The emigrant capital transfer problem, the subject of international discussions this week, is meanwhile being solved internally by the Reich in characteristic fashion. Under the ingenious and recently improved Nazi system of restrictive laws, special taxes, enforced loans and capital levies, the Jew leaving Germany today is stripped of anywhere from 96.5 percent to more than 99 percent of his fortune.
True to type, this financial wringer squeezes hardest when the feeding is bulkiest. The Jew with a modest fortune of 50,000 marks ($20,000 at the official rate) may succeed in bringing out with him as much as $700, or about 3 1/2 percent. But the Jew who is caught in the ringer with 500,000 marks ($200,000) is fortunate if he emerges with as much as one-fifth of one percent, plus an array of bonds representing a 20-year interest in some tottering Austria or Sudeten enterprise which has not been able to borrow money from a Reich bank.
The bonds are a new experiment in Nazi confiscation procedure. The Reich Gold Discount Bank, alone authorized to buy up emigrant “sperrmarks,” is now refusing to purchase large block except upon special conditions. These conditions are usually investment by the Jews of anywhere up to 50 percent of his fortune in some recently “Aryanized” enterprise which is badly in need of funds and is considered too great a risk for ordinary credits.
There is no market for these bonds outside. In the opinion of experts, the 3 or 4 percent interest they carry will seldom or never be paid, and the principal — even if it does not disappear with the collapse of the enterprise – will certainly never be sent out of the country so long as the Nazis remain in power.
The obligations which must be met by the emigrating Jew are (1) the 20 percent fine levied upon his entire fortune as punishment for the assassination of the German legation secretary in Paris; (2) the 25 percent Reich flight tax, payable by all persons with fortunes of 50,000 marks or more; (3) the 100 percent tax on all personal belongings purchased after 1933; and (4) sale of his remaining marks to the Gold Discount Bank at the prevailing rage of 6 1/2 percent–provided that the bank is willing to purchase.
To understand the emigrant’s deal with the Gold Discount Bank, it is necessary to recall that a Jew leaving the country can take only ten marks with him in cash, plus anything up to fifty marks in addition providing he can show an “emergency certificate” granted by the police. The rest of his fortune, the moment he steps beyond the borders of the Reich, automatically become “sperr” or blocked marks, which are irremovable from Germany.
The Jew, now an immigrant in England, the United States or elsewhere, can himself not profit by his blocked mark account. But he can, if he still retains property in Germany, pay taxes with it. What is more important, he can pay limited sums out of it to relatives left behind who may be in need of support. Beyond these, the uses of the blocked mark account is negligible.
Under these circumstances, most Jews attempt to get rid of this account, particularly if they have no German relatives to support and if they have no resources outside the Reich. The Gold Discount Bank is their only legal customer. The buying rate now is 6 1/2 percent. It has been as high as 50 percent and as low as 3 1/2. Unless some radical change takes place in Nazi policy, the rate is more likely to go down than up.
What does the Gold Discount Bank do with its cheaply purchased marks? One of two course is open to it. It can use the marks to extend credit to the manifold types of industry important to the Goering four-year plan for making Germany militarily impregnable and industrially independent. Or it can, on the same day that it has purchased the blocked marks at 6 1/2 percent, sell them in Amsterdam or some other foreign market at the “open market” rate where non-Jews are privileged to buy and sell. The “open market” rate today is a little more than 13 percent. In this fashion, the Gold Discount Bank not only makes a 100 percent profit on a simple turnover, but brings much needed foreign exchange into the country.
Help ensure Jewish news remains accessible to all. Your donation to the Jewish Telegraphic Agency powers the trusted journalism that has connected Jewish communities worldwide for more than 100 years. With your help, JTA can continue to deliver vital news and insights. Donate today.
The Archive of the Jewish Telegraphic Agency includes articles published from 1923 to 2008. Archive stories reflect the journalistic standards and practices of the time they were published.
