Chapter XXXVI: Part 41: 12th February 1943

The Head of the Government

[Rubber stamp]
German Armistice Delegation f. Economic Affairs
Wiesbaden, 13 January 1943
No. Del. W. 165
enclosures:

To his Excellency, Monsieur Hemmen, Minister Plenipotentiary German
Armistice Delegation for Economic Affairs

Sir,

On the 15th December 1942 the German government asked me through you to increase the payments towards the costs of occupation by 10 million RM (200 million French francs), which would bring the daily total of payments to 25 million RM, as against 15 millions, or 500 million French francs as against 300 millions.

During our conversation of the same day, the 15th December, at the German Embassy, I pointed out to you:

on one hand that these payments exceeded France’s ability to pay; that they would oblige the French government to cover this increase by advances from the Bank of France, and would in consequence risk compromising the French currency irretrievably;

on the other hand that the French payments exceeded the concept of occupation costs and really constituted a French contribution to the common defence of Europe;

that, wishing to collaborate and to render effective aid to the German war-effort under existing circumstances, I accepted these extra payments.

In formulating your request for an increase, you declared that close cooperation should be instituted between our two countries, with the purpose of seeking and applying common measures intended to ensure the stability of the French currency and of French economy. You mentioned, on this subject, that the German government would appoint a plenipotentiary to the French government, whose mission would be to advise the French government.

I declared myself ready to cooperate closely in the financial field as in all others, but I formally rejected the appointment of a financial adviser, as this would undermine the authority of the French government and risk ruining the confidence of investors.

It is in fact necessary to point out that the daily payments which are the object of your request of the 15th December for an increase, do not represent the total of the financial burdens on my country. Besides these payments, France bears the lodging and billeting expenses of the German troops in the occupied zone, as well as the advances made for the functioning of the Franco-German clearing agreement.

I had also pointed out to you, in our conversation of the 15th December, that a demand from the Italian Government could be expected. Since then, although the Franco-Italian Armistice Convention does not put part of the costs of maintenance of the Italian occupation troops on France, the Italian government has requested advances.

Finally, I consider that the daily payments should, from the day that they are raised to 25 million RM, i.e., 500 million French francs, include all obligations falling on France as a result both of the occupation and of the Clearing agreement, and should take into account any advances which may eventually be granted to the Italian government.

It has not been possible to hold any conversations since December; I consider that negotiations on these various points are essential and should be pursued without delay.

While waiting for these negotiations to end up the necessary agreement, I inform you that I accept from now, under the conditions I have just described, a provisional increase in the daily payments as from January 1943, to 25 million RM, i.e., 500 million French francs.

The French government will immediately take steps to meet, on this basis, the new payments which have been demanded from it, and particularly to make up the difference in the payment made on the 11th January 1943 at the old rate.

I am, sir, etc.

[signature illegible]

* * * * * * *

H. Hartlieb I propose a note 2/Nov
Received 2 November 1943 at 1630 o’clock from AA Berlin by Kn.
[Rubber Stamp]
German Armistice Delegation For Economy
Wiesbaden, 2 November 1943
No. 4492
Inclo.

From S Berlin, Foreign Office No. 52 Nov 1617 Etat

To Delegation Hemmen Paris

No. 196=Secret Letter

Reference: _written Decree HA POL FRIE 808 of 28 and 836 of 30
October [penciled note: not yet received] and 838 of 2 November._

All departments concerned attach the _greatest importance_ to the continued payment of the French occupation cost payment, previously paid to Italy, because of the condition of the occupation cost and of the increased demand, which has been caused by the occupation of the Southern French area, which was up to now reserved for the Italian armed forces. I therefore request, to demand from the French government the transfer of all payments promised to Italy, to the Reich. If the French government should raise any legal objections then I request to point out without going into legal questions that the German Reich has taken over the protection of the areas occupied by Italy up to now. If necessary, certain concessions can be made, according to the suggestion by the Four Years’ Plan, to which the Reich Minister of Finance has also agreed, in the question of the additional payment of 2.8 billion Francs for the previous additional demands of the Italians in the connection with war and occupation damages. The Reich Minister of Finance requests to point out to the French government also that its representatives themselves, during the negotiations of the delegate of the Reich cabinet (Reichsregierung) for economic and Financial questions, always have entered the Italian occupation costs as debit items. Request report on the acceptance of your demarche.

Dumont * * *

No. 6 of 2 November 1943 1630 Rec’d Wako Paris Ka † †

* * * * * * *