Chapter XXIX: Part 29

French delegation to the German armistice delegation for economic
affairs

Ref.: P 276/DE

Paris, 4 March 1942
Place du Palais-Royal

From: The president of the French delegation to the German armistice
delegation for economic affairs.

To: Monsieur Hemmen, Minister Plenipotentiary, president of the
German armistice delegation for economic affairs.

Sir,

I have the honour to inform you of the following by order of my government.

Ever since August 1940 the French government has continuously drawn the attention of the German Government to the extremely grave consequence which must necessarily accrue to French economics and finance from payments towards the costs of the occupation.

The French delegation to the German armistice delegation for economic affairs has time and again made personal and written representations on this point; the question has also been taken up regularly by members of the French government and their representatives every time they had a chance to discuss Franco-German problems with the German authorities; lastly, the French finance minister considered it his duty, in view of the seriousness of the situation, to make a direct appeal to the German finance minister.

The French government declared, as soon as it was informed of the German Government’s demands, that it only agreed under duress to make payments out of proportion to the obligations accruing to it out of the armistice agreement; it has protested against the German refusal to differentiate between occupation and operational troops and against the rate of exchange imposed between the franc and the mark, which enabled the German army, by reason of the very low level of French prices, to effect enormous requisitions in the occupied territory. Finally, it has proved again and again that the daily payments of 20 million Reichsmarks exceeded the total requirements of occupation and operational troops, since the sums placed at the disposal of the German authorities were never sent in their entirety, although they were even used otherwise than for the expenses of the German army in France (purchases of goods by the Reich, purchases of stocks and shares, etc.).

These representations remained without effect, and those protests were never accepted. Only one series of discussions was opened in May 1941; it continued for over three months and had no other result than the reduction of the daily payments to 15 million Reichsmark and an admission by the German government that this amount could very well be reduced a lot more. Even these concessions were made dependent by the Germans on extremely heavy compensations in the form of transfers which the French Government only accepted for a limited period and in order to facilitate an agreement.

More than seven months have gone by and this question is still outstanding. It is now impossible to put off a decision any longer, since the effects on French economics and finance of the payments exacted under occupation costs are now fully visible.

On February 28th, in other words after 20 months of occupation France will have paid 219,200,000,000 francs and another 9,000,000,000 odd under the heading of military accommodation costs. Payments for the year 1942 based on present facts and exclusive of accommodation costs will reach 110,000,000,000, which is considerably more than the total fiscal receipts of the French state.

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