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                                                    [Page 1]

THIRTY-NINTH DAY

MONDAY, 21ST JANUARY, 1946

M. GERTHOFFER: Mr. President, Your Honours: At the end of
the last session I had the honour 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 accords, functioning to their
benefit almost exclusively.

In a second chapter, entitled "Subjection of Productivity in
the Occupied Territories," I had the honour of expounding to
you that, after the invasion, the factories were under
military guard and that German technicians proceeded to
transfer the best machinery 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 utilised 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; trying to specialise in the manufacture
of objects destined for the civilian population.

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

The German control and seizure continually expanded in
conformity with secret directives given by the defendant
Goering himself, as can be seen in a document dated 2 August
1940, discovered by the Army of the United States, which
bears the number EC-137 and which I place before the
Tribunal under Exhibit 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 yielding of
   shares. It is essential, however, to exploit at once
   every opportunity to allow German economy, in time of
   war, to obtain access to interesting objectives of the
   economy of occupied territories, and to prevent any
   movement of capital which might hinder the realisation
   of the above-mentioned objective."

After becoming acquainted with such a document, no further
doubt is possible as to the intentions of the German rulers.
The proof of the putting

                                                    [Page 2]

into execution of such a plan is clear from a German
document, which will be read when the particular case of
France is called upon in the course of this expose.

The Tribunal will be able to study Michel, the Chief of the
Administrative General Staff on Economic Questions,
connected with the German military command in France, who
exposes 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, by
similar German enterprises which had become their Paten-
Firma or home establishment.

To give an example of this economic domination here are the
orders received by an important French company. This is the
Thomson-Houston house, and I present a letter to the
Tribunal under Number 106 in the French documentation, which
is addressed to this establishment. It is dated Paris, 8
October 1943, to Societe des Procedes Thomson-Houston, 173
Boulevard Haussmann:

   "You are fully responsible for the punctual execution
   and carrying out of the German orders which are passed
   to you, as well as towards the person giving the orders
   in my office, which is the establishment responsible for
   all orders given to France.
   
   To facilitate for you the execution of your obligations,
   the firm: Allgemeine Elektricitaets Gesellschaft,
   Berlin, NW40, Friederich Karl Ufer 2-4, is designated by
   me as the Paten-Firma. I attach the greatest importance
   to your working in a close comradeship on the technical
   level with the above-mentioned firm. The Paten-Firma
   will have the following functions:
   
   1. To cooperate in the establishment of your production
   plan, and to utilise your capacities.
   
   2. To keep itself at your disposal for all technical
   advice which you might need, and to exchange information
   with you.
   
   3. To serve as an intermediary when there is a case for
   negotiations with German services.
   
   4. To keep me informed as to anything that might occur
   that might prevent or limit the accomplishment of your
   obligations.
   
   In order to ensure these tasks, the Paten-Firma is
   authorised 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 authorisation 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 of the manner in which the capacities
   of your factories are being utilised, and permitting it
   to check on the production;
   
   3. By informing it of your connections and communicating
   to it your correspondence with the German services.
   
   It is your duty to inform the Paten-Firma or their
   Firmenbeauftragter to any orders which you may receive."

This is the end of the quotation.

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

In the agricultural domain the Germans used similar means of
pressure. They made wholesale requisitions of produce,
leaving the population only grossly insufficient quantities
to assure their subsistence.

                                                    [Page 3]

I now take up the third chapter, devoted to individual
purchases by the German military or civilian forces in the
occupied countries.

If this presentation 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 organised
methodically by the German rulers to the benefit of 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 to them by their
superiors; but presently the Germans had at their disposal a
quantity of money sufficient to allow them to purchase
without any kind of rationing or by means of special
vouchers considerable quantities of agricultural produce or
of goods of all kinds, notably textiles, shoes, furs,
leather goods, etc. It was thus, for instance, that certain
shoe establishments were obliged every week to sell, in
exchange for special German vouchers, 300 pairs of shoes for
city use, for men, women and children.

This is indicated in an important report of the French
economic control, which I will have occasion to refer to
several times in the course of this presentation and which I
submit to the Tribunal under Number 197.

The individual purchases which constitute a form of economic
pillage were, I repeat, not only authorised but organised by
the German rulers. In fact, when the Germans returned to
their country they were encumbered by voluminous baggage. A
package-sending postal service had been created by the
Germans for the benefit of Germans living in the occupied
countries. The objects were wrapped in a special kind of
paper and provided with seals that granted them a customs
franchise, before their entry into Germany.

In order to get an idea of the volume of the individual
purchases, it is important to refer to the declaration of
one Murdrel, ex-director of the Reichskreditkasse actually
detained in Paris, who was heard before an examining
Magistrate of the Court de Justice de la Seine on the 29th
of October, 1945. This is the declaration made by Murdrel on
the subject of individual purchases. The Judge asked him the
following questions:

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

This will be Exhibit RF 108, Mr. President, the testimony of
Murdel.

THE PRESIDENT: What are you doing about 107? Are you quoting
from 107?

M. GERTHOFFER: Exhibit 107 is a report of the Economic
Control -

THE PRESIDENT: You are asking the Tribunal to take judicial
notice of that, are you?

M. GERTHOFFER: I submit it to the Tribunal, and I shall make
readings from it from time to time in the course of my
declaration.

THE PRESIDENT: And now you are going to read 108?

M. GERTHOFFER: Yes, I shall make readings from 108, on Page
9.

The judge asked Murdel the following questions:

   "What were the needs of the Army of occupation? What
   purchases did you have to make on its account?"
   
   The answer: "It is impossible for me to answer the first
   part of the question. I had tried during the occupation
   to inform myself 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
   non-commissioned officer 50 per cent more, and an
   officer considerably more. Naturally, I have no idea of
   the forces that the occupation army may have included,
   as these forces were extremely variable."

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

   "Aside from this, every soldier on leave returning from
   Germany had
   
                                                    [Page 4]
   
   the right to bring back with him a certain number of
   marks-50. The same held good for any German soldier who
   was stationed for the first time in France. We made the
   exchange of marks for French francs. I calculate that
   the total amount that we paid over each month in this
   way was 5 billion francs.
   
   That is the end of the quotation.

One may thus calculate that a sum of about 250 billion
francs, at least, was spent individually in France by the
Germans, of which the greater portion was employed for the
purchase of products and objects sent to Germany, to the
detriment of the French population.

To assess the importance of this amount, I would say that
about 5 billion francs a month, in other words 60 billion
francs a year, is greater than the budgetary receipts of the
French budget in 1938, since this was only 54 billion francs
per year.

After having studied the individual purchases, I shall
launch upon a fourth chapter, devoted to the organisation 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 grossly insufficient quantities for their own
vital needs. This left free a large quantity of the stock
and of the production which the Germans seized by means of
operations that were, to all appearances, regular,
(requisitions, purchases by official services, individual
purchases or in exchange for vouchers of German priority).
We have just seen that these purchases represented, for
France only, an average of five billion francs per month.

But such a regulation had, as its corollary, a concealment
of merchandise and of products, the purpose being to keep
them from the Germans. This state of things gave birth, in
the occupied countries, to what was called the "black
market," that is to say, secret purchases made in violation
of rationing regulations.

The Germans themselves were not slow in buying in the black
market, to an even greater extent, usually through agents
and sub-agents, recruited amongst the most doubtful elements
of the population, who were charged with finding where these
products could be picked up.

These agents, compromised by reason of their violations of
the rationing legislation, benefited by a total immunity;
but they were constantly under the threat of denunciations
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 for the
services by commissions, which they obtained on the black
market.

The different German organisations in the occupied countries
got into the habit of making secret purchases that became
increasingly important in volume. Indeed they began to
compete amongst themselves for this merchandise, and the
chief result of this competition was a rise in prices, which
threatened to bring about inflation. The Germans, of course,
while they continued to profit by the secret purchases, were
anxious that the money which they utilised should maintain
as high a value as possible.

To obviate such a situation, the rulers of the Reich decided
in June 1942 to organise purchases on the black market
methodically. Thus the defendant Goering, the
"Plenipotentiary of the Four-Year Plan," on the 13th June,
1942, gave Colonel J. Veltjens, the task of centralising the
structure of the black market in the occupied countries.

This fact is proved from a document discovered by the Army
of the United States, which I submit to you as Exhibit RF
109. This includes three documents, one of them being the
nomination of Colonel Veltjens signed by the defendant
Goering. I do not want to waste the time of the Tribunal by
giving a complete reading of these documents. I do not think
they can be contested,

                                                    [Page 5]

but should they be so, later, I should reserve for myself
the privilege of reading them then, unless the Tribunal
would prefer I do so now.

THE PRESIDENT: I am afraid we must adhere to our ruling that
those documents of which we cannot take judicial notice 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 the 13th of June, 1942,
signed by the defendant Goering:

   "The purchases of merchandise affected simultaneously by
   the different organisations of the Wehrmacht and by
   other organisations have, in some of the occupied
   territories, created on the so-called black market, a
   situation which disturbs the methodical exploitation of
   these countries for the needs of the German war economy
   and is also harmful to the prestige indispensable to any
   military or civilian administration. This deplorable
   state of things can no longer be tolerated. I therefore
   charge you to regularise these commercial transactions
   in accordance 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
   affected outside the framework of the normal
   provisioning, or constitute a violation of price
   regulations, must be limited to special cases, and
   carried out only if your assent has been given. I
   approve your proposal to use the units controlled by the
   Reich and, above all, among these, the R.O.G.E.S., for
   the removal of merchandise.
   
   I beg you to submit, at the earliest possible date, a
   plan of work for putting into effect your activity in
   Holland, in Belgium, in France and Serbia. (In Serbia it
   is Consul General Neuhausen who is to be in charge).
   This plan must involve, in addition to the seizure of
   port installations, the utilisation of enterprises whose
   closing may be envisaged in occupied territories. As to
   the results of your activity, I beg you to submit a
   report to me every month, through my representative. The
   first of such reports is to be submitted to me on July
   1st, 1942.
   
   If necessary, it will be the "Central Service of the
   Plan" to make decisions concerning the distribution of
   merchandise thus purchased.
   
   (Signed) Goering."

Thereupon, on September 4th, 1942, the defendant Goering
gave orders for the complete gathering together of all the
merchandise that could be utilised, even if this should
result in signs of inflation in the occupied territories.
This is brought out by a report signed "Wiehl," referring to
the utilisation of funds derived from occupation expenses. I
submit this to the Tribunal, as Exhibit RF 110.

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