The Nizkor Project: Remembering the Holocaust (Shoah)

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To accomplish this, they misused the conventions of the
armistice. These, in fact, did not contain any economic
clauses and did not include any secret provisions, but
consisted only of regulations, which were published.
Nevertheless, the Germans utilised two clauses to promote
their undertakings. I submit to the Tribunal under Number
203 a copy of the Armistice Conventions, and I cite Article
18, which reads as follows:

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

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

                                                   [Page 55]

Article 17 of the Armistice Conventions reads as follows

  "The French Government is bound to prevent any transfer
  of economic values or stocks from the territory to be
  occupied by the German troops into the non-occupied area
  or into a foreign country. Those values and stocks in the
  occupied territory cannot be disposed of except by
  agreement with the Reich Government, it being understood
  that the German Government will take into account what is
  vitally necessary for the population of the non-occupied

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

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

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

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

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

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


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

   In compliance with the request of the French Government,
   Germany has agreed to take care equally of the vital
   requirements of the non-occupied zone by considering
   applications of the French Government regarding the
   disposal of values and reserves in the occupied zone."

I shall only cite this passage to shorten my explanatory
remarks, and I now come to the following document, which is
the reply to the German official who drew up this report, a
document which I submit as Exhibit RF 205. This is a
document found by the American Army. Here is the reply to
the document from which I just quoted the passage:

2. Exploitation of occupied French territory.

   "It is the Fuehrer's opinion that in all negotiations
   with France the political and not the economic point of
   view should be dominant. The elimination of the
   demarcation line is now out of the question. Should
   thereby the economic life of France be prevented from
   resuscitation, this will be quite immaterial to us. The
   French lost the war, and now must pay the bill. To my
   remark that France would then soon become a centre of
   unrest, I got the reply that shots would fix that and
   the free zone be occupied. For all concessions we make,
   the French must pay dearly in deliveries from the
   unoccupied zone and the colonies. Every effort must be
   made that French economy shall no longer be
   In the course of the negotiations regarding relaxation
   of the demarcation line, it has been suggested that the
   French Government take control of 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
                                                   [Page 56]
   with the French Government as a means of pressure in
   order to make it show a more conciliatory attitude in
   other respects."

This concludes the quotation.

A study of these documents shows the Germans' will, 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 "Beliner Borsen Zeitung," of April 10, 1942.
I submit it as Exhibit RF 207 and shall read one passage
from it:

   "The timely task of the competent offices of the German
   military administration consisted in the 'Direction of
   Economic Directives,' i.e. in the issuance of directives
   and, at the same time, in the supervision of the actual
   execution of these directives."

Further, on Page 12 of the statement-

   "Now that the direction of raw materials and the placing
   of orders has been organised and is functioning
   efficiently, the matter of rigorous restrictions on
   consumption not important to war economy is a 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."

I terminate here my quotation of Dr. Michel's article.

After having shown you, Mr. President, and members of the
Court, in this brief introduction concerning the economic
spoliation of France, the consequences of German domination
upon this country, I will give you an account of the methods
employed to arrive at such a result. This will be the
purpose of the four following chapters:

I. German seizure of means of payment.

II. Clandestine purchases in the black market.

III. Outwardly legal acquisitions.

IV. Impressment of labour.

I. German seizure of means of payment.

This seizure was the result of
   (a) paying occupation costs;
   (b) the oneway clearing system;
   (c) outright seizures and levies of gold, bank notes,
   and foreign currency and the imposition of collective

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

As I have had the honour 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 conferences of the Armistice Commission the
discussions bore on this point, whereas the French brought
out the fact that they could only be forced to pay an
indemnity representing the cost of maintaining an army
strictly necessary for the occupation of the territory. The
German General

                                                   [Page 57]

Wieth had to recognise the just foundation of this claim,
and declared that troops which were to fight against England
would not be maintained at the expense of France.

This is evident from an extract from minutes of the
Armistice Commission, which I submit as Exhibit RF 208. But,
later, General Wieth apparently was overruled by his
superiors, as in the course of a subsequent conference, July
16, 1940, without expressly going back on his word, he
declared that he could not say 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 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

   "As at present it is impossible to assess the exact
   costs, daily instalments 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 francs daily. In this amount the costs
   for billeting troops were not included, but were to be
   paid separately."

This is found in Exhibit 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 emphasised that the amount of
the daily payment did not permit the supposition that it had
been fixed in consideration of the normal strength 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 Exhibit RF 211.

On August 15, 1940, the German delegation took notice of the
fact that the French Government was ready to pay these
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 Exhibit RF
212, which I submit to the Tribunal.

On August 18, the French Delegation took notice of the
memorandum of 15 August and made the following reply.

  "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 that 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.
  The French Government, always anxious to fulfil
  faithfully 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.

(A recess was taken)

                                                   [Page 58]

M. GERTHOFFER: This morning I had the honour 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 had indicated that the French
leaders of that time, though not failing to recognise the
principle of their obligation, protested against the sum
demanded. At the moment of their arrival in France the
Germans had issued in France, as in the other occupied
countries, for that matter, occupation marks and requisition
vouchers over which the Bank of Issue had no control and
which was legal tender only in France. This issuance
represented a danger, for the circulation of this currency
was liable to increase at the mere will of the occupying

At the same time, by a decree of 17 May 1940, published in
the VOBIF of 17 May 1940, No. 7, which appears as Exhibit RF
214 in the document book, the occupying power fixed the rate
of the Reichsmark at 20 French francs per Mark, whereas the
real parity was approximately one Mark for 10 French francs.

The French Delegation, concerned over the increasing
circulation of the occupation marks, 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 Exhibit 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 exactions in the amount of the occupation costs
as well as in the pegged rate of the Mark and the clearing
agreements, which will be the subject of a later chapter.

In consequence, General Huntziger, President of the French
Delegation, addressed several dramatic appeals to the German
Delegation in which he asked that France be not hurled over
the precipice. This is evidenced by a teletype report
addressed by Hemmen on 18 August 1940 to the Minister of
Foreign Affairs, a report discovered by the United States
Army, (Document 1741-PS 5), which I submit to the Tribunal
as Exhibit RF 216. Here is the interesting passage of this

   "These considerable payments would enable Germany to
   purchase the whole of France, including its foreign
   interests and investments, and this would mean the ruin
   of France."

In a letter and note of 20 August, the German Delegation put
the French Delegation in a position to make partial
payments, specifying that no distinction would be made about
the German troops in France, and 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 20 August of the German Government,
which will be Exhibit 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, Germany was already
considering close economic collaboration between herself and
France through the creation of Kommissars of Control of
Exchange 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

                                                   [Page 59]

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 Reich
   government is incompatible with this right to live."
   This ends the quotation of this document which is
   submitted as Exhibit RF 219.

The Germans had the unquestionable intention of utilising
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 RF 220. 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 utilised by the troops in France, the Supreme
   Command of the armed Forces reserves for itself the
   right to dispose further of the foreign currency. In
   particular, the allocation of foreign currency to other
   offices not belonging to the Armed Forces, requires the
   authorisation of the Supreme Command of the Armed
   Forces, in order to ensure definitely, first, that the
   entire amount of francs required by the Armed Forces
   shall be covered, and second 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."

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