunal as

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Exhibit Number RF-105. This is the essential passage of the document:

"The extension of the German influence over foreign enterprises is an objective of German political economy. It is not yet possible to determine whether and to what extent the peace treaty will effect the surrender of shares. It is now, however, that every opportunity should be used for German economy, in time of war, to obtain access to material of interest to the economy in occupied territories and to prevent removals that might hinder the realization of the abovementioned aim .... "

I stop this quotation here. After having had knowledge of such a document, there can be no further doubt about the intentions of the German rulers. The proof of the putting into execution of such a plan is shown in a document which will be read when the particular case of France will be dealt with in the course of this expose.

The Tribunal will be informed about a study of a certain Michel, Chief of the Administrative General Staff on Economic Questions, deputy to the German commanding officer in France, which brings out the extent of the dictatorship of the Reich over the occupied countries in economic matters. The control of the enterprises in occupied countries was assured by civil or military officials who were on the spot and also, later on, by similar German enterprises, which had become their "Paten-Firma."

To give an example of this economic domination, here are the orders received by an important French company. This involves the Thomson-Houston Company, and I present a letter to the Tribunal under Document Number RF-106 in the French documentation, which is addressed to this establishment. It is dated Paris, 8 October 1943.

"Societe des Procedes Thomson-Houston, 173 Boulevard Haussmann, Paris.

"You are fully responsible for the punctual, careful, and reasonable filling of the German orders which are passed to you, both as regards the giver of the order and my office, which is the competent agency for all orders given to France. "To facilitate for you the execution of your obligations, the firm of the Allgemeine Elektrizitäts-Gesellschaft, Berlin (NW 40), Friederich-Karl-Ufer 2-4, is designated by me as the 'Paten-Firma.' I attach the greatest importance to close collaboration on technical matters with the above-mentioned firm. The Paten-Firma will have the following functions:

"1) To co-operate in the establishment of your production plan to utilize your capacities;

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"2) To be at your disposal for all technical advice which you may need, and to exchange information with you;

"3) To serve as an intermediary, if need be, for negotiations with German authorities;

"4) To keep me informed as to anything that might occur which might prevent or limit the fulfillment of your obligations.

"In view of assuring these tasks, the Paten-Firma is authorized to delegate a Firmenbeauftragter to your firm, and when necessary, technical engineers from other German firms who may have handed you important orders.

"In order to permit the Paten-Firma to accomplish its task it will be necessary to give the firm or its Firmenbeauftragter the necessary information on everything that relates to the German orders and to their execution:

"1) By placing at its disposal your correspondence with your supply houses and with your subcontractors;

"2) By informing it now of the extent, to which the capacities of your factories are being utilized and permitting it to check on the production;

"3) By letting it take part in your conferences and see your correspondence with the German authorities.

"It is your duty to inform the Paten-Firma or their Firmenbeauftragter immediately about any orders which you may receive."

This is the end of the quotation.

Almost all the important enterprises in the occupied territories were thus placed under the control of German firms, with the double aim of favoring the Reich's war effort and of achieving by progressive absorption an economic preponderance in Europe, even in case of a peace by compromise.

In the agricultural sphere the Germans used similar means of pressure. They made wholesale requisitions of products, leaving the population with quantities clearly insufficient to assure their subsistence.

I now take up the third chapter devoted to individual purchases by the German military or civilian forces in the occupied countries. If the present statement cannot take up individual acts of pillage or the numerous thefts committed in the occupied countries, it is important nevertheless to mention the individual purchases, these having been organized methodically by the German rulers to benefit their own nationals.

At the beginning of the occupation the soldiers or civilians effected purchases by means of vouchers of doubtful authenticity

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which had been handed them by their superiors. Soon, however, the Germans had at their disposal a sufficient quantity of money to allow them to purchase without any kind of rationing, or by means of special vouchers, considerable quantities of agricultural produce or of objects of all kinds, notably textiles, shoes, furs, leather goods, et cetera. Thus, for instance, certain shoe stores were obliged to sell every week, in exchange for special German vouchers, 300 pairs of men's, women's, or children's shoes for town wear.

This is indicated in an important report of the French economic control, to which I will have occasion to refer several times in the course of this presentation and which I submit to the Tribunal under Document Number RF-107. The individual purchases which constitute a form of economic, pillage were, I repeat, not only authorized but organized by the German rulers. In fact, when the Germans returned to their country they were encumbered by voluminous baggage. A postal parcel service had been created by the Germans for the benefit of their nationals living in the occupied countries. The objects were wrapped in a special kind of paper and provided with seals that enabled their entry, duty free, into Germany.

In order to get an idea of the volume of individual purchases, it is important to refer to the declarations of one Murdel, exdirector of the Reichskreditkasse at present detained in Paris, who was heard before an examining magistrate of the Cour de Justice de la Seine on 29 October 1945. This is the declaration made by Murdel on the subject of individual purchases, and I submit it in evidence as Document Number RF-108.

The judge asked Murdel the following question:

"What were the needs of the army of occupation? What purchases did you have to make on its account?"

Murdel answered:

"It is impossible for me to answer the first part of the question. I had tried during the occupation to obtain information on this point, but it was objected that this was a military secret which I had no right to know. What I can tell you is that we settled the pay of the troops and that a private earned from 50 to 60 marks, a noncommissioned officer 50 percent more, and an officer considerably more, naturally. I have no idea what forces the occupation army may have included, as these forces were extremely variable."

I skip a few lines to make this shorter. Murdel adds:

"Apart from this, every soldier on leave returning from Germany had the right to bring back with him a certain number of marks (50). The same was the case for any German soldier who was stationed, for the first time in

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France. We exchanged the marks into French francs. I value the total of the sum that we paid out each month in this way at 5,000 million francs."

One may thus estimate at about 250,000 million francs, at least, the individual expense incurred in France by the Germans, of which amount the greater part was used for the purchase of products and objects sent to Germany, to the detriment of the French population.

To show the size of these costs, I would add that the amount of 5,000 million francs a month, in other words 60,000 million francs a year, is greater than the budget receipts of the French State in 1938, for these were only 54,000 million francs.

After having viewed the individual purchases, I shall enter upon a fourth chapter devoted to the organization of the black market by the Germans in the occupied territories. The population of the occupied countries had been subjected to a severe rationing of products of all kinds. They had been. left only obviously insufficient quantities for their own vital needs.

These regulations made available a large quantity of the stock production which the Germans seized by means of operations that were, to all appearances, regular requisitions, purchases by official services, individual purchases, or those in exchange for vouchers of German priority. We have just seen that these purchases represented for France, alone, an average of 5,000 million francs per month.

But such regulations produced, as a corollary, a depletion of merchandise and the concealment of products with the aim of keeping them from the Germans. This state of affairs gave birth, in the occupied countries, to what was called the black market, that is to say, clandestine purchases made in violation of regulations on rationing.

The Germans themselves were not slow in proceeding, to an ever greater extent, to purchase on the black market, mostly through agents and sub-agents, recruited among the most doubtful elements of the population, whose work was to find out where these products could be found.

These agents, compromised by violations of the legislation on rationing which they had committed, enjoyed absolute immunity; but they were constantly under the threat of denunciation on the part of their German employers in case they should slow up or stop their activity. Often these agents also fulfilled functions for the Gestapo and were paid by commissions, which they obtained in black market transactions.

The different German organizations in the occupied countries fell Into the habit of making clandestine purchases that became increasingly important in volume. Indeed, they began to- compete among themselves for this merchandise, the chief result of which

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was to increase the prices, thus threatening to bring about inflation. The Germans, while they continued to profit by the clandestine purchases, were anxious that the money which they used should,, maintain as high a value as possible.

To obviate such a situation, the rulers of the Reich decided in June 1942 to organize purchases on the black market methodically. Thus the Defendant Göring, the Delegate of the Four Year Plan, gave to Colonel Veltjens, on 13 June 1942, the mission of centralizing the structure of the black market in the occupied countries. This fact emerges from several documents discovered by the Army of the United States, of which I submit the first to you as Document Number RF-109. It is the nomination of Colonel Veltjens, signed by the Defendant Göring himself. I do not want to take up the time of the Tribunal in giving a complete reading of these documents. I think that they cannot be contested, but if this should occur later, I will reserve for myself the privilege of reading them later, unless the Tribunal would prefer me to read them immediately.

THE PRESIDENT: I am afraid we must adhere to our ruling. The documents which we cannot take judicial notice of must be read if they are to be put in evidence.

You need only read the portions of the document which you require to put in evidence -- not necessarily the formal parts, but the substantial parts which you require for the purpose of your proof.

M. GERTHOFFER: This is the letter of 13 June 1942, signed by the Defendant Göring:

"Owing to the simultaneous purchases of goods by the different branches of the Wehrmacht and other organizations on the so-called black market, a situation has developed in some occupied territories which hampers the methodical exploitation of these countries for the needs of German war economy, is also harmful to German prestige, and endangers the discipline necessary in the military and civilian administration. This deplorable state of things can no longer be tolerated. I therefore charge you to regularize these commercial transactions in agreement with the services that are involved and, particularly, with the chiefs of the administration of the occupied territories. In principle, commercial transactions in the occupied territories that are made outside the framework of the normal provisioning, or constituting a violation of price regulations, must be limited to special cases and can be carried out only with your previously given assent. I approve your proposal that only to trading companies controlled by the Reich should be assigned the handling of these goods, in the first place the 'Roges.'

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"I beg you to submit, at the earliest possible date, a detailed plan of operation for starting your activity in Holland, Belgium, France, and Serbia. (In Serbia it is Consul General Neuhausen who is to be in charge.) This plan must include the seizure of port installations and machinery and tools of enterprises to be closed down in the occupied territories. As to the results of your work, I beg you to submit a report to me every month through my representative; the first to be sent on 1 July 1942.

"If necessary, the Central Planning Board will decide as to the distribution of merchandise thus purchased." – Signed "Göring."

Thereupon, on 4 September 1942, the Defendant Göring, had given orders for the complete collection of all merchandise of use, even if signs of inflation should result from this act, in the occupied territories. This is shown by a report signed "Wiehl," concerning the utilization of funds derived from occupation costs. I submit this to the Tribunal as Exhibit Number RF-110 (Document Number 1766-PS).

Shortly after, on 4 October 1942, the Defendant Göring, made a speech on the occasion of the Harvest Festival, a speech that is reported in Das Archiv of October 1942, Number 103, Page 645. In this speech the Defendant Göring, stated implicitly that he meant purchases on the black market in the occupied countries to continue for the benefit of the German population. I submit a copy of this article as Document Number RF-111 and I quote from it the following passage:

"I have examined with very special care the situation in the occupied countries. I have seen how the people lived in Holland, in Belgium, in France, in Norway, in Poland, and wherever else we set foot. I have noticed that although very often their propaganda speaks officially of the difficulty of their food situation, in point of fact this is far from being the case. Of course everywhere, even in France, the system of ration cards has been introduced; but what is obtained on these ration cards is but a supplement, and people live normally on illegal commerce.

"The recognition of this has caused me to make a firm decision, creating a principle which must be rigidly adhered to. The German people must be considered before all others in the battle against hunger and in the problem of food supply. It is my desire that the population of the territories which have been conquered by us and taken under our protection shall not suffer from hunger. If, however, through enemy measures difficulties of food supply should arise, then

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all must know that if there is to be hunger anywhere it shall in no case be in Germany ....

The United States Army has discovered a secret report, made on 15 January 1943, by Colonel Veltjens, in which he gives an account of his activity over a period of 6 months to the Defendant Göring, This is Document Number 1765-PS, which I submit now to the Tribunal as Exhibit Number RF-112. It is not possible for me to give a complete reading of this report. I shall simply read certain passages of it.

In the first part of his report Veltjens explains the reasons for the rise of the black market in these terms:

"1) The reduction in merchandise as a result of the regulations and rationing ....

"2) The impossibility of stabilizing prices ....

"3) The impossibility of price control on German lines owing to lack of personnel in the German control organizations.

"4) The neglect of practical support for counter-measures on the part of the local administrative authorities, especially in France.

"5) The half-hearted penal justice of the local judiciary authorities.

"6) The lack of discipline of the civilian population

Then under the same number 6), a little further, Veltjens indicates:

"The activity of the German services on the black market grew little by little to such an extent that more and more unbearable situations arose. It was known that the black market operators offered their merchandise to several bureaus at the same time and that it was the one which gave the highest price who obtained the merchandise. Thus, the different German formations not only vied with each other in obtaining the merchandise, but also they caused the prices to rise."

Further on in his report, Veltjens indicates that he has assumed the direction of the service created by the Delegate for the Four Year Plan in these terms:

"Finally, in June 1942, in agreement with all the central services, the delegates for the special missions (B. f. S.) were charged with taking in hand the seizure and the central control of the black market. Thus, for the first time, a necessary preliminary condition was created for effectively dealing with the problem of the black market."

In the second part of his report, Veltjens explains the advantages of the organization in charge of which he was placed and he writes, among other things:

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"It has been stated that purchases on the black market in their present volume would become in the long run too much for the budget of the Reich. In answer to this it must be pointed out that the greater part of the purchases were made in France and were financed by occupation costs. Out of a total of purchases amounting to 1,107,792,819 RM, the sum of 929,100,000 RM was charged to the French for occupation costs so that the Reich budget was not involved for that amount."

After having indicated the inconveniences of the black market, Veltjens concludes:

"In recapitulating" -- writes Veltjens -- "it must be stated that, in view of the supply situation in the Reich, now as before we cannot do without black market purchases as long as there are still hidden stocks which are important for carrying on the war. To this vital interest all other considerations must be subordinated."

In a third part of this same report, Veltjens deals with the technical organization of his offices. Here are some interesting passages:

"The general direction and supervision of the purchases is the task assigned to the control services which have been newly created for this purpose, as follows:

"a) Supervisory service in France, with headquarters in Paris;

"b) supervisory service in Belgium and the North of France, with headquarters in Brussels;

"c) supervisory service in Belgium and in the North of France, auxiliary service Lille, with headquarters in Lille;

"d) supervisory service in Holland with headquarters in The Hague;

"e) supervisory service in Serbia with headquarters in Belgrade."

Then Veltjens tells us that purchases themselves were carried out by a restricted number of licensed purchasing organizations, that is, 11 for France, 6 for Belgium, 6 for Holland, 3 for Serbia.

"So" -- he writes -- "all the purchases are subject to the central control of the delegate for the special missions."

Further on Veltjens adds:

"The financing of the purchases and the transport of merchandise are 'to be carried out by the Reich-owned Roges m. b. H. The merchandise is then to be distributed to the purchasers in the Reich by Roges in accordance with instructions from the Central Planning Board, or departments appointed by the Central Planning Board and in order of urgency."

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In the fourth section of his report Veltjens gives the volume of the operations carried out up to the date of 30 November 1942, that is to say, in less than 5 months, as his organization had not begun its activity before 1 July 1942. Here are the figures that Veltjens gives:

"The volume of purchases made (up to 30 November 1942):

"(a) Since the inauguration of the purchases directed by the German commanders or the Reich Commissioner, and of the directed distribution of merchandise in the Reich, there has been purchased a total of 1,107,792,818.64 Reichsmark: In France a total amount of 929,100,000 Reichsmark; in Belgium 103,881,929 Reichsmark; in Holland 73,685,162.64 Reichsmark; and in Serbia 1,125,727 Reichsmark."

Veltjens adds:

"The payment in France is made from the account of the occupation costs, and in the other countries by means of clearing."

Then Veltjens gives a table of merchandise purchased in this way over the period of these 5 months. I shall simply give a summary to the Tribunal:

"1) Metals, 66,202 tons valued at 273,078,287 Reichsmark; 2) textiles, a total value of 439,040,000 Reichsmark; 3) leather, skins, and hides to a total value of 120,754,000 Reichsmark.

Veltjens adds:

"Further purchases comprised: Industrial oils and fats, edible oils and fats, wool, household articles, mess articles, wines and spirits, engineering equipment, medical articles, sacks, et cetera."

Veltjens then gives a table of the increase in prices during these 5 months. Then he states the principle that the black market must be utilized solely to the benefit of Germany and be severely repressed when it is utilized by the populations of the occupied countries. On this subject he actually writes:

"1. Extension of price control. As an increase of the personnel of the German controlling offices may not be possible, or may be possible only to a limited extent, it will be necessary to obtain from the local administration authorities greater activity in this respect.

"2. Application of severe penalties, on German lines, for violations of regulations. This is the only means of remedying the lack of discipline among the civilian populations, arising from their individual and liberal ideas. A check of the sentences that have been passed by the local tribunals is to be recommended.

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"3. The promise of rewards for denouncing violations of the rationing regulations, equivalent to a high percentage of the value of the goods seized on account of the denunciation.

"4. The hiring of informers and of agents provocateurs. "Further to hinder illegal production:

"5. Closing of all enterprises that are not working for the war industry.

"6. Closing or merging of enterprises whose capacity or production is being only partly exploited.

"7. Closer control of the productivity of factories.

"8. Close examination of the quantity of raw materials allotted for the German orders placed in France.

"9. A policy of prices which affords the enterprises adequate profit and thus guarantees their means of existence."

Examining the demands of the rulers of the occupied countries with relation to the German purchases on the black market, Veltjens writes:

"Moreover, lately the French and Belgian economic and government circles, among others the Chief of the French Government himself, have considered it necessary to complain about the organized German buying. In response to remonstrations of this kind, it should be pointed out -- in addition to various other arguments -- that on the part of the Germans, too, there is naturally the greatest interest in the disappearance of the black market. But the chief responsibility for its existence rests with the government authorities themselves for their incompetence regarding price control and their negligence in meting out just punishment, whereby lack of discipline among their own population is encouraged."

The Tribunal will allow me to stress the value of the argument developed by Veltjens by reminding it that the Germans were the principal purchasers on the black market, and that their agents enjoyed absolute immunity.

Finally, speaking of the machinery in the factories, Veltjens writes in his report:

"Another order of the delegate for the special missions, concerns seizure of the machinery of closed factories. It is an established fact that great capacities, particularly of machine tools, are not being utilized at present, while at home they are urgently needed for armament production. After an agreement by the delegate of special missions, the military commander, and the plenipotentiary for machine production, there has been created in France, at the armament inspection

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office, an office for the distribution of machines (Maschinenausgleichstellen).

"The creation of Maschinenausgleichstellen in Belgium and Holland is pending. One of the main difficulties, in this field, is to overcome the resistance of the owners of the factories, as well as that of the local government offices of the occupied territories.

"The occupation authorities will have to use every means to break this resistance."

In conclusion, Veltjens alludes in his report to the Roges company, which was a special organization for the transport to Germany of the booty captured in the occupied countries, and more particularly, of products acquired by operations on the black market. One of the directors of this organization, called Ranis, was interrogated on 1 November 1945, and declared in substance that the Roges company had begun its activity in February 1941, succeeding another organization. On the whole he confirms the facts that are reported in Veltjens' report. I shall therefore simply submit a copy of his interrogation to the Tribunal under Document Number RF- 113.

The scope of the operations on the black market is thus established by German documents which cannot be contested by the opposite side. I beg to point out to you that these documents prove that within 5 months, in three countries, these operations amount to the sum of 1,107,792,818 Reichsmark. We shall come back to certain details when examining the special situation of certain countries.

However, it is necessary for me to indicate the reasons why the Defendant Göring finally came to decide that the black market operations should be suspended.

Indeed, on 15 March 1943, under the pretext of avoiding the risk of inflation in the occupied countries, Göring decided that black market purchases be suspended. We have just seen that the Defendant Göring worried little about the fate of the population of the occupied countries, since he had decided that the black market purchases were to continue even at the risk of inflation.

The true reason is the following: While the official German organizations were buying at prices which were strictly fixed by them, the clandestine organizations were accepting much higher prices. The merchandise was therefore always gravitating to the black market, to the detriment of the official market; and clandestine production in the end absorbed the normal production.

Finally it must be added that the corruption resulting from such practices in certain circles of the German Armed Forces became disquieting to the German leaders. The black market was therefore suppressed officially on 15 March 1943, but some purchasing bureaus

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continued their clandestine activities until the time of liberation but on a much smaller scale than before 15 March 1943.

I cite a passage of the report of the French Economic Control which I have just put into evidence as Document Number RF-107 and which gives an idea of the disorder that was created by the German actions and which shows the reasons why the Reich authorities officially suspended the black market purchases-Page 21 of the French text:

"That was the time when champagne, cognac, and benedictine were handled by lots of 10,000 to 50,000 bottles and pate de foie gras by the ton! From the very beginning the general corruption had affected a great number of the Wehrmacht officers, attracted by the sumptuous life which surrounded them. It penetrated so far into the German military circles that, from the lower mess sergeant up to the superior officer, each one was implicated with the worst traffickers, demanding commissions on all the deals. In a clandestine sale of wool thread the authorities found themselves face to face with a general of the Air Force."

Around them soon flocked all the bad elements of France, swindlers and other habitual criminals. Then came a crowd of all the customary trade traffickers, brokers, and out-of-work agents, generally unimportant middlemen.

It is understood that in such a circle, composed of unknown and elusive people, the black market deals which were transacted without invoices and in cash, and without written receipts, except those of the German offices, cannot today be easily disclosed and evaluated.

I resume the quotation at Page 2

"Originating in the course of the year 1941, the commercial agitation of these Parisian purchasing bureaus continued in this manner for about 20 months. But, after having attained its peak at the end of 1942, this activity came to an abrupt end in March 1943, a victim of its own excesses.

"Actually, during the entire occupation production prices were strictly limited by the French authorities and even more so by the German economic services which were systematically opposed to any increase in prices and anxious, above all, to maintain large purchasing power for the French money at par.

"But, since the supplies delivered to the enemy under contract were being paid for at prices hardly better than the legal ones, the clandestine purchasing agencies accepted at the same time rates several times higher for the same products.

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"So the conveying of merchandise to the German black market increased more and more, while the secret production of goods to be forwarded through these dark channels increased. The disorder became rapidly such that, in certain branches of industry, deliveries according to contract could not be carried out except with great delay, in spite of the menacing protests of the German authorities.

"Completely aghast, the French Ministry of Industrial Production had to inform the German authorities that the national production would soon no longer be able to meet its obligations.

"This obvious situation, together with the necessity of putting an end to the incredible corruption brought about by the black market in the Wehrmacht, led the Reich Government, if not totally to suppress the black market, at least to consider closing the Paris purchasing bureaus.

"This measure was made effective 13 March 1943 according to an agreement between Bichelonne and General Michel.

"However" -- and this is very significant -- "the German economic services did not fail to ask in compensation for a considerable rise in the quotas fixed under the agreements. Thus for the Kehrl plan alone this rise amounted to 6,000 tons of textiles.

"Only a few bureaus were able to carry on their activities until the liberation, either by endeavoring to execute their purchases through Roges (D'Humieres, Economic Union, et cetera), or collaborating with military authorities buying supplies and with the bureaus of the German Air force and the Navy."

[michael mills]

While the document posted contains a lot of useful historical data, it in no way demonstrates a "plundering" of France by Germany. It is not an objective document, having as its purpose the establishment of what actually happened, but rather a highly tendentious one, imposing an extremely subjective interpretation on the data contained within it for the purposes of presenting a one-sided case in a judicial proceeding.

An example of the tendentious nature of the document is the statement that individual purchases by Germans stationed in France constituted "pillage". The document makes the point that German purchases in France amounted to 5000 million francs a month, and states:

One may thus estimate at about 250,000 million francs, at least, the individual expense incurred in France by the Germans, of which amount the greater part was used for the purchase of products and objects sent to Germany, to the detriment of the French population.

It is hard to see how that expenditure could have been to the detriment of the French population, given that it represented an income to the French people to whom it flowed in one form or another. For example, if Germans purchased French products, that added to aggregate demand and eventually created income for French workers in the form of the wages paid to them for producing the items purchased by Germans. Obviously, the workers who produced the goods purchased by Germans were better off than if they had remained unemployed.

In short, the document posted provides a lot of useful information, but does not prove any sort of crime committed by the German occupiers. In post-war Germany, the Allied occupiers levied occupation costs on their respective zones of Germany, contributions which were then paid to members of the Allied occupation forces, who then made purchases in Germany, thereby providing a source of income to the destitute population. The total value of goods remitted home to the United States by members of the occupation forces greatly exceeded the nominal monetary value of the wages and salaries paid to those members, indicating that quite a lot of the purchases had been made on the black market. However, I doubt that any economic historian would claim that the Allied occupation forces systematically "plundered" post-war Germany (although of course individual acts of "liberation" occurred).

[David Thompson]

Michael -- You wrote:

In short, the document posted provides a lot of useful information, but does not prove any sort of crime committed by the German occupiers.

The International Military Tribunal found it, and the proof which accompanied it, persuasive. Here's the applicable portion of the IMT judgment, from vol. 22 of the IMT proceedings:
http://www.yale.edu/lawweb/avalon/imt/proc/09-30-46.htm

Pillage of Public and Private Property

MAJOR GENERAL I. T. NIKITCHENKO (Member of the Tribunal for the U.S.S.R.): Article 49 of the Hague Convention provides that an occupying power may levy a contribution of money from the

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occupied territory to pay for the needs of the army of occupation, and for the administration of the territory in question. Article 52 of the Hague Convention provides that an occupying power may make requisitions in kind only for the needs of the army of occupation, and that these requisitions shall be in proportion to the resources of the country. These articles, together with Article 48, dealing with the expenditure of money collected in taxes, and Articles 53, 55, and 56, dealing with public property, make it clear that under the rules of war, the economy of an occupied country can only be required to bear the expenses of the occupation, and these should not be greater than the economy of the country can reasonably be expected to bear. Article 56 reads as follows:

"The property of municipalities, of religious, charitable, educational, artistic, and scientific institutions, although belonging to the state, is to be accorded the same standing as private property. All premeditated seizure, destruction, or damage of such institutions, historical monuments, works of art and science, is prohibited and should be prosecuted."

The evidence in this case has established, however, that the territories occupied by Germany were exploited for the German war effort in the most ruthless way, without consideration of the local economy, and in consequence of a deliberate design and policy. There was in truth a systematic "plunder of public or private property," which was criminal under Article 6 (b) of the Charter. The German occupation policy was clearly stated in a speech made by the Defendant Göring on 6 August 1942 to the various German authorities in charge of occupied territories:

"God knows, you are not sent out there to work for the welfare of the people in your charge, but to get the utmost out of them, so that the German people can live. That is what I expect of your exertions. This everlasting concern about foreign people must cease now, once and for all. I have here, before me reports on what you are expected to deliver. It is nothing at all when I consider your territories. It makes no difference to me in this connection if 'you say that your people will starve."

The methods employed to exploit the resources of the occupied territories to the full varied from country to country. In some of the occupied countries in the East and the West, this exploitation was carried out within the framework of the existing economic structure. The local industries were put under German supervision, and the distribution of war materials was rigidly controlled. The industries thought to be of value to the German war effort were compelled to continue, and most of the rest were closed down altogether. Raw materials and the finished products alike

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were confiscated for the needs of the German industry. As early as 19 October 1939 the Defendant Göring had issued a directive giving detailed instructions for the administration of the occupied territories; it provided:

"The task for the economic treatment of the various administrative regions is different, depending on whether a country is involved which will be incorporated politically into the German Reich, or whether we are dealing with the Government General, which in all probability will not be made a part of Germany. In the first-mentioned territories, the ... safeguarding of all their productive facilities and supplies must be aimed at, as well as a complete incorporation into the Greater German economic system at the earliest possible time. On the other hand, there must be removed from the territories of the Government General all raw materials, scrap materials, machines, et cetera, which are of use for the German war economy. Enterprises which are not absolutely necessary for the meager maintenance of the naked existence of the population must be transferred to Germany, unless such transfer would require an unreasonably long period of time, and would make it more practicable to exploit those enterprises by giving them German orders, to be executed at their present location."

As a consequence of this order, agricultural products, raw materials needed by German factories, machine tools, transportation equipment, other finished products, and even foreign securities and holdings of foreign exchange were all requisitioned and sent to Germany. These resources were requisitioned in a manner out of all proportion to the economic resources of those countries, and resulted in famine, inflation, and an active black market. At first the German occupation authorities attempted to suppress the black market, because it was a channel of distribution keeping local products out of German hands. When attempts at suppression failed, a German purchasing agency was organized to make purchases for Germany on the black market, thus carrying out the assurance made by the Defendant Göring that it was "necessary that all should know that if there is to be famine anywhere, it shall in no case be in Germany."

In many of the occupied countries of the East and the West, the authorities maintained the pretense of paying for all the property which they seized. This elaborate pretense of payment merely disguised the fact that the goods sent to Germany from these occupied countries were paid for by the occupied countries themselves, either by the device of excessive occupation costs or by forced

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loans in return for a credit balance on a "clearing account," which was an account merely in name.

In most of the occupied countries of the East even this pretense of legality was not maintained; economic exploitation became deliberate plunder. This policy was first put into effect in the administration of the Government General in Poland. The main exploitation of the raw materials in the East was centered on agricultural products, and very large amounts of food were shipped from the Government General to Germany.

The evidence of the widespread starvation among the Polish people -in the Government General indicates the ruthlessness and the severity with which the policy of exploitation was carried out.

The occupation of the territories of the U.S.S.R. was characterized by premeditated and systematic looting. Before the attack on the U.S.S.R., an economic staff--Oldenburg--was organized to insure the most efficient exploitation of Soviet territories. The German armies were to be fed out of Soviet territory, even if "many millions of people will be starved to death." An OKW directive issued before the attack said: "To obtain the greatest possible quantity of food and crude oil for Germany--that is the main economic purpose of the campaign."

Similarly, a declaration by the Defendant Rosenberg of 20 June 1941 had advocated the use of the produce from southern, Russia and of the northern Caucasus to feed the German people, saying:

"We see absolutely no reason for any obligation on our part to feed also the Russian people with the products of that surplus territory. We know that this is a harsh necessity, bare of any feelings."

When the Soviet territory was occupied, this policy was put into effect; there was a large-scale confiscation of agricultural supplies, with complete disregard of the needs of the inhabitants of the occupied territory.

In addition to the seizure of raw materials and manufactured articles, a wholesale seizure was made of art treasures, furniture, textiles, and similar articles in all the invaded countries.

[michael mills]

This thread is about the alleged plundering of France. Actions of the German occupiers in Poland and the Soviet Union are not really relevant to the situation of France.

[David Thompson]

I'm aware of that, which is why I emphasized the IMT's findings of fact dealing with western Europe by putting them in bold italics. Having that portion of the IMT judgment (less the art plundering counts) in one place is for the convenience of the readers, and allows me to refer to it later by post number, rather than have to re-post all or part of it.

[michael mills]

PS. The position taken by the German Government was that the Polish and Soviet states had ceased to exist, and that therefore the German forces stationed in territories belonging to those former states were not occupying territory belonging to another sovereign state, and therefore the rules applying to such occupation did not apply.

In the view of the German Government, the people living on the territory of the former Polish and Soviet states were no longer citizens of a sovereign state, but were subjects of the German Reich. Their property was therefore subject to the laws of the German Government, and was not protected by international law, since the relationship between the German Reich and its subjects, and the decrees of the German Reich in respect to the property of its subjects, was outside the scope of international law. Since the Polish and Soviet states had ceased to exist, all property belonging to the governments of those former states was now the property of the German Reich as the effective sovereign power.

The situation was different in France. The German Government recognised the continued existence of the French state and its sovereignty over its territory and people. Accordingly, all actions of the German Government within the territory of the French state had to be negotiated and agreed with the government of that state.

The Allies, of course, had a different view in regard to the continued existence of the Polish and Soviet states, and since they eventually defeated Germany militarily, their view prevailed. Both the German and Allied views were subjective, and there is no objective criterion for determining which is correct. International law does allow the abolition of a sovereign state and the absorption of its territory by another sovereign state, as happened most recently with the German Democratic Republic.

[David Thompson]

Michael -- You wrote:

The Allies, of course, had a different view in regard to the continued existence of the Polish and Soviet states, and since they eventually defeated Germany militarily, their view prevailed. Both the German and Allied views were subjective, and there is no objective criterion for determining which is correct.

I disagree. There has been an international consensus on the subject since 1920, and acts which contravene that consensus were and are widely recognized as illegal. See:
http://forum.axishistory.com/viewtopic. ... 1#p1051981

In addition, the German views of the "debellation" of Poland and the "dissolution" of the USSR (which was still in existence at the time) were not supported by any precedents in international usage. This is generally a bad sign for a party claiming its acts are lawful. Furthermore, the context in which these claims were raised (the applicability of the rules of land warfare) makes it clear that they were merely a pretext for avoiding internationally accepted customs and usages of war.

Also, the German attacks against both countries were in violation of non-aggression treaties which Germany had signed and had not renounced. This practice was also regarded as unlawful by the international community, and had been regarded as unlawful for many years.

Finally, your argument is contradicted by the well-established legal principle that a party may not lawfully profit from his own wrongdoing.

For interested readers -- The German view on the "debellation" of Poland can be seen in the document reproduced at http://forum.axishistory.com/viewtopic. ... 93#p587693

Part III. Military Authority in Occupied Enemy Territories

Preliminary Remarks to Part III.

5. The Hague Rules of Land Warfare, particularly part III, do not apply for the debellation, that is, the complete subjugation of the enemy and the destruction of his sovereignty (example of the present war--Poland and Yugoslavia). One cannot speak here of warlike occupation, for the occupation of enemy territory presupposes that there exists an enemy in the sense of international law, that is, an enemy state. If the enemy State no longer exists there is no longer any room for the Hague Rules of Land Warfare. The territories which formerly belonged to the enemy are administered by the victor, so to speak, as their trustee until the final settlement. He will place those territories which he plans to annex into his permanent administration and will extend his jurisdiction to those territories as far as necessary. In other fields he can act as he pleases until the establishment of a new constitutional structure has been decided upon, be it in the form of independent States, Protectorates, or Mandates. Such an administration lies outside of the regulations of part III of the Hague Rules of Land Warfare. However, the administrator may use them as a guide for his actions.

The regulation of the Hague Rules of Land Warfare can only be applied to cases which constitute a true occupation of a territory which still belongs to the enemy. The presupposition of its validity is the existence of a sovereign enemy State. It is without any significance whether or not only part of the still existing enemy State is occupied (example of the present war--France) or whether the entire State territory is occupied (example of the present war--Norway.)

The notion that the USSR had been "dissolved" by the German attack appears in Document 1056-PS: The Organization of the Administration of Occupied Eastern Territories, dated 28 Jun 1941, at:
http://forum.axishistory.com/viewtopic. ... 06#p552506

I. General . . . The regulations of the Hague Rules of Land Warfare which deal with the administration of a country occupied by a foreign armed power are not valid since the USSR is dissolved and the Reich, as a result, has the duty of exercising all the powers of government and the other usual powers of sovereignty in the interest of the inhabitants. All measures therefore, which the German administration deems necessary and suitable for the execution of this comprehensive task are permissible.

* * * * *

g. With the dissolution of the USSR which accompanied the defeat of this state there is no longer any state structure in the Eastern Regions and consequently no state citizenship for the inhabitants. However, for practical reasons with respect to citizenship the further existence of a common state must be assumed for the time being, so that the inhabitants should not be considered as stateless, which is undesirable for various reasons. The final question of state citizenship can only be decided later since it depends on the state development in the East. Since this problem can only be solved for the whole Eastern Territory, the subordinate authorities must refrain from every independent ruling. At a given time the Reich Minister for the Eastern territories will issue appropriate decrees.

[michael mills]

Also, the German attacks against both countries were in violation of non-aggression treaties which Germany had signed and had not renounced.

Actually, Germany denounced its 1934 non-aggression pact with Poland early in April 1939, soon after the announcement of the British guarantee to Poland.

[David Thompson]

Michael -- You wrote:

Actually, Germany denounced its 1934 non-aggression pact with Poland early in April 1939, soon after the announcement of the British guarantee to Poland.

(1) The denunciation took place late in April, on the 28th. See

No. 13 : Extract from Herr Hitler's speech to the Reichstag on April 28, 1939.
http://www.yale.edu/lawweb/avalon/wwii/ ... blbk13.htm
No. 14 : German Government Memorandum handed to the Polish Government on April 28, 1939.
http://www.yale.edu/lawweb/avalon/wwii/ ... blbk14.htm
No. 15 : Speech made by M. Beck, the Polish Minister for Foreign Affairs in Parliament on May 5, 1939.
http://www.yale.edu/lawweb/avalon/wwii/ ... blbk15.htm
No. 16 : Memorandum communicated to the German Government by the Polish Government on May 5, 1939, in reply to the German Government memorandum of April 28, 1939.
http://www.yale.edu/lawweb/avalon/wwii/ ... blbk16.htm

(2) The treaty appears to require six month's notice for a renunciation to be effective:

If the declaration is not denounced by one of the two Governments six months before the expiration of this period [the term of the treaty was 10 years], it will continue in force, but can then be denounced by either Government at any time on notice of six months being given.

No.1 : Text of German-Polish Agreement of January 26, 1934.
http://www.yale.edu/lawweb/avalon/wwii/ ... blbk01.htm

and the German invasion of Poland (1 Sept 1939) preceded the effective date of the renunciation (28 Oct 1939) by nearly two months.

[Patzinak]

A relatively recent paper by three professors in Economics provides an overall picture of the burdens imposed on France. The authors use a sophisticated model (which is 'way above my level) to estimate not only current costs, but also projected costs in case of a German victory, as well as the impact of German plundering on post-Liberation economic policies.

I do not pretend to understand their model, and anyone who can criticise it intelligently and, perhaps, produce a comment couched in layman's terms is AFAIC, more than welcome.

Abstract: Occupation charges paid by France to Nazi Germany represent one of the largest international transfers and contributed significantly to the German war effort. We employ a neoclassical growth model that incorporates essential features of the occupied economy to assess the welfare costs of the policies that managed the payments to Germany. Our lower bound estimates show that occupation payments required a severe cut in consumption. A draft of labor to Germany and a reduction of real wages added to this burden. Management of the accumulated domestic debt required large budget surpluses; but post-Liberation inflation slashed the real debt.


To finance its continuing war on other fronts, Germany secured a massive and, perhaps, unparalleled transfer of resources from France. […] From the outset, French cooperation was predicated on the generally held belief that the Nazi victory had ushered in a new era. Vichy's economic regime and its considerable success in delivering resources to Germany was based on this conviction. […]

[The adopted model] guarantees that we do not overestimate the costs, as market imperfections would amplify the burden imposed on France. Yet, even with this downward bias, the costs of the occupations were alarmingly high. We find that the burden imposed on the French economy caused it to shrink at a rapid pace, severely curtailing consumption and creating large debt and monetary overhangs. […]

[France's] contributions to the Nazi war machine […] are probably representative of the maximum degree of exploitation that is feasible when a state is left intact. […]

[…] In 1940 when the military accounted for 36 percent of German GDP, imports accounted for 7 percent of total GDP. By 1943, when military spending had risen to 60 percent of GDP, 16 percent of GDP was obtained abroad. To feed Germany's armaments machine, France and other countries supplied key inputs—especially food, coal, and oil—practically ensuring that their manufacturing sectors would shrink. France was reduced to 8 percent of its prewar supply of oil, and it was cut off from 40 percent of its coal, which typically had come from German sources. Consequently, French output slumped in 1940 and never recovered. Shortages of food led to productivity declines, which were particularly acute in the mines, where there was a close correlation between caloric intake and output. […] In 1943 Germany took 50 percent of French iron ore, 99 percent of cement, 92 percent of trucks, and 76 percent of locomotives.

Labor was an equally serious problem for the Reich as more and more German men were drafted to the fronts. […] French skilled and semi-skilled workers were extremely desirable compared to the unskilled but more numerous laborers from east of the Reich.

[…]

During World War II the French economy became a vital part of the German war machine. […] Even though the measure of GDP is fragile and an underestimate because of the substantial black market, which may have reached 20 percent of the economy, the total resources extracted by the Nazis are stunning. In the partial first year of occupation, nearly 20 percent of GDP was transferred, rising to well over a third of GDP in 1941 and 1942. The German defeat at Stalingrad led to complete mobilization and a higher level of exploitation in 1943 and 1944.

Furthermore, in the heady days of victory, the Nazis went on a binge of looting. T[…]he seizure of assets, concentrated in 1940 and including works of art, was estimated by Milward to total 154 billion 1938 francs for 1940–1944. Roughly a third of the total, 52.4 billion francs, was military equipment. Although it was far from trivial, for purposes of our formal analysis, we exclude looting because this seizure of assets was effectively a lump-sum tax that did not distort the incentives to produce output.

[…] After Napoleon's defeat at Waterloo and after the Franco-Prussian war, France was forced to pay reparations for occupation and the cost of the war in 1815 and 1871. Imposing occupation payments on the French in 1940, the Germans made pointed comparisons to the post-World War I reparations settled on them. […] The 1815 and 1871 reparations were paid in full and ahead of schedule by the French government, borrowing partly from abroad. The post-World War I German reparations were set much higher than earlier French reparations. However, Germany did not meet its reparations obligations. Given that Weimar Germany borrowed more additional funds than it repaid, the effect was to reverse reparations, raising income and consumption.

[According to Table 2: German reparations, 1923-31 = 83% of 1 year's GDP; French reparations, 1940–44 = 111% of 1 year's GDP, 147% if looting is included.]

Unlike previous reparations, delivered at the end of hostilities, the occupation costs imposed on defeated France in 1940 were open-ended; Hitler was adamant that he would only consider a peace treaty once the war was over. […I]n contrast to 1815 or 1871 or post-World War I Germany, Vichy had no access to outside capital markets and, hence, did not have the option to finance its obligations with foreign loans. But as a measure of size, potential debt service reveals that France's burden at minimum matched Germany's. Of course, France made these payments; Germany did not. As will be seen, the methods of payment proved “crushing,” reducing consumption far more than the 2.6 percent dedicated to debt service in Table 2.

[…]

Extraction of resources began the moment the German Army first rolled into France. The military were initially supplied with an occupation currency, the Reichkreditkassenschein, which was legal tender only in the occupied countries and could not be spent in Germany or exchanged against the Reichsmark. The Bank of France was required to accept these notes and redeem then in francs, charging them as costs of occupation to the French government. The 50 billion francs of Reichkreditkassenschein are thus included as part of the occupation payments. The issue of this currency ceased once the agreement on occupation payments provided the German authorities with French francs to spend, and it was gradually demonetized between 30 April 1941 and 1 December 1943. [Aly, pp84–88, gives a more detailed description of the RKK.]

The exchange rate between the franc and the Reichkreditkassenschein was proclaimed to be 20 to one, which later became the official rate between the Reichsmark and the franc. According to Milward, this rate overvalued the mark by 50 percent using the dollar-franc and dollar-Reichsmark rates of June 1940, or 54 to 63 percent using the exchange rates against the pound in 1939. Exchange rates for 1 September 1939 implied an even greater overvaluation. French goods were therefore intended to be cheap for the occupying German army.

[…] In the Armistice talks in late 1940, the French were stunned and protested when they were informed during the negotiations that they would be obliged to pay occupation costs of 20 million Reichsmarks, or 400 million francs a day. Added to these were indemnities paid to owners of property occupied by the German army and compensation for requisitions.

[…]

At the outbreak of the war, French real GDP per capita exceed Germany's, and the Germans saw no reason why this difference should be sustained. The willingness of Vichy to collaborate with the Nazis reflected the rough consensus of the majority of the French political class that cooperation was in the long-term national interest. Faced with Nazi ruthlessness and the threat to society on many levels, the French concluded that collaboration was a lesser evil, permitting a peaceful rather than a violent seizure of resources, with the costs of extraction kept quite low for the exploiter. […]

[…]

Fearful that inflation would frighten investors and would raise government financing costs by driving up yields, Vichy's policy makers sought to prevent the growing stock of currency from having its full inflationary effect.

[…]

Wage and price controls were imposed from the very beginning in 1939. Wages soon began to lag prices and Michel Mitzakis estimated that, by 1944, wages had risen on average by 60 percent and prices, excluding the black market, had increased by 150 percent.

[…] In September 1941 there had been 1,000,567 POWs and 48,567 civilian workers in Germany; by the fall of 1943 POWs had fallen to 739,000 and civilians rose to 649,000. These 1,388,000 workers in Germany represented a reduction of about 10 percent of the French labor force. Added to the loss of the industrialized regions of the Nord and Alsace-Lorraine, the drastic reduction in oil and coal supplies, and credit restrictions, this reduction of the labor force seriously compromised France's productive capacity and her ability to deliver goods to Germany.

[…]

A central question faced by the Nazis was whether to deploy French labor in France or in Germany. If all the variables are set at their steady-state levels, and the only imposition on the French economy was the retention of POWs and the labor draft to Germany, the loss would be an annual 10.26 percent cut in consumption, representing a very large decline in living standards. Wage and price controls produced a loss of 8.25 percent per year for each of five years. By far the largest factor was the government spending and occupation payments, which cost consumption annually 45.89 percent. The remaining individual effects are relatively small by comparison. Net exports are slightly expansionary, as is money growth. […]

Even these understated welfare costs reveal the shocking effects of Nazi and Vichy policies on the population. […]

[…]

The cost borne by France was extraordinarily high […].

Under even the most optimistic scenario that Vichy's policy makers could have believed, where the war ended in 1942 and there was an immediate termination of occupation costs, the financing of the transfers to the Nazis imposed a minimum welfare cost equal to a 12.6 percent reduction of consumption for 20 years plus the cost of financing a debt overhang equal to 88 percent of steady-state GDP. […]

Sources:

• Aly, G (2007) Hitler's Beneficiaries : Plunder, Racial War, and the Nazi Welfare State. 1st US ed, New York: Metropolitan Books. ISBN 0805079262.
  
  Occhino, F, et al (2008) How Much Can a Victor Force the Vanquished to Pay? France under the Nazi Boot. J Econ Hist 68(1): 1–45.

--Patzinak

[David Thompson]

Here is the rest of the French prosecution's presentation of the case on German looting activities in France. This is taken from vol. 6 of the IMT proceedings [General index at http://www.yale.edu/lawweb/avalon/imt/proc/v6menu.htm ; this section at http://www.yale.edu/lawweb/avalon/imt/p ... gerthoffer ]

M. CHARLES GERTHOFFER (Assistant Prosecutor for the French Republic): Mr. President, Your Honors, I come to the sixth section of this presentation, which deals with the economic pillage of France.

When the Germans invaded France, they found there considerable wealth. They set about with ingenuity to seize it and also to subjugate the national production. When they failed to attain their ends by mere requisitions, they resorted to devious methods, using simultaneously ruse and violence, striving to cloak their criminal actions with legality.

To accomplish this, they misused the conventions of the armistice. These, in fact, did not contain any economic clauses and did not include any secret provisions but consisted only of regulations, which were published.

Nevertheless, the Germans utilized two clauses to promote their undertakings. I submit to the Tribunal as Document Number RF-203 a copy of the Armistice Conventions, and I cite Article 18, which reads as follows:

"The maintenance costs of German occupation troops in French territory will be charged to the French Government."

This clause was not contrary to the regulations of the Hague Conventions, but Germany imposed payment of enormous sums, far exceeding those necessary for the requirements of an occupation army. Thus she was enabled to dispose, without furnishing any compensation, of nearly all the money which, in fact, was cleverly transformed into an instrument of pillage.

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Article 17 of the Armistice Convention reads as follows:

"The French Government undertakes to prevent any transfer of economic securities or stocks from the territory to be occupied by the German troops into the non-occupied area or into a foreign country. Those securities and stocks in the occupied territory can be disposed of only in agreement with the Reich Government, it being understood that the German Government will take into account what is vitally necessary for the population of the non-occupied territories."

Apparently the purpose of this clause was to prevent things of any kind which might be utilized against Germany from being sent to England or to any of the colonies. But the occupying power took advantage of this to get control of production and the distribution of raw materials throughout France, since the non-occupied zone could not live -without the products of the occupied zone and vice versa.

This intention of the Germans is proved particularly by Document Number 1741-PS which was discovered by the American army, and which I now submit to the Tribunal as Exhibit Number RF-204.

I do not want to trouble the Tribunal by reading this long document, I shall give only a short summary.

It is a secret report, dated 5 July 1940 addressed to the President of the Council ...

THE PRESIDENT: M. Gerthoffer, as this is not a document of which we can take judicial notice, I think you must read anything that you wish to put in evidence.

M. GERTHOFFER: I shall read a passage of the document to the Tribunal.

THE PRESIDENT: Very well.

M. GERTHOFFER:

"Article 17 grants Germany the right to seize the securities and economic reserves in occupied territory, and any arrangements of the French Government are subject to approval by Germany.

"In compliance with the request of the French Government, Germany has agreed that when considering applications of the French Government regarding the disposal of securities and reserves in the occupied zone, she will also take into consideration the needs of the inhabitants of the non-occupied zone."

I shall cite only this passage in order to shorten my explanatory remarks, and I now come to the following document, which is in the nature of a reply to the German official who drew up this

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report, a document which I submit as Exhibit Number RF-205 (Document Number EC-409) and which is a document found by the American army. Here is the reply to the document from which I just quoted one passage:

"The elimination of the demarcation line is now out of the question, and if the revival of the economic life of France is thereby paralyzed, that is quite immaterial to us. The French have lost the war and must pay for the damages. Upon my objection that France would then soon become a center of unrest, I was answered that either shots would settle that or the occupation of the still free zone.

"For all concessions we make, the French must pay dearly in deliveries from the unoccupied zone or the colonies. We must strive to stop non-coordination. in the economic field in France."

Finally, another document captured by the U.S. Army which I submit as Exhibit Number RF-206 (Document Number EC-325), signed by Dr. Gramsch, gives us the following information:

"In the course of the negotiations regarding relaxation of the restrictions of the demarcation line, it has been suggested that the French Government seize the gold and foreign currency in the whole of France."

Further in this document:

"The foreign currency reserves of occupied France would strengthen our war potential. This measure could, moreover, be used in negotiations with the French Government as a means of pressure in order to make if show a more conciliatory attitude in other respects."

A study of these documents shows the German, intent, in disregard of all legal principles, to get all the wealth and economy of France under their control. Through force the Germans succeeded, after one year of occupation, in putting all or nearly all the French economy under their domination. This is evident from an article, published by Dr. Michel, director of the Economic Office, attached to the Military Government in France which appeared in the Berliner Borsen Zeitung, of 10 April 1942. I submit it as Document Number RF-207, and shall read one passage from it:

"The task of the competent offices of the German military administration should be regarded as directing 'Economic Direction,' that is issuing directives and at the same time seeing that these directives are really followed."

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Further, on Page 12 of the statement, Dr. Michel writes:

"Now that the direction of raw materials and the placing of orders has been organized and is functioning efficiently, rigorous restrictions on consumption not important to war economy are a matter of prime consideration in France. The restrictions imposed upon the French population in respect of food, clothing, footwear, and fuel, have been for some time more severe than in the Reich."

After having shown you, Mr. President and members of the Tribunal, in this brief introduction concerning the economic spoliation of France, the consequences of German domination upon this country, I give you an account of the methods employed to arrive at such a result. This will be the purpose of the four following chapters: German seizure of means of payment; clandestine purchases of the black market; outwardly legal acquisitions; finally, impressment of labor.

1. German seizure of means of payment.

This seizure was the result of paying occupation costs, the one-way clearing system, and outright seizures and levies of gold, bank notes, foreign currency, and the imposition of collective fines (Page 15).

Indemnity for the maintenance of occupation troops:

I shall not recapitulate the legal principles of the matter, but shall merely confine myself to a few explanatory remarks, so that you may realize the pressure which was brought to bear on the leaders in order to obtain the payment of considerable sums.

As I have had the honor of pointing out to you, in the Armistice Conventions the principle of the maintenance of occupation troops is succinctly worded, with no stipulation as to the amount and the method of collection. The Germans took advantage of this to distort and amplify this commitment of France, which became nothing more than a pretext for the imposition of exorbitant tribute.

At the first sessions of the Armistice Commission, the discussions bore on this point, while the French pointed out that they could only be forced to pay a contractual indemnity representing the cost of maintaining an army strictly necessary for the occupation of the territory. The German General Mieth had to recognize the just foundation of this claim and declared that troops which were to fight against England would not be maintained at expense to France.

This is evident from an extract of the minutes of the Armistice Commission, which I submit as Document Number RF-208. But later this General Mieth apparently was overruled by his superiors, since in the course of a subsequent session, 16 July 1940, without expressly going back on his word, he declared in this respect that

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he could not give any reply, that this question would no longer be discussed, and that, in short, everything necessary would be done to enable the French Government to draw up its budget. This appears from an extract of the minutes of the Armistice Commission which I submit as Exhibit Number RF-209.

On 8 August 1940 Hemmen, Chief of the German Economic Delegation, at Wiesbaden, forwarded a memorandum to General Huntziger, President of the French Delegation, in which he stated:

"As at present it is impossible to assess the exact costs of occupation, daily installments of at least 20 million Reichsmark are required until further notice, at a rate of exchange of I mark to 20 French francs.

"That is to say, 400 million French francs daily. In this amount the costs for billeting troops were not included, but were to be paid separately."

This is found in Document 210 (Document Number RF-210), which I submit to the Tribunal and which bears the signature of Hemmen. These exorbitant requirements provoked the reply of 12 August 1940, in which it was emphasized that the amount of the daily payment did not permit the supposition that it had been fixed in consideration of the normal forces of an occupation army and the normal cost of the maintenance of this army, that, moreover, such forces as corresponded to the notified figure would be out of proportion to anything that military precedent and the necessity of the moment might reasonably justify. This is the content of a note of 12 August, submitted as Document Number RF-211.

On 15 August 1940 the German delegation took notice of the fact that the French Government was ready to pay some accounts, but in a categorical manner refused to discuss either the amount of payment or the distinction between occupation and operation troops. This is found in Document Number RF-212, which I submit to the Tribunal.

On 18 August the French delegation took note of the memorandum of 15 August and made the following reply (Document Number RF-213):

". . that France is to pay the costs for the maintenance of operation troops is a demand incontestably beyond the spirit and the provisions of the Armistice Convention.

"... that the required costs are converted into francs at a rate considerably in excess of the purchasing power of the mark and franc respectively; furthermore, that the purchases of the German Army in France are a means of control over the life in this country and that they will, moreover, as the German Government admits, partly be replaced by deliveries in kind."

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The memorandum terminates as follows:

"In these circumstances the onerous tribute required of the French Government appears arbitrary and exceeds to a considerable extent what might legitimately be expected to be demanded.

"The French Government, always anxious to fulfill the clauses of the Armistice Convention, can only appeal to the Reich Government in the hope that it will take into account the arguments presented above."

THE PRESIDENT: The Court will adjourn now.

[The Tribunal recessed until 1400 hours.]

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Afternoon Session

M. GERTHOFFER: This morning I had the honor of presenting to the Tribunal the fact that the Germans demanded of France an indemnity of 400 million francs a day for the maintenance of their army of occupation. I indicated that the French leaders of that time, without failing to recognize the principle of their obligations, protested against the sum demanded.

At the moment of their arrival in France the Germans had issued, as in the other occupied countries, Reichskreditkasse notes and requisition vouchers over which the bank of issue had no control and which was legal tender only in France. This issue represented a danger, for the circulation of this currency was liable to increase at the mere will of the occupying power.

At the same time, by a decree of 17 May 1940, published in the VOBIF of 17 May 1940, Number 7, which appears as Document Number 214 in the document book (Exhibit Number RF-214), the occupying power fixed the rate of the Reichsmark at 20 French francs per mark, whereas the real parity was approximately 1 mark for 10 French francs.

The French delegation, having become concerned over the increasing circulation of the Reichskreditkasse notes and over the increased volume of German purchases, as well as over the rate of exchange of the mark, was informed by the German delegation, on 14 August 1940, of its refusal to withdraw these notes from circulation in France. This is to be found in a letter of 14 August, which I submit as Document Number RF-215.

The occupying power thus unjustifiably created a means of pressure upon the French Government of that time to make it yield to its demands concerning the amount of the occupation costs, as well as concerning the forced rate of the mark and the clearing agreements, which will be the subject of a later chapter. General Huntziger, President of the French delegation, addressed several dramatic appeals to the German delegation in which he asked that France should not be hurled over the precipice, as shown by a teletype report addressed by Hemmen on 18 August 1940, to his Minister of Foreign Affairs, a report discovered by the United States Army, bearing the Document Number 1741-PS(5), which I submit to the Tribunal as Exhibit Number RF-216. Here is the interesting passage of this report:

"These large payments would enable Germany to buy up the whole of France, including its industries and foreign investments, which would mean the ruin of France."

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In a letter and a note of 20 August, the German delegation summoned the French delegation to make partial payments, specifying that no distinction would be made between the German troops in France, that the strength of the German occupation would have to be determined by the necessities of the conduct of war. In addition, the fixing of the rate of the mark would be inoperative as far as the payments were concerned, since they would constitute only payments on account. I submit the note of the 20th of August of the German Government as Document Number RF-217.

The next day, 21 August 1940, General Huntziger, in the course of an interview with Hemmen, made a last vain attempt to obtain a reduction in the German demands. According to the minutes of this interview (Document Number RF-218), Germany was already considering close economic collaboration between herself and France through the creation of commissioners of exchange control and of foreign trade. At the same time Hemmen pledged elimination of the demarcation line between the two zones. But he refused to discuss the question of the amount of the occupation costs.

In a note of 26 August 1940, the French Government indicated that it considered itself obliged to yield under pressure and protested against the German demands; this note ended with the following passage:

"The French nation fears neither work nor suffering, but it must be allowed to live. This is why the French Government would be unable in the future to continue along the road to which it is committed if experience showed that the extent of the demands of the government of the Reich is incompatible with this right to live."

(Document Number RF-219.)

The Germans had the incontestable intention of utilizing the sums demanded as occupation costs, not only for the maintenance, the equipment, and the armament of their troops in France, or for operations based in France, but also for other purposes. This is shown in particular in a teletype from the Supreme Command of the Army, dated 2 September 1940, discovered by the United States Army, which I submit as Exhibit Number RF-220 (Document Number EC-204). There is a passage from this teletype message which I shall read to the Tribunal (Page 22):

"To the extent to which the incoming amounts in francs are not required for the troops in France, the Supreme Command of the Armed Forces reserves for itself the right to make further use of the money. In particular, the allocation of the money to any offices not belonging to the Armed Forces must be authorized by the Supreme Command of the Armed Forces, in order to insure definitely that, first, the entire

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amount of francs required by the Armed Forces shall be covered and that thereafter any possible surplus shall remain at the disposal of the Supreme Command of the Armed Forces for purposes important to the Four Year Plan."

From another teletype message, which was seized in the same manner and which I submit as Exhibit Number RF-221 (Document Number EC-201), I read the following:

"It is clear that there was no agreement at all with the French as to what should be understood by 'costs for maintenance of occupation troops' in France. If we are in agreement among ourselves that at the present moment we must, for practical reasons, avoid interminable discussions with the French, on the other hand there must be no doubt that we have the right to interpret the term 'maintenance' in the broadest possible sense."

Further on in the same teletype, Page 24, Paragraph 2, there is the following:

"In any case, the concessions demanded by the French on the question of specifying the amount of occupation costs and of the utilization of the francs thus delivered must be rejected."

And finally the following paragraph:

"The utilization of sums paid in francs.

"Concerning the use of the francs paid which are not really required for the costs of the maintenance of the occupation troops in France, there can, of course, be no discussion with French authorities."

The French then attempted, in vain, to obtain a reduction in the occupation costs and also a modification in the rate of the mark, but the Germans refused all discussion.

At the beginning of the year 1941, negotiations were resumed. In view of the intransigence of the Germans, the French Government suspended payments in the month of May 1941. Then, at the insistence of the occupying powers, they resumed it, but paid only 300 million francs a day. This is found in the document submitted as Document Number RF-222.

On the 15 December 1942, after the invasion of the entire French territory, Germany demanded that the daily payment of 300 million francs be raised to 500 million a day.

The sums paid for the occupation troops increased to a total of 631,866 million francs, or at the imposed rate, 31,593,300,000 marks. This amount is not only to be gathered from the information given by the French administration, but can also be verified by German documents, in particular by the report of Hemmen.

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Hemmen, Director of the Ministry of Foreign Affairs in Berlin, had been designated President of the German economic delegation of the Armistice Commission, and he was acting, in fact, under the direct orders of his Minister, Von Ribbentrop, as a veritable dictator in economic questions. His chief assistant in Paris was Dr. Michel, of whom we have already spoken.

While maintaining his functions as chief of the economic delegation of the Armistice Commission of Wiesbaden, the same Hemmen was to be appointed by a decision of Hitler, under date of 19 December 1942, Reich Government delegate for economic questions, attached to the French Government. This is verified in the document submitted as Exhibit Number RF-223 (Document Number 1763-PS). Hemmen periodically sent secret economic reports to his minister. These documents were discovered by the United States Army. They are of a fundamental importance in this part of the Trial, since, as you will see, they contain Germany's admission of economic pillage.

These voluminous reports are submitted as Exhibits Numbers RF-224, 225, 226, 227, 228, and 229 (Documents Numbers 1986- PS, 1987-PS, 1988-PS, 1989-PS, 1990-PS, 1991-PS) of the French documentation. It is not possible for me, in view of their length, to read them in their entirety to the Tribunal. I shall confine myself to giving a few brief extracts therefrom in the course of my presentation. To show their importance, here is the translation of the last volume of the Hemmen reports. In this last report, printed in Salzburg on 15 December 1944, on Page 26, Hemmen recognizes that France has paid by way of indemnity for the maintenance of occupation troops 31,693,300,000 marks, that is

THE PRESIDENT: M. Gerthoffer, these documents are in German, are they not?

M. GERTHOFFER: Yes, Mr. President, they are in German. I have only been able to have the last one translated into French. Because of their length it has not been possible for me to have all the translations made, but it is from the last volume, which is translated into French, that I will make certain very brief quotations by way of proof.

THE PRESIDENT: Yes, well then are you confining yourself to the last document, and to certain passages in the last document?

M. GERTHOFFER: I shall limit myself to this.

THE PRESIDENT: And then, as these are not documents of which we can take judicial notice, only the parts which you read will be regarded as part of the Record, and be treated as in evidence.

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M. GERTHOFFER: This enormous sum imposed was much greater than Germany was entitled to demand. In spite of the enormous sums which the Germans may have spent in France during the first two years, they were not able to use a sum less than half of that for which they were credited.

This is shown in the Hemmen report, where on Page 27 (Page 59 of the French translation) he gives a summary of the French payments made as occupational indemnity, and the German expenses in millions of marks corresponding to these expenses. This summary is very short. I shall read it to the Tribunal. It will constitute a German proof in support of my presentation.

French payment
in millions of marks

1940 4,000
1941 6,075
1942 5,475
1943 9,698.3
1944 6,345

German expenditure
in millions of marks

1940 1,569
1941 5,205
1942 8,271
1943 9,524
1944 6,748

This makes from 1940 to 1944 a total amount of 31,593,300,000 marks paid by the French and 31,317 million marks of German expenditure.

The figures contained in this table unquestionably constitute the German admission of the exorbitance of the indemnity for the maintenance of occupation troops, for Germany was not able to utilize the credit at its disposal. Most of it served to finance expenses relative to armament, operation troops, and feeding of Germany. This is shown by Document Number EC-232, which I submit as Exhibit Number RF-230.

According to the calculation of the "Institut de Conjoncture," the maximum sum of the indemnity which could be exacted was 74,531,800,000 francs, taking as a basis the average daily costs of upkeep per troop unit during the Allied occupation of the Rhineland in 1919, namely the sum of seventeen francs or twenty-one francs with billeting, which was at that time provided by the German Government. According to the report on the average cost of living (coefficient 3.14) the sum of 21 francs should correspond to 66 francs at the 1939 value when applying the coefficient of depreciation of the franc during the occupation, that is 2.10 percent, or a daily average cost of 139 francs per day. Granting that the real costs of the occupation army were half of those calculated by Hemmen, that is to say, 27,032,279,120 marks, this sum is still lower than the 74,531,800,000 calculated by the Institut de Conjoncture.

Even accepting the calculation most favorable to the accused, one can estimate that the indemnity imposed without justification

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amounted to 631,866 million less 74,531,800,000, that is, 557,334,200,000 francs.

In his final report, Page 10, and Page 22 of the French translation, Hemmen writes:

". . during the 4 years which have elapsed since conclusion of the Armistice, there has been paid for occupation costs and billeting 34,000 million Reichsmark, or 680,000 million francs. France thus contributed approximately 40 percent of the total cost of occupation and war contributions raised in all the occupied and Allied countries. This represents a charge of 830 Reichsmark, or 16,600 francs, per head of the population."

In the second part of this chapter we shall examine briefly the question of clearing. The Tribunal is acquainted with the functioning of clearing, and I shall not revert to this. I shall indicate under what conditions the French Government at the time was made to sign agreements which were imposed upon it. Parallel to the discussions relative to the indemnity for the maintenance of occupation troops, discussions were entered into concerning a Clearing Agreement.

On the 24 July 1940 the German Delegation announced that it would shortly submit a project. On 8 August 1940 Hemmen submitted to the French Delegation a project of a Franco-German arrangement for payment by compensation. This project, which I submit as Document Number RF-231(bis) of the French documentation, shows arbitrary provisions, which could not be voluntarily accepted.

It provided for financial transfers from France to Germany without any equivalent in financial transfers from Germany to France. It fixed the rate of exchange at 20 francs for 1 Reichsmark by a unilateral and purely arbitrary decision, whereas the rate on the Berlin Exchange was approximately 17.65 and the real parity of the two currencies, taking into account their respective purchasing power on both markets, was approximately ten francs for one Reichsmark.

I pass to Page 34. The French Delegation of the Armistice Commission submitted unsuccessfully a counter project, on 20 August 1940, and attempted to obtain a modification of the most unfavorable clauses. I submit this project as Document Number RF-232.

On 29 August 1940, the French delegation at the Armistice Commission brought up in detail the question of the parity of the franc and the Reichsmark. It called attention to the fact that the prohibition of the financial transfers from Germany to France would create gross inequality, whereas the transfers in the other direction

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were organized, and this meant the French Government giving its agreement to a veritable expropriation of French creditors. An extract from this report is submitted as Document Number RF-233.

In a letter of 31 August, General Huntziger again took up in vain the argument concerning the Franc-Reichsmark rate of exchange. I submit this letter as Document Number RF-234.

On 6 September 1940 the French delegation made a new attempt to obtain a modification of the most unfavorable clauses in the draft of the Clearing Agreement, but it encountered an absolute refusal. The German delegation meant to impose under the cloak of a bilateral agreement a project elaborated by it alone.

I quote a passage from the minutes of the Armistice Delegation (Document Number RF-235). Herr Schone, the German delegate, stated:

"I cannot reopen the discussion on this question. I can make no concession."

Concerning the Franc-Reichsmark rate of exchange, on 4 October 1940 Hemmen notified the French delegation that the rate of 20 francs must be considered as definite and according to his own words "this is no longer to be discussed." He added that if the French for their part refused to conclude the payment agreement, that is to say, the arbitrary contract imposed by Germany, he would advise the Fuehrer of this and that all facilities with regard to the demarcation line would be stopped. I submit 'as Document Number RF-236 this passage of the minutes.

Finally, in the course of the negotiations which followed on 10 October 1940, the French delegation attempted for the last time to obtain an alleviation of the drastic conditions which were imposed upon it, but the Germans remained intransigent and Hemmen declared in particular ...

THE PRESIDENT: M. Gerthoffer, do these negotiations lead up to a conclusion, because if they do, would it not be sufficient for your purpose to give us the conclusion without giving all the negotiations which lead up to it?

M. GERTHOFFER: Mr. President, I am just finishing the statement with the last quotation, in which the Tribunal will see what pressure, what threats, were made upon the French, who were then in contact with the Germans. I shall have concluded the discussion on clearing with this quotation, if the Tribunal will allow it, it will be a short one and it will then be finished:

"You are attempting to make the rate of the mark fictitious. I beg you to warn your government that we shall break off negotiations. I have in fact foreseen that you would be unable to prevent prices from rising, but export prices are

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rising systematically. We shall find other means of achieving our aims. We shall get the bauxite ourselves!"

(Document Number RF-237.)

This is the end of the quotation.

Perhaps the Tribunal will allow me a very brief comment. At the Armistice Commission all kinds of economic questions were discussed; and the French delegates resisted, for Germany wanted to seize immediately the bauxite beds which were in the unoccupied zone. This last sentence is the threat: if you do not accept our Clearing Agreement, we shall seize the bauxite. That is to say, we shall occupy by force of arms the free zone.

The so-called compensation agreement worked only to Germany's advantage. The results of the agreement are the following:

At the moment of liberation the total transfer from France to Germany amounted to 221,114 million francs, while the total transfer from Germany to France amounted to 50,474 million francs. The difference -- that is, 170,640 million francs credit balance on the French account -- represents the means of payment which Germany improperly obtained through the functioning of the clearing which she had imposed.

I now come to the third part of this chapter, which will be very brief. This is the seizure of goods and collective fines.

Besides the transactions which were outwardly legal, the Germans proceeded to make seizures and impose collective fines in violation of the principles of international law.

First, a contribution of 1,000 million francs was imposed upon the French Jews on 17 December 1941 without any pretext. This is shown in the documents submitted as Document Number RF-239 and cannot be contested.

Secondly, a certain number of collective fines were imposed. The amount actually known to the Finance Ministry amounts to 412,636,550 francs.

Thirdly, the Germans proceeded to make immediate seizure of gold. Even Hemmen admits in his last secret report, on Pages 33 and 34, Page 72 of the French translation, that on 24 September 1940 the Germans seized 257 kilograms of gold from the port of Bayonne, which represents at the 1939 rate 12,336,000 francs; and in July 1940 they seized a certain number of silver coins amounting to 55 millions.

Still following the secret report of Hemmen, for the period between 1 January to 30 June 1942 Germany had seized in France 221,730 kilograms of gold belonging to the Belgian National Bank, which represents at the 1939 rate the sum of 9,500 million francs.

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It is not possible for me to present in detail the conditions under which the Belgian gold was delivered to the Germans. This question in itself would involve me in an explanation which would take up several sessions. The fact is undeniable since it is admitted by Hemmen. I shall simply indicate that as early as the month of September 1940, in violation of international law, Hemmen had insisted on the delivery of this gold, which had, in May 1940, been entrusted by the National Bank of Belgium to the Bank of France. Moreover, these facts are part of the accusations made against the ex-ministers of the Vichy Government before the High Court of Justice in Paris.

The results of this procedure were long, and frequent discussions took place at the Armistice Commission, and an agreement was concluded on 29 October 1940, but was in fact not carried out because of difficulties raised by the French and Belgians.

According to the former Assistant Director of the Bank of France, the German pressure became stronger and stronger. Laval, who was then determined to pay any price for the authorization to go to Berlin, where he boasted that he would be able to achieve a large scale liberation of prisoners, the reduction of the occupation costs, as well as the elimination of the demarcation line, yielded to the German demands.

Thus, this gold was delivered to the Reichsbank and was requisitioned by order of the Plenipotentiary for the Four Year Plan. The documents relative to this question are submitted as Document Number RF-240.

I shall simply add that after the liberation the Provisional Government of the French Republic transferred to the National Bank of Belgium a quantity of gold equal to that which the Belgian Bank had entrusted to the Bank of France in the month of May 1940.

To conclude the gold question I shall indicate to the Tribunal that Germany was unable to obtain the gold reserve of the Bank of France, for it had been put in safekeeping in good time. Finally, still according to the last secret report of Hemmen, Pages 29 and 49 of the French translation, at the moment of their retreat the Germans seized without any right the sum of 6,899 million francs from branches of the Bank of France in Nancy, Belfort, and Epinal. Document 1741-PS (24). (Exhibit Number RF-241.)

I note for the Record that during the occupation the Germans seized great quantities of gold which they arranged to be bought from private citizens by intermediaries. I cannot give figures for this. I simply touch on the question for the Record.

If we summarize the question of the means of payment which Germany unduly requisitioned in France, we shall reach -- still

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taking the calculation most favorable to the defendants and taking the maximum amount for the cost of maintaining occupation troops -- a minimum total of 745,833,392,550 francs, in round figures 750,000 million francs.

I now come to Page 50, that is to say the use which the Germans made of these considerable sums; and first of all, the black market organized by the occupying power. Here again I don't want to take advantage of your kind attention. I have had the honor of presenting to you the mechanism of the black market in all the occupied countries. I have indicated how it arose, how the Germans utilized it, how, under the orders of the Defendant Göring it was organized and exploited. I do not wish to revert to this, and I shall pass over the whole section of my written expose which was devoted to the black market in France.

I come to Page 69 of my written expose Chapter 3: Ostensibly legal acquisitions.

Under the pressure of the Germans, the Vichy Government had to consent to reserve for them a very high quota of products of all kinds. In exchange the Germans undertook to furnish raw materials, the quantities of which were determined by them alone., But these raw materials, when they were delivered, which was not always the case, were for the most part absorbed by the industry which was forced to supply them with finished products. In fact, there was no compensation, since the occupiers got back in the form of finished products the raw materials delivered and did not in reality give anything in return.

In the report of the Economic Control which has already been quoted, submitted as Document Number RF-107, the following example may be noted which I shall read to the Tribunal:

"An agreement permitted the purchase in the free zone of 5,000 trucks destined for the German G.B.K., whereby the Reich furnished five tons of steel per vehicle or a total of 25,000 tons of steel destined for French industry. In view of the usual destination of the products of our metal industry at that time, this was obviously a one-sided bargain, indeed if our information is exact, the deliveries of steel to be made in return were not even fulfilled, and they were partly used for the defense of the Mediterranean coast, rails, antitank defenses, et cetera."

It is appropriate to call attention to the fact that a considerable part of the levies in kind were the object of no regulation whatever, either because the Germans remained debtors in these transactions, or that they considered without justification that these levies constituted war booty.

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[David Thompson]

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In regard to this there are no documents available; however, the United States Army has discovered a secret report of one called Kraney, the representative of Roges, an organization which was charged with collecting both war booty and purchases on the black market. It appears from this report that in September 1944, the Roges had resold to Germany for 10,858,499 marks, or 217,169,980 francs, objects seized in the southern zone as war booty. I submit this document as Exhibit Number RF-244.

As a result of the means of payment exacted by Germany and of requisitions regulated by her, or not, France was literally despoiled. Enormous quantities of articles of all kinds were removed by the occupiers. According to information given by the French statistical services, preliminary estimates of the minimum of these levies have been made. These estimates do not include damages resulting from military operations, but solely the German spoliations, computed in cases of doubt at a minimum figure. They will be summarized in the eight following sections.

1. Levies of agricultural produce.

I submit as Document Number RF-245, the report of the Ministry of Agriculture and a statistical table drawn up by the Institut de Conjoncture, summarizing the official German levies which included neither individual purchases nor black market purchases which were both considerable. It is not possible for me to read to the Tribunal a table as long as this; I shall confine myself to giving a brief resume of this statistical table.

Here are some of the chief agricultural products which were seized and their estimate in thousands of francs (I am indicating the totals in round figures): Cereals, 8,900,000 tons, estimate 22 million francs; meat, 900,000 tons, estimate 30 million; fish, 51,000 tons, estimate 1 million; wines, liquors, 13,413,000 hectoliters, estimate 18,500,000; colonial products, 47,000 tons, estimate 805,900; horses and mules, 690,000 head; wood, 36 million cubic meters; sugar, 11,600,000 tons.

I shall pass over the details, The Germans settled through clearing and by means of occupation costs 113,620,376,000 francs; the balance, that is 13,000 million, was not settled in any way.

Naturally, these estimates do not include considerable damage caused to forests as a result of abnormal cutting and the reduction of areas under cultivation. There is no mention, either, of the reduction in livestock and damage caused by soil exhaustion. This is a brief summary of the percentage of official German levies on agriculture in relation to the total French production: Wheat, 13 percent; oats, 75 percent; hay and straw, 80 percent; meat, 21 percent; poultry, 35 percent; eggs, 60 percent; butter, 20 percent; preserved fish, 30 percent; champagne, 56 percent; wood for

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industrial uses, 50 percent; forest fuels, 50 percent; alcohol, 25 percent.

These percentages, I repeat, do not include quantities of produce which the Germans bought up either by individual purchases or on the black market. I have had the privilege of presenting to you the fact that these operations were of a considerable scope and amounted for France approximately to several hundred thousand millions of francs. The quantities of agricultural produce thus taken from French consumers are incalculable. I shall simply indicate that wines, champagne, liquors, meat, poultry, eggs, butter were the object of a very considerable clandestine traffic to the benefit of the Germans and that the French population, except for certain privileged persons, was almost entirely deprived of these products.

In Section 2 of this chapter I shall discuss the important question concerning levies of raw materials.

THE PRESIDENT: That would be a good time for us to adjourn for ten minutes. [A recess was taken.]

M. GERTHOFFER: The summary of the levies in raw materials from the statistical point of view is contained in charts which I shall not take the time to read to the Tribunal. I shall submit them as Document Number RP-246 and point out that the total amount of these supplies reaches the sum of 83,804,145,000 francs. On Pages 77 to 80 of my written statement I had thought it necessary to make a summary of these charts, but I consider it is not possible to read even the summary because the figures are too numerous.

According to information provided by the French administration, of that sum the Germans settled, by way of occupation costs and clearing, only 59,254,639,000 francs, leaving the difference of 19,506,109,000 francs charged to the French Treasury.

The percentage of the German levies in relation to the whole French production can be summarized in a chart which I have given in my brief and I ask the Tribunal for permission to read it: "The percentage of levies of raw materials in relation to French production: Coal, 29 percent; electric power, 22 percent; petroleum and motor fuel, 80 percent; iron ore, 74 percent; steel products, crude and half finished, 51 percent; copper, 75 percent; lead, 43 percent; zinc, 38 percent; tin, 67 percent; nickel, 64 percent; mercury, 50 percent; platinum, 76 percent; bauxite, 40 percent; aluminum, 75 percent; magnesium, 100 percent; sulphur carbonate, 80 percent; industrial soap, 67 percent; vegetable oil, 40 percent; carbosol,

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100 percent; rubber, 38 percent; paper and cardboard, 16 percent; wool, 59 percent; cotton, 53 percent; flax, 65 percent; leather, 67 percent; cement, 55 percent; lime, 20 percent; acetone, 21 percent."

This enumeration permits us to consider that officially about three quarters of the raw materials were seized by the occupying power, but these statistics must be qualified in two ways: A large part of the quota of raw materials theoretically left to the French economy was in fact reserved for priority industries, that is to say, those industries whose production was reserved for the occupying power. Secondly, these requisitions and percentages include only the figures of official deliveries; but we have seen that the Germans acquired considerable quantities of raw materials from the black market, especially precious metals: gold, platinum, silver, radium, or rare metals, such as mercury, nickel, tin and copper.

In fact, one can say in general that the raw materials which were left for the needs of the population were insignificant.

Now, I come to Section 3: Levies of manufactured goods and products of the mining industry.

As I had the honor to point out to you in my general remarks, the Germans, using divers means of pressure, succeeded in utilizing directly or indirectly the greater part of the French industrial production. I shall not go over these facts again and I shall immediately pass to a summary of the products which were delivered. I submit as Document Number RF-248 a chart which contains statistical data, according to industries, of levies by the occupying power of manufactured goods during the course of the occupation.

I do not want to tax the patience of the Tribunal by reading this; I shall simply cite the summary of this chart, which is as follows: Orders for products finished and invoiced from 25 June 1940 until the liberation -- Mechanical and electrical industries, 59,455 million; chemical industry, 11,744 million; textiles and leather, 15,802 million; building and construction material, 56,256 million; mines (coal, aluminum, and phosphates), 4,160 million; iron industry, 4,474 million; motor fuel, 568 million; naval construction, 6,104 million; aeronautical construction, -23,620 million; miscellaneous industries, 2,457 million; making a total of 184,640 million.

These statistics should be commented upon as follows:

1) The information which is contained here does not include the production of the very industrialized departments of Nord and of Pas de Calais, attached to the German administration of Brussels, nor does it include the manufactures of the Haut-Rhin, Bas-Rhin, and Moselle departments, actually incorporated into the Reich.

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2) Out of the total sum of 184,640 million francs worth of supplies, the information which we have to date does not as yet permit us to fix the amount regulated by the Germans by way of either occupation costs or clearing, or the balance which was not made the subject of any settlement.

3) If, on the basis of contracts, one made an estimate of the industrial production levied by Germany in the departments of Nord and Pas de Calais, one would obtain a figure for those two departments of 18,500 million, which would bring the approximate total up to more than 200,000 million francs.

The extent of the German levies on manufactured products is summarized in the following chart which I submit to the Tribunal, and which I have summarized on Page 87 of my written statement. I shall take the liberty of reading it once more to the Tribunal. It will show the proportion of the manufactured goods which the French population was deprived of: Automobile construction, 70 percent; electrical and radio construction, 45 percent; industrial precision parts, 100 percent; heavy castings, 100 percent; foundries, 46 percent; chemical industries, 34 percent; rubber industry, 60 percent; paint and varnish, 60 percent; perfume, 33 percent; wool industry, 28 percent; cotton weaving, 15 percent; flax and cotton weaving, 12 percent; industrial hides, 20 percent; buildings and public works, 75 percent; wood work and furniture, 50 percent; lime and cement, 68 percent; naval construction, 79 percent; aeronautic construction, 90 percent.

The scrutiny of this chart leads to the following remarks:

The proportion of entirely finished products is very large, for instance: automobiles, 70 percent; precision instruments, 100 percent; heavy castings, 100 percent; whereas, the proportion of the products in the process of manufacture is not as great, for example: foundry, 46 percent; chemical industry, 34 percent; et cetera.

This state of affairs results from the fact that the Germans directed the products in the process of manufacture -- in theory reserved for the French population -- into finishing industries which had priority, that is to say, whose production was reserved for them.

Finally, through their purchases on the black market, the Germans procured an enormous quantity of textiles, machine tools, leather, perfumes, and so forth. The French population was almost completely deprived of textiles, in particular, during the occupation. That is also the case as regards leather.

Now, I reach Section 4: the removal of industrial tools.

I shall not impose on your time. This question has already been treated as far as the other occupied countries are concerned. I would merely point out that in France it was the subject of

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statistical estimates which I submit to you as Document Number RF-251. These statistical estimates show that the value of the material which was removed from the various French factories, either private or public enterprise, exceeds the sum of 9,000 minion francs.

It was observed that for many of the machines which were removed, the Germans merely indicated the inventory values after reduction for depreciation and not the replacement value of the machines.

I now come to Section 5: Securities and Foreign Investments. In Document EC-57, which I submitted as Exhibit Number RF-105 at the beginning of my presentation, I had indicated that the Defendant Göring himself had informed you of the aims of the German economic policy and he ventured to say that the extension of German influence over foreign enterprises was one of the purposes of German economic policy.

These directives were to be expressed much more precisely in the document of the 12th of August 1940, which I submit as Exhibit Number RF-252 (Document Number EC-40), from which I shall read a short extract:

"Since" -- as the document says -- "the principal economic enterprises are in the form of stock companies, it is first of all indispensable to secure the ownership of securities in France."

Further on it says:

"The exerting of influence by way of ordinances ......

Then the document indicates all the means to be employed to achieve this, in particular this passage concerning international law:

"According to Article 46 of the Hague Convention concerning Land Warfare, private property cannot be confiscated. Therefore the confiscation of securities is to be avoided in so far as it does not concern state owned property. According to Article 42 and following of the Hague Convention concerning Land Warfare, the authority exercising power in the occupied enemy territory must restrict itself in principle to utilizing measures which are necessary to re-establish or maintain public order and public life.

According to international law it is forbidden in principle to eliminate the still existing boards of companies and to replace them by commissioners! Such a measure would, from the point of view of international law, probably not be considered as efficacious. Consequently, we must strive to force the various functionaries of such companies to work for German economy, but not to dismiss those persons..."

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Further on:

"If these functionaries refuse to be guided by us, we must remove them from their posts and replace them by persons we can use."

We will briefly consider the three categories of seizure of financial investments, which were the purpose of German spoliation during the occupation, and first of all the seizure of financial investments in companies whose interests were abroad.

On the 14th of August 1940 an ordinance was published in VOBIF, Page 67 (Document Number RF-253), forbidding any negotiations regarding credits or foreign securities. But mere freezing of securities did not satisfy the occupying power; it was necessary for them to become outwardly the owners of the securities in order to be able, if necessary, to negotiate them in neutral countries.

They had agents who purchased foreign securities from private citizens who needed money, but above all, they put pressure on the Vichy Government in order to obtain the handing over of the principal French investments in foreign countries. That is why, in particular, after long discussions in the course of which the German pressure was very great, considerable surrenders of securities were made to the Germans.

It is not possible for me to submit to the Tribunal the numerous documents concerning the surrender of these securities: minutes, correspondence, valuations. There would be without exaggeration, several cubic meters of them. I shall merely quote several passages as examples.

Concerning the Bor Mines Company, the copper mines in Yugoslavia of which the greater part of the capital was in French hands, the Germans appointed, on 26 July 1940, an administrative commissioner for the branches of the company situated in Yugoslavia.

This is found in Document Number RP-254 which I submit to the Tribunal. The administrative commissioner was Herr Neuhausen, the German Consul General for Yugoslavia and Bulgaria.

In the course of the discussions of the Armistice Commission Hemmen declared (extract from the minutes of 27 September 1940 at 10:30, which I submit to the Tribunal as Document Number RP-255):

"Germany wishes to acquire the shares of the company without consideration for the juridical objections made by the French. Germany obeys, in fact, the imperative consideration of the economic order. She suspects that the Bor Mines are still delivering copper to England and she has definitely decided to take possession of these mines."

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Faced with the refusal of the French delegates, Hemmen declared at the meeting of 4 October 1940 (1 submit to the Tribunal an extract from the minutes of this meeting as Document Number RF-256):

"I should regret to have to transmit such a reply to my government. See if the French Government cannot reconsider its attitude. If not, our relations will become very difficult. My government is anxious to bring this matter to a close. If you refuse, the consequences will be extremely grave."

M. de Boisanger, the French Delegate, replied:

"I will therefore put that question once more."

And Hemmen replied:

"I shall expect your reply by tomorrow. If it does not come, I shall transmit the negative reply which you have just given."

Then, in the course of the meeting on 9 January 1941, Hemmen stated -- I submit again an extract from the minutes, Document Number RF-257:

"At first I was entrusted with this affair at Wiesbaden. Then it was taken over by Consul General Neuhausen on behalf of a very high-ranking personage (Marshal Göring, and it was handled directly in Paris by M. Laval and M. Abetz."

As far as French investments in petroleum companies in Romania are concerned, the pressure was no less. In the course of the meeting of 10 October 1940, of the Armistice Commission, the same Hemmen stated (I submit as Document Number RF-258, an extract from the minutes of the meeting):

"Moreover we shall be satisfied with the majority of the shares. We will leave in your hands anything which we do not need for this purpose. Can you accept on this point in principle? The matter is urgent, as for the Bor Mines. We want all."

On the 22 November 1940, Hemmen stated again (I submit this extract of the minutes of the Armistice Commission meeting as Document Number RF-259):

"We are still at war and we must exert immediate influence over petroleum production in Romania. Therefore we cannot wait for the peace treaty."

When the French delegates asked that the surrender should at least be made in exchange for a material compensation, Hemmen replied in the course of the same meeting:

"Impossible. The sums which you are to receive from us will be taken out of the occupation costs. This will save you from using the printing. This kind of participation will be made

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general on the German side when the new collaboration policy has once been defined."

We might present indefinitely quotations of this kind, and many even much more serious from the point of view of violation of the provisions of the Hague Convention.

All these surrenders, apparently agreed to by the French, were accepted only under German pressure. Scrutiny of the contracts agreed upon shows great losses to those who handed over their property and enormous profits for those who acquired it, without the latter having furnished any real compensation.

The Germans thus obtained French shares in the Romanian petroleum companies, in the enterprises of Central Europe, Norway, and the Balkans, and especially those of the Bor Mines Company which I mentioned. These surrenders paid by francs coming from occupation costs, rose to a little more than two thousand million francs. The others were paid by the floating of French loans abroad, notably in Holland, and through clearing.

Having given you a brief summary of the seizure of French business investments abroad, I shall also examine rapidly the German seizure of registered capitals of French industrial companies.

Shortly after the Armistice, in conformity with the directives of the Defendant Göring, a great number of French industries were the object of proposals on the part of German groups anxious to acquire all or part of the assets of these companies.

This operation was facilitated by the fact that the Germans, as I have had the honor of pointing out to you, were in reality in control of industry and had taken over the direction of production, particularly by the system of "Paten Firmen." Long discussions took place between the occupying power and the French Ministry of Finance, whose officials strove, sometimes without success, to limit to 30 percent the maximum of German shares. It is not possible for me to enter into details of the seizure of these shares. I shall point out, however, that the Finance Minister handed to us a list of the most important ones, which are reproduced in a chart appended to the French Document Book under Document RF-260 (Exhibit Number RF-260).

The result was that the seizure of shares, fictitiously paid through clearing, =reached the sum of 307,436,000 francs; through occupation costs accounts, 160 millions; through foreign stocks a sum which we have not been able to determine; and finally, through various or unknown means, 28,718,000 francs.

We shall conclude the paragraph of this fifth section by quoting part of the Hemmen report relative to these questions (Page 63 of the original and 142 of the French translation). Here is what Hemmen writes, in Salzburg in January 1944, concerning this subject:

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"The fifth report upon the activity of the delegation is devoted to the difficulty of future seizures of shares in France, in the face of the very challenging attitude of the French Government concerning the surrender of valuable domestic and foreign securities. This resistance increased during the period covered by the report to such an extent that the French Government was no longer disposed to give any approval to the transfer of shares even if economic compensation were offered."

Further on, Page 63 in the third paragraph:

"During the 4 years of the occupation of France the Armistice Delegation transferred stocks representing altogether about 121 million Reichsmark from French to German ownership, among them shares in enterprises important for the war in other countries, in Germany, and in France. Details of this are found in the earlier reports of the activities of the delegation. For about half of these transfers, economic compensation was given on the German side by delivery of French holdings of foreign shares acquired in Holland and in Belgium, while the remaining amount was paid by way of clearing or occupation costs. The use of French foreign investments as a means of payment resulted in a difference, between the German purchasing price and the French rate, of about 7 million Reichsmark which went to the Reich."

There is reason to emphasize that the profit derived by Germany merely from the financial point of view is not 7 million Reichsmark, or 140 million francs according to Hemmen, but much greater. In fact, Germany paid principally for these acquisitions with the occupation indemnity, clearing, and French loans issued in Holland or in Belgium, the appropriation of which by Germany amounted to spoliation of these countries and could not constitute a real compensation for France.

These surrenders of holdings, carried out under the cloak of legality, moved the United Nations in their declarations made in London on 5 January 1943 to lay down the principle that such surrenders should be declared null and void, even when carried out with the apparent consent of those who made them.

I submit as Document Number RF-261, the solemn statement signed in London on 5 January 1943, which was published in the French Journal Officiel on 15 August 1944, at the time of the liberation. I might add that all these surrenders are the subject of indictments before the French Courts of high treason against Frenchmen who surrendered their holdings to the Germans, even though undeniable pressure was brought to bear upon them.

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I shall conclude this chapter with one last observation The German seizure of real estate in France. It is still difficult to give at this time a precise account of this subject, for these operations were made most often through an intermediary with an assumed name. The most striking is that of a certain Skolnikoff, who during the occupation was able to invest nearly 2,000 million francs in the purchase of real estate.

This individual of indeterminate nationality, who lived in poverty before the war, enriched himself in a scandalous fashion, thanks to his connection with the Gestapo and his operations on the black market with the occupying power. But whatever may have been the profits he derived from his dishonest activities, he could not personally have acquired real estate to the value of almost 2,000 million in France.

I submit, as Document Number RF-262, a copy of a police report concerning this individual. It is not possible for me to read this to the Tribunal in its entirety, but this report contains the list of the buildings and real estate companies acquired by this individual. These are without question choice buildings of great value. It is evident that Skolnikoff, an agent for the Gestapo, was an assumed name for German personalities whose identity has not been discovered up to the present.

Now I shall take up Section 6; the requisition of transport and communication material.

A report from the French administration gives us statistics which are reproduced in very complete charts, which I shall not read to the Tribunal. I shall merely point out that most of the locomotives and rolling stock in good shape were removed, and that the total sum of the requisitions of transport material reaches the sum of 193,450 million francs.

I shall now deal with requisitions in the departments of Haut-Rhin, Bas-Rhin, and Moselle. From the beginning of the invasion the Germans incorporated these departments into the Reich. This question will be presented by the French Prosecution when they discuss the question of Germanization. From the point of view of economic spoliation it must be stressed that the Germans sought to derive a maximum from these three departments. If they paid in marks for a certain number of products, they made no settlement whatever for the principal products, especially coal, iron, crude oil, potash, industrial material, furniture, and agricultural machinery.

The information relating to this is given by the French administration in a chart which I shall summarize briefly and which I submit as Document Number RF-264. The value of requisitions made in the three French departments of the east -- requisitions not paid for by the Germans -- reaches the sum of 27,315 million francs.

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To conclude the question of the departments in the east, I should like to point out to the Tribunal that my colleague, who will discuss the question of Germanization, will show how the firm, Hermann Göring, Werke, in which the Defendant Göring, had considerable interests, appropriated equipment from mines of the large French company called the "Petits-Fils de Francois der Wendel et Cie." (See Document RF-1300.)

I now come to the Section 8, concerning miscellaneous levies.

1) Spoliations in Tunisia. The Germans went into Tunisia on 10 November 1942 and were driven out by the Allied Armies in May 1943. During this period they indulged in numerous acts of spoliation.

THE PRESIDENT: Do you think that it is necessary to go into details of the seizures in this part of the country if they are of the same sort as those in other parts of the country?

M. GERTHOFFER: Mr. President, it is similar; there is only one difference, and that concerns the amount. I believe the principle cannot be contested by anyone; therefore I shall go on.

Gentlemen, I shall also pass over the question of compulsory labor. I shall conclude my summary, however, by pointing out to the Tribunal that French economy suffered enormous losses from the deportation of workers, a subject which was discussed by my colleague. We have calculated the losses in working hours and we estimate -- and this will be my only remark -- that French economy lost 12,550 million working hours through the deportation of workers, a figure which does not include the number of workers who were more or less forced to work for the Germans in enterprises in France.

If you will permit me, gentlemen, I shall conclude this presentation concerning France by giving you a general review of the situation; and I shall refer once more to Hemmen, the economic dictator who actually ruined my country upon the orders of his masters, the defendants. While in the first five reports submitted, despite their apparently technical nature, the author shows the assurance of the victor who can allow himself to do anything, in the last report of 15 December 1944 at Salzburg, the only one I shall refer to, Hemmen sought visibly, while giving his work a technical quality, to plead the case of Germany -- that of his Nazi masters and his own case. He only succeeded, however, in bringing forth unwittingly an implacable accusation against the nefarious work with which he was entrusted. Here are some short extracts, gentlemen, of Hemmen's final report.

On Page I of his report, Page 2 of the French text, he implied the co-responsibility of the German leaders, and Göring particularly. He writes as follows:

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"According to the directives formulated on 5 July 1940 by the Reich Marshal and Delegate of the Four Year Plan, concerning the existing legal situation, the Armistice Convention does not give us rights in the economic domain of the unoccupied parts of France, not even when loosely interpreted."

A little farther on he admits blackmail with regard to the demarcation line with these words (Page 3 of the translation):

"The Petain Government manifested from the beginning a strong desire to re-establish rapidly the destroyed economy by means of German support and to find work for the French population in order to avoid the threat of unemployment, but above all to reunite the two French zones, separated by the demarcation line, into a unified economic and administrative territory. They were at the same time willing to bring this territory into line with German economic direction, under French management, thoroughly reorganizing it according to the German model."

Then Hemmen adds:

"In return for considerable relaxations regarding the demarcation line, the Armistice Delegation has come to an agreement with the French Government to introduce into French legislation the German law, relating to foreign currency."

Farther on, concerning pressure, on Page 4, and Page 7 of the translation, Hemmen wrote:

"Thereby the automatic rise of prices aggravated by the unchecked development of the black market was felt all the more strongly, since wages were forcibly fixed."

I pass over the passage in which Hemmen speaks of French resistance. However, I should like to point out to the Tribunal that, on Page 13-Page 29 of the translation -- Hemmen tries to show through financial evaluations and most questionable arguments that the cost of the war per head was heavier for the Germans than for the French. He himself destroys with one word the whole system of defense which he had built up by writing at the end of his bold calculations that from autumn 1940 to February 1944 the cost of living increased 166 percent in France, while in Germany it increased only 7 percent. Now, gentlemen, it is, I am quite sure, through the increase in the cost of living that one measures the impoverishment of a country.

Last of all, on Page 4, and this is my last quotation from the Hemmen report, he admits the German crime in these terms:

"Through the removal, for years, of considerable quantities of merchandise of every kind without economic compensation,

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a perceptible decrease in substance had resulted with a corresponding increase in monetary circulation, which had led ever more noticeably to the phenomena of inflation and especially to a devaluation of money and a lowering of the purchasing power."

These material losses, we may say, can be repaired. Through work and saving we can re-establish, in a more or less distant future, the economic situation of the country. That is true, but there is one thing which can never be repaired -- the results of privations upon the physical state of the population. If the other German crimes, such as deportations, murders, massacres, make one shudder with horror, the crime which consisted of deliberately starving whole populations is no less odious.

In the occupied countries, in France particularly, many persons died solely because of undernourishment and because of lack of heat. It was estimated that people require from 3,000 to 3,500 calories a day and heavy laborers about 4,000. From the beginning of the rationing in September 1940 only 1,800 calories per day per person were distributed. Successively the ration decreased to 1,700 calories in 1942, then to 1,500, and finally fell to 1,220 and 900 calories a day for adults and to 1,380 and 1300 for heavy laborers; old persons were given only 850 calories a day. But the true situation was still worse than the ration theoretically allotted through ration cards; in fact, frequently a certain number of coupons were not honored.

The Germans could not fail to recognize the disastrous situation as far as public health was concerned, since they themselves estimated in the course of the war of 1914-1918 that the distribution of 1,700 calories a day was a "regime of slow starvation, leading to death."

What aggravated the situation still more was the quality of the rations which were distributed. Bread was of the poorest quality; milk, when there was any, was skimmed to the point where the fat content amounted to only 3 percent. The small amount of meat given to the population was of bad quality. Fish had disappeared from the market. If we add to that an almost total lack of clothing, shoes, and fuel, and the fact that frequently neither schools nor hospitals were heated, one may easily understand what the physical condition of the population was.

Incurable sicknesses such as tuberculosis developed and will continue to extend their ravages for many years. The growth of children and adolescents is seriously impaired. The future of the race is a cause for the greatest concern. The results of economic spoliation will be felt for an indefinite period.

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THE PRESIDENT: Could you tell me what evidence you have for your figures of calories?

M. GERTHOFFER: I am going to show you this at the end of my presentation. It is a report of a professor at the Medical School of Paris who has been specially commissioned by the Dean of the University to make a report on the results of undernourishment. I will quote it at the end of my statement. I am almost there.

The results of this economic spoliation will be felt for an indefinite length of time. The exhaustion is such that, despite the generous aid brought by the United Nations, the situation of the occupied countries, taken as a whole, is still alarming. In fact, the complete absence of stocks, the insufficiency of the means of production and of transport, the reduction of livestock and the economic disorganization, do not permit the allotting of sufficient rations at this time.

This poverty, which strikes all occupied countries, can disappear only gradually over a long period of time, the length of which no one can yet determine if in certain rich agricultural regions the producers were able during the occupation to have and still do have a privileged situation from the point of view of food supply, the same is not true in the poorer regions nor in urban districts. If we consider that in France the urban population is somewhat more numerous than the rural population, we can state clearly that the great majority of the French population was subject to and still remains subject to a food regime definitely insufficient.

Professor Guy Laroche, delegated by the Dean of the Faculty of Medicine of Paris to study the consequences of undernourishment in France as a result of German requisitions, has just sent a report on this question.

I do not wish to prolong my explanation by reading the entire report. I shall ask the Tribunal's permission to quote the conclusion, which I submit as Document Number RF-264(bis). I received the whole report only a few days ago. It is submitted in its entirety, but I have not been able to have 50 copies made of it. Two copies have been made and are being submitted. Here are Dr. Laroche's conclusions:

"We see how great the crime of rationing was, which was imposed by the Germans upon the French during the occupation period from 1940 to 1944. It is difficult to give exact figures for the number of human lives lost due to excessive rationing. We would need general statistics and these we have been unable to establish.

"Nevertheless, without overestimating, we may well believe that, including patients in institutions, the loss of human

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life from 1940 to 1944 reached at least 150,000 persons. We must add a great number of cases which were not fatal, of physical and mental decline often incurable, of retarded development in children, and so forth.

"We think that three conclusions can be drawn from this report, which of course is incomplete:

" 1.) The German occupation authorities deliberately sacrificed the lives of patients in institutions and hospitals.

"2.) From the way everything happened it seemed as if they had wished to organize, in a rational and scientific fashion, the decline of the health of adolescents and adults.

"3.) Suckling babies and young children received a normal ration; it is probable that this privileged position is explained by the fact that the Nazi leaders hoped to spread their doctrine more easily among beings who would not have known any other conditions of life and who would, because of a -planned education, have accepted their doctrine, for they knew they could not expect to convince adolescents and adults except through force."

The report is signed by Professor Guy Laroche.

This report, gentlemen, has attached to it a photograph, which you will find at the end of the document book. I beg to hand it to you. The unfortunate beings that you see in that picture are not the victims of a concentration or reprisal camp. They are simply the patients of an asylum in the outskirts of Paris who fell into this state of physical weakness as a result of undernourishment. If these men had had the diet of the asylum prior to rationing, they would have been as strong as normal people. Unfortunately for them they were reduced to the official rationing and were unable to obtain the slightest supplement.

Do not let adversaries say:

"But the German people are just as badly off!"

I should reply that, in the first place, this is not true. The German did not suffer cold for four years; he was not undernourished. On the contrary, he was well fed, warmly clothed, warmly housed, with products stolen from the occupied countries, leaving only the minimum necessary for existence for the peoples of these countries.

Remember, gentlemen, the words of Göring, when he said:

"If famine is to reign, it will not reign in Germany."

Secondly I should say to my adversaries if they made such an objection: The Germans and their Nazi leaders wanted the war which they launched, but they had no right to starve other peoples in order to carry out their attempt at world domination. If today they are in a difficult situation, it is the result of their own behavior;

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and they seem to me to have no right to take recourse to the famous sentence: "I did not want that."

I am coming to the end of my statement. If you will permit me, gentlemen, I will conclude in two minutes the whole of this presentation by reminding the Tribunal in a few words what the premeditated crime was, of which the German leaders have been accused, from the economic point of view.

The application of racial and living space theories was bound to engender an economic situation which could not be solved and force the Nazi leaders to war.

In a modern society because of the division of labor, of its concentration, and of its scientific organization, the concept of national capital takes on more and more a primary importance, whatever may be the social principles of its distribution between nationals, or its possession in all or in part by states. Now, a national capital, public or private, is constituted by the joint effort of the labor and the savings of successive generations.

Saving, or the putting into reserve of the products of labor as a result of deprivations freely consented to, must exist in proportion to the needs of the concentration of the industrial enterprises of the country.

In Germany, a country highly industrialized, this equilibrium did not exist. In fact, the expenditures, private or public, of that country surpassed its means; saving was insufficient. The establishment of a system of obligatory savings was formulated only through the creation of new taxes and has never replaced true savings.

As a result of the war of 1914-1918, after having freed herself of the burden of reparations (and I must point out that two-thirds of the sum remained charged to France as far as this country is concerned), Germany, who had established her gold reserve in 1926, began a policy of foreign loans and spent without counting the cost. Finding it impossible to keep her agreements, she found no more creditors.

After Hitler's accession to power her policy became more definite. She isolated herself in a closed economic system, utilizing all her resources for the preparation of a war which would permit her, or at least that is what she hoped, to take through force the property of her western neighbors and then to turn against the Soviet Union in the hope of exploiting, for her profit, the immense wealth of that great country. It is the application of the theories formulated in Mein Kampf, which had as a corollary the enslavement and then the extermination of the populations of conquered countries.

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In the course of the occupation the invaded nations were systematically pillaged and brutally enslaved; and this would have permitted Germany to obtain her war aims, that is to say, to take the patrimony of the invaded countries and to exterminate their populations gradually, if the valor of the United Nations had not delivered them. Instead of becoming enriched from the looted property, Germany had to sink it into a war which she had provoked, right up to the very moment of her collapse.

Such actions, knowingly perpetrated and executed by the German leaders contrary to international law and particularly contrary to the Hague Convention, as well as the general principles of penal law in force in all civilized nations, constitute War Crimes for which they must answer before your high jurisdiction.

Mr. President, I should like to add that the French Prosecution had intended to present a statement on the pillage of works of art in the occupied countries of western Europe. But this question has already been discussed in two briefs of our American colleagues, briefs which seem to us to establish beyond any question the responsibility of the defendants. In order not to prolong the hearing, the French Prosecution feels that it is its duty to refrain from presenting this question again; but we remain respectfully at the disposal of the Tribunal in case, in the course of the trial, they feel they need further information on this question.

The presentation of the French Prosecution is concluded. I shall give the floor to Captain Sprecher of the American Delegation, who will make a statement on the responsibility of the Defendant Fritzsche.

CAPTAIN DREXEL A. SPRECHER (Assistant Trial Counsel for the United States): May it please the Tribunal, I notice that Dr. Fritz, the defendant's attorney, is not here; and in view of the late hour, it would be agreeable if we hold it over until tomorrow.

THE PRESIDENT: It is 5 o'clock now, so we shall adjourn in any event now.

[The Tribunal adjourned until 23 January 1946 at 1000 hours.]