Nazi conspiracy and aggression, Volume 03 (of 11)
d. The president of the superior court at Kattowitz;
e. The leader of the security service administrative sector [SD-Leitabschnitt] Kattowitz, attention: SS battalion Podlich;
f. The Reich commissar for the strengthening of German nationalism attention: SS battalion leader Dr. Arlt, at Kattowitz.
5. To the files at I b 2.
* * * * *
Kattowitz, 1 June 1942 The Chief President of the Province of Upper Silesia I b 2
Decree for the establishment of courts-martial in the annexed Eastern territories of the province of Upper Silesia dated 1 June 1942
On the basis of number 13 of the decree of the cabinet council for the Reich defense, for the administration of criminal jurisdiction against Poles and Jews in the annexed Eastern territories and the district of the previous Free City of Danzig, dated 4 December 1941 (RGBl. I, p. 759), the following is decreed in agreement with the Reichminister of the Interior and the Reichminister of Justice:
Par. 1.
1. Severe violations of Poles and Jews against Germans, as well as other criminal acts by Poles and Jews which seriously endanger the German reconstruction work, can be sentenced by courts-martial, until further notice.
I reserve for myself the decision as to whether or not the criminal act is a crime in the sense of paragraph 1.
Par. 2.
The courts-martial pass sentence of death, transfer to the secret state police acquittal.
Par. 3.
1. Courts-martial will be established for the district of a state police administration office. They consist of one president and two members.
2. President is the leader of the state police administrative office or his permanent deputy. The members will be appointed by the leader of the state police administration office.
Par. 4.
1. During the trial the _court_ must do officially everything that is necessary to discover the truth. If necessary, the accused is to be tried with the assistance of an interpreter.
2. The names of the judges and of the accused, the evidences on which the sentence is based, furthermore the crime, the sentence including a brief justification, as well as the day of the sentencing are to be recorded.
3. Otherwise the courts-martial determines its proceeding according to its dutiful judgment.
Par. 5.
1. The decisions of the courts-martial are not legally contestable.
2. The sentences of the courts-martial are subject to a reexamination which leads to confirmation or voiding.
3. The confirmation makes the sentence lawful and executable.
Par. 6.
The right of confirmation or voiding of the courts-martial sentences is mine and, on my orders, that of the higher SS and police officer.
Par. 7.
The courts-martial can, for special reasons, forego a penalty or transfer the case to another court.
Par. 8.
This decree becomes effective on the day of its publication.
TRANSLATION OF DOCUMENT 1276-PS
MOST SECRET The Chief of the Security Police and the SD _IV A 2 a - Bk. No. 502/42 Most Secret_
In written communications, please give this reference No., the date and subject.
Berlin SW 11, 17 June 1944 Prinz-Albrecht-Strasse 8 Local tel. no. 120040 Trunks 126421 Reichsbank Clearance Account: 1/146. Post Office Transfer Account: Berlin 2336. Express Letter Security Section III Recd: 20 June 1944 No. 20/44 Most Secret Annexes: Nil 94 To: Supreme Command Armed Forces Ops. Staff of the Armed Forces I C III general security
For the attention of Colonel of the General Staff Martini not represented in the department
_Berlin W 35_, Tirpitzufer 74/76.
Subject: Commando operations. Fuehrer's order of 18.10.1942
Reference: Communication of Counter Intelligence Bureau Defense Section III 527/2. 44g (C 2) of 21.3.1944.
The C-in-C of the Security Police and the SD in Paris reports the arrest of isolated parachutists of _French nationality_ in English uniform near Plumelec/Morbihan. It is evident from interrogation that _members of the De Gaulle Army_, after reporting voluntarily to the "Service Air Special," were taking part in a 14-days special training camp, in which were 300 Frenchmen and 300 Englishmen. Apparently only Frenchmen are used for operations in France. The parachute-jump is made in groups of ten, each consisting of:
1 Lieutenant 2 wireless operators 7 sabotage experts. Armament: each man 1 sub-machine gun 1 pistol 1 carbine 1 stabbing weapon. Equipment: Sabotage and radio apparatus, including Eureka gear i.e. D/F beacons. (therefore arrested by the SD? [marginal note in pencil])
The group which was arrested had orders to carry out railway sabotage in the district around Rennes. The acts of sabotage were obviously to be carried out by the group as a body. In addition, the group was to await further orders in some hiding-place.
Apparently they were not ordered to link up with the local resistance organisations. The arrested men had no civilian identity cards on them.
The employment of such groups is for the most part obviously planned for regions where, due to the action of the Security Police, there are no more local resistance or sabotage organisations in existence, or where the enemy knows that sabotage organisations were only counterfeited by tricks of the security police, which had meanwhile been disclosed.
* * * _I consider it essential that the necessary orders should also be given from there, in order that the lesser units_ of the Armed Forces may not--as has often been the case recently--interpret them wrongly and turn the Commando troops over to the Security Police instead of slaughtering them in combat as they retreat. It is only a question of handing them over to the Security Police when members of Commandos of this kind are not captured in battle by the Armed Forces but by other means, e.g., by being handed over by the native police.
If a few isolated Commando troops _are spared at first for interrogation purposes_, I consider it necessary for the _Security Police authorities to take part in_ the interrogation. The further treatment of members of Commandos, who are finally to be treated as killed in action [Gefallene], is, however, even in these cases, the responsibility of the Armed Forces.
I request that the measures taken from there be reported to me.
By Order
Signed: Mueller
TRANSLATION OF DOCUMENT 1279-PS
MOST SECRET
_WFSt/Qu (Admin. 1)_ No. 007893/44 Most Secret [The number is changed, in pencil, to 009074/44] One copy has been destroyed [remainder of pencil note illegible] 27/7 22.7.1944 2 Copies 2nd Copy
_Subject_: Treatment of members of foreign "military missions" captured with partisan groups.
Minutes of a meeting
1. The Fuehrer has decided that members of Anglo-American and Soviet-Russian so-called "military missions", captured in the partisan fighting in the South-East, are to be treated in the same way as those taking part in a commando-operation and not as prisoners of war.
2. Independently of the above, the Ag. Ausl., following queries made by the RSHA--Military Section--has put forward for decision the question of how British and American soldiers, captured with the partisan groups are to be treated.
The following are the resulting opinions:
a. _C-in-C, South-East_
The members of allied military missions are to be handed over to the SD, should the opinion below (b) be inapplicable.
b. _Supreme Command of the Armed Forces/Prisoners of war general_ in conjunction with _Supreme Command of the Army/Army General Staff Alien Armies in the West_ and Armed Forces Ops. Staff/Op. (Army).
Treatment as prisoners of war in accordance with Order: Armed Forces Ops. Staff/Op (Army) No. 03408/43 Secret, dated 18.8.43.
c. _Supreme Command of the Armed Forces/Chief of Prisoners of War Section_ in conjunction with _Armed Forces Reserve_ (_WR_) and _Armed Forces Ops Staff/Org I_.
Treatment as prisoners of war in accordance with Order: Armed Forces Ops Staff/Org II No. 02958/43 Secret, dated 8.7.43, which disregards differences of nationality. The only exception made is in the case of commando operations. (then they are handed over to the Security Service [SD]).
d. _RSHA/Section IV_
Fundamentally treatment as prisoners of war under the directives mentioned in b and c, but a more definite ruling is required to decide whether and in what circumstances, they are to be handed over to the Security Service [SD].
e. _RSHA/Military Section_
Considers that the Commando Order _cannot_ be applied to partisan fighting in the south East, that to do so would be dangerous in that it might imperil those taking part in our own operation (Brandenburg).
No opinion on the question of foreign missions.
f. _Ag. Ausl._
Fundamentally, treatment as prisoners of war, that implies that members of missions were taking part in a commando-operation.
g. _Armed Forces Ops Staff/Op._ (_Army_)
Treatment as the members of partisan groups themselves, i.e., as prisoners of war if they are in uniform and are captured or surrender in open battle, or executed if they are in civilian clothes or are captured in a sabotage- or commando-operation.
[The whole of g is crossed out.]
3. _Opinion and proposal of the Armed Forces Ops. Staff_
According to the orders issued to date, even for example, the British captured in the "Rosselsprung" operation must be treated as prisoners of war. This is especially evident in the Op. (Army)-Order dated 18.8.43.
[This last sentence is put in parenthesis, underlined, Op (Army) crossed out and a large query inserted in the margin.]
The Commando Order has never yet been applied to such missions, its extended application to cover them has not yet been ordered. If the missions are to be treated otherwise than in accordance with the orders to date, it must first be decided whether a foreign mission acting with the partisan groups in the South-East is to be called a commando-operation and therefore treated as such. Such a decision seems to be indicated even if it does not correspond completely to the wording of the Commando-Order or to the previous definition of a commando operation (as an especially under-hand and still unusual form of warfare which must be combatted with the appropriate counter measures). The principle must be adopted from the start that all members of partisan groups, even in the South-East are fundamentally guerrillas. Indeed they are treated as prisoners of war for reasons of expediency, in order to obtain the largest possible number of deserters and workers. There is no reason for this with regard to the members of foreign missions who are not numerous. There is therefore no necessity to treat them, in every case, in the same way as the members of partisan groups themselves. Basically, it would be far more appropriate to consider Anglo-American as well as Soviet-Russian military missions as commando-operations and to treat their members accordingly.
The appended Order is therefore proposed.
W [Initialed by Warlimont]
* * * * *
MOST SECRET
_WFSt/Qu_ (_Admin._ 1) 27.7.1944 No. 009074/44 Most Secret 2 Copies 1st Copy
_Subject_: Treatment of members of foreign "military missions" captured with partisan groups.
K [initialled in pencil by Keitel]
Minutes of a meeting
1. The Fuehrer has decided that members of Anglo-American and Soviet-Russian so-called "military missions", captured in the partisan fighting in the South East, are to be treated in the same way as those taking part in a commando-operation and not as prisoners of war.
2. Independently of the above, the Ag. Ausl. following queries made by the RSHA--Military section--, has put forward for decision the question of how British and American soldiers, captured with the partisan groups, are to be treated.
The following are the resulting opinions:
a. _C-in-C, South East._
The members of allied military missions are to be handed over to the SD, should the opinion below (b) be inapplicable.
b. _Supreme Command of the Armed Forces/Prisoners of War General_ in conjunction with _Supreme Command of the Army/Army General Staff/Alien Armies in the West_:
Treatment as prisoners of war in accordance with Order _Supreme Command of the Armed Forces_/Armed Forces Ops Staff/Op. (Army) No. 03408/43 Secret, dated 18.8.43.
c. _Supreme Command of the Armed Forces/Chief of Prisoners of War Section_ in conjunction with _Armed Forces Reserve_ (_WR_):
Treatment as prisoners of war in accordance with Order: Armed Forces Ops. Staff/Org II No. 02958/43 Secret, dated 8.7.43 which disregards differences of nationality. The only exception made is in the case of commando-operations (then they are handed over to the Security Service [SD]).
d. _RSHA/Section IV_
Fundamentally as prisoners of war under the directives mentioned in b and c, but a more definite ruling is required to decide whether, and in what circumstances, they are to be handed over to the Security Service [SD].
e. _RSHA/Military Section_:
Considers that the Commando-Order _cannot be applied_ to partisan fighting in the South East that to do so would be dangerous in that it might imperil those taking part in our own operations (Brandenburg).
No opinion on the question of Foreign Missions.
f. _Ag. Ausl._
Fundamentally, treatment as prisoners of war, that implies that members of missions were taking part in a commando-operation.
3. _Opinion and proposal of the Armed Forces Ops Staff_
According to the Orders issued to date, even, for example, the British captured in the "Ruesselsprung" operation must be treated as prisoners of war.
The Commando-Order has never yet been applied to such missions, its extended application to cover them has not yet been ordered. If the missions are to be treated otherwise than in accordance with the orders to date, it must first be decided whether a foreign mission acting with the partisan groups in the South East is to be called a commando operation and therefore treated as such. Such a decision seems to be indicated even if it does not correspond completely to the wording of the commando-order or to the previous definition of a commando-operation (as an especially under-hand and still unusual form of warfare which must be combatted with the appropriate counter measures). The principle must be adopted from the start that all members of partisan groups, even in the South East, are fundamentally guerillas. Indeed, they are treated _as_ prisoners of war, for reasons of expediency, in order to obtain the largest possible number of deserters and workers. There is no reason for this with regard to the members of foreign missions who are not numerous. There is therefore no necessity to treat them in every case, in the same way as the members of partisan groups themselves. Basically, it would be far more appropriate to consider Anglo-American as well as Soviet-Russian military missions as commando-operations and to treat their members accordingly.
The appended Order is therefore proposed.
Sgd: Warlimont _Distribution_:
Chief of the Supreme Command of the Armed Forces via the Deputy Chief of the Armed Forces Ops Staff.
1st Copy Qu. (Draft) 2nd Copy
[The second copy of the above dated 27.7.1944 marked "Draft" is also contained in 1279-PS it is initialled at the end by Warlimont and has an illegible pencil note at the top. In the second copy the first words of 2 and 3 are underlined in pencil. The type-script of both copies is identical.]
* * * * *
MOST SECRET Draft _Supreme Command of the Armed Forces_
No. 007893/4 Most Secret/Armed Forces Ops. Staff/QU (Admin. 1)
[The number is changed to 009074/44] Fuehrer Headquarters 22.7.1944 --Copies, --Copy
_Subject_: Treatment of members of foreign "military missions" captured with partisan groups.
The Special Orders for the treatment of captured members of partisan groups do not apply to members of foreign so-called "military mission" (Anglo-American or Soviet-Russian) captured in the fight against partisan groups in the areas under the command of the C-in-C South East and South West. They are therefore to be treated, not as prisoners of war, but in accordance with the Fuehrer's Order on the extermination of terrorist and sabotage troops, dated 18.10.1942 (OKW/WFSt No. 003830/42 Most Secret).
This order is not to be distributed beyond the divisional or equal-ranking staffs of the other branches of the Armed Forces. Any papers distributed to Army Headquarters and equal-ranking staffs, of the Armed Forces are to be recalled, when read, and destroyed.
[This last sentence is changed to "This order is not to be distributed beyond General Headquarters and equal-ranking staffs of other branches of the Armed Forces and is to be destroyed when read."]
Keitel
_Distribution_:
C-in-C South East Copy 1 C-in-C South West Copy 2 Army General Staff Copy 3 OKM/Naval War Staff Copy 4 OKL/Air Force Ops. Staff Copy 5
Reichsfuehrer SS and Chief of the German Police--Headquarters Staff of the Reichsfuehrer SS--for the attention of SS Brigadefuehrer and Major-General of the Waffen SS Rohde, also for RSHA Copy 6
OKW/Gen. Armed Forces Dept. Copy 7 /Chief of P.W. section Copy 8 /Armed Forces Reserves (WR) Copy 9 /WFSt/W Pr Copy 10 /Op (Army-Air Force-Navy) Copy 11 /Org Copy 12 /War Diary Copy 13 /Qu (Draft) Copy 14 Reserve Copy 15-25
PARTIAL TRANSLATION OF DOCUMENT 1285-PS
"The German Police"
[Extracts from handbook "Die Deutsche Polizei" 1943] B. Use of weapons on command
1. Every policeman is compelled to make use of his weapon if a superior officer, in compliance with his duty, orders him to do so.
2. In such a case, the superior officer alone bears the responsibility.
Use of weapons on the part of the police in the case of fugitive PWs
3. Fugitive Russian prisoners of war shall be fired upon without previous challenge.
4. Under no circumstances will warning shots be fired.
* * * * *
_To a_: According to paragraph 1 of the law mentioned * * * the following become as of 1 April 1937 immediate Reichs officials [unmittelbare Reichsbeamte]:
1. Officials occupying TO positions [Planstellen] in the agency "Reichsfuehrer SS and Chief of German Police in the Reichs Ministry of the Interior".
2. The officials of the Security Police [Secret State Police--Gestapo], and Criminal Police, however not the Police administrative officials working with the state police administrations for the criminal police.
3. The officials of the Protective Police [Schutzpolizei] and the Gendarmerie [Landjaegerei] and the police medical and police veterinary officials, police vocational school teachers and technical officials working with these organizations.
The personal salaries and welfare expenses of these officials and the operational expenses of the whole state police will be borne from 1 April 1937 on by the Reich, the same for the salaries, etc. of all employees and workers working at police agencies, who likewise on 1 April 1937 enter the Reichs service (paragraph 1(2) and paragraph 2). Hence from the fiscal year 1937 on there will be made up a Reichs budget for the police.
_To b_: For all police officials uniform official titles are introduced through the law cited * * * along with equal pay; only a few exceptions (retaining of some former official designations for the present incumbents) are permitted in the implementative regulations (transition lists).
_To c_: Through the German police official law [24 June 1937, RGBl I, 653] the same legal situation is created for all process servers without differentiation. Hence in Germany there is no longer a Prussian or a Bavarian process server, but now only a German process server, who is everywhere subject to the same legal regulations, wears the same uniform, and has the same official designation of rank.
The laws cited [relating to police officials] are valid since 1 October 1938 also for the former Austrian federal executive police, which including the police administrative officials by the decree of 27 October 1938 (RGBl. I, p. 1633) is at the same time taken over into the Reichs budget and thereby brought into the Reichs service.
More detailed regulations on this matter are to be found in the implementative regulations of 15 May 1939 [RGBl. I, p. 945]. According to these the valid functional police law in the former state of Austria is not affected.
_To d_: According to paragraph 1 of the law [28 March 1940, RGBl. I, p. 613] the police administrative officials of upper middle and simple civil service rank are transferred onto the Reichs budget. The officials of the higher police administrative service of a federal state can with the consent of the latter be transferred onto the Reichs budget.
* * * * *
[Pp. 81-82] III. Security Police [Sicherheitspolizei]
At the head of the Security Police is the chief of the security police and of the Security Service [SD]. Provisionally the Reichsfuehrer SS and Chief of the German Police in the Reichs Ministry of the Interior has taken over leadership personally. He unites in his person the direction of the security police and of the "Security Service of the Reichsfuehrer SS".
The security police is composed of the secret state police (including frontier police) and criminal police which in the central instance together with the central offices of the security service are united in the Chief Office for Reichs Security [RSHA].
Thereby the governmental security police and the party's SS intelligence activity complement each other in the unified central agency both organizationally and in leadership.
With the Chief Office for Reichs Security rest the elaboration of all organizational, personnel, economic, and technical affairs of the security police and security service; besides this however, the central agencies of the state police and criminal executives and the central direction of the security service information nets are also included.
In the field of functional legislation the Chief Office for Reichs Security, insofar as its interests are touched upon, either controls the framing of the law or has a part therein.
The chief office for Reich security is composed at present of 7 offices, to these several special institutes are attached.
The following serve to train the members of the security police and the security service:
1. The leaders' school of the security police in Berlin-Charlottenburg.
2. The elementary school of the security police in Fuerstenberg/Mecklenburg.
The establishment of special sport and technical schools is planned.
The criminal-technical institute [KTI] is available for all chemical and physical experiments and research to the whole security police.
The chief of the security police and of the security service is president of the international criminal-police commission. Through this personal union an especially close exchange of findings and methods of the German criminal police with other nations which are also connected with the IKpK is assured.
IV. Higher SS and Police Leaders
Higher SS and police leaders are installed for the area of every military district [Wehrkreis] as well as in the Protectorate of Bohemia and Moravia, in the General Government, in Norway, the Netherlands and in parts of the occupied area of the Soviet Union, who are in their areas the representatives of the Reichsfuehrer SS and chief of the German police in regard to all duties for which the Reichsfuehrer SS and Chief of German Police is responsible.
Inspectors of the order and security police are subordinate to the higher SS and police leaders.
[P. 83]
Inspectors (Commanders) of the Security Police and Security Service
Inspectors of the Security Police and Security Service--without prejudice to their subordination to the higher SS and police leaders--are installed in the field of responsibility of the security police in corresponding manner for the exercise of inspectoral authority.
Outside of territory strictly a part of the Reich, commanders of the security police and security service are appointed whose duty it is to lead the security police forces employed there.
PARTIAL TRANSLATION OF DOCUMENT 1292-PS
Fuehrer Headquarters, 4th Jan. 1944 To Rk. 13402 c Double Ref.: Allocation of Labor 1944
1. A conference took place with the Fuehrer to-day which was attended by:
The Plenipotentiary for the Employment of Labor, Gauleiter Sauckel,
The Secretary for Armament and War Production, Speer,
The Chief of the Supreme Command of the Army, General Field Marshal Keitel,
General Field Marshal Milch,
The Acting Reich Minister for Food and Agriculture, State Secretary Backe,
The Minister of the Interior, Reich Fuehrer of the SS, Himmler,
and myself.
(The Minister for Foreign Affairs and the Minister of National Economy had repeatedly asked to be permitted to participate prior to the Conference, but the Fuehrer did not wish their attendance).
The Fuehrer declared in his introductory remarks:
I want a clear picture:
(1) How many workers are required for the maintenance of German War Economy?
(a) For the maintenance of present output?
(b) To increase its output?
(2) How many workers can be obtained from Occupied Countries, or how many can still be gained in the Reich by suitable means (increased output)?
For one thing, it is this matter of making up for losses by death, infirmity, the constant fluctuation of workers, and so forth, and further it is a matter of procuring additional workers.
The Plenipotentiary for the Employment of Labor, Sauckel, declared that, in order to maintain the present pool of workers, he would have to add at least 2-1/2 but probably 3 million new workers in 1944. Otherwise production would fall off. Reichminister _Speer_ declared that he needs an _additional_ 1.3 million laborers. However, this would depend on whether it will be possible to increase production of iron ore. Should this not be possible, he would need no additional workers. Procurement of additional workers from Occupied Territory would, however, be subject to the condition that these workers will not be withdrawn from armament and auxiliary industries already working there. For this would mean a decrease of production of these industries which he could not tolerate. Those, for instance, who are already working in France in industries mentioned above, must be protected against being sent to work in Germany by the Plenipotentiary for the Employment of Labor. The Fuehrer agreed with the opinions of Reichminister Speer and emphasized that the measures taken by the Plenipotentiary for the Employment of Labor should order no circumstances which would lead to the withdrawal of workers from Armament and auxiliary industries working in occupied territories, because such a shift of workers would only cause disturbance of production in occupied countries.
The Fuehrer further called attention to the fact that at least 250,000 laborers will be required for preparations against air attacks in the field of civilian air raid protection. For Vienna alone 2000-2500 are required immediately. The Plenipotentiary for the Employment of Labor must add at least 4 million workers to the manpower pool, considering that he requires 2-1/2 million workers for maintenance of the present level, that Reich Minister Speer needs 1.3 million additional workers, and that the above-mentioned preparations for security measures against air attacks call for 0.25 million laborers.
The Plenipotentiary for Employment of Labor, Sauckel, declared that he will attempt with fanatical determination to obtain these workers. Until now, he has always kept his promise as to the number of workers to be furnished. With the best of intentions, however, he is unable to make a definite promise for 1944. He will do everything in his powers to furnish the requested manpower in 1944. Whether it will succeed depends primarily on what _German_ enforcement agents will be made available. His project cannot be carried out with domestic enforcement agents.
The Reichfuehrer SS explained that the enforcement agents put at his disposal are extremely few, but that he would try helping the Sauckel project to succeed by increasing them and working them harder. The Reichfuehrer SS made immediately available 2000 to 2500 men from concentration camps for air raid preparations in Vienna.
Generally all participants in the conference agreed that it will be possible to treat additional manpower even at home by activation and intensification of available labor, especially the Prisoners of War, provided they are given awards in form of additional food, clothing, and so forth. State Secretary Backe will examine to which extent help can be given with additional food. Field Marshal _Milch_ remarked that especially in agriculture, many women, who are really able to work, evade it because they receive family-allotments from their husbands who were inducted into the Armed Forces, and the wages for work done would be deducted from their family allotment. In their primitive way of thinking they therefore believe that they would have to work for nothing. Therefore on one hand, wages should not be deducted from the family allotment; on the other hand, it should be ruled that women who refuse work would, in consequence, receive no family allotment, or only a reduced family allotment.
The Fuehrer did not comment, declaring that he did not wish to go into details any longer.
Results of the Conference:
(1) The Plenipotentiary for Employment of Labor shall procure at least 4 million new workers from occupied territories.
(2) These workers may not be taken from armament and auxiliary industries in actual production in the occupied territories.
(3) It is to be examined by what means the output of workers now on hand can be increased and intensified, especially that of Prisoners of War.
(4) The Plenipotentiary for the Employment of Labor shall get in touch with the Reich Minister for Foreign Affairs before taking any action.
Signed: Dr. Lammers
II. Reichleiter Bormann has received a copy of paragraph I.
III. To the State Secretary for cognizance.
IV. Original to Mr. C. Please return. (Arrival at Fuehrer Headquarters, 6 January 1944.)
TRANSLATION OF DOCUMENT 1301-PS
Financing of the armament
The following explanations take as their premise the fact that the execution of the armament program is by its speed and extent _the_ mission of German policy, that everything else therefore must be subordinated to this purpose, unless the neglect of other questions would endanger the main goal. Even after 16 March 1935, the difficulty continues to exist, that one cannot attempt the influencing of the German people by propaganda for support of the armament, without endangering internationally our position. The financing of the armament program, already almost impossible, is being made especially difficult by that.
Further, another prerequisite must be presented. The printing press can only be used for the financing of armament to the extent which the maintenance of money value allows. Each inflation increases the prices of foreign raw materials, and increases the prices within the country; thus it is a snake, which bites its tail. The fact that our armament had to be camouflaged completely until 16 March 1935, and for the biggest part even afterwards, has led to that, that the printing press has already been made use of at the start of the armament program; whereas it would have been natural to put it at the final point of the financing. Of the 3775 millions in the portfolio of the Reichsbank plus 866 millions set aside in bills of exchange==total of 4641 millions, the bills of exchange to finance armament represent 2374 millions (status of 30 April 1935). The Reichsbank has invested most of the German mark sums, available to its administration and belonging to foreigners, in armament bills of exchange. Thus our armament was partly financed with the property of our political opponents. Also used for the financing of the armament program were the 500 millions RM, which came together through the Reich loan placed at the savings banks in Jan 1935. In the regular budget the following amounts were provided for the armed forces: fiscal year 1933/34 RM 750 millions, fiscal year 1934/35 RM 1100 millions, fiscal year 1935/36 RM 2500 millions.
The sum of the deficits of the budgets increase since 1928, according to the estimate 1935/36, up to 5 to 6 billions RM. At present this total deficit is already being financed by short-term credits from the money market. Thus it already burdens in this amount the possibilities of use of the public market for armament. The Reich Minister of Finance is justified in saying in his budget explanations: "Since an annual deficit ... is an impossibility permanently, since one cannot count with certainty on an increased tax income, covering the deficit and other previous debts; since on the other hand only a balanced budget offers a secure basis for our great future task in the armament policy, fundamentally and consciously--a budget policy must be followed, which will solve the problem of financing of armament by organic and planned decrease of other expenses, not only from the point of view of income, but also of expenses, that means saving."
How urgent this demand is can further be construed from the fact that an unending number of tasks were attacked and are in the process of execution by state and party, all of which cannot be covered by the budget but by subscriptions and credits, which must be raised besides the regular taxes by business. This simultaneous existence of various budgets, which however all serve a more or less public purpose, present the greatest obstacle to the gaining of a clear picture of the financing possibilities of armament. A whole series of ministries and numerous agencies of the party have their own budget in addition to their share of the Reich budget, and thus accordingly income and expense possibilities, which, although they are based on the financial sovereignty of the state, are not subordinated to the control of the Minister of Finance and thus also not to the control of the cabinet. Exactly as in the field of politics, the too far reaching delegation of legislative authority to individuals in Germany has led to the condition of many states within the state, thus the condition of parallelism and divergence [Nebeneinander und Gegeneinander] of numerous state and party agencies has absolutely a disastrous effect on the financing possibility of armament. If in this field, no concentration and no unified control is introduced finally, one must fear the worst for the solution of the almost impossible task of financing of armament.
Thus the following tasks result:
1. A commissioner must at first determine all sources and incomes, which are derived from Reich, State and Party funds, as well as from profits of public or party enterprises.
2. Then, a commission, appointed by the Fuehrer must investigate how these funds were used up to now, and how much can be taken from these funds in the future from their present purpose, and made available to the financing of armament.
3. The same commission has to examine the assets of all public and official party organizations, how the assets have been invested, and to what extent these assets can be utilized for the financing of armament.
4. The Reichministry of Finance is to be commissioned to investigate the possibilities of an increased tax income by the introduction of new taxes or the increase of existing tax rates.
The financing of armament previously by the Reich Bank was a necessity under the existing political conditions, and the political success has proved the correctness of this action. However, now other methods of financing of armament must be attempted under all conditions. With that, all not absolutely necessary expenses in other fields must be refrained from, and the entire, actually small, financial power of Germany must be concentrated on this one goal, the financing of armament. Whether the financial problem will succeed with this method of approach is as yet doubtful, but without such concentration it will fail with certainty.
Memorandum 9.III.1936 on the supply situation in the field of fuels and its effect on the Wehrmacht.
The simultaneous throttling and blocking of foreign sources of liquid fuel has caused an increasingly critical situation of supply of the German market since the beginning of the year 1936.
This situation calls for a description of the serious effects on the preparedness for action of the Wehrmacht and of the extraordinary measures which necessitate a decision in this matter.
The supply of the Wehrmacht is based on the home production, the reserves which can be made available in case of mobilization and the foreign imports which still for some time must fill the present gaps of supply.
I. _The German production._
The anticipating measures taken during the last 2 years by the Reich Cabinet to increase the home production of fuel, will not bring about an essential improvement of the supply situation during the current year because of the time required for factory construction and the uninterrupted increase of demand, but cannot bring an appreciable relief until the year 1938. The list in enclosure 1 of the requirements in case of mobilization and of the supply of these requirements by production, as well as the graphs added to the other enclosures, show the influence to be expected from the German production on the entire supply.
The expanding German production favors mainly light fuels, especially fuel for airplanes, and in addition, oil for airplane engines. As to the other kinds required by the Wehrmacht in case of war, we cannot expect any improvement for the time being; as to heating oils it may be anticipated that the situation will deteriorate. The developments of new processes (Uhde and Pott), the extent of which will shortly permit an opinion, offers certain possibilities of auxiliary supply which do not appear on the graphs, because the extent of the production possible until 1938 cannot yet be foreseen.
The inadequacy of the supply on the basis of home production is a fact which cannot be eliminated during the next 2-3 years, even with the greatest efforts and in spite of the planning started for additional expansion of production.
II. _Reserves._
To assure the requirements of the Wehrmacht it becomes necessary to bridge the supply gaps by reserves. For the first period of mobilization the Wehrmacht relies on the reserves of business, especially of great importing corporations, which also in peace time consider stored reserves for about 3 months as indispensable for smooth distribution. The Wehrmacht ought to be enabled to count on the amount of these reserves remaining constant.
Beyond that the Wehrmacht accumulates its own reserves in large storage houses so that considerable national reserves will be available as buffers in case of supply difficulties.
III. _Dependency of the overall supply on imports._
The obstacle to importing encountered to a large extent during the last weeks, and which have been brought about by an accumulation of economic-political events in foreign trade, endanger not only the maintenance of industrial reserves but also the continuation of the storage policy of the Wehrmacht. They shake the very foundations of the motorization program of industry and consequently also of Wehrmacht mobilization of mechanized vehicles to the extent planned for in case of war.
In particular large gaps have been opened:
1. due to the Russian prohibition of exporting petroleum, by which the benzol-association supplying about 20% of the German market got into considerable difficulties.
2. due to suddenly considerably increased demands of the Rumanians, who offer fuel only in exchange for foreign bills proper [Bardevisen] and/or at greatly increased prices in marks. The contribution of Rumanian imports to the supply of German requirements was 40% during the last year. The firm Olex which contributes 11% to the German market has already been forced, due to the obstruction of Rumanian deliveries, to decrease its business considerably, and will face a close-down of its market supply if relief is not procured before June 1936. Due to this reduction of imports similar stoppages are to be expected by the other great organizations of distribution during the same period.
IV. _Means to secure the supply._
In considering how to meet the situation the following devices are _unbearable_ for the Wehrmacht:
1. Reduction of mechanized traffic because this would, in addition to precarious economic and psychological effects, bring about a throttling of German motorization, which in view of the requirements of the Wehrmacht in case of war, would be a shock to mobility and supply of replacements.
2. Just as undesirable is to be considered the diminishing of reserves. The industrial reserves constitute the basis for mobilization, which has to rely on firm figures which remain about constant. As a decrease of reserves has already started, the further development in this direction is to be counteracted immediately. Aid from the reserves of the Wehrmacht cannot be granted because these modest quantities being ultimate reserves cannot be diminished under any circumstances.
Consequently, only the following means are to be considered:
1. Conceding to the Rumanian demands of paying imports in marks on a considerably raised price-basis.
2. Additional payments in foreign bills proper [Bardevisen] of imports from Anglo-Saxon countries.
3. Investigation to what extent an improvement can be achieved by accelerating or expanding the facilities for German production.
The first course has been followed by the authorization to negotiate new contracts on the basis of the Rumanian demands. Adequate and punctual delivery to the market, however, is not yet assured hereby.
Re. 2. Foreign bills [Devisen] for the minimum of the indispensable import requirements can probably be obtained only by reduction of import of other necessities. The narrow limits of the presently assured raw materials for armament do not allow for a decrease of such imports which are indispensable for the Wehrmacht. In particular we cannot do without the necessary quantities of metals required by the Wehrmacht for current procurements.
Re. 3. As a result of investigations made, essential changes cannot be expected at a date within sight.
V. _Uniform management of the petroleum industry._
During the last few months the Wehrmacht has repeatedly emphasized the unavoidable call for a uniform and planned steering of the entire German petroleum industry. The present dangerous situation of the German fuel industry puts this necessity again into the spotlight. The lack of stern guidance in the present moment must lead to severest damages to the public and the defense of the country. The duty of a management according to plans of the petroleum industry must be in the first line to avert the permanent threat to mechanized traffic and the preparedness of the Wehrmacht for action lying in the extensive dependency on forces outside of the German sphere of control.
* * * * *
_Enclosure 1_ to "memorandum on the supply situation in the field of fuels and its effect on the Wehrmacht" of 9 March 36.
-----------------------------+--------------------+---------------------- | |Supply of requirements |Mob. requirements | by production -----------------------------+---------+----------+------------+--------- | 1936 | 1938 | 1936 | 1938 | t/Jahr | t/Jahr | % | % | | | | Light fuels for car | | | | engines | 900 000 | 1 530 000| 43 | 60.5 | | | | Light fuels for airplane | | | | engines | 460 000 | 600 000| 39 | 61.5 | | | | (illegible), Fuel oil | 650 000 | 1 280 000| 11.6 | 22 | | | | Heating oil | 800 000 | 1 200 000| 30.6 | 22 | | | | Lubricating oil for car | | | | engines | 80 000 | 150 000| 22.5 | 23 | | | | Lubricating oil for airplane | | | | engines | 35 000 | 55 000| - | 22 -----------------------------+---------+----------+------------+---------
IIa Needed raw materials 4/28/1936 with consideration of the program for the supply of ammunition, amounting to 200 million marks [Mil. RM.] (for the months of April 1936 to March 1937=12 months)
_Supply needed, submitted to R.Wi.Min._ (letter of 1/1336.) Copper 5400 t/month (without plate VIII) lead 2300 t/month (without plate VIII) zinc 3100 t/month (without plate VIII) _Supply needed, considering the 200 Mill-plan._ Copper 5850 t/month (without plate VIII) lead 3350 t/month (without plate VIII) zinc 4020 t/month (without plate VIII) Therefore the _additional_ need amounts to Copper 450 t/month lead 1050 t/month zinc 920 t/month
_Raw materials needed by parts of the Armed Forces_ (for the months of April 1936 to March 1937) copper 4830 670 175 175 5850 lead 2750 280 300 20 3350 zinc 2420 160 260 1180 4020
* * * * *
SECRET
_Raw materials needed by the armed forces during the years 1935 and 1936_
---------------------------------------+-----------+------------- _Raw materials_ |_need 1936_| _t/month 1935_ ---------------------------------------+-----------+------------- _Iron and steel_ | | | | Iron ore Fe | 130,000 | 80,000 | | Manganese ore Mn | 7,000 | 4,000 | | Chromium 0,5 C | 220 | 88 | | 0,5 C | 160 | 86 | | Wolfram | 80 | 15 | | Molybdenum | 40 | 8 | | Vanadium | 3 | 1 | | Tantalum | 2 | 0.5 | | Silicon | 400 | 250 | | _Non-iron metals_ | | | | Copper | 7,500(1)| 4,670 | | Lead | 6,500(2)| 3,520 | | Nickel | 275 | 174 | | Tin | 150 | 89 | | Zinc | 3,100(3)| 1,830 | | Aluminum | 2,720 | 1,900 | | Antimone | 55 | 25 | | Cadmium | 10 | 0.62 | | Mercury | 20 | 12 | | Cobalt | 10 | 3 | | _Leather goods (economy)_ | | | | skins and pelts | 1 300 | 1 400 | | natural tanning matter | 800 | 860 | | _Wood_ | | | | special foreign timber | 170 | 150 | | _Grain, fodder and further | | agricultural products_ | | | | linseed | 1 500 | 1 900 | | _Coal and Salt_ | | | | oil coke and Pitch coke--of these 1500 | | t/month to produce the aluminum | | needed by the armed forces. | 1 700 | 1 300 | | _Various goods_ | | | | diamonds, amounting to a value of | RM. 15 000| 11 000RM | /month | | | cane | 200 | 160 | | mica | 18 | 15 | | magnesite | 1 200 | 1 000 | | _Rubber and asbestos_ | | | | rubber | 280 | 150 | | asbestos [spinasbest] | 100 | 70 | | _Fat for industrial purposes_ | | | | glycerine | 165 | 120 | | _Petroleum oils_ | | | | gas for plane engines | 7 000 | 4 000 | | light fuel f. motor vehicles | 3 000 | 1 500 | | lubrication oil f. plane engines | 700 | 200 | | lubrication oil f. motor vehicles | 500 | 150 | | gas-oil, (diesel) | 7 500 | 1 200 | | heating oil | 15 000 | 6 000 ---------------------------------------+-----------+-------------
Note: 1. for cables 2100 t/months; starting on 1 Apr. 36 possibly only 6000 t/month, including 2100 t/ for cables;
Note: 2. for cables 4200 t/months; starting 1 Apr. 36 7800 t/months which means 5500 t/month for cables;
Note: 3. from this amount: sheet-zinc in the limits of the quota of the association of zinc-rolling-mills 340 t/month; starting 1 Apr. 36 possibly only 2700 t/month including sheet-zinc.
Situation re fuel
---------------------+----------------------+-----------------------+ | Fuel for motorized | Fuel for airplanes | | vehicles | | |----------+-----------+----------+------------+ | Peace 36 | Case of | Peace 36 | Case of | | | mobil. 38 | | mobil. 38 | ---------------------+----------+-----------+----------+------------+ Total need of | | | armed forces | | | and economy | | | t/year | 2,000,000 1,650,000 | 80,000 600,000 | | | | Production in entire | | | Reich-territory | | | t/year | 900,000 | 80,000 | | | | Missing quantity | | | t/year | 1,100,000 750,000 | - 520,000 | | | | New planning | 700,000 | 300,000 | ---------------------+----------------------+-----------------------+ +----------------------+ ----------------------+ | Gas-Oil | | | Diesel | Heating fuel | |---------+------------+----------+------------+ |Peace 36 | Case of | Peace 36 | Case of | | | mobil. 38 | | mobil. 38 | ---------------------+---------+------------+----------+------------+ Total need of | | | armed forces | | | and economy | | | t/year |800,000 1,300,000 | 500,000 1,200,000 | | | | Production in entire | | | Reich-territory | | | t/year | 280,000 | 270,000 | | | | Missing quantity | | | t/year |520,000 1,020,000 | 230,000 930,000 | | | | New planning | 200,000 | ? | ---------------------+----------------------+-----------------------+ ---------------------+----------------------+--------------------- | Oil for motor | Oil for airplane | vehicles | engines |----------+-----------+----------+---------- | Peace 36 | Case of | Peace 36 | Case of | | mobil. 38 | | mobil. 38 --------------------+----------+-----------+----------+---------- Total need of | | armed forces | | and economy | | t/year | 75,000 150,000 | 5,000 55,000 | | Production in entire | | Reich-territory | | t/year | 20,000 | - | | Missing quantity | | t/year | 55,000 130,000 | 5,000 55,000 | | New planning | 20,000 | 15,000 ---------------------+----------------------+---------------------
Copy Berlin, 15 May 1936 Prime minister General Goering Raw material and Foreign exchange staff
Top Secret To the Reichminister of war Generaldfeldmarschall von Blomberg
Enclosed, a record of the conference of the council of ministers of 12 May 1936 in the afternoon is forwarded.
By order
/s/ Loeb Lt. Col. in the General Staff
* * * * *
Top Secret
_Record of the council of ministers on 12 May 1936 1700 hours_
Chairman: Prime minister General Goering.
Reichminister of War Generalfeldmarschall von Blomberg.
Reichsbank President and acting Reich and Prussian minister for Economy Dr. Schacht
Reichminister of Finance Graf Schwerin von Krosigk
Prussian minister of Finance Prof. Dr. Popitz as the recording secretary Lt. Col. in the General Staff Loeb
_Minister Schacht_: shows the development up to now when two years ago, the decision for rearmament was made, it was decided to carry out the financing mainly outside the means of the Reichministry of Finance. This meant the commitment of the last reserve from the very beginning. A decision which did not seem without hazards. The memorandum of 3 May 1936 says the same thing.
In the course of the last two years, the program was increased more and more in its extent and speed. Thus the requirements to the Reichsbank were increased steadily.
It would be necessary to create, as basis for financing, a steady, prosperous economy, and therefore renounce the execution of other, partially irrational ideas and aims of the party. The psychological prerequisite was not disturbed by the party as such, but by many individual groups of the party, again and again; personal attacks against Dr. Schacht and thus against the economy followed. Dr. Schacht has emphasized again and again, that one must follow a cultural and legal policy, which will leave economy alone. However one must not describe it as greedy and selfish from the beginning.
Also money theories of the most variable kind have been published repeatedly, thus causing anxiety for the economy; to counteract this was practically impossible, as the propaganda machine of the party did not permit this.
Despite all this, Dr. Schacht continued to work, because he stands with unswerving loyalty to the Fuehrer, because he fully recognizes the basic idea of national socialism and because at the end, the disturbances, compared to the great task, can be considered irrelevant. Previously, approximately 11 billion marks besides the budget have been raised for rearmament and re-employment without shaking the rates of exchange and currency; the rate of interest could be lowered.
The Fuehrer has repeatedly emphasized in personal talks and cabinet meetings, that the speed of rearmament must be kept up until the spring of 1936. This was agreed to and carried out.
_Prime Minister Goering_: has never heard about this time limitation.
_Minister Schacht_: The main question for the further execution of the program is, how much money can be gotten out of business. Some 2 billion can be consolidated annually by long term loans, 8 to 9 billion cannot be asked for; the possibility of making available depends on the development of the money market. Full concentration of the money market through the Reichsbank is necessary.
If the Reichsbank should have to issue more notes than could be born by the currency, one must reach back to other factors.
Dr. Schacht will never be part to an inflation; the Fuehrer also has decided in this sense. The danger of such a development is imminent. If a road is to be taken, which contains this danger, Dr. Schacht would like to drop out on time, so that he does not disturb the new course.
Dr. Schacht considers it impossible, that prices can be fixed by the state, if the same money policy is continued.
_Prime Minister Goering_: What is the basis of currency with the Reichsbank?
_Minister Schacht_: This question has nothing to do with the gold standard. It is a question of something imponderable, to recognize the time of which must be left up to fine sensitivity. If by a surplus of money, the danger of devaluation of the mark exists, the state can and must take action from the financial side by taxes, etc. Considering the material factor, it must be determined, that we are dependent for numerous goods on foreign countries. Even small percentages as a whole have considerable effect. In many cases, the necessity for import is caused by trade political relations; therefore the raw-material situation may not only be viewed and attacked from the production within Germany. The foreign relations must be decreased all of a sudden. For instance the negotiations with Standard and Shell were carried out on this basis.
_Prime Minister Goering_: When substitutes [ersatzstoffe] are sufficient in quantity, we shall no longer need the import, which presents us such difficulties.
_Minister Schacht_: In a series of cases, to be able to carry out the import, work from within Germany was utilized for compensation, for instance tankers for oil import corporations.
However it is especially required that nothing be said about intentions and measures of this field in public, so as not to aggravate the importers.
_Prime Minister Goering_: If the Fuehrer has expressed himself in this direction, he did it to counteract the increasing pessimism in the country in respect to this field.
_Minister Schacht_: In any case, all anxiety must be prevented. Foreign exporters have already shown less readiness to deliver against certificate of foreign exchange, since they apparently have no confidence in the cashing of these certificates.
_Prime Minister Goering_: Our raw material situation is generally known to the world. The article published in the papers on 28 April 1936 did not contain anything secret. Actually the confidence abroad should have been increased by this publication, because generally the opinion was held abroad that Dr. Schacht was protected by the Prime Minister against the party.
_Minister Schacht_: The situation at present is thus:
Some 64 million marks are already claimed by reimbursement.
We must buy especially crude rubber and textiles; we have practically no crude rubber. Cellulose wool is not an adequate substitute, especially not for export goods.
The necessity for the closing down of manufacturing plants will soon result from this accordingly.
It must be decided whether the available gold should be all spent at the present speed or whether it should already be slowed down.
Swedish ores are still available for about 3 months. The export to Sweden becomes more difficult, and thus the import possibilities decrease.
_Prime Minister Goering_: is of the opinion that our export to Sweden continues, so that one can further count on import.
_Minister Schacht_: The raw material supply of Germany amounted at the beginning of the war to a value of about 7 to 8 billions; now it is less than 1 billion.
_Prime Minister Goering_: has heard repeatedly, that export business was refused by the Reichminister for Economy. In the future, the departments will be caused by him to re-examine such occurrences; perhaps then it will work differently than until now.
_Minister Schacht_: Increase of our export appears improbable in the near future. Further obligations arise through the Foreign Office, the Reichsbank, Post Office, Party and other agencies; soon the consular service cannot be paid any more.
The time will come, when we will have no longer any reserves of either raw materials or foreign exchange at our disposal.
_Prime Minister Goering_: If we have war to-morrow, we must help ourselves by substitutes. Then money will not play any role at all. If that is the case, then we must be ready to create the prerequisites for that in peace. The account just described could have also been presented, in his opinion, in the meeting this morning.
_Minister Schacht_: Publication is recommended for only the smallest circle.
_Prime Minister Goering_: It is necessary to inform the people required for the execution.
_Minister Schacht_: In his opinion only the ministers, not the state secretaries. In addition, each department must be called in individually.
_Prime Minister Goering_: The psychological prerequisites for the correct approach to the work must be created everywhere. The actual work is done by the state-secretaries and the experts. In the future one must go much more into detail; confidence in the persons employed in this is absolute necessity.
_Prime Minister Goering_: summarizes the explanation by Minister Schacht: In short, demands on the Reichsbank can no longer be covered; only 64 million marks are still available.
_Minister Schacht_: declares that besides these 64 million Reichsmarks in the private banks, there are another 72 million gold with the Reichsbank.
_Prime Minister Goering_: continues with the summary: The shortage of raw material is known in its extent. A considerable increase is no longer possible, in the opinion of Minister Schacht.
_Minister Schacht_: The production of raw materials within Germany finds its limitation there, when an increase of prices of export goods is created by it.
_Prime Minister Goering_: One can separate requirements within Germany and export. Even the smallest details are important. The following appears necessary.
1. Increase of export despite all difficulties.
2. The raw material coverage within Germany.
3. The possibly necessary resettlement of workers and food-fundamentals for the execution of all measures.
These problems all affect each other, so that the participation of all departments is necessary.
Appropriate example: Position of the farmer, who does not utilize the available possibility of intensifying of fertilizing, because the capital lost is not bearable for him in case of bad harvests. In such a case, the risk lying with the weather must be partially taken from the farmer by a special organization.
The Reichministry of Finance must also be consulted greatly in reference to the regular budget. Re-awakening of thriftiness in all fields belongs to this program.
_Minister Popitz_: The final conclusions made by Dr. Schacht are clear and convincing, under the condition that the bases for these conclusions are correct. That must be examined. It must be determined again, whether the principles, according to which the present raw material and foreign currency policy has been carried out with such a big success, are unalterable and correct.
The time when perhaps an inflation is feared is unclear; actually it is already here, even if it has a bearable extent.
An increase of export cannot be expected with the present system. However it is to be examined, whether there is not a better system. The basis of the present economic policy is deflationary. However it appears impossible to integrate the deflation into an actually existing inflation. It must be discussed, whether forced economy of export is to be continued.
It is to be examined further, whether the money for rearmament can be drawn out from the remaining economy. In no case may the condition arise, that the Reichminister for Finance and the Reichminister for Economy push the responsibility for the providing of funds to each other.
The difference between 2 billion Reichsmarks, which the Reichsbank believes to be able to raise on a long term basis, and the 8 to 9 billion Reichsmarks required for armament, cannot be covered by taxes. Therefore the following suggestion:
1. The raw material question, which can be solved comparatively simply, must be attended to at once by a special committee.
2. Illuminate critically the export question, so to say, in a scientific manner.
_Minister von Krosigk_: Economy of foreign exchange in detail is necessary. In that, small things also play a part. Equal saving is necessary in spending money within Germany. In contrast to Minister Popitz, he is of the opinion that expenses for armament must be taken over more and more by the regular budget. Expenses above this budget are to be covered
a. by long term consolidation of annually some 2 billion marks.
b. by short term bills of exchange and similarly.
The financing has succeeded up to now by these two means.
However the danger exists, the short-term bills of exchange can no longer be negotiated, so that flooding of the Reichsbank with MEFO bills would have an increased printing of banknotes as consequence.
_Minister Popitz_: In this case, printing of bank notes is only necessary if the money is absolutely necessary for payment of wages among other unavoidable things.
_Minister von Krosigk_: The decisive question for that is, whether inflation would actually happen by printing of banknotes to this extent. He does not believe so. The increase of prices observed so far was not caused by monetary reasons, but can be derived from increase of prices for raw materials and agricultural products. Thus one cannot speak of an inflation.
_Prime Minister Goering_: does not believe that an inflation would happen from the monetary angle.
Measures which in a state with a parliamentary government would probably bring about inflation, do not have to have the same results in a totalitarian state.
Important for this is the application of an appropriate propaganda, so that the co-operation of the propaganda ministry, promised by the Fuehrer, is of great importance.
_Minister Schacht_: gives a summary of the holdings of bills of exchange in the Reichsbank at present:
4,353,000,000.--RM bills of exchange
3,731,000,000.--RM of which are in MEFO bills of exchange
2,200,000.--MEFO bills of exchange are deposited in clearing accounts.
More than 5 billions in bills of exchange are deposited thus, that they can be presented immediately in case of disturbances of the money market, caused by any measure. Therefore any disturbance must be prevented under all conditions.
_Prime Minister Goering_: agrees to be the "shield" for the measure of financial nature, so that no disturbances would happen.
The regular budget is to take over the current upkeep of the armed forces, but not the costs of the reconstruction.
_Minister Popitz_: It is to be examined whether the regular budget cannot be relieved from interests and amortization quotas of advance drawings. Even the observing of the international bank law cannot prevent the using of these recognized necessary measures in this direction.
If the economy is started by increased export, naturally the circulation of money will increase and with that the possibility of further financing.
If the money, which had to be put into circulation, is only used for payment of wages, no inflation can take place.
_Prime Minister Goering_: orders:
1. Determination as rapidly as possible of the basis of payment.
2. Beginning of the execution work in the realm of raw material production within Germany.
3. Examination of the question of the export system.
In the next conference, contemplated for Friday afternoon, the examination of the export system is to take place.
First under his chairmanship (Goering's) the ministers Dr. Schacht, Graf Schwerin von Krosigk and Prof. Dr. Popitz will consult each other. Then, immediately thereafter, the suggestions voiced there are to be discussed by a board of experts. The following were named for this board:
By Minister Schacht: Reichsbank Director Brinkman Reichsbank Director Blessing Ministerialdirektor Dr. Sarnow
By Minister von Blomberg: Dr. Trendelenburg
By Minister Popitz: Dr. Springorum Dr. Sogemeier
Further Reg. Burgermeister Kroogmann Prof. Wayemann and others, who will be appointed by the Prime Minister.
_Prime Minister Goering_: states that he can expect and demand discipline from the party, so that the protection of the individual auditor, called, is guaranteed.
Close of the conference; 1910.
Summary of the raw material situation 2 May
----------------------+-----------------------+-----------------------+ | Iron ores | Aluminum | ----------------------+-----------+-----------+-----------+-----------+ Total requirement for | peace | case of | peace | case of | the armed forces | 1936 |mobil. 1938| 1936 |mobil. 1938| and the industry | | | | | (estimated) | | | | | ----------------------+-----------+-----------+-----------+-----------+ | 9.5 | 11 | 105,000 | 160,000 | | million | million | | | | | | | | | | | | | ----------------------+-----------+-----------+-----------+-----------+ Production entire | | | Reich industry | 1.8 million | 96,000 | ----------------------+-----------+-----------+-----------+-----------+ Deficit | 7.7 | 9.2 | 9,000 | 64,000 | | million | million | | | | | | | | | | | | | ----------------------+-----------+-----------+-----------+-----------+ Excess | -- | -- | -- | -- | ----------------------+-----------+-----------+-----------+-----------+ Tentative plans for | 1.2 million | -- | expansion of own | proposal Keppler | | production | | | ----------------------+-----------------------+-----------------------+ ----------------------+-----------------------+-------------------------+ | Crude Rubber | Cellulose wool | ----------------------+-----------+-----------+-------------+-----------+ Total requirement for | peace | case of | peace | case of | the armed forces | 1936 |mobil. 1938| 1936 |mobil. 1938| and the industry | | | | | (estimated) | | | | | ----------------------+-----------+-----------+-------------+-----------+ | 75,000 | 85,000 | 12,000- |depending | | | | 70,000 |on import | | | | |of natural | | | | |fiber | ----------------------+-----------+-----------+-------------+-----------+ Production entire | | | Reich industry | 1000 | 12,000-70,000 | ----------------------+-----------+-----------+-------------------------+ Deficit | 74,000 | 84,000 |any increase in | | | |production would be | | | |taken up by the | | | |market | ----------------------+-----------+-----------+-------------------------+ Excess | -- | -- | | ----------------------+-----------+-----------+-------------------------+ Tentative plans for | 2400 | first increase until | expansion of own | | end of 1936 70,000 t | production | | | ----------------------+-----------------------+-------------------------+ Berlin, 30 May 1936 Behrenstrasse 68-70 Telephone A 2 0048 Prime Minister General Goering Raw Material and Foreign Exchange Staff Journal No. * * * /36 [initial] BG th 2/6 [initial] Rubber Stamp Top Secret
To the Reichminister of War Generalfeldmarschall von Blomberg
Berlin
Enclosed, a report of the conference of the council of ministers of 27 May 1936, is forwarded.
By Order
Loeb Lt. Col. in the General Staff 1 Inclosure:
* * * * *
Top Secret
Copy of meeting of Minister on 27 May 36, at 1130 o'clock.
Chairman: Ministerpraesident Generaloberst Goering
Reichskriegsminister Generalfeldmarschall von Blomberg
Reischsbankpraesident und kommissarischer Reichs- und Preussischer Wirtschaftsminister Dr. Schacht
Reichsfinanzminister Graf Schwerin von Krosigk
Preussischer Finanzminister Prof. Dr. Popitz
Recording Secretary: Lt. Col in the General Staff Loeb
_Prime Minister Goering_: The two sessions of the board of experts held so far have brought forth interesting discussions. Naturally, opinions frequently disagree. The experts are invited to state their concepts in writing.
Today, discussion concerning the question of substitute-material. What objections are made to the production of war-raw materials within the Reich?
_Minister Schacht_: Principly there is nothing to object; a solution of the raw material problem by self-producing is absolutely necessary and agreed with, theoretically.
Difficulties are encountered with regard to:
1. serious monetary strain because of investments. Providing money by taxing capital is impossible. Circulation of money can not be increased beyond a certain amount. Previous measures executed correctly and without danger to monetary value. Further increase seems precarious; matter of confidence. This point of view alone, however, not determining; possible that funds could be drawn from industrial profits.
2. special scruples, regarding the cases where prices for substitute [Ersatz] material are far beyond world-market prices, and therefore the products cannot compete (for example: tires made from Buna). Adjustment would further increase the excise tax on exports. Inflation cannot be chosen, as this would immediately upset the state's budget.
It must be attempted to produce those raw materials within Germany which are economically favorable; _for other raw materials ready reserves for the case of mobilization_ [_Mobfall_]. Especially clear is the situation of flax; the complete covering of the requirement is possible; however not with hemp.
_Certain raw materials for war must be stocked._
These viewpoints are recognized and followed by the Reich ministry for Economy. The execution is mainly dependent on the question of funds. Therefore, necessity to save in all fields, to make saved funds available for investment.
_Prime Minister Goering_: All measures are to be considered from the standpoint of an assured waging of war.
Ready reserves must ordinarily be accumulated already in peace in certain amounts.
It is to be attempted to use cheap imported raw materials for export purposes, expensive raw materials from within Germany. In cases where the price differences are small, probably creation of a settlement is preferred.
_Minister Schacht_: This settlement can be carried out either by compulsory mixing or by a price settlement by the state of the expensive raw materials.
_In any case, price supervision must be introduced again._
_Minister Popitz_: Placing of the burden of increased prices on the consumer is possible when the difference is only small.
The other possible method is sales monopoly or wholesale monopoly of certain goods.
_Minister Schacht_: It is recommendable not to influence individual, large fields, for instance textiles, by prices; but to concentrate funds for the monetary subsidation of other fields of raw materials.
_Minister von Krosigk_: The question cannot generally be judged theoretically, but only practically with the use of individual examples.
_Prime Minister Goering_: At first, the specially urgent petroleum question is to be treated.
General agreement to that.
_Minister von Krosigk_: Present experience is that the beginning of new methods of sale or price guarantee by the Reich results thus, that soon new and cheaper production methods are found. This recommends a not too sudden expansion of production.
_Prime Minister Goering_: Waiting for new methods is no longer appropriate. Plan of the Reich forestry office for the utilization of wood is ready. Import of timber must be cut down in any case; strongest demands on German forests to be preferred at present and can be advocated.
It is to be decided, whether at the beginning, a risk bonus over 6% profit is to be granted.
_Minister Schacht_: turns against higher profits than 6%. Guarantee of interest-bearing is to be preferred, and must be sufficient.
_Minister von Krosigk_: discusses the advantages of the amortization program.
_Minister von Popitz_: In contracts many times rapid cancellation is contemplated.
_Minister Schacht_: At the beginning more consideration is recommended, later stronger concentration, with profit sharing by the Reich.
_Minister Popitz_: requests that the cancellation periods be re-examined by a special committee.
_Prime Minister Goering_: The summary is to be prepared for the next committee meeting about:
1. Inventory of German Raw Material possibilities.
2. Form of the present decrease.
3. Mobilization requirement.
4. How shall raw materials be handled? Especially clarifications whether production within Germany is to start already in peace or whether the stocking or reserves is more important.
Subject of petroleum also can be considered concluded, therefore is to be handled immediately.
In the next council of Ministers, discussion of the agricultural question, then Minister Darré and State secretary Backe present.
_Minister von Blomberg_: In the fuel industry it is to be decided whether conversion to solid fuels should already be carried out in peace, or whether, as in France, it is to be prepared for the mobilization case. If possible and recommendable, increased use of tar coke [Schwelkok], no diesel oil for railroads.
_Prime Minister Goering_: Economy also absolutely necessary and to be insisted on in other fields of raw materials.
_Minister von Blomberg_: Examine as an example substitution of heavy metal by light metal (for instance cans of aluminum): general increase of the use of glass, especially for aerial bombs, maybe also for grenades; use of plastics for wide fields, even as far as transmissions. Certain hopes can be set on China. Therefore prevent political estrangement. Careful advances in the approaching of Japan necessary, at present the recognition of Manchukuo would be disastrous for Mr. Klein's current plans in China.
_Prime Minister Goering_: Common front of China with Japan against Soviet Russia can probably be produced.
[in green pencil] I did _not_ express myself so specifically BL/
_Minister von Blomberg_: Japan is doubtful as a factor of military power.
_Prime Minister Goering_: Furthermore, the danger of Japan's turnabout always exists.
Results of the China affair cannot be viewed clearly because of the unclear inner political situation.
_Minister Schacht_: always has supported the attempts of Mr. Klein, because he especially hopes for food, raw materials from China.
_Minister von Blomberg_: recommends further collaboration with the Kaiser Wilhelm Gesellschaft, with whom the Reichministry of War had very good experiences. At its head is the scientific authority; other imminent changes for solution proposed by the party unbearable.
_Minister Popitz_: Nomination of Geheimrat Bosch is possible for this post, when his resignation from the IG is possible.
_Minister Schacht_: General complaints about the deterioration of German science; this is also harmful for export, since the missing replacement limits the execution of German engineering missions abroad and thus German orders from abroad.
_Minister Popitz_: Seconds these complaints. Actions by the party which remove the most important people is unbearable. Explanation by examples.
In the liberal arts, the consequences are not being felt immediately, all the more so in the natural sciences. If service etc., should be limited to the first two semesters of study, then full time and freedom for scientific activity.
_Prime Minister Goering_: In Prussia then, difficulties are partially removed. Influence of the liaison staff not always fortunate. Role of Professor Wagner.
Puts to discussion a taking over of a Spanish tin source, which is being offered from the Swedish side.
_Minister Schacht_: Basically in agreement, particularly when in a partnership enterprise German achievements will result by deliveries of machines.
_Prime Minister Goering_: asks Minister Schacht to conduct negotiations in this spirit during his visit in Belgrade relative to Jugoslavia in the near future.
_Minister Schacht_: The copper mining in Jugoslavia must take place by excluding the French, who sell copper for foreign exchange only.
_Prime Minister Goering_: During the next ministerial session, the investigation of the problems in the agricultural sector has to be conducted in such a way that direct statements of Minister Schacht/Minister Darré should be made about the single problematic issues.
End of the session 13 o'clock.
Fuel-supply situation (1st draft of a plan for solution) 27 May 1936
+------------------+----------------------+ |Light vehicle fuel| Airplane fuel | +--------+---------+----------+-----------+ | Peace | case of| Peace | case of | | 36 | mobil. | 36 | mobil. | | | 38 | | 38 | --------------------------------+--------+---------+----------+-----------+ Total requirement Armed | | | Forces and Industry tons/years|2,000,000 1,650,00| 80,000 600,000 | | | | Production in the entire | | | Reich industry tons/years | 1,300,000 | | | | | Deficit from requirements | | | of mobilization tons/years | 950,000 | | | | | To be covered by conversion | | | (substitute fuel) | | | | | | Necessary new plans 950,000 | | | | | | Proposal for a solution | 3 Fischer plants of 320,000 tons | | each by the end of 1937 | | | | | Costs | 380 million RM | --------------------------------+-----------------------------------------+
+----------------------+ | Gas oil | |----------+-----------+ | Peace | case of | | 36 | mobil. | | | 38 | ---------------------------------+----------+-----------+ Total requirement Armed | | Forces and Industry tons/years | 800,000 1,300,000 | | | Production in the entire | | Reich industry tons/years | 220,000 | | | Deficit from requirements | | of mobilization tons/years | 1,080,000 | | | To be covered by conversion | | (substitute fuel) | 200,000 | | | Necessary new plans 950,000 | 880,000 | | | Proposal for a solution |4 IG-Pott plants of | |220,000 tons/year each| | by end of 1937 | | | Costs | 400 million RM | ---------------------------------+----------------------+ ---------------------------------+----------------------+ | Heating oil | |----------+-----------+ | Peace | case of | | 36 | mobil. | | | 38 | ---------------------------------+----------+-----------+ Total requirement Armed | | Forces and Industry tons/years |500,000 1,200,000 | | | Production in the entire | 270,000 | Reich industry tons/years | | | | Deficit from requirements | 930,000 | of mobilization tons/years | | | | To be covered by conversion | | (substitute fuel) | | | | Necessary new plans 950,000 | 930,000 | |3 Fischer whole-Pott | Proposal for a solution |or distilling plants | |of 310,000 tons/year | |each | | | Costs | 370 million RM | ---------------------------------+----------------------+
Copy of draft Top Secret 31 August 1936
The War Minister and Supreme Commander of the Armed Forces No. 2001/36 Top Secret WH
4 copies-- 1st copy--draft 2nd copy--Reich Air Ministry 3rd copy--Reich Ministry for Finances 4th copy--President of the Reichsbank
1. To the Reich Minister of Air and the Supreme Commander of the Air Forces General Goering
Berlin W 8 Dear General Goering!
The negotiations conducted until now in the commission for foreign exchange and raw materials which is under your leadership, have already shown the necessity of dealing also with the financing of the armed forces there also. I believe the time has now arrived that the commission should take up the treatment of this problem.
As a preparation of such a discussion I suggest the following:
I. _Overstepping of the 1936 budget._
It has been proven, particularly from the decree issued 7 March 1936, that the sum of about 10 billions of RM which was provided for the Wehrmacht for 1936 is not sufficient.
1. Additional expenses in the _army_ are needed in first place for
a. the remilitarizing of the Rhineland
b. the fortification of the Rhineland
c. the setting up of all the 36 divisions already by 1 Oct 1936
d. the speeding-up of motorization, particularly the establishment of 4 fully motorized Infantry divisions.
e. the necessity of markedly increasing the reserve ammunition because of the increased number of divisions.
f. industrial preparations in a great variety of fields.
2. In the _navy_ the required faster increase of personnel, the building of a 4th entry to Wilhelmshaven and the refortification of Helgoland cause additional expenses.
3. _Air Force_
a. According to an order of the Fuehrer, the setting up of all air force units has to be completed on 1 April 1937. Therefore considerable expenditures have to be made in 1936 which at the time when the budget for 1936 was made, were planned for later years only. Special additional expenses are caused by the creation of sufficient ground force personnel.
b. In the air force the first introduction of new types has to take place in 1937. Therefore the required industrial preparations have to begin in 1936.
It follows that an additional sum of at least 3.6 billions of RM will be needed by the Wehrmacht for 1936.
Of this about 1 billion RM is allotted to Army and Navy together. In the case of the Army and Navy, the execution of the orders and, in consequence, the dead-lines for the payments of the deliveries lagged quite considerably behind the placing of the orders. Therefore it can be assumed that these 1 billion RM will not be needed _in cash_ before 1 Apr 1937. However, the orders for these 1 billion RM have been placed and in the fiscal year 1937 these 1 billion RM will also be needed in cash.
In the air force the additional expenditures amount to 2600 millions RM. Here the execution of the orders from the budget funds of 1936 as well as of the orders for the additional requirements is in full progress. The 2600 millions RM for the air force have to be made available in the fiscal year 1936.
As yet it cannot be ultimately settled whether the introduction of the two years' service will lead to further additional expenses.
II. _Requirements for 1937_
The preparatory works for the budget of 1937 have not been concluded. At present the requirements for 1937 are estimated to be for:
1. the army 6.5 billions RM 2. the navy 1.2 billions RM 3. the air force 6.0 billions RM ---------------- Total 13.7 billions RM
Besides these 13.7 billions RM about 500 millions RM will be needed for the Reich defense requirements of the civilian departments.
III. _Permanent requirements_
According to a recently conducted survey, the component of the armed forces will have the following permanent requirement after the rearming is completed:
1. Army 3.6 billions RM 2. Navy 0.73 billions RM 3. Air Force 2.507 billions RM ------------------ Total 6.837 billions RM
At present it is hardly possible to make an accurate estimate of the permanent requirements. In the case of the Army it is very likely that the amount for the permanent requirement will be considerably raised.
Later I will submit further material, particularly a statement about the requirements for the years until the completion of the rearming, as soon as the necessary inquiries are concluded.
I submitted copies of this letter to the Reich Minister for Finance, and to the President of the Reichsbank.
Heil Hitler! Yours, [unsigned]
2. To the Reich Minister for Finances _Berlin W 8_
3. To the President of the Reichsbank Dr. Schacht _Berlin SW 111_
Copy (of 1) for your kind information
4. WV
_Chief WA Chief WH_ signed P _Remark_:
1. Major v. Wolff has given the letter addressed to General Goering to Lt. Col. Bodenschatz on 31 Aug.
2. I have personally handed the letters 2 and 3 to the President of the Reichsbank, Dr. Schacht, and to the Reich Minister of Finance, Count Schwerin von Krosigk, on Aug 31.
signed P Copy authenticated Hollender Ministerial Councillor 30 Sept 36.
* * * * *
Note
[initialed] B [Blomberg?] [initialed] K 2/9 [Keitel]
President Schacht called me to him today at 1300 and requested me to forward the following to the Minister of War:
Schacht returned from the Fuehrer with the greatest anxiety, since he could not agree to the economic program planned by the Fuehrer.
The Fuehrer wants to speak at the party convention [Parteitag] about economic policy, and wants to emphasize there that we now want to get free with all our energy from foreign countries by production in Germany.
Schacht requests urgently that the Reichminister of War warn the Fuehrer from this step.
If the Fuehrer emphasizes in front of the masses in Nurnberg, he will receive a great amount of applause from the audience, but with it he will bring failure to the entire commercial policy. There is only one thing in our needy position: _the promotion of export_. _Every threat against foreign countries_ however, will show contrary results.
We have reverses in the field of fuels until the middle of next year, there will not be large amounts in the field of rubber. The Renn-process in the field of ores is having great difficulties.
If we now shout out our decision abroad to make ourselves economically independent, then we cut our own throats, because we can no longer survive the necessary transitory period.
Also, it must always be pointed out that German materials are at present much too expensive to be used for export, and export alone makes further armament possible.
If the food-basis of the people is not to be endangered, the Fuehrer must refrain from his plan.
President Schacht concluded that he again requests urgently to listen to this warning, and that he forwards it to the minister of war, as he will not participate in to-morrow's conference.
Thomas 2/9 [in blue pencil]
[Translator's note: the following is written in pencil in the original:]
_THOMAS in his memorandum:_
The missing million in cash must be saved, since there is no more possibility to obtain it by increase of export.
English armament-ore! Our own procurement is a _must_.
_4 Year Plan without_ antagonizing foreign countries.
Card file? Speed of armament? Yes--
Extent of armament not sufficient. Backing by foreign exchange and raw materials is absolutely necessary.
* * * * *
Top Secret [rubber stamp] 1st copy 5 Sept 1936 Wi II File No 66 b 9910 II z-a
_Minutes on a Conference in the Reichministry for Economy on 3 Sept 1936_
} Reichministry Chairman: Ministerialdirektor Sarnow } for Economy Present: Ministerialdirektor Dr. Landwehr } and the competent Ministerialdirigent Dr. Spitta } experts of Oberregierungsrat Dr. Michals } the Reichministry } for Economy } and the supervisory } agencies Major Czimatis Commander Griebel } Reichministry Regierungsbaurat Wissman } of War, W.A. Intendanturrat Nierhoff Reichministry of War, V.A. Lt.Col. Ploch } Reichministry for Air and Col. Witting } Supreme Commander of the Dipl.ing. Bresser } Air Force Gen.Direktor Schirner, } combined alum. plants } Dr. Westrick, combined } Only during the conference alum. plants } on aluminum Dir. Byer, Alum. Sales } Corp. }
_Subject_:
I. Possibilities of allotment of foreign exchange to the armed forces and economy.
II. Aluminum supply.
I. After extensive study of the connected disadvantages, the Reichministry for economy has dropped the principle that one could desist from exporting all products with more than 40% foreign raw materials. Therefore an additional need for foreign exchange results for the upkeep of the export of 2 million marks with the supervisory board for base metals. Furthermore the allotment of cash foreign exchange to the supervisory board for bast fibres must be increased from 10 million marks to 17 million marks.
Intendanturrat Nierhoff made reports on the need of the Armed Forces of textiles and leather in the year 1937, which has increased considerably from the requirements of the year 1936 (see inclosure). To fulfill these Armed Forces requirements, cash foreign exchange is necessary in the following amounts:
------------------------------+------------------------------------- | Additional Armed Forces requirements Group of goods | of cash foreign exchange in millions | of marks ------------------------------+------------------------------------- 1. Wool | 24 shredded wool [Reisswolle] | 3 mohair wool | 0.75 | 2. silk | 0.55 | 3. bast fibres | 0.25 | 4. cotton | 4 | 5. leather | 22.5 | ----- Total | 55.00 ------------------------------+-------------------------------------
Accordingly, the following overall picture results:
Amount of cash foreign exchange necessary previously for the upkeep of economy and for the covering of requirements of the Armed Forces. _146.8 million marks_
Amount of cash foreign necessary for the upkeep of export. _248 million marks_
Additional requirement of cash foreign exchange necessary for the Armed Forces. _146.8 million marks_
Available amount of cash foreign exchange _140 million marks_.
II. Aluminum
Report on the requirements of aluminum for the Armed Forces are contained in the summary given to the Reichministry for Economy on 29 Aug.
Major Czimatis explained that the Reichministry of War did not renounce the limitations of the allotments of aluminum to the general industry, as it was said in the letter of the Reichministry for Economy of 21 Aug 1936, but that the demands for full delivery to the Armed forces for the programatic rearmament, especially for the Air Force, will be kept up.
The Reichministry for Economy considers the full delivery to industry urgently necessary also in the interest of the Armed Forces, since by a "strangulation" installations important to the Armed Forces (power issues) would also be affected immediately, and one could therefore count on an increased requirement of copper and thus of foreign exchange.
The administration of aluminum by the supervisory board for base metals is being absolutely refused by the Reichministry for Economy.
Generaldirektor Schirner reports that the negotiations for the import of 1000 tons of aluminum from Switzerland against delivery of German clay and pitch-coke are favorable. Also, the payment of processing wages is to be done with clay. However, the import of these 1000 tons is distributed over 6 to 7 months.
1000 tons more can be obtained in a comparatively short time from the Aluminum Ltd. from Canada. The negotiations for this are still in process.
Schirner reported that the stocks of aluminum in the plants is so high that he, in case the Reichministry for Air should agree to a temporary decrease of the stocks, could guarantee full delivery for both the Armed Forces and Industry until the opening of the new plants in Toging and Bitterfeld.
Lt. Col. Ploch consents that the stocks be decreased temporarily.
The Reichministry for Economy orders that the supervisory board for base metals first determine by revision the exact size of the stocks of aluminum for the Duren Metal works and the combined Light Metal works [Vereinigten leicht Metall Werke].
However, if difficulties should arise in the delivery to the Armed Forces with aluminum, then the Reichministry for Economy is ready to take up negotiations again.
MW [initials in pencil]
* * * * *
Inclosure
Textile and Leather Requirements of the Armed Forces
+-----------+-----------+------------- | | |Required | | |additional |Requirement|Requirement|cash foreign Raw materials |in the year|in the year|exchange |1936 in |1937 in |requirements |tons |tons |in millions | | |of marks ------------------------------------+-----------+-----------+------------- Sheared wool | 7 200| 18 152| 24 | | | Wool scrap [Reisswolle] | 1 040| 4 900| 3 | | | Combings | 11| 42| - | | | Mohair wool | -| 260| 0.75 | | | Wool from tanned hides | | | [Gerberwolle] | 761| 1 236| - | | | Silk | 23| 72| 0.5 | | | Cocoons[4] | 72| 72| - | | | Silk yarns[4] | 48| 48| - | | | Cotton of which quality cotton | 8 600| 16 200| Portiers and shelter halves (Egypt) | |about 4 000| 4 | | | Cotton scraps | 560| 835| - | | | Artificial silk | 310| 670| - | | | Cellulose wool | 1 080| 3 130| - | | | Cleaned flax [Schwingflachs] | 3 600| 4 800| - | | | Flax scrap | 7 070| 10 500| - | | | Jute | 2 100| 2 100| - | | | Soft hemp and hard fibers | 1 100| 1 635| 0.25[5] of which hard fiber | | about 200 | | | | Sleek leather | 11 000| 24 000| | | | Skins for uppers | 7 100| 13 900| | | | Tanned leather | | 4 100| ---- | | | Leather for soles | | 9 500| 22.5[6] | | | | | | Total 55.00 ------------------------------------+-----------+-----------+-------------
[Footnote 4: figures by Reichministry for air]
[Footnote 5: for 400 tons soft hemp and 200 tons Manila and Sisal]
[Footnote 6: for 22 500 tons hides corresponding to 11 200 tons leather]
It must be considered in the calculation of the foreign exchange requirements for the upkeep of the export of woolen goods, that the wool industry cannot stand more than a 10% decrease of the present amount, if it is to retain its export capability. Instead of Australian wool, one must reach back to about 50% of the available South-African wool for exports. The wool available through the limitations of value of the clearing agreement is entirely used for export. The calculated amount of foreign exchange and the most urgent requirement within Germany of 12 million marks only applies under the condition that there are until the end of September still 2 million marks in cash foreign exchange available.
One can count for the requirement of the Armed Forces on an amount of 10,000 tons raw wool, based on existing agreement. 24 million marks in cash foreign exchange are required for the additional amount of 8,152 tons with the price basis of 3,000-marks per ton.
Intendanturrat Nierhoff explained: that a decrease of the demands for quality for the Armed Forces is no longer bearable. Already 20% cellulose wool is being earmarked for uniform cloths, and a mixing of 30% scrap wool for over-coats.
The amount of foreign exchange of 4 million marks for quality cotton is therefore necessary, because one cannot count any more on the hitherto existing compensating transactions--especially with Egypt after circular 237.
The amount of foreign exchange estimated for export of 17 million marks for the supervisory board for bast fibres is distributed as follows:
10 million marks for jute 6 million marks for Sisal 1 million marks for Manila
The production of hides in Germany is reported as 140,000 tons per year. Even with the basis that the consumption of leather within Germany is decreased to a minimum, the 22,500 ton hides, corresponding to 11,200 tons leather for the Armed Forces, can only be procured with cash foreign exchange (22.5 million marks).
The raw hide requirement has been determined individually with consideration for the time required to tan the individual types of leather.
* * * * *
[in pencil] Top Secret!
Conference at General Field Marshal Goering's at 1000, 14 Oct. 38, in the Reich Air Ministry
[in pencil] attention H.G.
General Field Marshal Goering opened the session by declaring that he intended to give directives about the work for the next months. Everybody knows from the press what the world situation looks like and therefore the Fuehrer has issued an order to him to carry out a gigantic program compared to which previous achievements are insignificant. There are difficulties in the way which he will overcome with utmost energy and ruthlessness.
The amount of foreign exchange has completely dwindled on account of the preparation for the Czech enterprise, and this makes it necessary that it should be strongly increased immediately. Furthermore, the foreign credits have been greatly over-drawn and thus the strongest export activity--stronger than up to now--is in the foreground. For the next weeks an increased export was first priority in order to improve the foreign exchange situation. The Reich Ministry for Economy _should make_ a plan about raising the export activity by pushing aside the current difficulties which prevent export.
These gains made through the export are to be used for increased armament. The armament should not be curtailed by the export activity. He received the order from the Fuehrer to increase the armament to an abnormal extent, the air force having first priority. Within the shortest time the air force is to be increased five fold, also the navy should get armed more rapidly and the army should procure large amounts of offensive weapons at a faster rate, particularly heavy artillery pieces and heavy tanks. Along with this manufactured armaments must go; especially fuel, powder and explosives are moved into the foreground. It should be coupled with the accelerated construction of highways, canals, and particularly of the railroads.
To this comes the Four Years' Plan which is to be reorganized according to 2 points of view.
In the Four Years' Plan in 1st place all the constructions which are in the service of armament are to be promoted and in 2nd place all the installations are to be created which really spare foreign exchange.
The substitutes produced by the Four Years' Plan are to be brought rapidly into circulation. The Reich Ministry for Economy and the other agencies should make suggestions by the beginning of November for rapidly increasing the introduction of the substitutes. The import of materials for which we have substitutes has to be drastically curtailed.
General Field Marshal Goering enlarged then upon the main problem of the session: how can these requirements be fulfilled.
He is faced with unheard difficulties. The treasury is empty, the industrial capacity is crammed with orders for many years. In spite of these difficulties he is going to change the situation under all circumstances. Memoranda were of no help, he desires only positive proposals. If necessary, he is going to convert the economy with brutal methods in order to achieve his aim. The time has come when private enterprise can show whether it has a right for continued existence. If it fails, he is going over to state enterprise without any regard. He is going to make barbaric use of his plenipotentiary power which was given to him by the Fuehrer.
All the wishes and plans of the state, party and other agencies which are not entirely in this line have to be rejected without pity. Also the ideological problems cannot be solved now, there will be time for them later. He urgently cautions against making promises to the workers which can not be kept by him. The wishes of the labor front recede entirely into the background. Industry has to be fully converted. An immediate investigation of all productive plants is to be initiated in order to determine whether they can be converted for armament and export or whether they are to be closed down. The problem of the machine industry has the first consideration in this respect. There is no place for printing and laundry machines and other machines of that kind, they all have to produce machine tools. In the field of machine tools the priorities of the orders are to be investigated, and wherever possible, increase in productive capacity is to be introduced. It follows without saying that work has to be conducted in 3 shifts.
It remains now to decide who is going to carry out this task; the state of the self-administrative industry. He requested a proposal from General Director Zangen for the methods to realize these plans. He warns all agencies, particularly the labor front, price controller, etc., from interfering with these proposals in any way. He is going to proceed ruthlessly against every interference on the part of the Labor Front. The Labor Front would not receive raw materials and workers for its tasks any more. Similarly all other party requirements have to be set aside without consideration. Foreign workers can continue being employed except in the particularly secret sections of the enterprise. At the present time the plants should not be burdened with unnecessary demands, such as athletic fields, casinos or similar desires of the Labor Front. Measures proposed by the Labor Front have to be submitted to him for approval.
Raw materials and power are to be subjected to accurate management. Similarly the distribution of men has to be organized in an entirely different way than it has been done until now. The retraining did not function; all agencies failed. The recommitment of the youth into the industry will be organized by him on a very large scale. Large state apprenticeships are to be created; besides, the plants will be obliged to hire a certain number of apprentices. A retraining of hundreds of thousands of people will have to take place. Much more work will have to be performed by women than until now. Above all, the young women have to be employed much more. Work periods of eight hours do not exist any more; wherever necessary, overtime is to be performed, double and triple shifts are a matter of course. Where the workers will protest, as in Austria, for example, General Field Marshal Goering will proceed with forced labor; he will create camps for forced labor. The Labor Front should not carry false social ideas among the workers. It is a fact that one generation has driven the cart into the mud through the mutiny of the workers and by being guilty of not having shot these workers on the spot. Therefore, we had to put the thing in order again.
Much is to be done at once in the field of transportation. The Ministry for Transportation should submit a request about the construction of rolling stock and about other requirements. The branch-canal near the Hermann Goering Works is particularly important. It cannot continue that the Armed Forces interfere with the car park. If that will continue, he will make a decision, because it is impossible that the people should starve on account of it.
In the agriculture it is of importance to employ foreign workers. Similarly the problem of the agricultural machine has to be promoted. Of particular importance is the erection of store-houses.
The Sudeten land has to be exploited with all the means. General Field Marshal Goering counts upon a complete industrial assimilation of Slovakia. Czechia and Slovakia would become German dominions. Everything possible must be taken out. The Oder-Danube Canal has to be speeded up. Searches for oil and ore have to be conducted in Slovakia, notably by State Secretary Keppler.
In the second part of his discussion General Field Marshal Goering took up the Jewish problem. The Jewish problem had to be tackled now with all methods, because they have to get out of the economy. However, the wild bustle of commissars as it developed in Austria has to be prevented under all circumstances. These wild actions have to cease and the settling of the Jewish problem should not be regarded as a system of providing for inefficient party members. Thereupon Ministry Councillor Fischboeck was allowed to speak. He revealed that in the beginning there were 25,000 commissars in Austria. Today there are still 3,500 who are useless almost without exception. In Austria the party is of the opinion that Aryanization is a duty of the party and that it is connected with the recompensation of the old party members.
In Austria there is still a total of 2 billions of Jewish property. The large enterprises are being bought up by the Control Bank; it is difficult to oust the Jews from the small industrial enterprises.
General Field Marshal Goering took a strong stand against the opinion that the Aryanization is the duty of the party. It is the duty of the State alone. However, he could not release foreign exchange for shipping away the Jews. In an emergency situation ghettos should be erected in the individual large cities.
State Councillor Schmeer cautioned against more lenient methods in the fight against the Jews; Jewish labor units should be established, then the people would emigrate of their own accord. State Councillor Neumann warned and expressed the opinion that one should use more precaution in this matter, particularly in Austria.
Thereupon the meeting was quite surprisingly closed by General Field Marshal Goering without recording the minutes of the meeting or making decisions.
HG.
* * * * *
Material for the Conference with Goering on 25 Nov 1938 (General Keitel, Brig. Gen. Thomas)
27 Oct 1938 W.Wi Id.
For the consideration of the assignment of tasks to people, state and the Armed Forces, judging of the requirements of raw materials, especially steel, appears necessary.
This is shown as follows, as far as it can be judged from here. The inclosed summary shows that one must count, according to the Fuehrer's directives, on a steel requirement for armament production, which amounts to 1.08 million tons monthly from 1 Jan 1939 on, that is, it must be increased by about 48% of the present contingent. Added to this requirement are the increased demands of the Four Years' Plan, the demands of export and the amount necessary for the upkeep of the production machine of German economy in the amount of 1.83 million tons monthly from 1 Jan 1939 on; thus this results in a total requirement of 2.9 million tons monthly from 1 Jan 1939 on, against which there is only a monthly production of at present 1.8 million tons monthly.
Furthermore, it must be pointed out, that with the increased use of steel, an increased use of the already scarce non-ferrous metals is necessarily coupled; the latter also are closely associated with the procurement of foreign exchange.
The increased rearmament of the armed forces must further affect deeply the supply requirements of the armed forces, especially munitions and fuels. Therefore, it must be expected that the future requirements of the armed forces will exceed the present plans (accelerated program for powder and explosives, fuel program), which will have an increase of the steel requirements not yet planned as result.
* * * * *
Secret
Summary of the Iron and Steel Requirements of the Armed Forces and Industry tons per month
+------------+------------+------------+-------------- | | | |in contrast to | Contingent | Contingent |Requirement |the contingent |of the IVth | of the 1st | from 1 Jan | of 1st |quarter 1938|quarter 1939| 1939 on | quarter 1939 ---------------------+------------+------------+------------+-------------- | | | | I. Armed Forces | 584,333 | 573,133 | 1,088,300 | --515,167 | | | | II. War economical | | | | organization of | | | | German industry | 306,600 | 306,600 | 613,500 | --306,900 | | | | III. Export in case | | | | it is possible to | | | | reach the stage of | | | | beginning of 1938 | 380,000 | 380,000 | 550,000 | --170,000 | | | | IV. Upkeep of the | | | | production machine | | | | of the German | 582,800 | 582,800 | 582,800 | ---- industry | | | | | | | | V. Other requirements| 83,500 | 83,500 | 83,500 | ---- | | | | Total | 1,937,233 | 1,926,033 | 2,918,100 | --992,067 ---------------------+------------+------------+------------+--------------
Summary on the Iron and Steel Requirement of the Armed Forces (tons per months)
+------------+------------+------------+-------------- | | | |in contrast to | Contingent | Contingent |Requirement |the contingent |of the IVth |of the 1st |from 1 Jan |of 1st |quarter 1938|quarter 1939| 1939 on |quarter 1939 ---------------------+------------+------------+------------+-------------- Army | 300 367 | 266 000 | 525 000 | --259 000 (For fortifications) | (86 667) | (85 000) | (165 000) | (--80 000) | | | | Navy | 78 000 | 74 000 | 140 500 | --66 500 (For "Gruenewiese") | (- - -) | ( - ) | (35 000) | (--35 000) | | | | Air Force | 166 400 | 191 133 | 247 300 | --56 187 (For fortifications) | (13 333) | (15 000) | (15 000) | ( - ) | | | | Reich communication | | | | measures | 39 566 | 42 000 | 175 500 | --133 500 [RV-Massnahmen] | | | | | | | | (For increased | | | | extension of the | | | | Reich railroad) | | | | | (- - -) | ( - ) | 130 000 | (--130 000) | | | | Armed Forces | | | | Total | 584 333 | 573 133 | 1 088 300 | --515 167 -------------------+------------+------------+------------+--------------
Chief OKW _58a 40 38 top secret_ 1157/38 top secret 7 Dec 1938 Top Secret 7 copies 7th copy [in pencil] To the State Secretary Neumann Received copy without receipt K. 12 Dec 38 Documents for the conference at Field Marshal Goering's on 13 Dec 1938 with Supreme Commanders General Keitel, Neumann, Koerner, Gen. Thomas.
To the Supreme Commander of the Army } the Supreme Commander of the Navy } the Reichs Marshal of the Air Force and } one copy each Supreme Commander of the Air Force }
The Fuehrer and Supreme Commander of the Armed Forces authorized me to inform the Supreme Commander of the following:
The strained financial situation of the Reich makes it necessary that for the rest of the current fiscal year 38/39 the expenses of the Armed Forces, which in the last months under the strain of extraordinary circumstances have undergone a very considerable increase, should be lowered again to a level which would be tolerable for some time.
It will be at the discretion of the Supreme Commander to decide what measures should be taken for this purpose according to the priorities in the armament program. According to the Fuehrer's request.
ARMY
The equipping with arms will have first priority, the providing of ammunition and the building of fortifications for the army will be considered in second place only.
NAVY
The building of ships, of ports and docks will have first priority over all other requirements, also over that of providing ammunition.
AIR FORCE
The equipping with arms will have first priority, the providing of ammunition will have to be considered in second place only.
If necessary, the initiation of new enterprises will have to be delayed, the execution of current enterprises and orders will have to be distributed over a longer period of time. The allotted quota of raw materials which will be decreased starting 1 Jan 39, will also compel us to a certain extent to do this. It has to be achieved that
in the _Army_ in the _Navy_ in the _Air Force_
during the period from 1 November 1938 to 31 March 1939 (end of the fiscal year) not more than
(_Army_): 3.7 billion RM (used until now 4.9) (_Navy_): 650 million RM (_Air Force_): 2.5 billion RM
should be expended in the form of cash and delivery treasury scrips.
It is not yet definitely established how much can be allotted for the next fiscal year 1939/40 in the form of cash and delivery scrips. At present, the branches of the Armed Forces cannot expect greater quotas than the following:
5.2 billion RM for the Army 1.4 billion RM for the Navy 4.9 billion RM for the Air Force
signed: Keitel
* * * * *
W H _58 a 40 38 g K_ 1157/38 g K Top Secret Copy for information [illegible signature] to the Chief of the Air Force the Chief of the W Stb Chief of the War Industry Staff Adjutant 1 March 1939 Draft To the adjutant's office of General Field Marshal Goering.
On behalf of Brig. Gen. Thomas I request an appointment for a conference for the general before the departure of the General Field Marshal on following urgent subjects:
1. The branches of the Armed Forces--particularly the Navy--submitted requests for additional amounts of non-ferrous metals and of steel. General Thomas requests instructions what attitude he should take in regard to this question during the absence of the General Field Marshal.
2. The General Field Marshal has to make decisions in 2 matters concerning foreign policy.
[signature illegible] Captain.
TRANSLATION OF DOCUMENT 1316-PS
Working Committee Oldenburg B.Nr. 15/41 g.Kdos. 21.3.41 _2 copies_ 1st. copy.
TOP SECRET _Note for Files._
Regarding the discussion held on the 21.3.41. at 11 o'clock with the head of the department.
Top Secret
Present: General Thomas, Colonel Huenermann, Lt. Col. Luther, Major v. Gusevius.
From the Quartermaster General: Major v. Altenstadt, Min. Dir. Sarnow.
_Major v. a._ develops the idea of the Quartermaster General regarding the employment of his organization. The Fuehrer had laid down that he would appoint his three commissioners in about four weeks time. Only then would he lay down the directives for their activities.
The Quartermaster General thinks it necessary to create a modest economic organization in the operational area as well, so as to be able to supply the needs of the fighting forces. This organization would later be replaced by the office of the industrial armaments organization. This was to a certain extent a measure of self-help by the Quartermaster General. He would also employ field-commands, which would be manned by individual officials. As soon as the operational area has moved on, the handing over of large areas has been planned. At this time the Quartermaster General's organizations will be withdrawn and their tasks will be taken over by the industrial armaments organization.
Regarding the present organization of the areas he mentioned the following:
_Operational Area_: Army area Rear area of the Army _Political Area_: in which the Wehrmacht commanders operate.
In the rear area of the army, the Reichsleader of the SS is first of all responsible for the entire control, except for the economic field. The Wehrmacht commanders are made responsible for the exploitation of the country's industry. According to the general interpretation, this only means a utilization "for purposes of the Wehrmacht". Quartermaster General makes the following proposal:
The department IV-Wi at Army Commands will be enlarged, so that they are able to direct industry in the operational area. For this purpose the V.O. are to be strengthened by suitable personnel who can be employed in the spheres of banking, customs and finance.
OKW/industrial armaments department will put its demands to Quartermaster General. Quartermaster General will pass these demands in the form of an order to the V.O. at Army Commands. The IV Wi will of course receive the technical instructions from Industrial Armaments through the official channels, just as Industrial Armaments is also providing the organization in the form of IV Wi.
The proposal meets with general approval.
With regard to basic directives the representative of the Quartermaster General mentions:
Each army is followed by a security division. For reasons of expediency the industrial armaments commands in the beginning will be attached to these security divisions. As soon as operations have made further progress, the industrial armaments commands will come under the Wehrmacht commanders.
The Quartermaster General thinks it expedient, that the industrial armament Staff should be near to or actually with the Quartermaster General whilst operations are in progress. Only thus can it be guaranteed that the Industrial Armament Staff is kept informed of the progress of the operations as a whole, and of the intentions of the leadership. As soon as operations cease, the Industrial Armaments Staff will join the Industrial Armaments Department, as the inspectorates (with the Reich Commissioners) will then be operating as their economic department. The main activity of the Industrial Armaments Staff will then be properly in Berlin.
The Quartermaster General does not intend to create a Quartermaster General organization for the East. He will attach a General Staff Officer as representative to each Army Group. The Quartermaster General intends to go forward in person.
_Min. Dir. Sarnow_ mentions that there is in existence an agricultural atlas of Russia which contains the latest information about all tractor stations. This atlas is in the possession of Secretary of State Backe. Acquaintance with this atlas is of the greatest importance for the V.O. and the industrial armaments commands. General Thomas orders that this atlas be obtained. On the basis of this publication the Quartermaster General is to receive information on how to supply the fighting forces with circulars containing detailed instructions regarding the armaments department to provide the Quartermaster General with the contributions required for compiling these circulars for the fighting forces. The Quartermaster General's representative mentions that it is intended to attach suitable individuals for the securing of these tractor stations to the armoured divisions.
In these circulars the primary demand made on the fighting forces will be:
a. Securing of all supplies found.
b. Safeguarding of all tractors and fuel in stock.
_Quartermaster General_ states that Admiral Canaris has drawn up a list of reliable people with detailed knowledge of the locality and industry, who are to be employed immediately on entry. For the occupation of East-Galicia, special oil-detachments are to be provided, where possible from the present West-Galicia, to take over supervision of the oil installations in the district of Lemberg immediately.
_The Chief of the department_ sums up:
1. The most urgent task is the strengthening of IV Wi. The staff of the industrial armaments command takes over the responsibility for this.
2. In the rear of the army area it is the intention to appoint a commanding general in the area of each Army Command, under whose command the security divisions will also be placed. Here in the industrial armaments commands are to be introduced and attached to the security divisions. As soon as this rear army area passes into the political area, the armament commands, or the industrial armament inspectorates, will come under the command of the Wehrmacht Commander.
3. The Reich Commissioners take over political administration in the so-called political area.
4. The inspectorates and industrial armaments commands furthest to the rear (western) must be the first to be employed, i.e., must be in front. They are the first to reach their final areas.
_Distribution_: _1st. copy_ _2nd. copy_ Staff of the Industrial Armaments Department Working Committee Oldenburg.
TRANSLATION OF DOCUMENT 1317-PS
Rue Ic Berlin, March 1, 1941 [stamp] TOP SECRET 5 copies, 1st copy _Re_: _Oldenburg_ Memorandum
_Conference at Office Chief, General of the Infantry Thomas on February 28, 1941_
_Present_: General of the Infantry Thomas Colonel Becht Lt. Col. Luther Lt. Col. Matzky Major von Gusevius Major von Payr Major Huch Captain Emmerich Captain Dr. Hamann
The general ordered that a broader plan of organization be drafted for the Reich Marshal.
Essential Points:
1. The whole organization to be subordinate to the Reich Marshal. _Purpose_: Support and extension of the measures of the four-year plan.
2. The organization must include everything concerning war economy, excepting only food, which is said to be made already a special mission of State Secretary Backe.
3. Clear statement that _the organization is to be independent of the military or civil administration_. Close cooperation, but instructions direct from the central office in Berlin.
4. Scope of activities to be divided in two steps:
a. Accompanying the advancing troops directly behind the front lines, in order to avoid the destruction of supplies and to secure the removal of important goods.
b. Administration of the occupied industrial districts and exploitation of economically complimentary districts.
5. In view of the extended field of activity, the term _war economy_ inspection is to be used preferably, instead of armament inspection.
6. In view of the great field of activity, the organization must be generously equipped and personnel must be correspondingly numerous.
_The main mission of the organization_ will consist of _seizing raw materials_ and _taking over all important concerns_. For the latter mission reliable persons from German concerns will be interposed suitably from the beginning, since successful operation from the beginning can only be performed by the aid of their experiences (for example, lignite, ore, chemistry, petroleum).
After the discussion of further details, Lt. Col. Luther was instructed to make an initial draft of such an organization within one week.
Close cooperation with the individual sections in the building is essential. An Officer must still be appointed for Wi. and Ro, with whom the operational staff can remain in constant contact. Wi is to give each section chief and Lt. Col. Luther a copy of the new plan regarding Russia.
Major General Schubert is to be asked to be in Berlin the second half of next week. Also, the 4 officers who are ordered to draw up the individual armament inspections are to report to the Office Chief at the end of next week.
(signed) Hamann _Distribution_: Staff 1st Copy Rue 2nd Copy Lt. Col. Luther 3rd Copy Planning 4th Copy Supply 5th Copy
TRANSLATION OF DOCUMENT 1337-PS
_Decree setting up Secret Cabinet Council 4 February 1938_
Reichsgesetzblatt, 1938, Part I, page 112.
For my guidance in the conduct of Foreign Policy, I am creating a Secret Cabinet Council.
I nominate as President of the Secret Cabinet Council:
Reichsminister Freiherr von Neurath.
I appoint as members of the Secret Cabinet;
The Foreign Minister, Joachim von Ribbentrop,
The President of Prussia, Minister for Air and the Air Force, Field Marshal Herman Goering,
The Deputy of the Fuehrer, Rudolf Hess,
The Minister for Enlightenment and Propaganda, Dr. Joseph Goebbels,
The Minister and Head of the Reich Chancellory, Dr. Hans Heinrich Lammers,
The Supreme Commander of the Army, Col. Gen. Walther v Brauchitsch,
The Supreme Commander of the Navy, Admiral Dr. L.C. Erich Raeder,
Supreme Commander of the Armed Forces, General of the Artillery, Wilhelm Keitel,
The Reichsminister and Head of the Reichschancellery will conduct the current business of the Secret Cabinet Council.
Berlin, 4th February 1938. Fuehrer and Reichchancellor, ADOLF HITLER. Reichsminister and Head of Reichschancellery Dr. LAMMERS.
PARTIAL TRANSLATION OF DOCUMENT 1347-PS
The Reich Minister for Nutrition and Agriculture Berlin W 8, Wilhelmstr. 72. 18 September 1942.
To the State Governments [Landesregierungen] (State Nutrition offices) the Prussian Provincial Presidents (provincial nutrition offices) with the exception of the Eastern territories not incorporated into Upper Silesia.
For information of the district presidents [Regierungspraesidenten] and respective authorities
Re: food supply for Jews.
* * * * *
2. Rations.
Jews will no longer receive the following foods, beginning with the 42nd distribution period (19 October 1942): meat, meat products, eggs, wheat products (cake, white bread, wheat rolls, wheat flour, etc) whole milk, fresh skimmed milk, as well as such foods are distributed not on food ration cards issued uniformly throughout the Reich but on local supply certificates or by special announcement of the nutrition offices on extra coupons of the food cards. Jewish children and young people over 10 years of age will receive the bread ration of the normal consumer. Jewish children and young people over 6 years of age will receive the fat ration of the normal consumer, no honey substitute and no cocoa powder, and they will not receive the supplement of marmalade accorded the age classes of 6 to 14 years. Jewish children up to 6 years receive 1/2 liter of fresh skimmed milk daily.
Accordingly no meat, egg or milk cards and no local supply certificates shall be issued to Jews. Jewish children and young people over 10 years of age will receive the bread cards and those over 6 years of age the fat cards of the normal consumer. The bread cards issued to Jews will entitle them to rye flour products only. Jewish children under 6 years of age shall be issued the supply certificate for fresh skimmed milk. "Good for 1/2 liter daily" shall be noted on it.
Jews cannot be self-providers in the sense of any decrees.
3. Regulation for sick persons, etc.
The regulations for sick and infirm persons, expectant and nursing mothers and women in childbed do not apply to Jews.
The regulations of this decree apply also to Jewish inmates of hospitals.
4. Special allotments.
Jews are excluded from special allotments.
5. Exchange of food cards for travel and restaurant coupons.
The exchange of food cards for travel and restaurant coupons may be allowed to Jews only in urgent exceptional cases.
6. Ration-free food.
For the purchase of non-rationed food the Jews are not subject to restrictions as long as these products are available to the Aryan population in sufficient quantities. Ration-free foods which are distributed only from time to time and in limited quantities, such as vegetable and herring salad, fish paste, etc., are not to be given to Jews. The nutrition offices are authorized to permit Jews to purchase turnips, plain kind of cabbage etc.
7. Marking of ration cards.
Ration cards issued to Jews shall be printed over diagonally (i.e. over all individual coupons) with the repeated over-print "Jew". A color in contrast to the basic color of the cards shall be chosen for this. Cards and coupons overprinted "Jew" do not entitle the bearer to special allotments. Cancellation of these coupons before issue of the cards is therefore not necessary.
8. Special shopping time for Jews.
In order to avoid inconveniences in the supply of the Aryan population, it is recommended that the nutrition authorities establish special shopping times for Jews.
9. Food gift parcels for Jews.
The nutrition offices have to charge in full against the rations of the received all gift food parcels from abroad addressed to Jews. Should it be products which are rationed but not regularly distributed (such as coffee, cocoa, tea, etc.) the entire shipment or in case of a delayed report on the receipt of the package, the still unused part--will be made available to big consumers, such as hospitals and will be charged against their rations.
In the decree of 29 April 1941, of which a copy is enclosed, the Reich Minister of Finance instructed the Customs Offices to report weekly to the competent nutrition offices all gift packages, regardless of the quantity of the incoming merchandise, when it is known or can suspect that the receiver is a Jew. In case the report of the Customs Office to the nutrition office is delayed until the food received in the gift package is consumed, it can still be charged against their rations.
Insofar as the State Police Offices are informed of these food parcels from abroad addressed to Jews, they will secure the packages and put them at the disposal of the nutrition offices [Ernaehrungs-Aemter].
For the Secretary of State Reicke
PARTIAL TRANSLATION OF DOCUMENT 1352-PS
COPY
The Leader of the Central Landoffice for the Reichfuehrer SS
Reich Commissioner for the Strengthening of German Nationalism
Berlin NW7, May 29, 1940 Friedrichstrasse 110-112 Tel. 42 38 62 _Az. K Al_
Subject: Report on the confiscations in the Bielitz District of May 22, 1940
Ref: Your letter of May 22, 1940, Br./Schl. to the Silesian Land Office
_Kattowitz_ Bernhardstrasse 49
I have repeatedly pointed out to you that the Land Office is to concern itself exclusively with the tasks outlined in the Service Directive of Feb. 1, 1940. In accordance with this, the Land Office, in the case under discussion, is also to restrict itself to the seizure and proposal for confiscation of Polish or Jewish private agriculture enterprises that are needed in consequence of the construction of the concentration camp. I forbid you any participation in measures going beyond this and their preparation, such as, more or less, the evacuation, management or reoccupation of the enterprises concerned as well as the accommodation elsewhere of the Polish farm owners. In the same way, the Land Office is to do nothing further regarding the Bielitz district villages named in the report than to undertake the seizure of the Polish and Jewish agriculture enterprises and to propose their confiscation to the State Police. Arrangements which according to the Land Office report have been found too sweeping are in every case to be revoked immediately, in consideration of their invalidity I again point out that as against the other Land Offices, the Silesian Land Office has the poorest results to show in connection with seizures.
Signed: W Baron von Holzschuher, SS Group Leader Certified a true copy Signed: signature Administrative Leader. (L.S.)
* * * * *
Ku/Ni Kattowitz, May 22, 1940 SECRET
_Report on Details of the confiscation in the Bielitz country_
Some days ago the commandant of the concentration camp being built at Auschwitz spoke at Staff Leader Mueller's and we requested support for the carrying out of his assignments. He said that it was absolutely necessary to confiscate the agriculture enterprises within a certain area around the concentration camp, since not only the fields but also the farm houses of these border directly on the concentration camp. A local inspection held on the 21st of this month revealed the following: There is no room for doubt that the agriculture enterprises bordering on the concentration camp must be confiscated at once. Further than this, the camp commandant requests that further plots of farm land be placed at his disposal, so that he can keep the prisoners busy. This too can be done without further delay since enough land can be made available for the purpose. The owners of the plots are all Poles.
The following agreements have been reached by me with the Camp Commandant and the proper measures prepared. The Director of the Branch agency in Bielitz will immediately determine the names of the Polish farmers and will also divide the land to be confiscated into zones.
Zone 1. Enterprises whose plots border directly on the camp.
Zone 2. Agricultural plots with enterprises which are placed at the disposal of the camp for the employment of the prisoners, namely for about 2000 prisoners for the time being.
Zone 3. As in zone 2, with the only difference, that the number of prisoners has increased considerably. Zones 4 and 5 follow them. In the last case it must be determined to what extent it is possible to put that kind of terrain at the disposal of the camp. The result for Zone I must be known within a few days, in order to enable the Land office in Kattowitz to start the confiscation procedures. It will be necessary to state the size of the families whose enterprises have been confiscated, even giving age and sex.
I had the following discussion with the head of the labor-office in Bielitz.
The lack of agricultural laborers still exists in the old Reich. The transfer of the previous owners of the confiscated enterprises, together with their entire families, to the Reich is possible without any further consideration. It is only necessary for the labor office to receive the lists of the persons in time, in order to enable it to take the necessary steps (collection of transportation, distribution over the various regions in need of such labor). Furniture cannot be taken along under any circumstances in the course of the confiscation, the only things left to the Poles, were, anyway, only the most vital items, like bedding, ample food, clothes and other such things.
If the confiscation takes place the Poles will be billeted by the labor office in barracks, put at its disposal by the camp commandant, until their deportation. The deportation of the Poles of further zones will follow along the same lines.
This matter has already been discussed in its outlines with the agricultural management (Ruppert). A farmer will be appointed by the Association of Agricultural Management, who will supervise the agricultural labor of the prisoners at the agricultural enterprises and who, naturally, will carry the sole responsibility for the agricultural measures, which he alone determines.
As soon as the preparatory measures are finished, a meeting will be called on the spot, next week, with the participation of the agricultural management, in order to clear up and determine completely everything that might be necessary. The chief of the Branch Agency Bielitz has been ordered to report on Thursday the 23rd of this month to this office, in order to receive the necessary instructions.
Moreover, I have reached the following agreement with the camp commandant: As there are a number of villages in the district of Bielitz, which contain racial-German [Volksdeutsche] farmers, the existing Poles must be sheltered in those villages in the very near future as quickly as possible, in order to realize a quick consolidation of German folkdom [Volkstume]. The Poles of the confiscated enterprises are taken by the concentration camps then, but not as prisoners [Haeftlinge], rather until the Labor Office Bielitz has turned them over to the Reich as farm laborers.
The following villages are to be considered for the time being: Alzen, Ernstdorf, Batzdorf, Lomnitz.
I have already spoken with the mayor of Alzen, and he will collect all the Poles who possess agricultural property by Saturday, 25th of this month, and submit the list to the Branch Agency Bielitz. The Chief of the Branch Agency Bielitz is requested to get that list personally.
The confiscation of those Polish enterprises in Alzen will also be carried out within the next few days. The Commandant of the Concentration camp will furnish SS-men and a truck for the execution of the action. Should it not yet be possible to take the Poles from Alzen to Auschwitz, they should be transferred to the empty castle at Zator.
The liberated Polish property is to be given to the needy racial-German farmers for their use. The Chief of the Branch Agency must therefore on Saturday determine, in cooperation with the local authorities, the Germans who can be taken into consideration for that purpose.
The list of the Poles to be turned over to the Reich for agricultural labor is to be handed over to the labor office Bielitz, as quickly as possible. Care is to be taken that the size of the family, etc, is also indicated. The Poles in the other German villages of the district Bielitz, are to be determined in the same manner, in cooperation with the various mayors, in order to enable the office here to prepare the confiscation as quickly as possible. The execution of these measures naturally takes place simultaneously with those at Auschwitz. A discussion with the district-leader, the district head-farmers of the association of agricultural management for Eastern Germany [Kreislandwirt der Ostdeutschen landbewirtschaftungs-Gesellschaft] must of course, take place, before those measures are carried out.
signed: KUSCHE
* * * * *
Ku/Ni CONFIDENTIAL
_Report Re_: Achievement of confiscations of Polish agricultural enterprises with the purpose to transfer the Poles to the Old Reich and to employ them as agricultural workers.
In the Old Reich again and again the complaint can be heard that a shortage of agricultural workers exists, and that it cannot be remedied by any means though Polish farm-workers have been placed at disposal. The employment offices have informed farmers and owners of estates who are looking for workers that it was difficult to get any workers at all from Poland, that the recruiting in the Government-General and also in the Eastern territory was initiated and the Poles who had applied were placed.
A few days ago, the Country Farmers Leader from Neutitschein called on our Office and told us that in his district many lands were still not yet tilled because there is a lack of any workers. The Reich Food Estate has decreed that everyone can procure himself Polish workers in the Eastern territory or in the Government General.
This appears preposterous if one knows that the office of the Higher SS and Police leader as deputy of the Reich commissar for the strengthening of German nationality, Land Office Silesia, cannot perform the confiscations of small and even very small agricultural enterprises for the reason that we do not know where to put the former Polish owners. Until now the work regarding the confiscation of Polish small farms has been limited to racial-German villages. I have already reported on this matter for the county of Blachownia as well as for the county of Bielitz-Biala, in connection with the institution of a concentration camp in Auschwitz.
I have made an arrangement with the Chief of an employment agency to transfer at once for employment into the Old Reich such Poles as agricultural workers who are designated by us.
It is possible without difficulty to accomplish the confiscation of small agricultural enterprises in the villages in which larger agricultural enterprises have been already confiscated and are under the management of the East German Corporation for Agricultural Development. For it is by no means difficult for the larger agricultural estate to manage a few hundred acres, of course consistent with its own character without any particular additional expenses. It is a matter of course that above all Polish arable lands adjacent to the land of the estate should be confiscated and added to the estate for exploitation. Agricultural-technical or other difficulties by no means can occur. _The former owners of Polish farms together with their families will be transferred to the Old Reich by the employment agencies for employment as farm-workers._
In this way many hundred Polish agricultural workers can be placed at the disposal of agriculture in the Old Reich in the shortest and simplest manner. This way the most pressing shortage is removed that is now in a very disagreeable manner felt especially in the root-crop districts.
Besides, the settlers who are still working in the confiscated and formerly settled enterprises and who are superfluous are to be removed into the Old Reich, for until now they were only a burden for the respective enterprise if they are too numerous. In this way, Polish agricultural workers can be made free for the Old Reich.
The confiscations of small enterprises already achieved together with the following transfer of the farmer owners as agricultural workers to the larger estates already in operation have not only brought experience but have proved unequivocably that no difficulties are to be expected. The measures themselves are only a matter of organization, and the success of the measures as proposed by me is based on the good will of cooperation of the other authorities with the office of the Reich Fuehrer-SS as Reich Commissioner for the strengthening of German folkdom. Means of transportation to the railroad can be provided
1. by the enterprises of the East-German Corporation of Agricultural Development
2. by the SS NCO school in Lublinitz and the Concentration Camp of Auschwitz.
These two latter places will also detail the necessary SS-men for the day of the confiscation etc. In case that a place of assembly is necessary for the Polish land-workers who are to be transported into the Reich, for there too sufficient rooms and lodgings can be provided (Kaminiek, Zator Castle, barracks in Auschwitz).
I have already reported on the accomplishment of confiscations in Bielitz county and initiated the necessary measures.
For the purpose of accomplishing further measures proposed by me which envision particularly the supplying of the farms in the Reich with Polish agricultural workers, ask that I be given your consent and the necessary full authority.
(signed) Kusche 5/22/40.
* * * * *
Kattowitz, 16 May 1940. Ku/Ni. CONFIDENTIAL
Report on the accomplishment of confiscations of agricultural enterprises in Blachownia County.
With the scope of responsibility of the Higher SS--and Police leaders as the deputy of the Reichs Commissar for the strengthening of German nationality, Land officer Silesia, a survey was made in Blachownia County since the beginning of April as to how far confiscations of agricultural enterprises in Polish ownership could be accomplished.
Before the outbreak of the war the present county of Blachownia was a part of Czestachowa County (before 1941 this territory belonged to Russian Poland). Only recently, it was decided to incorporate the present county area of Blachownia County into the district of Oppeln. Blachownia is a rather big market-place which in Polish times was even called a Spa.
As the necessary preparations can be considered closed in the following a short survey on the general conditions shall be given as far as they are at present of interest and importance.
At first, contact was made by the Chief of the local agency of the Land Office in Lublinitz, with the local authorities of the Party, the State such as the East German Corporation for Agricultural Development and the Secret State Police, and after a thorough exposition of the aims of the Land Office, excellent state of agreement was reached. Before this the Land Office of Kattowitz had discussions in the same direction regarding the Blachownia County with the higher authorities of the Party and the State District Governor [Regierungspresident], Provincial Governor [Oberpresident], Gauleitung.
The chief of the local agency at Lublinitz had found out that a number of villages exist in Blachownia County the inhabitants of which belong for the greatest part to the German nationality and that particularly in recent years the Polish nationality strongly penetrated into these small ethnic German islands.
Blachownia County comprises about 133,000 inhabitants. Of these, 2,000 can be considered without further ado as ethnic Germans. The number of Jews is estimated at 6,000. 260 villages are combined in 15 greater communities. In 3 of such greater communities to which also the German villages belong, racial German mayors are in office.
1. The greater community Lipie: Mayor Mueller, comprising the racial-German villages of Haukow, Lindow, Natalin and Rosalin,
2. The greater community Scharny-Las: Mayor Lorenz, comprising the racial-German villages of Schwarzwald,
3. The greater community Wrozosowa: Mayor Neugebauer, comprising the racial-German village of Alt-Hutau.
The rest of the communities are Polish throughout and have still an almost pure Polish administration.
To 1. In greater Lipie 20 of the 23 villages are destroyed up to 80%. The ethnic-German families are living in the most primitive conditions, closely compressed into the few dwelling-houses still remaining or into other poorly prepared shelters consisting of destroyed houses even in holes in the ground. The German villages mentioned were founded about 80 years ago by Germans who came mostly from Middle-Silesia (Strehlen, district of Breslau). By hard work they have cleared the woods and created farms.
To 2. The Germans of this village immigrated about 100 years ago from the region of Frankfort on Main and have built up by their own work their economic basis of life.
To 3. In Alt-Hutau, it is a question above all, of Sudeten German-weavers, who immigrated in 1812 from Maehrisch-Truebau. Because of shortage of raw materials for several months the looms have been idle, so that, on account of the cessation of this so necessary opportunity for additional income, the economic situation of these ethnic-Germans is endangered.
In course of time, of course, the Poles also have intruded into these German settlements with the purpose at first to weaken Germanism in its economic existence and finally to drive it out. The agricultural enterprises of the racial-Germans have sizes from 1-1/2 to 5 hectares. In all probability the enterprises have become so small due to partitioning and above all to economic pressure from the former Polish masters.
By the quick advance of the German troops a terrible massacre of the ethnic Germans by the Poles of the Polish soldiery has been prevented. Before the outbreak of the war, the Poles in these German settlements behaved very aggressively against the German nationality and everything was made ready for its destruction during the disorders of war. Even if at the present moment the Poles have become a little more quiet it appears that it concerns only outward appearances. Therefore, it is absolutely necessary to bring about a strengthening of the German nationality in the small far advanced German linguistic islands. These ethnic-Germans make the best impressions. For whole decades they have not abandoned their German national culture despite terror and so on, but have confessed firmly and resolutely. Thus for example, the present Mayor Mueller of Natalin has given to German children during the Polish times lessons in reading and writing on Saturday and Sunday because a school for the German minority did not exist. The ethnic-Germans and above all the youth know the German language not only orally but even by the written word.
In order to break down the Polish nationality most quickly in the German villages, the Polish agricultural enterprises were confiscated. Therewith it has to be remarked further that also Polish enterprises were destroyed by warfare and the Poles too are partly in a situation which gives grounds for fear in so far that theft of German property and other encroachments on the part of the Poles may occur. The confiscation was done in accordance with the directives of Reich Fuehrer-SS as Reich Commissioner for the strengthening of German nationality, on 9 May in the villages of Natalin and Rosalin. As the Polish enterprises were from 2 to about 8 hectares in size and the arable land and the farm-buildings are dispersed within the area. The County agronomist [Kreislandwirt] of the East-German Agricultural Development Corporation thought that a centralized management of the confiscated farms by appointment of a manager was impractical. He resolved therefore to give the arable land, livestock and other property to the trusteeship of needy racial-Germans. The agronomist who was present at the performance of the confiscation accomplished this at once on the spot. However he thought it necessary to take the former Polish owners as farm-workers to an estate in Blachownia County which is also managed by the East-German Agricultural Development Corporation, in order to enable the racial-Germans installed to run the Polish enterprises without friction. Today in fact farm-workers are lacking here, for the former workers were Jews and are useless for such work and moreover, they would endanger an orderly management. However, if the Poles would remain on their former farms the danger of the worst sort of sabotage to the agricultural property now at the disposal of the German Reich would exist. The Poles are paid for their work. The execution of the confiscation as well as the transfer of the Polish farm-workers to the estate of the East-German Corporation for Agriculture Management was accomplished quite quietly and without friction.
In the same way as it was done until now the break-up of Polish Nationality will be shortly accomplished in the other racial-German villages as well.
Because of the extremely good cooperation with the authorities, the party offices and the East German Corporation for Agricultural Development, and above all with the Secret State Police the confiscations etc. will be accomplished absolutely without friction in the future, as well especially as preparations of greatest minuteness will secure the success from the outset.
Before the end of June the soil in the ethnic-German villages of Blachownia County will be taken entirely from Polish hands and be confiscated for the German Reich at the disposal of Reich Fuehrer-SS as Reich Commissioner for the strengthening of German Nationality.
(signed) Kusche
TRANSLATION OF DOCUMENT 1366-PS
[Secret Decree of Reich Minister and Chief of the Reich Chancellery Lammers of 29 August 1943, RK. 99 MD]
BUDGET OF THE REICH PROTECTOR FOR THE YEAR 1944
Introduction
* * *
The Fuehrer has modified the position, duties and authorities of the Reich Protector in Bohemia and Moravia upon the appointment of the new Reich Protector. The Reich Protector is the representative of the Fuehrer in his capacity as Chief of State ... It is his function to confirm the members of the government of the Protectorate, to appoint, dismiss and retire the German civil servants. He exercises the power to grant pardons and to quash legal proceedings except in cases before the Military and SS Police Courts.
TRANSLATION OF DOCUMENT 1375-PS
Castle Krakow 25 Jan. 1940
Minister President Field Marshal Goering Deputy for the Four-Year Plan
The Commissioner General for the General-gouvernement Poland
STRICTLY CONFIDENTIAL
_S B 1/40_
I To the Director of the Service Agency for the Four-Year Plan Major General Buehrmann or representative in _Krakow_ Lenartovicza 13
For the execution of the task of systematically placing the economic strength of the General-gouvernement, within the framework of the Four-Year Plan, in the service of the German defense industry, I give the following
_Directives_
1. In view of the present requirements of the Reich for the defense industry, it is at present fundamentally impossible to carry on a long-term economic policy in the General gouvernement. Rather, it is necessary so to steer the economy of the General gouvernement that it will, in the shortest possible time, accomplish results representing the maximum that can be gotten out of the economic strength of the General gouvernement for the immediate strengthening of our capacity for defense.
2. In particular the following performances are expected of the total economy of the General gouvernement:
a. Intensification of agricultural production esp. in the larger farms (above 100 ha.) and a planned distribution of the food-stuffs to be requisitioned in order to fill the requirements of the troops, units, and service agencies as well as of the native population, which are not yet fully covered by the present production.
b. Fullest exploitation of the forests, in temporary disregard of forest conservation principles, so as to deliver to the Reich approx. 1 million fm sawmill lumber, 1. 2 million fm of mine timbers and up to 0.4 million rm of fiber wood.