by The Destruction of the European Jews, Vol. 1-3 (Third Edition) Yale University Press (2003) (pdf)
Lamm, "Über die Innere und Äussere Entwicklung des Deutschen Judentums im Dritten
Reich" (Erlangen, 1951; mimeographed), p. 223. Emigration statistics for Austria can be
calculated from a report by the Statistical Office, Reichsgau Vienna. December 15,1939,
PS-1949.
135
EXPROPRIATION
year to the next, so does the tax yield. In order to predict revenue
collection, it is therefore necessary to make some complicated calculations. The Finance Ministry had an even more difficult task than that.
Instead of starting with a tax and calculating the revenue, it had to start
with a precise amount and determine the tax. There was no precedent
to be guided by. In no previous fiscal year had taxes been imposed on
Jews specifically. (The Reich Flight Tax was paid only by emigrants.)
The Finance Ministry knew that an income tax would not do, since
the income of the Jews was declining too fast. The only way in which
such a sum could be collected was in the form of a property tax. But
this required a knowledge of how much property the Jews still had in
their possession. The Finance Ministry knew how much Jewish property was available. Only a few months before the November fine was decreed, the Interior Ministry, with the foresight borne out of a conviction that sooner or later all Jewish property would be German, had ordered the Jews to register their property.
The decree of April 26, 1938,7 8 9 which we have already mentioned as
a preparatory measure in the Aryanizations, required all Jews (other
than foreign Jews) to evaluate and report their domestic and foreign
property. Foreign Jews had to report only their domestic property.
Movable objects used by the individual and home furnishings did not
have to be included unless they were luxuries. The property had to be
evaluated at current and usual prices. It had to be reported if its value
was over 5,000 reichsmark. In pursuance of this decree (which was in
effect in the Old Reich and Austria), the following property values
were registered:* 135,750 Jews of German nationality reported
7,050,000,000
reichsmark;
9,567
foreign
Jews
reported
415,000,000
reichsmark; 2,269 stateless Jews reported 73,500,000 reichsmark. The
total reported was thus 7,538,500,000 reichsmark. With such figures at
its disposal, the Finance Ministry could arrive at a tax rate without
much difficulty.
On November 12, 1938, Goring proclaimed the “fine.”’ Nine days
later, the Finance Ministry was ready with its implementation decree,10 11
which made liable all Jews (except foreign Jews) who had reported
their property under the decree of April 26,1938. Valuations were to be
adjusted to November 12. It was estimated that between April 26 and
November 12 about two billion reichsmark of the registered assets had
passed into German possession." The finance officials had to assume
7. RGBI 1,414.
8. Wiehl (Foreign Office/Political Trade Division) 10 German missions and consulates abroad, January 25, 1939, NG-1793.
9. RGBI I, 1579.
10. RGBI I, 1638.
11. Speech by Economy Minister Funk, November 15, 1938, PS-3545.
136
PROPERTY TAXES
that a large number—if not all—of the sellers had already left the
country. After deducting these two billion and after making another
adjustment for the property of the foreign Jews (four hundred million),
property worth at least five billion reichsmark was left to be taxed. The
“fine” to be paid by each liable Jew was consequently fixed at 20
percent of his registered property, due in four installments: on December 15, 1938, February 15, 1939, May 15, 1939, and August 15, 1939.
The finance offices were empowered to require payment of a security
by Jews wishing to emigrate.
On December 10, 1938, the Finance Ministry issued unpublished
supplementary instructions to
its regional machinery.12 These instructions reveal more clearly how the fine was designed to confiscate Jewish liquid assets. The finance offices were requested to take note of payment offices set up by the Economy Ministry for the purchase of
valuables and art objects. Since payments would also be made from
accounts
in
foreign
countries,
notification
of
such
money
transfers
could be expected from the Foreign Exchange Office of the Economy
Ministry. Securities were to be accepted, if quoted in official exchange
lists, at the rate of exchange stated there. Preference was to be given to
shares first, bonds next, and Reich loans last. Acceptance of such
securities was to be considered as a privilege extended to the Jew. He
was therefore obliged to pay the stock exchange turnover tax. Actually, of course, the provision for acceptance of securities was not a
"privilege” at all. It was a necessity because of the depletion of Jewish
cash reserves and because the Finance Ministry could not afford to
allow the Jews to “throw” their securities into the market, “thus spoiling the market for the Reich loan.”1*
As the cash, art objects, foreign exchange, and securities began to
roll in, the Finance Ministry became worried that the rate of 20 percent
had been fixed too low. Accordingly, another installment of 5 percent
was added, payable on November 15, 1939.“ With this installment the
Ministry overshot the mark, as revealed by the following totals:15
Fiscal year
1938 RM
498,514,808
Fiscal year
1939 RM
533,126,504
Fiscal year
1940 RM
94,971,184
Total
RM
1,126,612,496
12. Finance Ministry instructions. December 10, 1938. NG-4902.
13. Testimony by Finance Minister Schwerin von Krosigk, Case No. 11, tr.
p. 23292. Schacht pointed out after the war that about one-third of the Jim installment
had to be accepted “in kind." Interrogation of Hjalmar Schacht. July 11, 1945, PS-3724.
14. Decree of October 19, 1939, RGB1 I, 2059.
15. Liquidation Administration of former German Finance Ministry (signed
Siegert) to Control Commission of Germany/British Element/Finance Division, November 14, 1946, NG-4904.
137
EXPROPRIATION
The Reich Flight Tax and the Jewish Atonement Payment are summarized in Table 5-9. The two taxes yielded a total of two billion reichsmark. The combined yield during the fiscal year 1938 (RM
841.000.
000) represented nearly 5 percent of the total revenues (RM
17.690.000.
000) of that year.14 Fiscal 1938 (April 1, 1938, to March 31,
1939) was a year of mobilization. The shortage of funds was “critical."
As the Finance Ministry collected the Jewish money, it was poured
immediately into the funnels of armament spending.17
Although the two billion reichsmark constituted the greatest profit
registered by the Reich in the entire European destruction process, the
amount was less than a third of the assets reported by the Jews in 1938.
From the 7.5 billion reichsmark registered in that year, the
Reich received only the leftovers. This fact became clear when the Finance Ministry discovered that in some cases the "ridiculous countervalue”
received by the Jews for their Aryanized property was insufficient to
pay the property taxes."
T A B L E 5 - 9
REICH FLIGHT TAX AND JEWISH ATONEMENT PAYMENT
Flight Tax
Atonement Payment
Liability
All emigrating Reich nation
All Jews (other than foreign
als who had property of more
Jews) who had registered
than RM 50,000 on January
property of more than RM
1, 1931 (or any time there5,000
after), or an income of more
than RM 20,000 in 1931 (or
any year thereafter)
Amount of tax
25 percent of taxable prop-
25 percent of registered
property
Yield
RM 900,000,000
RM 1,100,000,000
16. Fiscal 1938 revenue total from Deutsche Bank, May 30, 1939, pp. 144-45.
17. Summary by Wörmann (Foreign Office/Political Division) of a speech by Göring
to ministers, Staatssekretäre, and generals, dated November 19, 1938, PS-3375. Interrogation of Schacht, July 11, 1945, PS-3724.
18. Affidavit by Ministerialrat Walter Donandt, May 20, 1948, Krosigk-24. Donandt
was personal advisor to Finance Minister von Krosigk.
138
BLOCKED MONEY
B L O C K E D M O N E Y
Suppose a Jew sold his property and paid his taxes and, after these
ruinous procedures, still had some money left? Could he take it to the
bank, exchange it for dollars, and travel to America? The answer is no.
In the first place, there was a view that all Jewish capital in Germany really belonged to the German people, because the Jews could not have acquired it honestly.1 In other words, the Jews could not be
permitted to transfer any money abroad, for, if they still had any
money, the Reich wanted to confiscate it eventually. A second and
more formidable reason was that if emigrating Jews were to be permitted to salvage any of their resources, the Reich would be forced to expend foreign currency for mere reichsmark, and that was out of the
question. Since 1931, strict exchange controls had regulated all transactions in foreign currency. Under the law, every German was obliged to offer to the Reichsbank any foreign currency at his disposal, even
including claims expressed in foreign currency. Thus if an exporter sold
some goods abroad, he was paid in reichsmark, and the Reich collected
the dollars, pounds, francs, or whatever.
The purpose of this mobilization of foreign exchange was to ensure
that whatever foreign funds were available would be spent only for
essential imports. Any diversion of such reserves to enable Jewish emigrants to establish a new life abroad was the last thing anybody thought of doing. Yet something of the sort had to be done if the emigration of
the Jews was to be furthered. Foreign countries were loath to accept
any Jews, let alone poor Jews.2 The exchange controls were therefore
one of the principal stumbling blocks to rapid emigration. The problem
could be solved in two ways only: through financial support by fellow
Jews abroad, and through exceptional, roundabout and forbidden currency transfers. To the extent that foreign Jewish assistance failed, the salvaging of money became an absolute prerequisite for any emigration
program.
Following is a list of twelve methods used by the Jews to transfer
money abroad. That there were at least twelve of these avenues is in
itself a telling indication of the German dilemma.
1. Foreign Office notes (signed by Staalssekretar WeizsScker) to German embassies in London, Paris. Rome, Washington, and Warsaw, and to German legations in Belgrade, Bucharest. Budapest, Prague, and Sofia, July 8, 1938, NG-3702.
2, See report by Albrecht (Foreign Office/Legal Division) to Himmler on immigration restrictions affecting Jews in the United States, Canada. Guatemala, El Salvador.
Brazil, Ecuador, Bolivia, the South African Union, and Palestine, November 10, 1937,
NG-3236.
139
EXPROPRIATION
1.
The so-called Freigrenze (free currency zone). Each emigrant,
including a Jew, was permitted to take out of the country the sum of 10
reichsmark in foreign currency (at the official exchange rate), and twice
that amount if the point of destination was a country with which Germany had no border. In other words, a family of three traveling to the United States could take along $24.’
2.
The Warenfreigrenze (free goods zone). An emigrant was also
permitted to remove goods in the amount of 1,000 reichsmark. For the
calculation of the price, the sales value at the point of destination
rather than the market value in the Reich was decisive.3 4
3.
Each emigrant could also take out of the country his personal
belongings,
including
furniture.
However,
emigrants
were
requred
to
submit to the authorities lists of all items intended for removal.5 The
purpose of the lists was to screen the shipments, with a view to preventing the export of jewelry and valuables. There was, of course, a tendency to smuggle such items out of the country, but the bureaucracy
did its best to frustrate transfers of that sort. On February 21, 1939, the
Jews were directed to surrender their gold, platinum, silver, precious
stones, and art objects to purchasing offices of the Economy Ministry,
“compensation to be fixed by the ministry.”6
4.
Another way of disposing of money before emigration was the
purchase
of
railway
and
ship
accommodations
in
reichsmark.
This
method was altogether permissible, but foreign steamship lines were
not always willing to accept German currency. For example, the Italian
line Lloyd THestino required payment of half the fare in foreign exchange.7 8
5.
The Altreu, or Allgemeine Treuhandstelle für die Jüdische Auswanderung (General Trusteeship Office for Jewish Emigration) was an exchange office set up in order to convert reichsmark into foreign
currency (other than Palestine currency) at a 50 percent loss to the Jew.
Complicated
schedules
governed the administration of this procedure.
Up to October 1937, the upper limit was 8,000 reichsmark. The maximum was then pushed up in some cases to 50,000 reichsmark. In 1938, however, new applications were no longer accepted.*
6.
Jews emigrating to Palestine were given a special opportunity to
remove their capital by the so-called Haavara agreement. This agreement was concluded in August 1933 by the German Reich and the 3. Implementation decree to the Currency Law, December 22, 1938, RGBl I, 1851.
The 10-mark limit resulted from successive reductions. It was in effect from 1934.
4. Cohn, Auswanderungsvorschrifien, p. 35.
5. Currency Law, December 12, 1938. RGBl I, 1734, par. 58.
6. RGBl 1.279.
7. The New York Times. July 6, 1939. p. 14.
8. Cohn, Auswanderungsvorschriften, pp. 37-39.
140
BLOCKED MONEY
Jewish Agency for Palestine. In form it was a
modified clearing arrangement. Under its terms a Jewish “capitalist” who wanted to emigrate to Palestine was permitted to make a contract with a German exporter for the transfer of goods from Germany to Palestine. The
German exporter was paid with funds drawn from the blocked account
of the emigrating Jew. The emigrant received his Palestine currency
from the Jewish Agency upon arrival in Palestine. In short, the channels were as follows:’
Jewish emigrant's
blocked account
Emigrant
payment in
pounds
Jewish Agency
The Jewish Agency and the exporters were just as satisfied with
this arrangement as the emigrants themselves. German goods poured
into Palestine and, after a while, the Haavara clearing agreement was
supplemented by a barter agreement providing for the exchange of
Palestine
oranges
for
German
timber,
wrapping
paper,
motor
cars,
pumps, agricultural machinery, and so on.9 10 11 It seemed as though the
economic relations between Nazi Germany and the Jewish community
in Palestine were excellent. Naturally, there was some dissatisfaction
in the Nazi party, the Foreign Office’s Germany Referai (which was to
deal with Jewish matters), and the Palestine Germans, who complained
that their interests had been neglected utterly in favor of the Jews."
Nevertheless,
this
interesting
arrangement
survived
until
the
outbreak
of war.
7.
Aryanization payments in foreign currency. Only rich Jews who
had
foreign
nationality
or
who
controlled
foreign
enterprises
could
benefit from this method.
8.
The sale of blocked reichsmark. An emigrant who did not take
his money along automatically lost that money to a blocked account
(Sperrguthaben) over which he could exercise no control. The blocked
9. Foreign Office memorandum, March 10, 1938, NG-1889. The complex history of
the agreement is described by Wemer Feitchenfeld, Dolf Michaelis. and Ludwig Pinner,
Haavara-Transfer nach Palàsüna (Tübingen, 1972). Haavara-transfers, including goods
purchased with reichsmark in Germany by emigrants themselves, totaled over 100 million reichsmark and facilitated the emigration of about 36 percent of the 50,000 Jews who entered Palestine from the Old Reich.