To enslave the country from an economic point of view, the most simple procedure was to secure the possession of the greater part of the means of payment and to make impossible the export of currency and valuables of all kinds.
There is an ordinance of 17 June 1940 which forbids the export of currency and valuables of all kinds. This ordinance was published in the Verordnungsblatt for Belgium, Northern France, and Luxembourg and will hereafter be called by its usual abbreviated form VOBEL. This ordinance was published in VOBEL, Number 3, and was submitted under Document Number RF-99. In the VOBEL of the same day appeared a notice dated 9 May 1940, which regulated the issuing of Reichskreditkasse notes to provide the occupation troops with legal tender. By this means the Germans made possible the buying, without supplying any equivalent, all they desired in a country abounding with products of all kinds, without the inhabitants being able to protect their possessions against the invader.
The occupier used, in addition, three other methods for securing the greater part of the means of payment. These three methods were: The creation of an issuing bank, the imposition of war tribute under the pretext of maintaining occupation troops, and the working of a system of clearing to their profit alone. These measures will be fully dealt with in three sections which now follow.
Establishment of an issuing bank.
As soon as they arrived in Belgium the Germans established an office for supervising banks, which was entrusted at the same time with the control of the National Bank of Belgium. This was ordered on 14 June 1940—VOBEL, Number 2, which is submitted as Document Number RF-141.
At this time the directorate of the National Bank of Belgium was outside the occupied territories; but the amount of notes on hand would have been insufficient to insure normal circulation, as a great number of Belgians had fled before the invasion, taking with them a large quantity of paper money. These are, at least, the reasons which the Germans put forward for establishing an issuing bank by the ordinance of 27 June 1940, published in VOBEL, Numbers 4 and 5, which I submit as Document Number RF-142.
By virtue of this last ordinance, 27 June 1940, the new issuing bank with a capital of 150 million Belgian francs, 20 percent of which had been issued in coin, received the monopoly for issuing paper money in Belgian francs. As a matter of fact, the National Bank of Belgium no longer had the right to issue money. The cover of the issuing bank was not represented by a gold balance but: 1) by credits from discount operations and loans granted in conformity with Article 8 of the new statutes; 2) monies owed to the National Bank of Belgium, as well as coin which was in circulation for the account of the public treasury; 3) finally, the third means of cover—foreign currency and francs, particularly German money, including Reichskreditkasse notes as well as assets at the Reichsbank, at the Office of Compensation for the Reich, and the Reichskreditkasse.
The German Commissioner who had been appointed by a decree of 26 June 1940 became the controller of the issuing bank—decree of 26 June 1940, published in VOBEL, Number 3, Page 88, and submitted as Document Number RF-143.
After the return to Belgium of the directors of the National Bank, on 10 July 1940, an agreement between this bank and the new issuing bank was effected by the nomination of the head of the new issuing bank to the position of director of the National Bank of Belgium.
The issuing bank proceeded to put out a large amount of notes, so much so that on 8 May 1940 the currency in circulation amounted to 29,800 million Belgian francs. On 29 December 1943 it amounted to 83,200 million Belgian francs, and on 31 August 1944 it was 100,200 million Belgian francs, that is to say, an increase of 236 percent.