The Nizkor Project: Remembering the Holocaust (Shoah)

The Trial of German Major War Criminals

Sitting at Nuremberg, Germany
21st January to 1st February, 1946

Fortieth Day: Tuesday, 22nd January, 1946
(Part 4 of 8)

[M. GERTHOFER continues]

[Page 54]

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 Government."
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 pillage.

[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 territories."
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 Tribunal.


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 uncoordinated.

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 fines.

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 stated:

"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 power.

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 report:

"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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