dislocaTion and The ‘new order’
As indicated above, the evacuation of government departments had been poorly planned, if indeed there was any planning at all. Soon after the German invasion not only had the parliamentary representatives and the government quit the country, but they had been followed by many officers of the central administration, the sole exception being the magistrates, most of whom, both locally and centrally, remained at their posts1. The situation was repeated at the Bank and among the other semi-public institutions: many officials and white-collar workers had slipped across the border to join their institution in France. The officials of the Postal Cheque Office had even taken their book-keeping and other documents with them, but were forced to abandon every-thing at a school in Kortrijk and hide them there before getting across the border just in time2.
The Belgian army by implementing the ‘scorched earth’ policy had destroyed many bridges, viaducts, tunnels and other infrastructural works all over the country. Rivers and canals had been made unnavi-gable by the collapsed bridges and various public utility installations, such as telephone and telegraph networks, and even gasworks and elec-tricity generating stations had been put out of action3. If it was not
over-1 BIS (Basel), Archives, dossier 7.over-18 (6), AUB 4/2over-1: Struye, l’opinion publique de Belgique, p. 11.
2 It was only shortly before 13 June that the documents were recovered: SG, Archives, DC, 04.06.1940 and 13.06.1940.
3 BIS (Basel), Archives, dossier 7.18 (6), AUB 4/21: Struye, l’opinion publique de Belgique, p. 2; SG, Archives, DC, 22.05.1940 and 27.05.1940.
whelming, the amount of material damage done during the Eighteen-days Campaign nevertheless was still fairly substantial4.
The situation was aggravated by the lack of public administration and particularly by the acute shortage of money. It is true that the gov-ernment had given local and provincial authorities additional powers to take emergency measures5, but the Committees for Public Assistance fairly quickly found themselves with no cash to provide support6. The evacuation of the Postal Cheque Office posed an even greater problem:
because of the absence of the account books and a large proportion of the staff, the 442,000 account-holders were no longer able to make transfers, withdraw deposits or cash cheques7. When the Liège coal mines gradually resumed their activity, they found themselves obliged to pay their workers with their own emergency money8.
The discipline of the German army of occupation contrasted sharply with the chaos and anarchy rife among Belgian public authorities dur-ing the first weeks of the war. The Germans did not behave arrogantly, but sought to give the impression that they wanted strictly to observe the international rule of law and more particularly the 1907 Hague Convention9. German attempts to build up a favourable image among the population received an indirect boost from an unexpected quarter after the armistice of 28 May. The disgraceful accusations levelled by the French government at Leopold III and the Belgian army, followed by a somewhat toned-down repetition of them over the radio by the Belgian Prime Minister, Pierlot, deeply offended Belgian people both at home and scattered abroad. Their view of matters was that the King had not committed any treasonable act and, in capitulating, had avoided a
4 BNB, Archives, Studiedienst, dossier 01.02.01.70 (A 238/2, s. f. 4 a): estimation des dommages de guerre subis par la Belgique.
5 BNB, Archives, Studiedienst, 2, dossier 01.02.01.70 (A 247/6, s. f. 9): quelques rétroactes relatifs aux circonstances qui ont provoqué la création de la BEB (note de la Société Générale), 26.03.1943, pp. 3-4.
6 SG, Archives, DC, 15.05.1940.
7 BNB, Archives, Studiedienst, 2, dossier 01.02.01.70 (A 247/6, s. f. 9): quelques rétroactes relatifs aux circonstances qui ont provoqué la création de la BEB (note de la Société Générale), 26.03.1943, pp. 4-5.
8 SG, Archives, DC, 21.05.1940.
9 BNB, Archives, SD, 41, Commission of Enquiry (Banque d’Emission), dossier 8.11.43 (n° 33): letter of 01.10.1940 from Rolin to Janssen.
needless bloodbath; they stood four square behind him and against the government. Even greater castigation was heaped on the Belgian gov-ernment by the refugees returning from France, who attributed their losses in the currency exchange operations to their government’s ‘mon-etary manipulations’10.
Meanwhile, the feeling grew that the war would be of short duration and that Germany would in any case dominate the European conti-nent for some time to come. Public opinion in Belgium, which included a number of prominent people in the country, hesitated between two possible outcomes: either total victory for Germany or a compromise peace between the two remaining belligerents11. Writing from Lisbon on 3 July to his minister in London, the Dutch envoy Bennert Philip van Harinxma thoe Slooten, who had kept close to the Belgian government from mid-May to the end of June, observed ‘I continue to look for a ray of hope for the British cause, but can find none and feel that there are few chances of England winning this war12. Somewhat later, from Vichy, Ansiaux wrote to Baudewyns in London: ‘Prevailing Belgian opinion is strongly in favour of the Germans.…Everyone is taken with the idea of a «European Peace»…Whatever happens, the old regime is finished, because the revolution, which has overtaken hearts and minds, is al-ready too far advanced. Everyone is coming back – the rush to return to Brussels is as great as was the rush to leave it’13.
The occupation of Belgium, the Netherlands and France had been well prepared by Germany14. On 19 October 1939, with the experiences
10 See above.
11 The German Luftwaffe’s failure in September-October 1940 to win control of British skies and thereby the Battle of Britain had already then raised serious doubts about the possibility of total German victory, though the possibility of a compromise peace was still alive: P. Nefors, Industriële collaboratie in België. De Galopin-doc-trine, de Emissiebank en de Belgische industrie in de Tweede Wereldoorlog, Leuven, 2000, pp. 31-32; BIS (Basel), Archives, dossier 7.18 (6), AUB 4/21: Struye, l’opinion publique de Belgique, pp. 7-8.
12 Ndl.BZ, London Archives, 1940-1945, GA GII, België, n° 4: letter of 03.07.1940 from van Harinxma thoe Slooten (Lisbon) to Van Kleffens (London).
13 BNB, Archives, SD, London Archives: letter of 23.08.1940 from Ansiaux (Vichy) to Baudewyns (London).
14 P.F. Klemm, German Economic Policies in Belgium from 1940 to 1944, Ann Arbor (Michigan), 1973, pp. 29-33. For Himmler’s unavailing attempts to install a Civil Government in Belgium, see: Velaers and Van Goethem, Leopold III, pp. 329-330.
in Poland in mind, Hitler had ordered the army to draw up a general plan for military administration in the occupied territories to the west.
The plan worked out was twofold: governance would be strictly central-ized and would not aim at any annexation. It would be geared to reviv-ing the individual economies; scarce strategic raw materials, however, would be requisitioned and transferred to the German war economy15. Hitler approved the plan and on 5 November of that year a special com-mission was set up under the presidency of the district president of Rhineland-Westphalia, Eggert Reeder, with the task of fleshing out the plan; the commission completed its work in January 1940.
On 14 May 1940, Hitler appointed Alexander von Falkenhausen as military commander for Belgium, Northern France and Luxembourg, though this last was removed from his authority a few weeks later on its annexation to the Reich in July-August 1940. Reeder was appointed as head of the Military Government and Harry von Craushaar as Deputy-president16. The Military Government had various departments, includ-ing an important economic department (Abteilung Wirtschaft). Within a sub-department for monetary and financial affairs (Gruppe VIII), a unit (the Bankaufsichtamt) was created to supervise private banking and the central bank; this sub-department was headed by Hans von Becker, with Dr. Helmuth Hofrichter as his deputy.
Von Falkenhausen (°1878) belonged to the old German aristocracy and had had a distinguished military career that had taken him to the Middle East, Japan and China. He was a highly cultivated man, open-minded, correct and had an international outlook (‘ein ausserordentlich anständig denkender Mann’17). Conservative in his opinions, but nev-ertheless with an independent spirit, he also steadfastly refused to join the Nazi Party. He was certainly not ill-disposed towards Belgium and, insofar as he could, attempted to defend Belgian interests, but could not and would not run foul of instructions from the Nazi government in
15 Velaers and Van Goethem, Leopold III, p. 44; Milward, Economy and Society, 1939-1945, p. 132.
16 Velaers and Van Goethem, Leopold III, pp. 38-39; BNB, Archives, Studiedienst, 2, dossier 01.02.01.70 (A 247/6, s. f. 7): indications relatives à certains membres du commissariat allemand, annex.
17 SOMA, Archives, Prack Papers, dossier JP 965: Vier Jahre Besatzungszeit in Belgien.
Persönliche Erinnerungen von Herbert Prack, p. 43.
Berlin. He was dismissed on 18 July 1944 and shortly thereafter arrested by the Gestapo18.
Reeder (°1894) was a lawyer from Schleswig and had been a member of the Nazi Party since 1933. He, too, was independent-minded and, for example, never gave up his friendship with well-known non-Nazis, de-spite pressure from the party. Prior to his appointment as head of the Military Government in Belgium, Northern France and Luxembourg, he, as a Prussian official, had occupied high office in Rhineland-West-phalia. He was the epitome of the traditional Prussian bureaucrat: in-telligent, purposeful, sober, demanding of himself and his colleagues, honourable and fundamentally honest. Standing by hierarchy and authority, he deemed it his duty to mobilize the Belgian economy to the fullest in the service of the German war effort. However, he never lost sight of the original purpose of the special commission that he had presided over in 1939, namely to promote the development of national economies in the occupied territories in order that a certain degree of prosperity should be maintained. Naturally enough, and indeed as a matter of priority, all efforts had to be in the service of the Reich19 The attitude of Reeder and von Falkenhausen thus contrasted clearly with that of the Nazis, whose purpose was simply a systematic plundering of conquered territories20.
Von Becker was made commissioner of the Banque d’Emission on 26 June 194021. During the First World War, he had been deputy to the then German commissioner at the Bank, Karl von Lumm, in Brussels, and during the inter-war years had worked in a Berlin private bank.
Despite these credentials, he was not regarded in the banking world
18 M. De Vlaminck and L. De Vos, ‘De Belgische industriëlen tijdens de bezetting, 1940-1944. Collaboreren om de bezetter te schaden, produceren met het oog op de naoorlogse periode’, in: Belgisch tijdschrift voor militaire geschiedenis, XXVI, 2 (June 1985), p. 114.
19 J. Gérard-Libois and J. Gotovitch, L’An 40. La Belgique occupée, 1971, p. 151.
20 P.F. Klemm, German Economic Policies in Belgium, pp. 34-37; M. Rehm, Eggert Reeder (22 Juli 1894 – 22 November 1959): Preuszischer Regierungspräsident, Mil-itärverwaltungschef, Staatsburger, 13 p.
21 BNB, Archives, Prack Papers, dossier JP 965: Das Währungs-, Geld- und Bankwesen in Belgien, Part 1; SG, Archives, DC, 14.06.1940; BNB, Archives, Studiedienst, 2, dos-sier 01.02.01.70 (A 247/6 s. f. 7): Basyn, note relative à certains membres du commis-sariat allemand, pp. 1-2.
as being professionally competent. What he lacked in intelligence, he more than made up for in arrogance. He was, in the worst sense of the term, the bon vivant type and was chiefly out for money and honour.
In August 1943, he was dismissed as commissioner at the Bank and the Banque d’Emission. A year later, in 1944, he was convicted of currency smuggling by a Berlin court and demoted22. With effect from 1 Decem-ber 1943, he was succeeded by Reichsbank director Jost, a rather weak figure, suspicious and secretive.
Von Becker’s deputy, Hofrichter, was cast in an entirely differ-ent mould. He was the driving force behind the control of the private banks, the strong man in the supervision of the Bank and the Banque d’Emission23. During the autumn of 1939, he had been involved in the reorganization of central banking in Poland, and this experience had led to his appointment in Brussels. A confirmed party member, with a number of typically Prussian traits, he was intelligent and well ground-ed, not to say thoroughly expert, in banking matters. To cap that, he was a workaholic and a tough negotiator.
Hofrichter was thus anything but well liked in Belgian banking cir-cles or indeed among his own people, and was feared by all, a regu-lar comment of his to his staff being, ‘One should not be loved, but feared’24. On the other hand, it was said of him that, aside with a few exceptions, he was fundamentally correct in his dealings with people and that, as the war progressed, he became less acerbic. He was in any case upright, although it undoubtedly took courage and intelligence to oppose him; in fact, the only persons in the Bank who could face up to him were governor Janssen, the chief inspector François Cracco, and later also the director Robert Vandeputte.
A man of action and tenacious, Hofrichter was to play an important part in 1940-1941 in getting the Belgian gold from Dakar to Berlin. At
22 BNB, Archives, SD, service étranger, dossier 8.11/32, ‘rapports sur l’activité de la BEB, 1940-1944’ (September 1944): création de la BEB, texte revu par Basyn, passage sur von Becker.
23 SOMA, Archives, Prack Papers, dossier JP 965: Vier Jahre Besatzungszeit in Belgien.
Persönliche Erinnerungen von Herbert Prack, pp. 28-29. See also: BNB, Archives, Studiedienst, 2, dossier 01.02.01.70 (A247/6, s. f. 7): Basyn, note relative à certains membres du commissariat allemand, pp. 2-5.
24 SOMA, Archives, Prack Papers, dossier JP 965: Vier Jahre Besatzungszeit in Belgien.
Persönliche Erinnerungen von Herbert Prack, p. 29.
the end of 1943, however, he fell out of favour, the victim, probably, of an internal German power struggle. He was sent to Poland, where he died25. His dominant role in Brussels was taken over by a Reichsbank director, Dr. Hoppe, a competent jurist. Unlike Hofrichter, however, he was cunning and untrustworthy, maintaining close relations with the Gestapo in Brussels. A sinister figure, the Bank had great difficulty in dealing with him.
Another member of the Bankaufsichtamt, Dr. Herbert Prack, was something of an odd-man-out. He had been born in Austria and before the war – as secretary to the governor of the Austrian central bank – had got to know the Belgian financial expert, Maurice Frère, whom the League of Nations had sent to Vienna. The friendship they had struck up at first meeting was continued during the war, when Frère was Chairman of the Banking Commission and a member of the board of directors of the Banque d’Emission. Prack was an Austrian nationalist, who had a great deal of sympathy for Belgium and was clearly anti-Nazi. However, he was not a fighter and was chary about any strategy of direct confrontation, seeing more benefit in serious negotiation and cautious, but obstinate, obstruction. His function in Gruppe VIII was a subordinate one, but he spoke reasonable French, which resulted in him attending most meetings of the Bank and the Banque d’Emission26. As staff numbers thinned in the course of the occupation, so his influ-ence grew, as did his nerve. Through him, the management of the Bank were made more and more aware of affairs within the Gruppe and of its strategy, intentions and ulterior motives.
Although ruling over a population of at least 11.5 million, the Mili-tary Government was poorly manned. At its peak, in September 1941, the German staff numbered no more than 1,16627, a sharp contrast with the figure of about 10,000 during the First World War. In December 1940, if the low-ranking staff who carried out purely clerical tasks are excluded, there were barely 700. Later, numbers were reinforced a little, but they began to fall again from the autumn of 1941 to the point where,
25 These final details are drawn from later conversations with von Falkenhausen, ex-tracts of which have been published by Jo Gérard.
26 BNB, Archives, SD, 30, BEB, dossier 8.11.24/ 1 and 2: travaux préparatoires à la créa-tion de la BEB (comptes-rendus).
27 P. Nefors, Industriële collaboratie in België, p. 62.
in 1942, the Military Government in Belgium and Northern France was being run by a staff of just 47028. This low level helps to explain the rather limited deployment of the Military Government and its reliance on the cooperation of the country’s civil service, the world of business and banking in order to be able to function effectively29.
‘le Temps des noTables’30
On 16 May 1940, the doors of the Bank were closed, the only persons left at their posts by Goffin being the conciërge, the chauffeur and a team of security guards. The following day – Friday, 17 May – Brussels was oc-cupied by the Germans and on 20 May, the bank specialists of the Mili-tary Government Dr. Möckel and Dr. Heppert, two former officials of the Reichsbank, started discussions with Goffin31. Right from the start, the Germans made Goffin reopen the Bank and resume all its normal activities32. For both legal and practical reasons, Goffin was not able to comply. Legally, his authority was limited to taking conservatory meas-ures33, while, in practice, the Bank no longer had the necessary materi-als, its banknotes, printing presses and dies having been sent abroad34.
As soon as Goffin heard what the two representatives of the Military Government had to say, he informed the top man of the Société Géné-rale, Alexander Galopin, who from 19 May had begun to have daily meetings with Max-Léo Gérard, Chairman of the Banque de Bruxelles and, later, with Fernand Collin, Chairman of the Kredietbank. Acting at the request of Ministers Gutt and Spaak, Galopin extended the small group, inviting prominent people from various fields to join; together they would consult about the decisions to be taken, which promised to
28 Klemm, German Economic Policies in Belgium, p. 82.
29 M.G. Haupt, Der ‘Arbeitseinsatz’ der belgischen Bevölkerung während des Zweiten Weltkrieges, 1970, p. 12.
30 Term applied by Gérard-Libois and Gotovitch in their book L’An 40.
31 BNB, Archives, SD, BEB, dossier 8.11.24/11: mémoranda des réunions, 12.06.1940, 19.06.1940, 03.07.1940 and 10.07.1940. See also: BNB, Archives, SD, 30, BEB, dossier 8.11.24/f. 13: protocole allemand du 21.05.1940.
32 BNB, Archives, SD, 30, BEB, dossier 8.11.24/11: memorandum of 12.06.1940.
33 ARA, fonds ministerie van Financiën, AS, dossier 14-15, a: conversation (de Goffin) avec Heppner, 11.06.1940.
34 BNB, Archives, SD, Malaise Papers: Kauch, La Banque Nationale (unpublished text), Part 1, Chapter 3, p. 37.
be very tough, and share the consequences. Among those brought into the trusted circle were ex-minister Paul Tschoffen, a lawyer practising at Liège, Baron Raymond Vaxelaire, a Brussels businessman, Willy de Munck and Albert Goffin, Albert-Edouard Janssen, Chairman of the Société Générale de Banque, and, from 16 June, Léon Bekaert, a Flemish industrialist. Occasionally, ex-minister Emile Van Dievoet, professor of Civil Law at Leuven, was invited to join them35. The group itself came to be known as the ‘Galopin Committee’, Galopin indeed being its driving force and dominant figure.
The bankers’ immediate focus of attention was the general short-age of hard cash. During the initial days of the occupation, the Banque de la Société Générale (the only private bank still with a cash reserve) advanced more than 200 million Belgian francs to municipalities and various public services, to enable them to pay benefits to the needy and the unemployed. On 29 May, moreover, in cooperation with the Caisse Générale d’Epargne et de Retraite and a number of other private banks, it also created an Association Nationale d’Assistance to organize bank help more systematically. Lastly, pushed by Galopin, the bankers, in collaboration with the business world, set up a Société Coopérative
The bankers’ immediate focus of attention was the general short-age of hard cash. During the initial days of the occupation, the Banque de la Société Générale (the only private bank still with a cash reserve) advanced more than 200 million Belgian francs to municipalities and various public services, to enable them to pay benefits to the needy and the unemployed. On 29 May, moreover, in cooperation with the Caisse Générale d’Epargne et de Retraite and a number of other private banks, it also created an Association Nationale d’Assistance to organize bank help more systematically. Lastly, pushed by Galopin, the bankers, in collaboration with the business world, set up a Société Coopérative