Hitler's Beneficiaries: Plunder, Racial War, and the Nazi Welfare State (32 page)

On April 2, 1942, the German military commander in Belgium issued an ordinance entitled “The Forfeiture of Jewish Wealth for the Benefit of the Reich.” The decree empowered the Brussels Trust Company to act as the Reich’s agent for the dispossession of Belgium’s Jews, while maintaining the facade of legitimacy before the Belgian public. The company promptly took over the disposal of “cash, diamonds, and jewelry” that had been seized from Jews being held at a deportation center inside military barracks in Mecheln, near Antwerp. (A company operative was assigned to the barracks.) Stocks, bonds, and bank deposits, as well as the proceeds from the sale of Aryanized assets, were transferred to the Société Française de Banque et de Dépôts in Brussels, which had been already put under the company’s control.
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In the winter of 1944–45, after German troops had retreated from Belgium, Reich military officials filed their final report on currency and finances. The report contained a number of omissions, one of which is significant in the present context. In addition to the funds officially transferred to cover occupation costs, “further sums of Belgian francs” flowed “to the occupying authorities as administrative receipts.” The money was “mostly fines, . . . monetary punishments, proceeds from the sale of confiscated contraband and black market wares and the like.” But the writer of the report noted that records had been kept only for the period between October 1, 1943, and March 31, 1944. During that period, such proceeds amounted to merely a few million reichsmarks; nevertheless, he pointed out, they “did have the practical effect of lowering real occupation costs.”
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Concealed under the heading “Administrative Revenues,” which the final report downplayed, were the seized assets of Belgian Jews. It is impossible to say how much money was involved. The sum couldn’t have been very large, given the relatively scant wealth of Belgium’s Jews. Deposits were made periodically, in amounts ranging from 3 million to 12 million reichsmarks.
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In the autumn of 1944, a civil servant in the Reich Finance Ministry listed the following items under the heading “RemaincupTasks of the Reich Commissioner, Belgium”: “The Trust Company (Because of Jewish Wealth)”; “Enemy and Jewish Wealth (Transferred Securities)”; “Demands on the Eastern Ministry by the Reich for the Transport of Jewish Furniture”; “Artworks Taken Away by the Rosenberg Task Force.”
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The civil servant apparently felt the need to follow up on these matters because they concerned monies that were either to be secured or recovered for the military budget. It is unclear from the documents which, if any, of these tasks were ever carried out.

In Holland, also invaded by the Wehrmacht in May 1940, the German military established a small civilian supervisory administration. Unlike in Belgium or Norway, there was neither a German nor a local law formally dispossessing Dutch Jews. Yet the revenues the Reich would ultimately collect from the Netherlands were surprisingly large. On October 22, 1940, the Reich commissioner announced that certain businesses would be subject to registration requirements. On March 21, 1941, a follow-up order was issued, called the Ordinance on the Treatment of Businesses Required to Register. As neutral as that title may have sounded, its final paragraph was crystal clear: “This ordinance takes effect immediately upon being made public. It will be known as the ‘Ordinance on the Removal of Jews from the Economy.’”

On January 10, 1941, the standard “atonement” payment had been levied on Dutch Jews. It was followed on March 26 by mandatory controls on currency and gold transactions. On May 27, Jews were ordered to register all properties used for agricultural purposes. On August 8, stocks and bonds became subject to registration, as, three days later, did all remaining Jewish-owned property.

But the ordinance of August 8 did not mention dispossession or forfeiture of assets by Jews for the benefit of the German or Dutch treasuries. Instead, the wording dealt more generally with “the handling of Jewish wealth.” A Security Service document spoke of the “amassing of all Jewish assets” for use at a later date to pay for forced Jewish emigration. A hollow phrase about “establishing an emigration fund” concealed the fact that these assets were being directly used to finance the war.
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German authorities in Holland went to great lengths to conceal the ultimate destination of the stolen property. All cash and checks from Jews were deposited into an account of the Lippmann, Rosenthal & Co. Bank, which had quietly been turned into a financial center for the Aryanization process. Securities were to be either kept there or held in escrow at other banks. “Collections of all kinds, art objects, objects made of gold, platinum, or silver, as well as cut and uncut gemstones, semiprecious stones, and pearls,” also had to be “handed over.”
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In addition, as of May 21, 1942, Jews had to report all outstanding private debts and remaining payments owed to them.
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Despite the Jewish-sounding name of the bank, it was run by German directors for the purpose of disposing of Jewish property.
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Dutch brokers at the Amsterdam stock exchange helped the Reich sell off around 80 percent of the stocks previously owned by Jews. Dutch institutions also assisted in the liquidation of other types of assets, such as jewelry in bank safety deposit boxes. This procedure was intended to assuage Dutch concerns that a direct seizure of valuables would violate the Hague Conventions’ prohibition on occupiers confiscating native assets. On the surface, the process looked legitimate since the assets were not being formally seized, merely transferred. The proceeds from liquidation sales were initially invested in state and industrial bonds—but a short time later the funds were converted exclusively into Dutch government securities. In a feature unique to the Netherlands, part of the revenues from Jewish assets were converted directly into German treasury obligations, but that made no real difference since Dutch treasury obligations, too, went exclusively toward covering the monetary needs of the occupiers. Both the Dutch treasury and the German Reich made regular interest payments to the Lippmann, Rosenthal & Co. Bank. These were immediately reinvested in state bonds. Thus, they flowed back into the Dutch state’s coffers, where they were then transferred to the occupation budget. The fact that the transactions were carried out via a collective account, so that the value of individuals’ property could only have been estimated, shows that no effort was being made to manage individuals’ assets in their own interest.

This procedure was doubly advantageous from the German perspective because it made Dutch financial administrators accessories and allowed the Reich to claim, however disingenuously, that it was not confiscating the assets of Dutch Jews. The system used in Holland did not require a formal act of dispossession because, formally, the assets seized were only being reinvested, not confiscated. (If Reich officials had felt the need for legislation, it could have been retroactively instituted five, ten, or even fifteen years later.) The Reich commissioner for Holland simply collected the proceeds from Jewish assets that had been converted into state securities and transferred the money to the specially created Administrative Office for Property and Pensions in The Hague. That was the end of the paper trail. If no one appeared to claim ownership when the state bonds and the accrued interest came due, the debts did not have to be repaid—and the claims of the putative owners simply disappeared.
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The assets of “enemy aliens” and Dutch citizens who had fled the country were placed under compulsory receivership—a perfectly legitimate practice under international law and one that existed in Britain and the United States. Yet in 1942 and 1943, the German Enemy Assets Administration liquidated all assets belonging to Jews and deposited the proceeds into a newly opened account at the German Audit and Trust Company in Amsterdam. There the money was converted, in the names of its owners, into Dutch government bonds. In this way, the funds went in their entirety toward financing the German war effort.
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As soon as the transfer of assets had been concluded in 1942, the commander of the SS in The Hague, who also served as the city’s police chief, reported: “On October 15, open season will be declared on Dutch Jewry. A massive police operation will commence, which will involve not only German and Dutch police organs but also the labor division and membership of the Nazi Party, the National Socialist movement in the Netherlands, . . . the Wehrmacht, etc. At the same time, I will begin to publish [regulations] allowing the seizure of assets of Aryans who harbor Jews, who help them flee across the border, or who provide them with false identification. The culprits will be transferred to a concentration camp. This is all intended to stem the massive flight of Jews that has occurred.”
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Official estimates of liquid assets stolen from Jews totaled around 150 million guilders. Aryanized businesses yielded “far in excess of 200 million,” Jewish property and real estate approximately 150 million. The total of all assets, according to Dutch estimates, was “a round sum of more than a half billion guilders,” or, as the German occupiers put it, “a sum that has to be of concern for Dutch economic life.”
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In late 1943, German economists used the operating figure of 600 to 700 million guilders. In addition, German Jews living in the Netherlands paid a lump sum of 10 percent of the value of their assets to the Reich Finance Ministry.
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According to postwar Dutch figures, however, Jews in the Netherlands were robbed of some 1.1 to 1.5 billion guilders—or 1.4 to 2 billion reichsmarks. Part of the discrepancy may arise from the fact that German authorities did not take into account the effect of corruption in decreasing the sales value of some Jewish assets. Moreover, certain appropriated assets recorded as belonging to enemy aliens may have actually belonged to Jews. Conservatively estimated, the German occupiers—in cooperation with the Dutch State Bank—converted at least 1.5 billion reichsmarks’ worth of Jewish assets into Dutch government bonds. During the course of the occupation, Germans extracted 14.5 billion reichsmarks’ worth of goods and services from Holland. The portion of those costs borne by Holland’s tiny population of 140,000 Jews amounts to around 10 percent.
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In occupied France, the Reich set up an elaborate and highly secretive system to Aryanize Jewish assets. Jewish-owned property was sold off and the proceeds invested in French government bonds, which put the funds within reach of the occupation budget. The German occupiers used other, more transparent means to gain access to “enemy” assets. Article 46 of the Hague Conventions regulated the general administration of businesses, property, and securities seized from citizens of occupied states. These rules applied equally to both the Axis and the Allies. But the Reich interpreted enemy assets to include not only the property of citizens of hostile states but also those material assets left behind by French people who had fled the country, as well as the belongings of citizens of neutral states who resided in hostile nations. (A Swiss citizen who owned a factory in France and lived in England, for example, was classified as a “resident enemy”
[Aufenthaltsfeind].)

Nazi Germany’s official policy during the war was to “act as a trustee on behalf of the legitimate owners to maintain” enemy assets and the profits derived from them.
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On the surface, the German trust commissioner took great care to follow the letter of the law. In reality, however, he transferred large amounts of this wealth into accounts that helped finance the war. This was possible because individual trustees were granted full power of attorney “to take certain administrative measures in the interests of the security and preservation” of assets.

In France, the Reich trained its sights on assets worth approximately 2.5 billion reichsmarks.
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But the individual “administrative measures” taken were determined both by the Nazi leadership’s insistence on the option of confiscating those assets at a later date and by the temporary need, for appearance8217; sake, “to preserve” them.
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Enemy assets were also subject to the full range of currency regulations. Gold, currency, and foreign securities were to be offered up for sale to the Reich Credit Bank in Paris. That institution purchased the assets and transferred their equivalent value in francs to the Trust Office, taking the money from the occupation account. A similar procedure was used for motor vehicles subject to mandatory sale.
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For all these transactions, the trustee received nominal compensation in the form of French treasury bonds. Germany doubly profited from these transactions. First, they gained gold, hard currency, and securities that they could use to make purchases in neutral countries. Second, they could immediately stop the redemption of the treasury bonds handed out in compensation, thereby helping to stabilize the franc. Liquid assets from enemy-owned businesses were subject to similar treatment. They “were transferred to the Trust Office,” where they were “invested” in treasury bonds. In the rare case where trustees decided to sell off individual companies, the dividends, profits, and all other forms of capital income from those enterprises were likewise put into bonds.
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As in other countries where German occupation had unleashed inflation, the German commissioner at the Banque de France took immediate measures to restrict the flow of currency. One of those measures was a system of cash-free payment agreed to by the main administration of the Reich Credit Banks and the Banque de France in November 1940. Under the agreement, French business owners received payments for goods and services delivered to the occupiers in the form of bank credits issued by the Banque de France on behalf of the Reich Credit Bank in Paris.
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The occupiers also encouraged payment by check, reduced the number of large-denomination bills in circulation, issued bills of exchange with a nine-month maturity date, and proposed paying out some state subsidies in four-year treasury bonds. All these measures aimed at restricting the volume of money in the wake of massive occupation spending.
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At the same time, the occupation authority continued its policy of keeping interest rates low, which France as well as Germany had instituted in the fall of 1939 to ease the burden on state finances. Part of this overall fiscal strategy, in France as well as in many other European countries, was the confiscation of Jewish assets.