Chapter XXXIII: Part 34

OKW Berlin, 6 November 1942
2 f 32 Beih. 1A WV (XVI)
3145/42 secret

SECRET

To the Foreign Office

Subject: Occupation costs France

Reference: a. Note of the DWFW Del. W. 347 g of 16 Oct 42
b. Meeting of committee for trade policy of 22 Oct. 42 and
30 Oct 42

The Chief Intendant with the military Commander in France has reported that in the past deliveries have been made amounting to a total of 90,000,000 RM monthly which could have been paid by way of the German-French clearing system, because the procured goods were exported from France. The following figures have been obtained from the present monthly average of the year 1942 but they can only serve as a conjecture because the elimination of those goods which were not procured for the requirements of the units of the German Wehrmacht stationed in France is very difficult on basis of the available documents. The following items are involved:

1. Food supply and forage ca. 11 mill. RM
2. Spirits, wine and champagne ” 4 ” ”
3. Red wine for troops ” 0.6 ” ”
4. Canteen goods of all kinds ” 1 ” ”
5. Billeting utensils ” 16 ” ”
6. Tools for vehicles ” 3 ” ”
7. Procurements of ordnance staffs ” 0.4 ” ”
8. Procurements of air force ” 23.5 ” ”
9. Procurements of horses ” 15 ” ”
10. Purchases by Wehrmacht procurement
office ” 4 ” ”
11. Procurements by the departments
North and Pas de Calais ” 5.3 ” ”
12. War risk premiums ” 2.5 ” ”
13. Navy ” 5 ” ”
-----------------
ca. 91 ” ”

These procurements have been transacted at the prices resulting from the general increase of prices in France. As the procurements were made for service branches outside of France, payment by way of the German-French clearing system is permissible as a matter of principle. Funds of occupation costs have been claimed so far, because the final customer of the goods in most cases is not known at the time of procurement. The payment and final entry into the books of these expenditures is the duty of the procurement office in France.

The amount of 150 mill. RM provided so far for carrying out the flat clearing process [Pauschalclearingverfahren] with France can be reached only by including the purchases made by the Roges “Raw Material Trading Company Ltd.” [Rohstoffhandelsgesellschaft m k H] on the black market. Objections have been made hereto, because resale of the goods bought on the black market [“S-Markt”] is practicable only with subsidies to reduce the prices granted by the Reich Minister of Finances, and it is irresponsible to incur a commercial debt in the amount of these subsidies given by the Reich Minister of Finance, in order to procure goods which bring a considerably lower price than that expended. Payment of the procurements on the black market should be possible, however, at least to the amounts _actually_ obtained by the Roges through resale. The amount of 150 mill. RM would almost be reached if the Roges were required to transfer by way of the German-French clearing the proceeds obtained by resale of the goods with exception of the Reich subsidies for price reduction.

If this settlement should not be practicable carrying out of the flat clearing process could be restricted to the amount of 90 mill. RM per month. In this case, the French Government in accordance with the suggestion of the Reich Minister of Finances of 27 October 1942 should be obliged to provide in form of occupation costs the surplus amount missing from the 150 mill. RM.

The excess consumption of occupation cost funds in 1942, as already thoroughly pointed out in the last meetings of the Committee for Trade Policy, is primarily due to the decrease in purchasing power of the franc, and it is to be assumed that this decrease compared with 1940 is at least one third. In addition, payments to a considerable extent had to be made from the occupation cost funds which were not allotted to meet the demands of those units of the German Wehrmacht stationed in France. On 15 January the B account of occupation costs was approximately _3 bill. RM._ The reason for the decrease appears from the following compilation:

a for procurement of goods exported from
France during the period of 1 Jan.-31 Oct
1942 an estimated 10 × 90 mill. RM 900 mill. RM

b to Roges Raw Material Trading Company
Ltd. for purchases on black market 700 ” ”

c for procurement of foreign bills by the Navy
(the purchase of foreign bills with French
francs was necessary to buy and repair merchant
ships in Spanish harbors. These merchant
ships are to serve for supplying Rommel’s
Panzer army in Africa) 40 ” ”

d Reimbursement to Foreign Office (account
Syria) 4 ” ”

e Allotments in favor of families of French
workers working in Germany 1.5 ” ”

f Special commissioner Rumania 1.3 ” ”

g Costs of building completions for directors
of French powder factories 0.2 ” ”
---------------
1647 ” ”

Therefrom it appears that the decrease of reserves of occupation cost funds amounting to 3000 mill. RM on 15 January 1942 is primarily due to expenditures for purposes unrelated to the occupation. Also in the above compilation are not included the bills issued by the Reichskreditkasse imported into France. Of these probably a not immaterial part has been imported by troop units transferred to France, but to carry out procurement of goods destined for export from France. Consequently, it may be assumed that the requirements of the Wehrmacht units stationed in France up to now could have been approximately satisfied from the installments of 450 mill. RM made available every month by the French Government. It is further pointed out that a considerable part of the above-listed expenditures unrelated to occupation, in particular the expenditures for purchases on the black market (S-Markt) and for French food deliveries not destined for the occupation troops proper, have not been caused by the OKW.

The Chief of the OKW
b. Dr. Kersten
Del. W. 7479

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