IN 1938 GERMAN BUREAUCRATS began setting a complex and somewhat improvised—yet effective—machinery into motion. In a series of several dozen operations, they seized the assets the Jews had been forced to leave behind when they emigrated, placed them “in trust” for the German state, and eventually expropriated them. The loot was divided every which way. Although a substantial portion flowed into the Reich reserves for the benefit of the public at large, individuals eager to grab their share did not miss out. All across the board—from bigwigs and bourgeois to minions and manual laborers—there were profits to be had.
From London, Fromm gave instructions in 1939 to Günther Loebinger, an attorney and tax consultant in Berlin, to look after his remaining assets in Germany. Once the war began, Loebinger reported Fromm’s various asset values to the Reich commissioner for the administration of enemy assets. Twelve dossiers were compiled to document every detail of Fromm’s possessions. Copies of such important papers were always submitted to the Reich Finance Ministry and directed to the attention of a senior civil servant named Ludwig Bänfer, thus laying the bureaucratic foundation for the expropriation to follow.59
Although Fromm had lost his German citizenship and was considered stateless in Great Britain, back home in Germany he was listed as an enemy alien, that is, as a Briton, once the British declared war on September 3, 1939. Compared to the legal status of a German Jew, this proved to be quite advantageous at first. The property he had left behind in the Reich was now subject to enemy asset administration, according to the standard principles of wartime international law. In the first year of the war, Loebinger continued to represent Fromm’s interests using his power of attorney, but two resolutions by the Court of Appeal in Berlin, in November 1940 and in January 1941, resulted in the appointment of Werner Ranz, a lawyer and notary, as trustee; subsequently the attorney Karl Kühne assumed this function.
Günther Loebinger was born in 1899 in Schlesiengrube, outside of Beuthen (now Bytom in Poland), in Upper Silesia. Before he studied law in Breslau, he served as a volunteer in the German Army. He seems to have been an exceptionally judicious man, a real stickler for the rules. After 1939 he was forced to take Israel as his middle name, and because the job title “attorney” was now reserved for Aryans, his letterhead had to read: “Legal Consultant / Permitted to Advise and Represent Only Jews/ J.[ewish] ID: Berlin A 429165.” His office was located in the Wilmersdorf district of Berlin, at Brandenburgische Strasse 38.
The Aryan business partners’ behavior toward a man thus stigmatized was mixed. Some—including attorneys Ranz and Kühne—referred to him respectfully and without any discriminatory add-ons in their official correspondence as “Dr. Loebinger,” acknowledging his legal degree. Others—mainly Julius Fromm’s debtors—opted for the disdainful “Legal Consultant Israel Loebinger.”
Owing to his service in World War I, Loebinger was not brought to the extermination camps when he was deported on July 1, 1943, but to Theresienstadt, on a transport for the elderly—the ninety-fourth Alterstransport from Berlin. Part of his furniture went to Albert Merten, a tax official from Teltow who had been bombed out shortly before that.60 On October 28, 1944, Loebinger—together with 2,038 other prisoners—was transported from Theresienstadt to Auschwitz. Of them, 1,689 were sent straight to the gas chambers from the arrival ramp, among them the forty-six-year-old attorney Günther Loebinger.
On November 13, 1942, a group of undersecretaries of state decreed that expelled German Jews, who, like Julius Fromm, had actually or purportedly acquired citizenships in other countries were no longer to be treated as enemy aliens, but instead would be renaturalized as German citizens. The aim of this seemingly paradoxical measure was to subject emigrants to Reich laws, thus enabling the government to expropriate Jewish property still in Germany.61
For this reason, the Gestapo in Berlin now requested that the head of the security police and intelligence service conduct an “assessment according to [paragraph] 8 of the Eleventh Ordinance of the Reich Citizenship Law” in the matter of Fromm’s property. The sole purpose of this ordinance, which was issued on November 25, 1941, was to take over the property of Jews holding German citizenship the instant they were deported. Paragraph 8 read: “(1) The head of the security police and intelligence service will determine whether the prerequisites for asset forfeiture have been met. (2) The administration and valuation of the assets is incumbent upon the Chief Finance Authority in Berlin.” The latter had already set up the Asset Valuation Office in Berlin-Alt-Moabit for this express purpose. The Chief Finance Authority soon merged with the Chief Finance Authority of Brandenburg to gain the complement of civil servants required to carry out this massive theft from the German Jews.
Earlier, the Gestapo had called upon the Chief Finance Authority to secure Fromm’s remaining assets from the Reich commissioner for the administration of enemy assets, but to hold off on their sale until a formal notice had been issued. The closing sentence of the Gestapo official Heinrich’s letter (“I have closed my files”) suggests that he knew exactly how the notice would read. The official notice of asset forfeiture followed on October 13, 1942. It was issued by Section IV B 4 of the Reich Security Main Office, headed by Adolf Eichmann, and signed by a man named Kube. Fromm’s assets had been transferred from trustee administration into Reich property exactly one month before the undersecretaries of state got around to weighing in on this matter at their conference on November 13.
The Chief Finance Authority was delighted to announce that the involvement of trustees Ranz and Kühne was now a thing of the past. Kühne begged to differ. On January 13, 1943, he stated matter-of-factly: “The administration of enemy assets will not be terminated until a conclusion is pronounced by a ruling of the Court of Appeal.” He refused to hand over the assets or settle his accounts until this ruling was made. Two days later, the pertinent application was filed by the Reich commissioner for the administration of enemy assets.
On March 9, 1943, Kühne was relieved of his duties by the Court of Appeal. This step by the judges of the Fifteenth Civil Court—Günther, Andrée, and Schroeter—put the finishing legal touches on Julius Fromm’s expropriation. They declared that the entire fortune in Germany that had belonged to the London businessman Julius Israel Fromm was now “forfeited to the Reich.” This fortune comprised a wide variety of assets.
On April 17, 1940, the Dresdner Bank had reported to the central tax office in Berlin that its client, Julius Fromm, had a credit balance of 294,267 Reichsmarks. There were also accounts at the Commerzbank and Privat-Bank with a balance of 21,134 Reichsmarks, as well as a balance of 12,814.97 Reichsmarks at the Deutsche Bank (as of December 31, 1940). An additional account at the Reichs-Kredit-Gesellschaft contained 14,917 Reichsmarks.
The Berlin tax office in Moabit-West issued a warrant of distress in the amount of 110,614.82 Reichsmarks “as a precautionary measure” for a portion of the account at the Dresdner Bank on June 8, 1940, as a first step in gaining control over the full sum of the assets. With the accrued interest, Fromm’s bank balance had risen to 305,266 Reichsmarks by December 31, 1940, but a year later it was down to 112,639.65 Reichsmarks.
The Reich Finance Ministry on Wilhelmplatz
So what happened to the non-impounded shortfall of about 200,000 Reichsmarks? In 1941 the Finance Ministry used this money for the German war chest and turned it into Reich treasury notes bearing 3.5 percent interest.
By 1941 a substantial portion of Julius Fromm’s savings had been transformed into a war loan, and his assets were being handled by the Reich commissioner for the administration of enemy assets. Historians still tend to accept uncritically the view that this office generally “took prudent care” of the foreign property belonging to Jews, but this notion is patently false.62 Even a cursory glance at the files reveals that these civil servants, who were allegedly so eager to stick to the letter of the law, made a point of stamping “Jew” on selected asset reports.
After the Court of Appeal had released Fromm’s assets for transfer to the state in early 1943, the Chief Finance Authority submitted a printed form to the safe deposit section of the Dresdner Bank on June 7, 1943, ordering it to send “German Reich treasury notes V. 41 III 16J/D yielding 3½% interest in the amount of 195,500 Reichsmarks belonging to the Jew Julius Israel Fromm” to “the Deutsche Reichsbank, securities division.” The Reichsbank was given a copy. But the key document was a printed form prepared especially for this sort of transfer: “To Patzer’s Division of the Reich Finance Ministry.”
Max Patzer was responsible for securities collected from Jews for the benefit of the Reich. He eagerly sought out ways to delete debt certificates from the German Reich debt register by using the mass expropriations from Jews to alter the national budget, creating new borrowings in their place without increasing the overall debt. The officials entrusted with this task were to leave no traces of these maneuvers. They were expected to obliterate each item “without recording the name of the individual Jew who had given the securities in payment.”63 The smoke screen did not work perfectly, however. In 1963 a document from the Reichsbank surfaced in the Berlin restitution office with details showing that Reich treasury notes issued to the name of Julius Fromm (including accrued interest) had been “realized on September 11, 1944, in the amount of 202,268.20 Reichsmarks” and were therefore no longer listed as war debts of the German Reich.
On a questionnaire about its client Fromm, the Berlin private bank Reichs-Kredit-Gesellschaft A.G. reported to the local central finance office on May 15, 1940, under the heading “Interest-bearing and non-interest-bearing receivables of every description”: “It[em] 1 package (sealed) with the address: Israel Julius Fromm, Hotel Esplanade, 2 Warrington Crescent, London W 9, sealed and appraised by the sworn assessor.” About a year later, the bank noted somewhat cryptically: “Safe deposit box settled. Holdings as of December 31, 1940, no longer available.”
The bank had indeed delivered the mysterious package, in accordance with a decree by the Reich Economics Ministry dated July 8, 1940, to the Municipal Pawnshop, Dept. III, Central Office, Berlin, Danziger Strasse 64. There the unknown contents were treated like an unredeemed pawn item—they were sold. The Reichs-Kredit-Gesellschaft had requested that the equivalent value of the package be remitted to the emigrant account it held in Fromm’s name. Although the law required this transaction, it did not take place, and the trail of the sealed package was lost. A tax office inspection stamp dated January 1944, bearing the text “2nd registration not applicable” on the 1940 registration form documents the fact that the money was pocketed by the German Reich.64
As the restitution proceedings later established, the package contained gold coins of various origins worth at least twenty thousand gold marks. It was also filled with Selma Fromm’s jewelry, which included a pair of platinum earrings with two white diamonds; a pearl necklace with diamond clasp; a platinum necklace “made up of alternating diamonds and emeralds,” a total of thirty gemstones, also with a diamond clasp; “a gold bracelet that was set with about ten rubies and ten diamonds;” and matching brooches, rings, and pendant earrings. The safe deposit box also contained gold wristwatches, cigarette cases in platinum or gold, a large gold men’s signet ring, and other high-quality accessories.
After the war, the restitution office offered to pay 350 German marks for the lot. However, the District Court of Berlin set the value of the package at 202,320 German marks.65
“Client also has a steel box,” the Deutsche Bank reported to the Berlin central tax office at Jüdenstrasse 59 on January 30, 1941, nearly a year after the safe deposit box had been turned over. No response. Displaying its own peculiar brand of dogged allegiance to the regime, the bank tried for a second time to notify the Chief Finance Authority of Berlin-Brandenburg on March 30, 1942: “The client also has a steel box.” Just under a year later, the authorities instructed Eulert, the valuation officer, to remove the contents.
Because the keys for the box could not be located, the Deutsche Bank made arrangements for the Bode-Panzer Safe Factory, Inc., a locksmith company in Berlin, to “force open the box on Thursday, February 4, 1943, at 10 a.m.” The costs of breaking and entering Fromm’s steel box, and for the “repair of the box, making new keys, etc.,” came to forty Reichsmarks. The Deutsche Bank simply withdrew this sum of money from the account of its longstanding customer.
Eulert made the necessary arrangements for opening the box. Recognizing that this procedure might invite corruption, he brought his colleague Otto Gottschalk along as a witness. The branch manager Wilhelm Beutjer and the bank official Wilhelm Neumann appeared on behalf of the Deutsche Bank. Beutjer and Neumann prepared a report detailing the opening of the box, which included the following text:
of the Fromms Act
in Köpenick, ca. 1935
The Jew Julius Israel Fromm, who has emigrated to England, and who last resided in Berlin-Nikolassee, at Rolandstr. 4, rented steel box no. 57 at the N3 branch office of the Deutsche Bank in Berlin-Köpenick, according to a contract dated June 30, 1931. The assets of this Jew have been forfeited to the Reich in accordance with the Eleventh Ordinance of the Reich Citizenship Law of November 25, 1941. On orders from the Chief Finance Authority of Berlin-Brandenburg, the steel box of Julius Israel Fromm is to be forced open. The keys to the box could not be produced. The following witnesses in the N3 branch office are present …
This is how legally regulated plundering was carried out in the vaults of a German bank. The betrayal of a client and the breach of trust it entailed meant nothing to the bankers who were active parties to it. Eulert and the three witnesses affixed their signatures in perfect penmanship under the minutes of the meeting. The final paragraph closed with this sober comment: “After steel box no. 57 was opened by an employee of Bode-Panzer, Inc., in the presence of the three witnesses, the strongbox was taken out and jointly opened by the three witnesses.” Beutjer, Neumann, and Gottschalk bent expectantly and patriotically over the strongbox. A handwritten note by witness Gottschalk included at the end of the official record stated what they discovered in this box: “nothing.”
A few days later, Karl Kühne, the notary who was still the official enemy asset administrator at the time, was explaining the legal situation. As always, he skipped right past the “Heil Hitler” greeting and got straight to the point: “In any case, the steel box was opened without anyone consulting me.” Herr Assessor Kühn of the Chief Finance Authority office informed him that “all this happened inadvertently” and he should contact the person responsible, an attorney named Gärtner in the Asset Valuation Office who was performing wartime public service duty. A written complaint was addressed to Gärtner, who scribbled a nasty “Why?” on the letter and left it unanswered.
Like every successful businessman, Julius Fromm had debtors. His outstanding accounts were also to be deposited to an account containing “assets forfeited to the Reich,” administered by the Deutsche Reichsbank and listed as account number 1/1111. As a rule, the debtors were former business partners of Fromms Act whom the boss had helped out of financial jams with his own money, especially during the world economic crisis that began in 1929. He accepted real estate property as collateral for these debts, and the debts were duly registered in a land registry.
These transactions had to be reported to the Enemy Assets Administration in 1940. The reaction of the executives at the Daubitz Rubber Company in Berlin-Rudow was typical of borrowers. Only after an official inquiry did they acknowledge having received from Julius Fromm, who was “reportedly in London,” a loan in the amount of thirty thousand Reichsmarks—with no set maturity date.
Fromm’s former business partners falsely claimed that they had been given the money without the expectation of paying it back as long as they themselves refrained from manufacturing condoms. Eventually they had to repay to the German Reich in full the loan that Fromm had extended to them against supply contracts.
The case of Otto Schultz, a pharmacist, affords unique insights into this matter. He ran a wholesale business at Chausseestrasse 87/88 in Berlin-Wedding, specializing in chemical photography equipment and Fromms Act products. Back in 1931, Schultz had borrowed ten thousand Reichsmarks from Fromm at an interest rate of 4 percent and used his vacation property in Zingst on the Baltic Sea as collateral. Three years later, Fromm waived any further interest payments.
When Schultz had to make a declaration to the Chief Finance Authority on April 12, 1940, he claimed that a large part of the debt had already been paid off. Some time later he demanded that at least part of the mortgage payable to Fromm be cleared. The debtor was hoping that by now, Fromm’s official status had shifted to “evacuated Jew Julius Israel Fromm.” But the Chief Finance Authority insisted on seeing proof of the alleged repayments. Schultz responded with a letter containing “explanations in lieu of sworn statements.” He contended that in September and October 1938, Fromm had released him from repaying seven thousand Reichsmarks, but shortly thereafter “left for parts unknown,” and as a result there was no written agreement.
The Chief Finance Authority insisted that the pertinent documents be produced, at which point Schultz suddenly recalled that “the Jew Fromm” was in London. He had corresponded with him several times regarding this matter. On August 29, 1939, everything had been settled, but then—regrettably!—war broke out two days later. In late 1940, the management of the Reich postal service in Stettin expressed interest in the lovely Baltic Sea property on the Darss peninsula and wanted to use the building as a vacation center for its workers. Schultz was inclined to sell it, but in order to do so, he had to put the issue of the “Jewish mortgage” to rest once and for all on an official level. To prove that he had been released from this debt, he produced a friend named Erich Wallenhauer, who lived in Berlin-Steglitz. Wallenhauer was prepared to testify under oath that he was quoting from memory an allegedly “misplaced letter” sent by Fromm that confirmed Schultz’s version.
Bookkeepers at Fromms Act in Köpenick, ca. 1935
According to an internal memorandum in early 1943, the head of the Asset Valuation Office was inclined to let the matter rest and accept a payment of 3,500 Reichsmarks. However, someone in the hierarchy decided to consult Schultz’s local tax office and described the case to his colleague. The answer came by return mail: “Over the years, Schultz has declared impossible profits or losses, although his sales were consistently good. He has regularly submitted requests for deferral or exemption from payment. His bookkeeping does not add up… In matters of taxation, I must deem him unreliable.”
Schultz deposited 3,500 Reichsmarks into the account of the Chief Finance Authority at the Deutsche Reichsbank and again asked that the mortgage be canceled. However, the Chief Finance Authority was unyielding, demanding categorically on March 5, and then again on April 1, 1943, that the entire debt be paid—with interest. Schultz reacted on June 19 by applying for a deferral, since he was anxious to “produce new evidence.” At this point he came up with a new addition to his string of lies, claiming that Fromm had not waived the debt of seven thousand Reichsmarks in 1939—as he had already testified twice under oath—but only of five thousand. And sure enough, nine days later the determined debtor located a “witness,” an attorney and notary named Ernst Ziehe, who confirmed “as requested” and “with a Heil Hitler salutation” that he had in his possession a letter to this effect from creditor Fromm, dated August 16, 1939. He claimed to recall the matter quite well. The Chief Finance Authority was no longer interested, and on September 2 filed a complaint at the district court in Berlin. On September 17, Schultz paid “the Jewish mortgage” to the German Reich, and on October 6, 1943, the court cleared the mortgage in the land registry.
The administrators at the Asset Valuation Office had known the true situation for quite some time, because in February 1943 they had contacted the management of the Fromms company, where a copy of the letter that Julius Fromm had written to his old business friend from London (not in August, but in April 1939) was located right away. Fromm’s tone was polite and accommodating, and suggested that Schultz pay him six thousand Reichsmarks in two installments, and Fromm would be happy to waive the rest. But Otto Schultz had ignored the offer. “No cash payment can have taken place,” Fromms Act stated, since the expatriate “had emigrated in late 1938.”
Julius Fromm dealt with his other debtors similarly, following the principle of “live and let live.” But Otto Schultz, who had been working with Fromms Act since 1914, had the audacity to claim: “Unhappily, this Jew debt has been disastrous for me.” In actual fact, he had used the money interest-free for nearly ten years.