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 stand-still. 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 will 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.

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._]

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 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 above-mentioned 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 exposé.

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.

“Société des Procédés 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 Elektricitäts 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;

“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 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, ex-director 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 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 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.’

“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 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:

“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.”

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.

“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 office, an office
for the distribution of machines (Maschinenausgleichstelle).

“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 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 _pâte 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 22:

“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 their disposal.

“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.

“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’Humières, Economic Union, _et cetera_), or
collaborating with military authorities buying supplies and with
the bureaus of the German Air force and the Navy.”

THE PRESIDENT: We will adjourn for 10 minutes.

[_A recess was taken._]

M. GERTHOFFER: In the course of my explanations I shall come back to the case of each particular country, concerning the black market operations, in order to show their extent. But I think that, just now, it is established by the Veltjens report, as well as by the passages from the French Economic Control report which I had the honor to read to the Tribunal, that the black market was organized by the leaders of the Reich, and especially by the Defendant Göring.

And to finish the general observations concerning economic plundering, I beg the Tribunal’s permission to give a few explanations from the legal point of view. That is the subject of Chapter 5 of this first part.

From a legal point of view it is not contestable that organized plundering of the countries invaded by Germany is prohibited by the International Hague Convention, signed by Germany and deliberately violated by her, even though her leaders never failed to invoke this Convention every time they tried to benefit by it.