Chapter II: Part 2

“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 it 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 Börsen 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.”

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.

I. 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 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 1
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.”

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._]

_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.”

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 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.

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 31,593,300,000 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.

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_ _German expenditure_
_in millions of marks_ _in millions of marks_
1940 4,000 1,569
1941 6,075 5,205
1942 5,475 8,271
1943 9,698.3 9,524
1944 6,345 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 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 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 Führer 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 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.

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 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 exposé which was devoted to the black market in France.

I come to Page 69 of my written exposé. 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.

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 résumé 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 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 RF-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, 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.

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; woodwork 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 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 million 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 . . .”

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 RF-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 RF-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.”

Faced with the refusal of the French delegates, Hemmen declared at the meeting of 4 October 1940 (I 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 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:

“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.”