Hitler's Beneficiaries: Plunder, Racial War, and the Nazi Welfare State (30 page)

The Jüterbog agreement provoked the immediate ire of Schwerin von Krosigk, who cited his responsibility to see “that state debt does not increase unnecessarily and that the Reich does not incur obligations that it will later be unable to fulfill.” Moreover, von Krosigk argued, the burdens and sacrifices “in the broad European struggle” had to be evenly distributed. “Having Hungary assume the costs” was the best way of ensuring its “offsetting the expenditures connected with the occupation by implementing other financial-political measures, thereby energetically countering unavoidable wartime inflation—in the interests of both Hungary itself and the Reich.”
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One of those “measures” was the selling off of Jewish assets. Thus, instead of following the original course of moderation, the Finance Ministry’s representative in Hungary made the usual heavy demands for compensation for occupation costs.

In April and May 1944, the new Hungarian government confiscated the assets of Hungarian Jews. Their deportation was organized by Adolf Eichmann with the help of the Hungarian police. The disposition of their assets fell to Leopold Scheffler of the Reichsbank, one of the first German administrators to arrive in Budapest after the invasion. Scheffler had been responsible for overseeing the financial administration of France and, after a short apprenticeship in occupied Poland, had helped found the Central Currency Bank of Ukraine. Now he was assigned to Budapest. On April 23, he promptly fired the sitting president of the Hungarian National Bank and appointed the more compliant István Belatiny in his stead. (“He’s always worked well with us,” Scheffler assured his superiors.) On April 26, Belatiny ordered all Jewish-owned assets and securities stored in safety deposit boxes turned over to the Hungarian National Bank. On April 28, Scheffler was already inquiring about gold and currency reserves, as well as what reports and expertise he could expect—especially from the bank’s economics division.
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Transferring responsibility for occupation costs to Hungary was a significant success for the Reich. At a meeting called on May 23, 1944, to discuss affairs in Hungary, satisfied civil servants in the Economics Ministry were able to conclude: “The Hungarian Jewish legislation has been expanded. The Hungarian government expects that the great financial exertions necessary for the war effort can be offset by continuing to expropriate Jewish assets. These assets are thought to account for at least one-third of the total wealth of the country. We can assume that we will have numerous opportunities to liquidate Jewish wealth.”
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The Hungarian representative who recorded the minutes and reported back on the meeting commented in June that “the radical solution to the Jewish question” was continuing apace. Jews “forfeit their Hungarian citizenship upon leaving Hungarian territory, and assets fall to the Hungarian state.” As a result, “we have been able to meet the increased financial demands upon the Hungarian state with confiscated Jewish funds.” The amount of currency in circulation “did not have to be dramatically increased,” and short-term inflation had been avoided. Nevertheless, the Hungarian representative added, the inflationary situation was precarious “due to the extensive purchases made by the German Wehrmacht “
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The civil servant responsible for the dispossession of Hungarian Jews, Albert Túrvölgyi, also directed the state monopoly on alcohol. The monopoly was established in 1941, and taxes on alcohol were continually increased to raise funds for Hungarian troops fighting alongside their German allies against the Soviet Union. The double responsibility, which he assumed in 1944, meant that the drive to “Magyarize” Jewish assets and to bankroll the war in Hungary came together in one person.

As the war drew to its conclusion, the Hungarian government’s policies of confiscation proved harder and harder to put into practice. In early October 1944, Göring’s economic adviser Otto Donner reported on the financial situation in Budapest. He predicted that Jewish assets could be utilized to the benefit of Hungary’s wartime budget. But he also cautioned that because “only the most liquid assets” could be sold to help balance the budget, the effect would be at best short term.
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Nonetheless, the sums in question over the duration of the occupation amounted to several hundred million reichsmarks. The money was raised by Hungarians selling off Jewish assets to other Hungarians. But the sums taken in on paper by the Hungarian treasury were transferred directly into the budget for the German occupation and were paid out to German soldiers. They also went to buy food, oil, and essential raw materials, such as bauxite, for export to Germany.

With the atonement payment of 1938-39, the Nazi government appropriated around a quarter of all the tangible wealth of German and Austrian Jews. The rest of their assets—for example, rental properties—were put under the administration of trustees and thus remained, for the time being, untouched. But it was not uncommon for the state to sell off those assets and reinvest the money—ostensibly for the benefit of the previous owners—in government treasury bills. The transformation of personal assets into government bonds took considerable pressure off public finances in wartime Germany. While there are no exact figures for the total amount of money extracted by what amounted to compulsory loans, the transactions were numerous enough that the state media watchdog ordered journalists on August 28,1941, “not to mention the exchange of stocks held by Jews for
percent treasury bills.”
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The practice, also used in occupied countries like Holland and France, of trustees discreetly liquidating property, stocks, gold, silver, and other assets and directing the proceeds into government bonds amounts to nothing less than an outright confiscation without a formal act of law. The leadership reasoned that either appropriation legislation would be passed at a later date or the assets would disappear when the Reich went bankrupt. To the civil servants responsible for wartime finances, it mattered little whether they merely controlled Jewish wealth or legally appropriated it.

But sometimes legislation was passed. Nazi officials and senior civil servs met throughout 1941 to formulate a law authorizing the seizure of assets from Jews. Foreign Office employees released a draft on March 15 that described confiscation as meeting “the demands of Jewish emigration.” The innocuous language aimed to avoid the impression that the confiscation of assets was “a measure for financing the war.”
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On November 21, 1941, the government formally issued the eleventh ordinance of the Reich Citizenship Law. In one stroke, the assets of German Jews, many of which had already been converted into government bonds, were officially expropriated. Outstanding government debts to Jewish institutions or individuals were simply erased. The Nazi leadership instructed civil servants to leave as few traces as possible of what they had done. Debt cancelations were to be entered “without recording the name of the individual Jew who had given the securities in payment.”
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Wiping out old debts without compensation was ideal for a budgetary policy guided by the idea, unusual for its day, that no more than 50 percent of what was needed for the war should be acquired on credit. Now new lines of credit could be opened. Revenues in Germany alone from this form of larceny can be conservatively estimated at 2 billion reichsmarks.

In special cases, the Reich opted to transfer seized Jewish assets directly to local communities. In May 1941, Hitler declared that this option would apply especially to “wealth and assets” that were “by their very nature useful for the fulfillment of obligations of local, autonomous public entities.” Hitler’s target was real estate that could be used for expanding or constructing streets, “for public squares, parks, and sporting facilities,” or for similar public amenities. A document accompanying Hitler’s directive suggested that suitable properties could be used, “for example, to house local civic offices, schools, Hitler Youth clubs, children’s and old-age homes, and Red Cross facilities.” Later in the war, vacant properties would become sites “for the construction of residential facilities for the victims of aerial bombardment.” In Hammer am See, in Bohemia, for instance, “properties owned by the Jewess Ginzky” were to be transformed into a “recuperative facility for those suffering aftereffects of the war.” Assets such as furnishings and household necessities could also be removed if they were needed by “government offices, institutions, asylums, hospitals, etc.”
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On September 16, 1942, Walther Bayrhoffer, the Finance Ministry’s representative on the Reichsbank board of directors, called on local finance offices to “transfer immediately” all formerly Jewish-owned securities, or the proceeds earned from their sale, “to the Reich treasury in Berlin.” A similar order was issued for property. The prelude to Bayrhof-fer’s move came in May 1942, when the Finance Ministry concluded that “an enormous amount of Jewish real estate has fallen to the Reich” because of paragraph 3 of the eleventh ordinance.
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These acquisitions were noted under the heading “Individual Measures XVII” of the Supplementary Budget, which had been created to take account of “extraordinary revenues and expenditures of war.” The revenues resulting from the liquidation of Jewish assets were recorded there under chapter 7, part 1. They included stocks and bonds from Jewish households. (Part 2 of the same chapter was to be used for securities “that hav fallen to the Reich for other reasons.” Part 3 was for general “revenues from administration and liquidation.”)
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In early 1944, Schwerin von Krosigk ordered the “seized goods in the possession of the Reich treasury” liquidated in order to balance the Reich’s budget.
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In 1942 Reichsbank president Walther Funk and Heinrich Himmler agreed that any gold, gemstones, and cash taken along to the death camps by European Jews would be handed over to the Reichsbank. The Reichsbank paid the prevailing market rate for gold, gold coins, and foreign currencies into a special treasury account that was cynically assigned a fictional owner named Max Heiliger (“Max Holyman”). This was how the state appropriated the remaining belongings of those exterminated at Belzec, Sobibor, Treblinka, Majdanek, and Auschwitz, including gold fillings removed from corpses’ mouths. According to a memorandum of September 22,1942, on the “Liquidation of Property Related to the Resettlement and Evacuation of Jews,” cash was to be paid into the account of the SS camp management at the Berlin-Schöneberg branch of the Reichsbank. Foreign currency, precious metals, jewelry, gemstones, pearls, and dental and scrap gold were to be collected, and the concentration camp management in Berlin was “put in charge of the immediate transfer of these valuables to the Reichsbank.” Watches, pocket knives, fountain pens, wallets, and similar items were to be sold at military commissaries for predetermined prices. “All proceeds,” read one memo, “are to be turned over to the Reich.” Ethnic German settlers in Eastern Europe were allowed to buy clothing and shoes that were in good condition, but here, too, the proceeds were to be turned over without exception to the Reich.
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At the International Military Tribunal of 1946, Albert Thoms, a civil servant employed by the Reichsbank, testified about the direct deliveries of gold, gemstones, dental gold, and securities. Thoms said that in the summer of 1942 he had been informed by Reichsbank vice president Emil Puhl that the SS would immediately start shipping these items to bank headquarters. Between then and late 1944, an SS man named Bruno Melmer dropped off such goods by the crate, for which Thoms issued him receipts. Thoms then distributed the goods “to the relevant departments of the Reichsbank for processing. Stocks, securities, and bonds were transferred to the securities department. I kept coins and gold in the precious metals department.” Gemstones were handed over to the Berlin
Pfandhaus
, or pawnshop—in Germany pawnshops were run by local governments—“with the request that they be sold for as much as possible.” The proceeds were deposited into the account of “Max Heiliger.” From there, the monies were transferred “from time to time” into the war budget, where they were recorded as proceeds from “individual measures.”
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Personal effects delivered to the Main Trustee Office East (Haupt-treuhandstelle Ost) were handled in much the same way. The items came from Jews in the part of Poland annexed by Germany as well as from Poles who had been declared enemies of the state or had been forcibly resettled.
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By and large the transfer and disposal of Jewish valuables proceeded efficiently. On October 4, 1943, Himmler remarked—accurately—that “the riches” of Jews had “as a matter of course been immediately handed over to the Reich.”

The exceptions—the isolated cases in which individuals lined their pockets and the extermination machine engaged in unauthorized self-financing—prove the rule. For example, following the eradication of the Warsaw ghetto, the Finance Ministry was eager to know what had happened to any belongings that had been left behind. Although the SS insisted that everything had been transferred to the treasury in line with procedure, no “valuables identified as coming from Warsaw” could be located.
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But that was unusual. Far more typical was the bureaucratic diligence with which authorities disposed of property belonging to Jews killed in Simferopol, Crimea. In February 1942, the head of the Security Police there reported to army headquarters that “all timepieces confiscated as part of the Jewish operation have been handed over as per order to the treasury in Berlin.”
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