Report on the work of the plenipotentiary for war economy (Schacht), including the agency's authority and organization, cooperation with the war ministry, military and civilian economic needs, plans for various industries, wartime labor, and finance and money

THE PREPARATION OF THE ECONOMIC MOBILIZATION BY THE PLENIPOTENTIARY FOR WAR ECONOMY STATUS AT THE END OF DECEMBER 1937
T , CONTENTS
I. The task.
In war—In peace.
II. The organization. '
The leading staff as superministerial agency. The G. B. offices as ministerial level. Central offices under the ministerial level. The field authorities of the G. B. divisions as central level. Special deputies of the G. B. on the staff of the chief of the Civil Administration with the High Command of the Armies. Subordinate offices of . the field offices of the G. B. divisions as agencies on a lower level.
III. The measures.
1. Industrial war economy.
A. Central regulation: Statistics of war economy—economic plans—preparations for the execution of economic plans, special regulations—coal economy—motor fuel economy—power economy—construction of storage rooms and preparation buildings, storing—evacuation and salvage—regulation of consumption.
B. Local securing—.Distinction between R and KL plants. Protection of the KL plants.
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2. War food economy.
War food plan—Preparations for execution of the war food plan—storing—evacuation and salvaging—regulation of consumption for the civilian population—supplying the Wehrmacht—agricultural card index—card index of the food industry—securing the KL enterprises.
3. War forestry and wood industry.
Wood economy plan—economic system—ascertaining the KL enterprises—securing the KL enterprises.
4. Foreign trade in times of war.
Plans for import and export—preparation of the carrying out of the plans for import and export—ascertaining and protection of KL—export enterprises.
5. Transportation in the war economy.
Ascertaining transportation requirements—coordination of transportation requirements of military economy and Wehrmacht—transport situation in the Rhemisch-Westphalian Industrial Region—ascertaining and securing of trucks of KL enterprises.
6. Conscription of manpower in war.
Legal basis—preparation of labor conscription—ascertaining the available amount of manpower—ascertaining war , requirements of manpower—covering of wartime requirements—abolition of right to choose domicile in the event of war—relaxation of provisions on the working hours and the prohibition to employ certain persons—social protection.
7. War finance and money economy.
War finance requirements—covering of war finance requirements—self financing of war economy—war taxes— war loans—restrictions on traffic of money—securing of war important money requirements.
IV. Final remarks.
I.
THE TASK
In Wartime
The Plenipotentiary for War Economy (G.B.) pursuant to the non-published Reichs Defense Law of May 21, 1935, has the task to make available in case of mobilization all economic forces to the conduct of war and to secure the life of the German people economically.
The reasons for the law emphasize that the experiences of the great war proved the necessity to concentrate during a war the total economy and the whole system of financing of the conduct
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of the war under one uniform direction. According to the will of the Fuehrer and Reichs-Chancellor, the G. B. is to be in charge of this responsible direction and thus, together with the Reichsminister of War, who hold the executive power, be independent and responsible for the scope of his activities under the Fuehrer and Reichs Chancellor.
In Peace Time
The Plenipotentiary (G. B.) appointed by the Fuehrer and Reichs Chancellor for the case of mobilization has, pursuant to the resolution of the Reich Government of May 21, 1935, to begin his work already in peace time. According to the direction by the Fuehrer and Reichs Chancellor, in his capacity as Chairman of the Reich Defense Council, he has to direct the economic preparations for the case of war as far as they are not within the jurisdiction relative to the armament industry of the Reich War Minister. G. B. and Reich War Minister have to make their preparations for mobilization in close mutual understanding.
II.
THE ORGANIZATION The Leading Staff as Superministerial Agency.
For the uniform planning coordination and performance of all fundamental war economic preparations the G.B. has established a leading staff consisting of specialists of the following ministries and Reich authorities which are subject to it in war time and bound by its directions in peace time :
Reich Ministry for Economy.
Reich Ministry for Food
Reich Ministry for Forest-Economy
Reich Ministry for Labor
Reich Ministry for Finance { for financing the conduct Reichsbank Directory j of the war.
The Reich Ministry for Transportation which, contrary to the request of the G. B. has not been brought into the sphere of the G. B. has, upon the desire of the G. B., put specialists at his disposal to work on questions of war economic transportation.
The War Economic Departments at Ministry Level
The offices within the G. B., in order to carry out the directions given to them by the G. B. and its leading staff, have appointed a Reich Defense Division Chief who is immediately under the Secretary of State or, as to the Reichsbank, placed immediately under the President of the Reichsbank. The Reich defense Division Chiefs are responsible that the war economic preparations within the divisions are carried out uniformly. While as a rule the Reich
693260—46—23 .
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Defense Division Chiefs make use for this purpose of the peacetime economy sections of the GB Divisions, there has been formed in the Reichs Ministry for Economy under the direction of the Reich Defense Division Chief an independent Economic Division for Armament which, in collaboration with the other sections of this division, shall take the measures necessary for the preparation of industrial war economy.
Central authorities below the ministry level.
The divisions placed under the GB, for the purpose of carrying out the individual war economic tasks, have assigned mobilization tasks to the following central agencies.
The Reichs Ministry for Economy:
The Reichs Office for. Statistics to assemble statistical figures for war economic production;
The Control Offices to prepare the management of materials;
The Reich Chamber for Economy to limit economic publications ;
The Economic Groups to prepare plans for war economic foreign trade;
The WIFO [Economic Research Corporation with Limited Liability] to construct fuel depots and places for alertness and for the storage of raw materials and fuels important for war;
The Reichs Ministry for Food:
The Reich Research Institute for Food Economy for drawing war food plans;
The Reichs Offices to prepare the war food economy;
The Reich Food Estate to prepare the war food economy;
The Reich Office of Forestry
The Control Office for wood to prepare the war wood economy.
The Reichs Ministry for Labor
The Reich Office for procurement of employment and unemployment insurance, to make preparations for the procurement of labor in case of war.
The field offices of the GB divisions as intermediate level.
The Reich Ministry for Economy, The Reich Ministry for Food, The Reich Office for Forestry and The Reich Ministry for Labor, for the purpose of carrying out district and local tasks, have created branch offices with 7 Prussian Chief Presidents, 2 Prussian District Presidents, 1 Bavarian District President and 4 Non-Prussian Lander Governments which are at the seat of a Military District Command. With regard to the close coopera-
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tion with the military offices of the Military District Command the areas of the field offices are not to be coordinated with the areas of the offices of the general and interior administration to which they are attached, but with the Military districts. An exception is made as to the areas of the field offices Dusseldorf and Munster which together correspond to Military District VI.
To guarantee the uniform collaboration within the sphere of GB also on the intermediate level, GB has since IV2 years requested that the field offices of GB be combined at the same seat of the office into economic section for armament under the direction of a Government Director to be appointed by him in agreement with the GB departments. The Reich Minister of Interior has not met this demand yet but advocated in a drill for the Preparation of the War Administration [KRG], which at present is with the Fuehrer and Reichskanzler, the formation of general RV division comprising all mobilization preparations in the civilian sector under a director to be appointed by him.
In wartime the field offices of the GB divisions form the Gau economic offices to be formed within the offices of the general and interior administration with the following divisions : Industrial War Economy War Food Economy .
War Forestry and Wood Economy War Labor Economy.
The Reich Finance Ministry and the Reichsbank for the purpose of carrying out their tasks within their field districts make use of their following subordinated offices: The Finance Offices for the Provinces, Local Finance Offices, Main custom offices etc., and the Reichsbank Main Branches, Reichsbank offices and Reichsbank subordinate offices.
Special deputees of GB on the staff of the chief of civil administration with the Army High Commands.
In wartime the executive power in the field of operations passes over to the Army Chief Commanders who exercise their authority in the civil administration through the Chiefs of Civil Administration [CdZ] assigned to them by the Reichsminister of Interior. The GB sends an own special deputy to the staff of each CdZ who has to carry out all war economic orders issued by the Army Chief Commander to the CdZ. If there are no directions to the contrary by the Army Chief Commander, the Special Deputy of the GB on the staff of the CdZ has to take care that all orders of the GB and the divisions belonging to the jurisdiction of the GB are carried out uniformly in the field of operations. For this purpose the Gau economic offices within the
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offices of the general and interior administration are subordinated to him. The GB has selected the Special Deputies in agreement with the Reichsminister of Interior, the GB must now appoint and instruct them.
Subordinate offices of the field offices of the GB departments as agencies on a lower level.
The following offices are subordinated to the field offices of the divisions under the authority of the GB, for carrying out district and local preparations:
The Regierungs Presidents and corresponding non-Prussian authorities;
The Landrate, Chief Mayors and corresponding authorities for preparation of ration certificates and the preparation of industrial evacuation and salvaging;
The Industry Supervising Offices for examining the procurement of labor forces in the industrial KL plants;
The Chambers for Economy for general war economic preparations in the economic districts and for limitations on economic publications;
The Chambers of Industry and Commerce for securing the productive capacity.of the industrial KL plants;
The Foreign Trade Offices for securing the capacity of the industrial KL plants as to export production.
To the field offices of the Reichs Food Ministry:
The Land farmers organizations with the especially created offices for making the food situation secure, for the preparation within their districts of the war food economy.
The Kreis farmers organization for the local preparation of the War Food Economy;
To the field offices of the Reich Forestry Office:
The Land Forest Masters and Land Forestry Administrations for general district questions referring to war forest and wood economy;
The Forestry Offices for local questions of the war forest economy;
To the field offices of the Reich Labor Ministry:
The Land Labor Offices for general preparation of wartime use of labor in their districts;
The Labor Offices for securing the labor forces in the KL plants of the total war economy and other plants in need of labor outside of the Wehrmacht.
A general survey of the total organization for the preparation of the war economy is shown in the attached chart.
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. III.
THE MEASURES
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THE MEASURES 1. Industrial War Economy.
A. Central Regulation.
The preparation of industrial war economy is divided into:
(1) a central regulation of the production and consumption of industrial products.
(2) a local securing of production in the industrial KL
plants and of consumption of the civil population. Statistics of War Economy.
For the purpose of securing basic information for the central general regulation of production, and consumption, the Reichs office for Statistics has collected comprehensive war economic statistical figures of the whole German industry in 1936, just as it was done in 1933.
These statistics comprising 300 branches of industry with
180,000 industrial plants, pertains to the composition of the labor force as to sex, age and training, the consumption of raw and auxiliary material, fuels, power, the productive capacity, the domestic and foreign trade as well as the supply of material and products in the beginning and at the end of the year.
The information received from the individual plants has been collected in a factory card index and will, when photostated, be put at the disposal of the field offices of the Reich Ministry for Economy as basis for locally securing of the industrial KL factories.
The reports of the individual enterprises will also be put together for the district of each foreign field office and for the Reich classified as to branches of industry and will be used in the central and intermediate agency as basis to judge on the significance of the individual enterprises within the Reich and foreign districts.
The results of branches of industry of a coherent industry group supplementing each other are for the purpose of showing the mutual dependence with respect to various materials and products combined into industrial family trees. Equally, the flow of materials into the various branches of industry and over the various grades of processing is shown by material family trees. Economy Plans.
On the basis of these statistics collected by the Reichs Office for Statistics, economic plans are drafted in the division for war economy of the Reich Ministry for Economy in cooperation with
the control offices and industry exports, for about 200 materials, half of which have already been worked out. In these plans the
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needs of the Armed Forces and the civilian minimum needs in wartime are compared with the covering thereof by supplies and production. A deficit will be reported to the office for German raw and working materials and be considered in the execution of the Four Year Plan. In addition it will be registered as import needs in the foreign trade plans which are worked out by the war economy division of the Reichs Ministry for Economy in cooperation with the economic groups of the organization of the industrial economy. The export needs set up in these plans for the purpose of compensating with the import needs, as far as raw materials for manufacturing purposes are concerned, again find consideration in the economic plans mentioned before. For E^st Prussia special economic plans are being worked out. Preparations for carrying out the economic plans.
The economic plans serve as basis for the legal and organizational preparations. According to the unpublished War Contribution Law [RLG] of May 21, 1935, in case of war, contractual agreements are replaced by the contribution duty of the individual. Based upon this law [RLG] a decree on the creation of Reichs offices, orders the establishment of State economic offices authorities, which are set up by converting the control offices into Reich offices with increased authority (the right to earmark, seize and assign). The supervisory boards already drawing up their plans for distribution of war contracts are preparing their orders for the regulation of war contracts and fees, they are securing for themselves their indispensable personnel by collaboration with the replacement offices of the Wehrmacht and the field offices of the Reich Office for the Procurement of work and Unemployment Insurance, and they are working out, on the basis of the economic plans submitted to them, a system of management within the framework of their authority. They are preparing the orders which are necessary to carry out this economy in case of mobilization. ,
Special regulations.
For the handling of coal motor fuels and power further-going regulations have been prepared in view of the k and 1 importance of these materials.
Coal economy.
In case of mobilization, the authority to supervise the coal production and to distribute the coal will be transferred to the Reich Coal Commissar. He will also be in charge of the immediate distribution to the large consumers and armament factories. The Gau economic offices in whose "individual economy" division Gau coal offices are set up, are further charged with
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distribution of the contingents allotted to them by the Reichs Coal Commissar for the other war important and vital plants and for domestic consumption. Special local coal offices serve this purpose which will be incorporated into contemplated economic offices in the offices of the Landrate, Chief mayors and corresponding authorities. To improve the coal stock situation in the protected territory the Rhenish-Westphalian Coal Syndicate maintains a mobilization stock of 500,000 tons near Magdeburg. For the same purpose, the Reichsbahn has increased its supplies by 500,000 tons. To ease the situation of the Reichsbahn which in case of a mobilization will be heavily burdened by the deployment of and replacement for the Wehrmacht, the industrial plants with an annual consumption of more than 3000 tons have been requested to store a coal supply of 3-4 months. Motor fuel economy.
For the preparation of the fuel management, investigations have been carried out in order to find out the needs for fixed and movable motors, and in order to find out the capacity of the storage facilities an investigation regarding the tap and gasoline stations has been carried out. On the basis of the results of these investigations and the needs of the Wehrmacht and the existing possibilities to cover the demands, the Control Office for Mineral Oils as Reich Office will allot to the Gau Mineral Oil offices which are to be established in the divisions for industrial war economy of the Gau economy offices group contingents for the distribution to large consumers, such as railroads, post, shipping. In addition the Gau Mineral Oil offices will allot subcontingents to the Kreis Mineral Oil Offices, to be created in the planned economic offices of the Landrate, Chief Mayors and corresponding authorities, of which their k and 1 plants and other k and 1 important consumers can dispose by ration cards which have been prepared already. Besides now definite gasoline stations and gasoline stores have been designated to the Wehrmacht for the first equipment of the troops in case of mobilization, and which are needed only for the first days after mobilization. A report on the construction of Reich owned large gasoline storage places and intermediate gasoline storage places as well as on the storage of national fuel reserved in these for purposes of the Wehrmacht will be rendered in another place in connection with the work of the Economic Research Corporation [Wifo]. .
Power economy.
In the field of energy economy, the Law Concerning Power Economy furnished effective means to prohibit war economi-EC-258
cally undesirable construction plans and to promote construction plans necessary for the war economy. In the center of the military energy policy is at present the extension of the German compound economy by combining the individual lines into a Reich collecting line, the German Ring. The already appointed Reichs Burden Distributor and ten district burden distributors will have to decide on power supply in the case of mobilization. By instructing these burden distributors about the, needs of the R-industry and the war economy to be covered under any circumstances, care will be taken that in case of energy saving which might become necessary, in the first time the need unimportant for war be throttled or cut oif. It is practiced by ma-neuvres what measures have to be taken in case places of power generation should be eliminated.
Construction of supply rooms and readiness arrangements
supplies.
The Reiehsminister of Economy, to overcome bottlenecks in the war economical situation founded in the fall of 1934, the Economic Research Corporation m b h [Wifo]. The Wifo which at present employs 1,300 employees and workers including guards has, for the finishing of constructions and storage, invested up to now 248 million Reichsmarks.
The constructions of Wifo are as follows:
(1) Large storage facilities: total of 9 with a capacity of
150,000 tons,
(a) ready 3
(b) under construction 6
(2) Facilities for supplement: a total of 30 with a capacity of 150,000 tons,
(a) ready 7
(b) under construction 6
(c) planned 17
(3) Readiness constructions for the production of nitric acid, Oleum, carbide alcohol and alumina: a total of ten, of which are
(it) finished and taken into operation according to the provisions of the Four Year Plan 3
(b) finished 4
(c) under construction 3
In all these readiness constructions can be produced;
183.000 tons per year of nitric acid
118.000 tons per year of oleum
20.000 tons per year of carbide alcohol
50.000 tons per year of alumina.
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The supplies furnished by Wifo comprise, according to the status of December 1, 1937:
266,000 tons carburetor fuel .
94.000 tons Diesel fuel
43.000 tons of lubricating oil
40.000 tons of manganese ore
4.000 tons of ferro nickel
1.000 tons of copper 800 tons of magnesium 400 tons of antimony
75 kilograms of platinum
Evacuation and salvage.
In cooperation with the 6th division of the General Staff of the Reich War Ministry directions on the preparation and execution of the economic evacuation have been worked out. According to an emergency list for evacuation goods and an evacuation list for skilled workers, the supplies and skilled workers in the evacuation zones 'are registered, earmarked for transportation into certain salvage areas and registered with the Military District Commands by the field offices of evacuation and salvaging plans. The Military District Commands following these evacuation and salvaging plans issue their evacuation plans, the execution of which is prepared with special regard for transportation under the supervision of the District President, the Landrate and corresponding authorities with the support of special evacuation commissars. The supplies secured by evacuation will find consideration as supplementary reserves in the central economic plans.
Regulation of consumption.
The management of production is supplemented by a regulation of the consumption of the civil population. The Reich Minister of Economy in cooperation with the Reich Food Minister and the Reich Minister of Interior has worked out a decree for securing the vital needs of the German people with four executive decrees (for food, coal, soap and cleansing agents, textiles and shoes). For purposes of economy and in order to prevent covering of needs which is not uniform (hoarding) these orders introduced a system of ration cards which will be effective immediately in case of mobilization. The 80 million ration cards necessary for this purpose have already been printed and deposited with the Landrate, Chief Mayors and corresponding authorities. The further distribution of the ration cards to the individual households is prepared by these authorities to take place within 24 hours after mobilization has been ordered. The ration cards are valid
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for the first four weeks after mobilization. Subsequently a more detailed separate system of rationing will become effective for the industrial war economy and the war food economy which is being prepared at present.
B. Local Securing.
The central regulation of the production and consumption of industrial products is supplemented by a local securing of the production by the field offices of the Reich Ministry for Economy.
Distinction between R—and KL—Enterprises. '
The aforementioned resolution of the Reich Government dated 21 May 1935 confers the direction of the economic preparations for the event of war on the Plenipotentiary (GB) only insofar as these preparations are not within the jurisdiction of the Reich War Minister relative to the armament industry. The Reich War Minister has combined the war requirements of the three parts of the Wehrmacht with regard to first equipment and replacement in a programme for finished goods. According to this plan for finished goods the military agencies will place with certain suitable industrial enterprises mobilization contracts providing for the delivery of finished implements of war and war contracts providing for the delivery of finished implements of a kind customary in commerce. Industrial enterprises which obtain an order for finished implements of war will be designated by the Reich War Ministry as armament enterprises (R-enterprises). Thereby they pass under the special jurisdiction of the Reich War Ministry; at the present time there exist approximately 2800 R-enterprises. Within the scope of his jurisdiction as Plenipotentiary (GB) the Reich Minister for Economics has responsibility for maintaining the KL production and the production for export which is within the capacity of the R-enterprises not absorbed by mobilization contracts. However, he must report to the military authorities which have jurisdiction over those R-enterprises which measures are necessary to secure the aforementioned maintenance of production and the military authorities shall first ascertain that these measures do not impair the performance of the mobilization contracts and shall then include them in the mobilization calendar. Only after the inclusion in the mobilization calendar, may be taken the measures relative to the part of the R-enterprises not used for mobilization contracts.
As to all measures outside of direct production, e.g. providing with material, fuel and motor fuel, energy and manpower, the Plenipotentiary has jurisdiction also with regard to R-enterprises. Through the Reich Ministry for Economy and its field offices he
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supervises also those industrial enterprises which the military authorities * * * agencies needing manpower which are
necessary for maintaining of export and the supplying of the civilian economy and population with vital necessities and are designated by the Reich Minister for Economy as KL-enterprises. Wholesale and craftsman enterprises which are important to the war economy can also be designated as KL-enterprises. The field offices report to the Command of Military Districts all of the KL-enterprises (approximately 25,000). The Command'in turn will see to it that the KL-enterprises are covered by the Local Police Protection and the Airprotection of the District Confidence Agencies of the Reich Group Industry which are placed under the authority of the Reich Air Minister. Besides the most important KL-enterprises will be reported by the field offices to the District Military Commands in order to insure to them Active Air Protec- tion (Flaks, fighter squads).
Security of KL-enterpfises.
The field offices of the Reich Ministry for Economy appoints in each KL-enterprise a trusted person whose reliability has been investigated by the Secret State Police. In accordance with the directives of the field offices of the Reich Ministry for Economy these trusted persons shall carry out the measures which guarantee the maintenance of the production of their enterprises in event of mobilization. In particular they shall report to the competent Labor Offices for exemptions from military service and draft for civilian service all of their workers and employees who are indispensable to their enterprise. In the same manner they shall report to the field offices of the Reich Ministry for Economy for exemption from military and civilian draft requirements all of the motor trucks on which their enterprises depend. The field offices of the Reich Ministry for Economy apply with the competent Military Replacement Inspections for exemption of the trucks and secure for the KL-enterprises the trucks exempted and not required by the Wehrmacht. For those KL-enterprises as to which in the extent of mobilization there must be expected with certainty a maximum use of their capacity (e.g. mining iron industry) as a transformation of their production (e.g. chemical industry, etc.) production plans will be made by the Reich Ministry of Economy. These plans will be transmitted by the field offices to the trusted persons of these KL-enterprises. The trusted persons of these enterprises shall have all protective measures on these plans of production. The trusted persons shall list all the protective measures taken by them in a mobilization calen-
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dar. For this purpose the trusted persons have been furnished with special instructions.
2. War Food Economy.
In order to obtain an exact survey of the possibilities of supplying- Germany in the event of a mobilization, which takes into account various cases, such as a blockade or a war on two fronts, the Reich Food Ministry has caused the Research Agency for Food Economy to draw up annual food plans beginning 1 April 1934.
Preparation of the Execution of the War Food Plan
In order to execute the War Food Plan the Reich Food Minister has completed drafts of a skeleton decree relative to the organization of the War Food Economy and of several decrees relating to the public management of the various agricultural products. The provisions thereof have been drafted in such a manner that they can be adapted at any time to the- changes based on the peacetime economic measures. On this legal basis the competent Central Associations of the Reich Food Estate and the Reich agencies of the Reich Food Ministry prepare plans concerning the management of the individual kinds of victuals.
In order to carry, out the Food Economy Plan the Reich Food Estate is placed under the authority of the Reich Food Ministry in the event of mobilization. With the District Economy Offices which will function in the event of mobilization as an intermediate government agency of the general administration. There will be established a branch for War Food Economy. The external agencies of the Reich Food Ministry are the germcells from which that branch will develop. The branch will be divided into two subdivisions, one of which will deal with the regulation of the production and its control by the competent Country Peasantry while the other will handle the regulation of distribution and consumption by the competent agencies of the general administration. Similarly divisions for war food economy will be established with the planned Economic Offices of the Landrate, Chief Mayors, and of similar governmental agencies. The related agencies of the Kreis Peasantries shall be merged into those divisions for war food economy.
Storage
Owing to the serious food situation it has not been possible to store food to the extent necessary in case of mobilization. At the present time there exists only the following national reserve in case of war:
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1900 tons of oats, 2000 tons of legumes, 1500 tons of butter and considerable quantities of fruit pulp for the making of marmalade. .
Evacuating and Salvaging
Within the framework of the directives agreed upon by the Plenipotentiary (G.B.) and the Reich War Ministry relative to the preparation and execution of the evacuating and salvaging of agricultural products and of animals has also been regulated. Excepting certain deviations, that regulation follows generally the same lines as the procedure prescribed for the removal and salvaging of industrial products. The provisions salvaged by removal will constitute an additional reserve for the war food economy in the protected zone.
Rationing of Supplies for Civilian Population.
As was stated above in the section on industrial war economy, in the event of mobilization all vitally important foodstuffs will be covered by a system of rationing certificates pursuant to a Decree on the Safeguarding of the Vital Necessities of the German People and regulations thereunder. Drafts of both the decree and the appertaining regulations have been completed. It has already been stated that ration certificates have already been printed and have been distributed to the lower administration agencies and that preparations have been made to issue them to the individual households within 24 hours. ,
A special regulation made in accord with the Reich War Ministry regulates the supplying of the members of the Army, or the Police etc. who-live in common lodgings in Germany and are fed in messes. .
Supplying of Wehrmacht
Pursuant to the Principles regarding Supply agreed upon with the Reich War Ministry productive enterprises have been ascertained which have been directed to furnish the food replacement warehouses with certain quantities in the event of mobilization. The collection of oats, roughage and potatoes for the Wehrmacht has been prepared by fixing the shares of the intermediate and lower agencies of the Reich Food Estate. Similarly the supplying of the Wehrmacht in the zones of operation will be regulated. Agricultural Card Index
In order to ascertain the kind and efficiency of the agricultural establishments the Reich Office for Statistics is preparing a cardindex of altogether 1,6 million establishments. Under the supervision of the Reich Food Ministry and its field offices this cardindex is being distributed among the Kreis-Peasantries and man-
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aged by them. From year to year it will be kept up to date by means of a farm card.
Card-Index of Food Industry
Within the framework of the Inquiry into Military Economic Production of the German Industry made by the Reich Office for Statistics the establishments of the food industry have also been checked and the material has been collected in a factory cardindex. This factory card-index system is being managed by the field offices of the Reich Food Ministry, which, on the basis of that index, investigate the ever-important establishment of the food industry and declare them to be KL-establishments.
Protection of KL Establishments
KL-establishments of the food economy are protected similarly to KL-establishments of the industrial economy. Thus, in particular, the field offices of the Reich Food Ministry will notify the Commands of the Military Districts of the KL-establishments which may have to be the subject of local police action and active and passive air protection. The material needed by agricultural enterprises, has been ascertained for each district on the basis of thorough investigations by the Reich Food Estate. The field offices of the Reich Food Ministry will notify the field offices of the Reich Ministry for Economy of that material needed and the latter field offices shall see to it that these needs will be satisfied. The field offices of the Reich Labor Ministry, the State Labor Offices and the Labor Offices will cooperate in preparing the securing of the indispensable farm hands and of the skilled workers necessary for the food industry. In the same manner as it is done in the case of the industrial economy the trucks necessary for agricultural enterprises and enterprises of the food economy will be ascertained and secured. It is planned to collect all protective measures in mobilization calendars.
3. War Forests and Wood Economy Wood Economy Plan
In order to establish a Plan for Wood Economy, the Reich Forest Master has initiated a thorough investigation of the existing wood supply and the requirements of wood. On the basis of the existing material related to the peace time requirements, the civilian minimum requirements in the event of war can be estimated with a fair degree of accuracy. However, in spite of several requests made, it was not yet possible to obtain from the Reich War Ministry information on the requirements of the
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Armed Forces. For this reason the Wood Economy Plan could not yet be completed.
System of Management
Independently from this not yet completed work, the Reich Forest Master has made legal and administrative preparations to carry out the management of wood in event of War. As was done in the field of industrial economy, it has been provided to transform, in the event of mobilization, the Supervisory Office for Wood in a Reich Office with enlarged authority (power to investigate, seize and allot). To carry out regional tasks there will be established a Division for Forest and Wood Economy with the Gau Economy Offices in the intermediate branch of the general administration. This division will be composed of the field office of the Reich Forest Master, of the State Forest Office or the State Forest Administration at the seat of a command of a military district and of the competent marketing association and will be headed by a State Forest Master.
Ascertaining of KL Enterprises
On the basis of the factory card-index established by the Reich Office for Statistics, the field offices of the Reich Forest Master have ascertained the KL enterprises of the wood economy situated within their respective precincts, especially the raw-mills. Protection of the KL Enterprises
In view of their requirements of material and fuel, of indispensable labor and of absolutely essential trucks, these KL enterprises are protected in the same manner as the KL enterprises of the industrial and food economy. This is being done in cooperation with the field offices of the Reich Ministry for Economy, the State Labor Offices and the Labor Offices and with the competent agencies of the armed forces. 4
4. Foreign Trade in Times of War Plans for Import and Export
On the basis of material which will be gathered by the departments of the Plenipotentiary (GB), the Plenipotentiary (GB) will draw up plans for imports and exports which will take into consideration the probable war situation. The plans shall show which import requirements must be met during the war, what amount of exports can still be maintained and what will be the probable terms of foreign currency (Devisen) and of clearing possibilities.
Preparation of the Carrying out of the Plans for Import and Export. .
A draft of a decree has been completed, which shall become
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effective in the event of mobilization. It provides that for the direction and regulation of the foreign trade during the war there shall be appointed a Reich Commissioner for Foreign Trade who shall be placed under the authority of the Plenipotentiary. With the Reich Commissioner there will be established a Working Committee for the Foreign Trade consisting of representatives of all Ministries which have jurisdiction over foreign trade. It is incumbent upon the competent Ministries in the event of War to carry out their tasks in the field of foreign trade.
For the purpose of regulating imports and managing the foreign currency needed in the traffic with goods, the Reich agencies of the GB-Departments shall be required to cooperate in case of War. In order to direct exports, particularly in the field of industrial economy, export offices will be established with those Groups of the Economy which relate to branches of the economy which, even during a war, may engage in exporting. These export offices will take over the tasks and powers of the now existing investigating offices.
As to foreign trade and the transfer of currency, which are already at present to a large extent subject to regulation by law, regulations are being prepared relative to the carrying out and supplementing of the existing provisions. Mainly involved are: the issuing of prohibitions of imports and exports, made necessary by the war, the introduction of custom decreases or exceptions from customs, duties with respect to war essential goods, the supplementing of existing currency laws and provisions under which trade treaties and economic agreements with foreign countries become ineffective.
Ascertaining and Protection Of KL-Export-Enterprises
As mentioned already in the section on industrial war economy, the field offices ascertain all of the enterprises the exports of which amount to the value of 500,000 Reichsmark annually. Those enterprises will be designated as KL enterprises (export) and their production will be protected in accordance with the procedure applicable to KL enterprises.
In order to obtain more detailed material the Economy Groups have been directed to collect with respect to enterprises engaged in export certain data on the export turnover and the direction of the export and to combine the data in a card-index. This cardindex will be made known to the competent field offices so that they may supplement their factory card-index. The field offices shall then use these statements as a basis for the protection of production.
5. Transportation in the War Economy
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Ascertaining of Transportation Requirements
In order to ascertain the transportation requirements of the War economy, classified separately as to means of transportation and kinds of goods, the following has been done:
(1) With the aid of the Reich Office for Statistics, the traffic statistics have been evaluated and the results have been combined in Verfleck-Sungs-cards.
(2) The Groups of the Economy have furnished coherent reports on the individual kinds of goods.
Consideration of Transportation Requirements of Military Economy and Wehrmacht.
The transportation requirements of the military economy will be coordinated with the military transportation requirements of the Wehrmacht centrally by the Plenipotentiary in the War Transportation Committee [KTA], A similar coordination shall be effected in the precincts of the field offices of the GB-depart-ments. together with" the military agencies of the Regional Transportation Committees [BTA]. Deroutings, which are to be expected during war because of changes in the domestic and foreign traffic, will be taken into account.
Transport Situation in the Rhenish-Westphalian Industrial Regions
The General Staff has stated that the examination of the transport situation in the Rhenish-Westphalian industrial regions is of prime importance. Hence, a special investigation has been initiated in order to secure, in spite of the military use of the railways, the supplying of the population, particularly the supplying with food, of which no stores can be maintained in view of the present food situation, by transportation of supplies into the Rhenish-Westphalian industrial region in the event of mobilization. Corresponding investigations have been initiated to keep up the necessary business travel.
Ascertaining and Securing of Trucks of KL Enterprises
The Plenipotentiary, in cooperation with the Reich War Minister, has prepared directives for the securing of the requirements of the KL enterprises relative to motor trucks. As mentioned above, the trucks of the KL enterprises are ascertained by the field offices of the Reich Ministry for Economy, of the Reich Food Ministry and of the Reich Forest Office. They request the District Military Commands to release these vehicles. With a few exceptions to the contrary, the Commands of the Military Districts have not granted the requests to a sufficient extent, particularly as far as trucks with a net loading capacity
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exceeding- one ton are concerned. The Plenipotentiary has taken up negotiations with the Reich War Ministry regarding a change of the distribution of trucks.
6. Conscription of Manpower in war Legal Basis
The basis for the wartime conscription of manpower is the hitherto unpublished law on the German People's Service of 21 May 1935. It established conscription of the people for all nationals of the 15th until the completion of the 65th year of life, insofar as they are not called to the colors or expressly exempted from the people's service. It is incumbent upon the Reich Minister of Labor to direct the people's service. For the carrying out of his directions he may use the agencies of the Reich Office for the Procurement of Work and Unemployment Insurance. Preparation of Labor Conscription
In order to prepare the Wartime conscription of labor, the Reich Minister of Labor and the Reich Office for the Procurement of Work and Unemployment Insurance, pursuant to directives issued by the Plenipotentiary, ascertain the available amount of manpower, the wartime requirements of manpower and measures for the covering of the Wartime needs. Ascertaining the Available Amount of Manpower
Pursuant to the Law on the Introduction of Labor Passports the Labor Offices maintain in card-registries relative to 22 millions of workers and employees, i.e. more than 2/3i of the working population. The card-registries, which are kept up to date on the basis of information received from the enterprises, contain exact data as to the professional training, the occupation of the individual up to the present time and the existing skills. This material is supplemented by a card-registry relative to 16 millions of independent craftsmen who in war time constitute a valuable reserve of skilled labor. Similar investigations have been initiated as to leaders of enterprises and managers and as to farmers and members of their families who help on the farms. Hence, the entire population, classified according to professions, is surveyed by the Labor Offices, excepting only officials and professional men.
The card-registries of the Labor Offices are checked against the Military Conscription Lists of the Military Regional Commands and the holders of Military passports who in the event of War are called to the colors are especially marked. Furthermore, the amount of manpower employed in peacetime in R-enterprises, KL enterprises and War-essential government agencies is espe-
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daily indicated. Hence, in the district of each Labor Office and for each profession there is apparent the following:
(1) the number of existing workers
(2) the number of holders of military passports,
(3) the number of men already employed in the war economy or other war-important jobs.
The difference shown constitutes the number of workers employed in enterprises of lesser importance and of other reserves, which eventually can be used elsewhere.
Ascertaining of War Requirements of Manpower
Under the supervision of the field offices of the competent GB-departments, the KL-enterprises of the industrial economy, of the food economy and agriculture and of the forest and wood economy compute their probable labor requirements in the event of war. Insofar as the mobilization-production of a KL enterprise is not yet known exactly, its peacetime production is taken as a basis for the time being. The manpower requirement in the event of mobilization thus computed is compared with the peacetime amount of manpower used in the enterprise, from which must first be deducted, however, the number of the holders of military passports. The Labor Office is notified of the result of the computation. .
Covering of War Time Requirements '
In principle, the manpower employed in peace time in KL enterprises and KL agenciesi shall remain intact. The need for replacing the holders of military passports and for the increased production in the event of mobilization will be covered by using reserve manpower (manpower theretofore used in nonessential enterprises, women etc.). As reserve manpower will be used also the skilled workers who, within the framework of the economic evacuation, have been brought back from the evacuated zones—a process in which the Labor Offices play a part and who are used in salvage zones with a great need for skilled labor. For workers who are irreplaceable for the enterprise (defense workers) the KL enterprises file with the Labor Offices applications for exceptions from the military service (Indispensability Applications). The lists of defense workers made by the Reich Labor Ministry serve as directives for the selection of those forces. The Labor Offices examine the applications and transmit them to the Military Re-. placement Agencies. The decision is made by the Commander of the Military Region and, upon appeal, by the Military Replacement Inspector.
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The procedure, established for the scope of the Office of the Plenipotentiary has been accepted—with insignificant deviations —by the Reich War Minister for the R-enterprises and the civilian personnel requirements of the Armed Forces, by the Deputy of the Fuehrer for the mobilization of the personnel of the German National Socialist Workers Party (NSDAP), its formations and affiliated associations, the Reich Minister for Propaganda and Enlightenment for the agencies and enterprises within his jurisdiction, the Reich Traffic Minister for local traffic and inland shipping and the Reich Minister of Finance for the monopoly enterprises. Similar negotiations have been initiated with the Reich Post Department and the Reich Railway.
The agencies of the air protection, of reinforced police protection and of road construction have been directed by the competent departments to notify the Labor Offices of their requirements as to replacements of, and increases in personnel—insofar as the requirements relate to persons who hitherto were within the scope of the activities of the Labor Offices.
Negotiations are being conducted with the other agencies needing manpower (Department of the Interior, Reinforced Border Supervision Service). Their purpose is to concentrate in the civilian sector all preparations for the wartime use of manpower in one place, namely at the Labor Office, which closely collaborates with the Military Regional Command that has jurisdiction over the military sector.
Abolition of Right to Choose Domicile in the Event of War.
The planned preparation of the use of manpower in the event of war necessitates measures against freedom of workers to choose their domicile. Therefore, a completed draft of a Law on the Use of Labor and the Conditions of Labor in Times of War makes every change of the working place and every hiring of workers dependent upon the consent of the Labor Office. The law also provides that, in the event of war, wages and salaries may not be increased; thereby it shall be prevented that higher wages and salaries cause changes of the place of labor. At the same time it is intended to stabilize the price level by freezing wages and salaries.
Relaxation of Provisions on the Working Hours and of the Prohibitions to Employ Certain Persons
In view of the labor shortage which must be expected with certainty in the event of war, a completed draft of a decree relaxes, in the event of war, the existing limitations on working hours and renders ineffective the prohibition to employ women
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and juveniles insofar as this can be justified in contemplating the nation in its entirety. .
Local Protection
A decree on the Housing of Individuals and Families regulates the transfer of manpower which is inevitable in war in connection with the planned direction of labor. For the same reason there have been enlarged for the case of war, the provisions relative to the granting of travel expenses, work equipment and family allowances for double households, which shall facilitate the employment of workers coming from other places.
7. War Finance and Money Economy War Finance Requirements
The Reich Finance Minister estimates that the financial war requirements for the first year of war will amount to approximately 50 billions of Reichsmark.
Covering of War Finance Requirements The covering of the War finance requirements must be effected by taxation and loans, as far as the war economy cannot be limited to self-financing.
Self-Financing of War Economy
Enterprises which have to perform mobilization-contracts and contracts for delivery of war goods shall cover their financial needs primarily out of their own resources or by way of regular private loans. Wherever this is not possible the leaders of the enterprises will be afforded the possibility of obtaining credits for operating and investing purposes by the issuance of Army Bonds (Securities payable to the bearer which may be lombarded). Through these securitites the Reich assumes the role of a surety. War Taxes
Insofar as the war economy cannot be requested to rely on self-financing, it is attempted to cover the financial war needs . primarily by means of war taxes. A completed draft of a law provides for the following war taxes :
Additions of 50 percent to the Income and Wage Tax,
Additions of 62 percent to the Corporation Tax
Additions of 8 percent to the Increased Wage Income,
Addition of 30 to 100 percent to other Increased Income Additions to 200 percent to the Property Tax.
The entire revenue to be derived from these war taxes, it is estimated, will amount to approximately 5 billions annually.
War Loans
Since the planned war taxes will cover only a fraction of the
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financial war requirements, it is provided that they will be supplemented by war loans, the issue terms and price of issue of which even in case of war will depend on the economic and political situation existing at the time. Hence it is probable that large demands will be made upon the Reichsbank for the discontinuance of Treasury Notes. Preparations have been made to make possible the enlargement of the credit volume by amending the Banking Law.
Restrictions on Traffic with Money
In order to secure the credit economy and to prevent withdrawals caused by fear in one of war, regulations have been prepared providing for restrictions on withdrawals and for bank holidays. .
Securing of War-Important Money Requirements
Since most war expenses are made without the use of cash the increase in the quantity of cash is only a fraction of the entire financial war requirements. This increased need for money tokens amounts for the first three war months according to an investigation relating to 1937/1938 to the following:
Need of Wehrmacht (reported) approx 3 billions RM Need of Civilian Administration (reported)
approx 0.4 Billions RM
Need of Economy (estimated) approx 1.5 Billions RM So called panic Needs (estimate) approx 0.7 Billions RM
Total approx. 5.6 Billions RM
To satisfy those needs there is at our disposal, in addition to the usual amount of current legal tender which at present exceeds 7 Billions of Reichsmark the reserve of money tokens in the amount of 13.5 billions of Reichsmark which is in the custody of the main office of the Reichsbank and of the Reichsbank Offices at the places where it is needed.
IV.
Final Remarks
Since its establishment in 1935, the agency of the Plenipotentiary for the war Economy, j ust as the Reich Defense Council as a super-ministerial office directing the preparations for mobilization, has been treated as a secret. Since all of the great powers have created similar forms of organization during the last years, secrecy is at present no longer of the same importance as in 1935. It should be considered whether, on some suitable political occasion, the Fuehrer should announce the existence of. those forms
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of organization, which the foreign government naturally assume to exist after, in addition to the Plenipotentiary, the Reich War Minister and the Reich Foreign Minister have furnished opinions relative to the effects of such an action.
(signed) WOHLTHAT