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From another teletype message, which was seized in the same
manner and which I submit as Exhibit RF 221, 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 among
   ourselves we are in agreement on the fact that at the
   present moment we must, for practical reasons, avoid all
   discussion, then on the other hand, discussions with the
   French must leave 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 utilisation of the francs thus
   delivered must be rejected:

And finally the following paragraph:

   "The utilisation of sums paid in francs:
   
   Concerning the utilisation of the francs paid, and the
   fact that their use does not correspond to the costs
   really involved in the maintenance of occupation troops
   in France, this is a question that must be not discussed
   with the 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
(Page 42). 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 power they
resumed it, but paid only 300 million francs a day. This is
found in the document submitted as Exhibit RF 222.

On the 15 September, 1942, after the invasion of French
territory, Germany

                                                   [Page 60]

demanded that the daily payment of 300 million francs be
raised to 500 million.

The sums paid for the occupation troops increased to a total
of 631 866,000,000 francs, or, on the imposed rate,
31,593,300,000 Mark. This amount can be calculated not only
from the information given by the French administration but
can also be verified by German documents, in particular 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 Doctor 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, delegate of the Government
of the Reich for economic questions, attached to the French
Government. This is verified in the Exhibit RF 223.

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 pillaging.

These voluminous reports are submitted under Exhibits RF
224, 225, 226, 227, 228, and 229 of the French
documentation. It is not possible for me, important though
they are, to read them in their entirety to the Tribunal. I
shall confine myself to quoting a few brief extracts in the
course of my presentation. As an example of 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 recognises that France has paid by
way of indemnity for the maintenance of occupation troops
31,593,300,000 Mark, 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.

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 that which 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 could not use even half of
the amount of their credit.

This is brought out 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 Mark 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.

                                                   [Page 61]

   Year         French Payment          German
                in millions of     expenditure
   Marks        in millions of
                                          Mark
   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
The figures contained in this table unquestionably
constitute the German admission of the exorbitance of the
indemnity for the maintenance of occupation troops, since
Germany was not able to utilise the credit at its disposal,
especially as most of this served to finance expenses
relative to armament, operation troops, and feeding of
Germany. This is shown by Document EC 232, which I submit as
Exhibit RF 230 of the French documentation.

According to the calculation of the Economic Analysis
Institute, the maximum sum of the indemnity which could be
exacted amounted to 74,531,800,000 francs; taking as a basis
the medium daily costs of upkeep per troop unit in the
course of the entire Allied occupation of the Rhineland in
1919, namely the sum of seventeen francs increased to twenty-
one francs, and taking into account the billeting, which was
at that time provided by the German Government. According to
the report of the average indices of living cost of 3.14,
the sum of 21 francs should correspond to 66 francs at the
1939 value, when applying the co-efficient of depreciation
of the franc during the occupation, that is 2.10 per cent,
or a daily average cost of 199 francs per day.

Granting that the real costs of the occupation army were
half of these calculated by Hemmen, that is to say,
27,032,079,120 Mark, this sum is still lower than the
74,531,800,000 calculated by the Economic Analysis
Institute.

Even accepting the calculation most favourable to the
accused, one can estimate that the indemnity imposed without
justification amounted to 631, 866,000,000 less
74,531,800,000 or 557,334,200,000 francs.

In his final report, Page 19, at Page 22 of the French
translation, Hemmen writes, -

   "during the four years which have passed since
   conclusion of the Armistice, there has been paid in
   occupation and billeting costs, thirty-four million
   Reichsmark or six-hundred and eighty million francs."

France thus contributed approximately forty per cent of the
total cost of occupation and war contributions raised in all
the occupied and Allied countries. This represents a charge
of eight hundred and thirty Reichsmark, or sixteen-thousand
six hundred 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 function of the Clearing device; we 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 the Clearing Agreement.

On 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 Franco-
German arrangement for payment of compensation. This
project, which I submit as Exhibit RF 231 of the French
documentation, contained drastic rules, which could not be
voluntarily accepted.

First is provided financial transfers from France to Germany
without any equivalent in financial transfers from Germany
to France.

Then it fixed the rate of exchange of twenty francs for one
Reichsmark by

                                                   [Page 62]


a unilateral and clearly 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 Mark.

I shall go on to Page 34. The French Delegation of the
Armistice Commission submitted unsuccessfully on 20 August
1940, a counter project, and attempted to obtain a
modification of the most unfavourable clauses. I submit this
project as Exhibit RF 232 of the French documentation.

On 21 August 1940, at the Armistice Commission, the French
Delegation brought up in detail the question of the Franc-
Reichsmark parity, and it called attention to the fact of
the prohibition of the financial transfer from Germany to
France creating a gross inequality, whereas the transfer in
the other direction was organised, and pointed out that this
meant, that the French Government had to give its agreement
to a veritable dispossession of French creditors. An extract
from this report is presented and submitted as Exhibit RF
232.

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

On 6 September 1940, the French Delegation made a new
attempt to obtain a modification of the most unfavourable
clauses of the Clearing Agreement, but it met with a flat
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. 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 twenty 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 a payment agreement, that is to say the
drastic contract imposed by Germany, he would advise the
Fuehrer of this, and that all facilities with regard to the
demarcation line would be stopped.

I submit this extract from the minutes as Exhibit RF 236.

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 may
see what pressure - what threats were made upon the French,
who were then in contact with the Germans. I shall have
concluded the discussion of the Clearing with this
quotation, if the Tribunal will allow it; it will be a short
one and it will then be finished.

It was at the last meeting of 10 October 1940, in the course
of which Hemmen declared the following: I submit this as
Exhibit RF 237:

   "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 certainly foresaw that
   you would be unable to prevent the prices from rising,
   but now you are systematically causing them to rise for
   export purposes. We shall find other means of achieving
   our aims. We shall go and take the bauxite." This is the
   end of the quotation.

                                                   [Page 63]

If the Tribunal will allow me a very brief comment. At the
Armistice Commission all kinds of economic questions were
discussed, and to the very end the French delegates
resisted, for Germany wanted to seize immediately the
bauxite resources, 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 the free zone by force of arms.

The so-called compensation agreement worked only to
Germany's advantage. The results of the agreement are the
following (Page 116):

At the moment of liberation the total transfer from France
to Germany amounted to 221,114,000,000 francs, while the
total transfer from Germany to France amounted to
50,474,000,000 francs. The difference, that is,
170,640,000,000 francs credit balance on the French account,
represents the means of payment which Germany improperly
obtained through the functioning of the Clearing which it
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 to impose collective
fines, in violation of the principles of International Law.

Firstly: a contribution of one billion francs was imposed
upon the French Jews on 17 December 1941, without any
pretext. This is evidenced by the documents submitted as
Exhibit RF 239, and cannot be contested.

Secondly: a certain number of collective fines were imposed.
The amount made known by the Finance Ministry amounted to
412,636,550 francs.

Thirdly; the Germans proceeded to make immediate seizure of
gold stocks, and 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
represented at the 1939 rate 12,336,000 francs, and in July
1940 they seized a certain number of silver coins, amounting
to 35 millions.

Still following the secret report of Hemmen for the period
between January 1 and 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 nine billion five hundred 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-minister of the Vichy
Government before the High Court of Justice in Paris.

The sequels to this procedure were long and frequent
discussions that took place at the Armistice Commission, and
an agreement was concluded on 29 October 1940, but was not
in fact 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
authorisation 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.

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