Hitler's Beneficiaries: Plunder, Racial War, and the Nazi Welfare State (36 page)

On August 29, 1942, a law came into force entitled A Compilation of Measures for the Regulation of the Jewish Question and Related Matters. This legislation assembled the anti-Jewish laws that had been previously issued into fifty-nine articles and laid the groundwork for a Jewish Commission. The importance of financial considerations was reflected in the fact that representatives from both the Finance Ministry and the national bank were allowed to sit on the commission’s administrative council. Article 43 provided for the “confiscation of stocks and other securities” for the benefit of the Bulgarian state. Article 45 required Jews to register other liquid and deferred assets with the national bank, including insurance policies, wills, loan documents, and bonds. Article 47 stipulated that these assets were to be sold off “at public auction.” For the sake of appearances, Bulgarian civil servants credited the proceeds from the sales of such assets to their individual Jewish owners. (Only the declared value of the assets was credited, however, not their actual price at auction. Because of rapid wartime inflation, higher sums were often fetched, “with the difference falling to the state.”)
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n early 1943, Bulgarian Jewish commissioner Aleksandar Belev requested the Reich to begin deporting “economically well-situated Jews” from his country.
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Fear of stirring up anti-Bulgarian sentiment abroad led the Bulgarian government to cancel the request, saving the Jews in Bulgaria proper from German gas chambers but by no means putting an end to their dispossession.
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In a diary entry from June 1943, a Wehrmacht economist in Sofia recorded “that the majority of Sofia’s Jews have been relocated to the provinces.”
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In total, Belev disposed of Jewish property valued at some 4.5 billion leva.
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A substantial portion of this money landed in German hands, in the form of subsidies that the Reich constantly extracted from its ally.

On February 22, 1943, Belev met with Eichmann’s deputy Theodor Dannecker to confirm a previous agreement to deport Jews “from the new provinces of Thrace and Macedonia to eastern German territories.” The final destination for the 11,343 deportees was the Treblinka concentration camp, where they were killed. Bulgarian settlers moved into residences previously occupied by Jews and continued the ethnic cleansing of the two regions.
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At the same time, Greeks who were expelled from the areas concerned were forced to flee to the German-occupied part of Macedonia. There, they were housed in residences left behind by Jews who had been deported from Salonika and the surrounding area. In this way, just as parts of Macedonia and Thrace were turned over to Bulgaria, the disputed territories in what is today northern Greece were Hellenized.

The brutal exploitation of allied and occupied countries often put local currencies under extreme pressure. In two cases, the proceeds from the dispossession of local Jews weren’t enough to stabilize such currencies. Consequently, the Reich had no choice but to transfer gold from its “own” reserves to prevent monetary collapse. One case was that of occupied Greece. The other was that of Germany’s ally Romania.

In December 1940, ostensibly at the request of the Romanian leadership, Hermann Neubacher traveled to Bucharest as a special envoy of the German Foreign Office. His mission was to see “that the Reich put technical advisers at the disposal of the Romanian government.” Those advisers included Reichsbank director Louis Wolf, a specialist in export and currency matters, and two government counsels, a Dr. Krebs and Hans Gurski, who would also be given responsibility for the “de-Jewification” of Serbia.
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But the true reason for Neubacher’s visit emerges from the transcript of a conversation from October 1940 involving officials at the Economics and Finance Ministries. “Above all, we want to have influence over the petroleum economy,” one speaker asserted. “The Reich marshal [Göring] has indicated that the excess production of 3 million tons (300 million reichsmarks) is to be secured for the Reich. In the short term it is not possible to balance accounts with supplies from our side. The National Bank [of Romania] will have to advance the money. This can have inflationary consequences. To combat these, the Romanian government will be supported by a staff of German advisers.” At the end of their consultations, one participant concluded: “Some day they will have to tackle the Jewish question (Aryanization) just as we did.”
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In the summer of 1940, following the signing of the Hitler-Stalin Pact, Romania had been forced to cede northern Bukovina and Bessarabia to the Soviet Union. A short time later, in response to German and Italian pressure, the country also had to give up northern Transylvania to Hungary and southern Dobruja to Bulgaria. Those territorial losses meant a wave of 260,000 ethnic German refugees who suddenly had to be cared for. Most were sent back to Germany, while 77,000 others were resettled in southern Bukovina and northern Dobruja, which remained parts of Romania. To assist in the resettlement, Romania issued a series of laws between October 1940 and June 1942 dispossessing its Jewish minority. At first, the proceeds generated from the sale of Jewish property were allocated directly to aid for the refugees. Later, once Romania had become actively involved in fighting the Soviet Union, more and more of the money went toward the war effort.

On October 4, 1940, all rural Jewish-owned properties in Romania were officially expropriated. On October 10, the government confiscated all Jewish-owned
Pfandbriefe
, or German-backed bonds, and nationalized Jewish hospitals and public welfare facilities. These confiscations helped reduce short-term government debt. The state, forced to issue credit to refugees to help them rebuild their lives, could take on new obligations without upsetting the budget balance. Romania was also able to underwrite the deliveries of supplies that the Reich demanded. Many of the Jewish community and public welfare facilities that were nationalized at this juncture were converted into centers for refugees.

On November 12, the Romanian government confiscated all Jewish-owned forestland as well as all businesses involved in processing agricultural and timber products. On March 27, 1941, urban properties were expropriated, and on May 2, the Central Office for Romanization was founded. As one Reich official noted, “the material basis” for housing refugees from former parts of the country “was the 260,000 hectares of farmland that became part of the state’s domain with the resettlement of ethnic Germans and the dispossession of Jews.” Simultaneously, laws were passed barring Jews from certain types of work, therefore creating jobs for ethnic Romanian refugees.
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Naturally, the Reich did not just let the new Romanian owners take over abandoned German properties and businesses free of charge. As in other countries where ethnic Germans had been “retrieved” by the Reich, Romania was forced to make a lump-sum payment to the German treasury. Joint Romanian and German committees estimated the value of individual properties. The total came to 7.7 billion lei, or 130 million reichsmarks, a sum that was paid off in installments. Beginning in the summer of 1942, most of the money was allocated to the Wehrmacht’s intendant for Romania, who used it to pay for food for German troops, soldiers’ wages, and private purchases on the Romanian market.
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That money was intended for ethnic Germans who had resettled within the Reich, but instead they received compensation in the form of property confiscated in Poland. To acquire the necessary farmland, Eich-mann’s troops brutally expelled 62,000 Poles from the Warthegau, the part of Poland annexed by Germany. Those refugees were quartered west of Warsaw on General Government territory, in residences previously occupied by Polish Jews. In the winter of 1940–41, some 72,000 Jews—10,000 more than the number of Poles driven out—were forced to march on foot to the Warsaw ghetto, which was already suffering from overcrowding and widesead malnutrition.

By the end of 1942, German commissioners under SS leader Heinrich Himmler boasted that they had resettled some 500,000 ethnic Germans. “In the main,” wrote one commissioner, “the resettlement of immigrants has been financed by the uncompensated exploitation of wealth previously in the possession of alien races
[fremdvölkisches Vermögen]
—without having to make recourse to the resources of the Reich.” The claim wasn’t entirely true. In 1941, the Finance Ministry had allocated 300 million reichsmarks for resettlement.
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Nonetheless, lump-sum compensation payments received for the property of ethnic Germans in Romania, the Soviet Union, Italy, and Croatia bolstered the administrative revenues in the Reich budget and were used to procure goods and services in those countries. No sooner had ethnic Germans from Romania crossed the Danube than Himmler’s attaché at the Reichsbank, Hermann Wald-hecker, proposed that some of Germany’s debts to Romania could be paid off “from the resettlement.”
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The procedure was called “natural restitution.” At the end of the resettlement chain, Jews were always forced to bear the costs, while German soldiers spent the proceeds from the sale of assets left behind by those who were being repatriated. Because resettled ethnic Germans were compensated with property confiscated from Poles, and the Poles in turn by property confiscated from Jews, it was ultimately the Jews in the Warsaw ghetto who were squeezed to pay for what the Wehrmacht consumed in Romania. Many ghetto inhabitants froze or starved to death there. Those who survived until the summer of 1942 were sent to Treblinka and murdered in the gas chambers.
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In the summer of 1941, when Romania joined Germany’s war against the Soviet Union, the anti-Jewish laws being issued in Bucharest took on an entirely new dimension. In late July, the Romanian finance minister forced the Jewish community of that city to buy 10 billion lei in war bonds. In September, the army confiscated bed frames, mattresses, and linens owned by Jews for use in military hospitals. In October, a law voided all claims on outstanding loans held by Jewish creditors. The state trampled on the rights of Jews in order to increase revenues. Meanwhile, Romanian Jews were forced to hand over gold, silver, jewelry, and other valuables to the state treasury. They were also obliged to pay various fines and a special tax four times as large as the one paid by non-Jews. On January 3, 1942, a decree ordered Jews to surrender their clothing and remaining household linens; on May 16, they were required to raise a collective wartime contribution of 4 billion lei, and in June, Jewish cemeteries were handed over to local governments. The dispossession of Jews generated revenues for the Romanian state and eased the burdens of war for the majority of Romanians. In all, Jews were forced to cover between 25 and 33 percent of all loans taken out by the country to finance the war.
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The beginning of the plunder coincided with Hermann Neubacher’s arrival in Bucharest, which in turn was accompanied by the arrival of German troops. “There should be no talk,” noted one German Finance Ministry official, “of an occupation.” Instead, German troops were officially in Romania for “training” purposes.
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However one wished to describe their mission, the German troops needed money. On December 31, 1941, Reichsbank director Rudolf Sattler flew to Bucharest “at the urgent request of the reign Office” to “assist envoy Neubacher in negotiations with the Romanian government about monetary support for the German troops.” Sattler lived in Oslo, where he was responsible for overseeing the national banks of Norway and Denmark and for regulating the flow of funds to pay for occupying troops. His job now was to apply “the experience gained in Oslo and Copenhagen” to Romania.
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The result was apparently a success. A few months later, Romanian head of state Ion Antonescu complained: “How long do they think I can remain in charge of the government, when demands are issued every ten days for a billion lei for the German troops?”
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Carl Friedrich Goerdeler, the former mayor of Leipzig, had protested that no sooner had Wehrmacht personnel been stationed in Romania than the country’s public finances began to dissolve: “Romania is being burdened with occupation costs that the state cannot shoulder.”
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German economic attaché Carl Clodius also predicted that “the currency will be endangered” since the demands of the Wehrmacht for 7 to 8 billion lei a year (much less than would ultimately be consumed) could scarcely be managed in an annual state budget of “only around 30 billion lei.”
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At the end of September 1941, at Neubacher’s behest, Karl Blessing (later the head of the Central Bank of West Germany) conducted a study on the state of the Romanian currency. He found that both prices and the amount of money in circulation had tripled since 1937. The sole reason was “the issuance of loans for state purposes, especially military and economic purposes.” Romania’s entry into the war against the Soviet Union had made it necessary “to increasingly tap the national bank.” Blessing found that “the German troops present in the country had also required, for professional and personal purposes, sums of lei that had been provided by the Romanian government in return for equivalent credits in the clearing account in Berlin.” By September 13, 1941, those credits already amounted to 15.5 billion lei. Blessing calculated that German demands were responsible for 41.4 percent of the Romanian state debt in the first nine months of 1941. Further Werhmacht demands in the period up to February 1942 amounted to “some 16 billion lei.” Since the proceeds from the Romanization of Jewish assets were directed into the state’s war chest, to slow the accretion of debt, it can be safely assumed that much of this money ultimately landed in German pockets. The levy of 4 billion lei imposed on Romanian Jews in the spring of 1942 allowed the state to fulfill the demands of the Wehrmacht for only one month without having to print more money.