A Small Nation in the Turmoil of the Second World War

Based on intensive research in the archives of six countries, this monograph presents an in-depth analysis of Belgium’s monetary and financial history during the Second World War. Exploring Belgium’s financial and business links with Germany, France, The Netherlands, Great Britain, the United States, and the Grand Duchy of Luxembourg, the study focuses on the roles played in this complex wartime network by the Central Bank and private bankers in Brussels, by the Belgian government in exile in London, and by the Belgian minister plenipotentiary in New York. Among the many subjects arising in the course of the analysis are: German attempts to plunder Belgium and Belgian resistance strategies; the peripeteia of the Belgian gold reserve, given in custody to the central banks of France and Great Britain; the role of the Belgian Congo; Belgium’s participation in the discussions leading up to the Bretton Woods conference; and the negotiations for creating a Customs Union, the so-called Benelux, blueprint for the 1958 Treaty of Rome. The final part of the book analyzes the famous monetary reform devised by Belgian Minister of Finance Camille Gutt at the liberation of the country in September 1944. A Small Nation in the Turmoil of the Second World War is a magisterial contribution to European history, Belgian history, and the history of the Second World War. Ebook available in Open Access.

Contents

Preface 

Chapter 1
Prelude to a new world conflict 
The policy of neutrality under discussion 
The problem of governing under occupation 
Getting the gold stock to safety 

Chapter 2
The Blitzkrieg and the Banque nationale de Belgique 
The German invasion 
Rising war panic 
Ostend, a confused episode 
The peregrination through France 

Chapter 3
France and the monetary crisis 
The capitulation and its monetary consequences 
The search for scapegoats 
Emotion and frustration among the Belgian refugees 
The Bank under tutelage 

Chapter 4
A rudderless Belgian government 
The evacuation of Belgian gold from France 
The dramatic discussion of 18 June 1940 at Bordeaux 
A Belgian government in its death throes 
The Bank’s return to Brussels 

Chapter 5
In the aftermath of Belgium’s war drama in France 
Ingenbleek’s ‘finest hour’ 
Theunis’s despair 82
Final efforts to evacuate the gold 
The cost of the peregrination in France 

Chapter 6
The installation of the German administration 
Dislocation and the ‘new order’ 
‘Le temps des notables’ 
The bankers’ initiative for a bank of issue 

Chapter 7
The Establishment of the Banque d’Emission 
The decisive negotiations 
The Bank and the Banque d’Emission 
The principal actors of the two banks 

Chapter 8
The politics of accommodation in daily reality 
The distribution of responsibilities 
The challenge to legal competence 
The economic, social and political context in 1940 and 1941 
Money circulation 
The costs of occupation and their financing 

Chapter 9
The policy of accommodation put to the test 
The commandeering of gold and foreign currency 
The fraudulent clearing system 
The first crisis of the clearing system 
Janssen and the German occupier 

Chapter 10
The looting of gold 
The prelude 
Janssen misled 
The Wiesbaden Convention (29 October 1940) 
The supplementary protocol of 11 December 1940 
The aftermath of the repatriation 
The restoration of Luxembourg’s gold 

Chapter 11
In the shadow of Janssen’s death 
The problem of the succession 
A new administration 
The first great disillusions 
Occupation and economy (May 1940-May 1942) 

Chapter 12
The gold cover and the clearing system
under discussion 
The dilemma concerning cover for the note issue 
Towards a confrontation with the Ministry of Finance 
The clearing system in discredit 
The motion of 24 September 1941 
The motion of 7 January 1942 
The mission to Berlin (24-28 March 1942) 

Chapter 13
The installation of the Banque Nationale de Belgique
in London 
The establishment of a Belgian government in London 
The financing of the Belgian government in London 
The Bank in London and its protagonists 
Baudewyn’s difficulties at his installation in London 

Chapter 14
The Banque Nationale de Belgique in London in the
maelstrom of war 
The loan of gold to Great Britain 
The decrees of 27 November 1941 
The reactions in Belgium 
Goffin’s appointment and the outside world 

Chapter 15
The proceedings against the Banque de France
in New York 
The cause 
The French attempts to achieve an amicable solution 
The problem of the Luxembourg gold 
The legal proceedings: worth the candle? 

Chapter 16
The payment orders ‘Laut besonderer Mitteilung’ 
Incorporation into the German war economy 
Towards the agreement of 5 May 1942 
The reappearance of the Reichskreditkassenscheine 
Cracco’s memorandum and its consequences 

Chapter 17
The creation of a united front 
The resolutions of 16 October 1942 
The dramatic interview with Reeder 
Reeder’s order for immediate payment 

Chapter 18
The rupture of the united front 
Preparations for the negotiations of 18 November 1942 
The negotiations of 18 November 1942 
The arrangement of 25 November 1942 
The question of successors for Berger and Van Nieuwenhuyse 

Chapter 19
Towards the end of the occupation 
The turn of the tide in military affairs 
The Belgian economy at the end of the occupation 
Anxious years for the staff and for the Bank 
Cracco’s Emissiebank certificates 

Chapter 20
The liberation in sight 
The final skirmishes with the Bankaufsichtamt 
The export of banknotes to France 
Monetary differences and disputes with the Netherlands and Germany 
The preparations for post-war monetary reform 
The final days of the occupation 

Chapter 21
Preparation in London for post-war Belgium 
The establishment and start of the CEPAG 
Baudewyns’ proposal becomes the Gutt plan 
The Belgian discussions about the exchange rate and currency reform 

Chapter 22
The build-up to post-war international cooperation 
From the Dutch-Belgian-Luxembourg monetary agreement to BENELUX 
The Franco-Belgian and the Anglo-Belgian monetary agreements 

Chapter 23
Belgium and the new economic world order 
Belgium and the Bretton Woods agreements of 22 July 1944 
The banknotes for the army of liberation and for the currency reform 
The organization of the Bank’s return to Belgium 

Chapter 24
The return from London 
The great settling of scores 
Governor Theunis in Brussels 
The closure of the Belgo-French gold dossier 
12 Contents

Chapter 25
Back to normality 
The completion of the Belgo-French reconciliation 
The Gutt Operation (6 October 1944) 

Chapter 26
The end of an era 
The currency reform in action 
Criticism and evaluation 

Chapter 27
The commission of enquiry and the Legal investigation 
Installation and start 
The Commission’s report 
Reactions 
The prosecutor’s decision and its aftermath 

Epilogue 

Sources 
1. Public Archives 
2. Private Archives 
3. Interviews 

Bibliography 

List of abbreviations 

index 

Format: Monograph - hardback

Size: 240 × 160 × 30 mm

494 pages

ISBN: 9789058677594

Publication: August 05, 2009

Series: Studies in Social and Economic History 35

Languages: English

Stock item number: 56471

Monique Verbreyt is a legal historian and a former business manager.

Van der Wee and Verbreyt offer a well-researched and well-written account of a fascinating episode in the history ofthe National Bank of Belgium. True, the title of the book is somewhat misleading, as it suggests an all-encompassing history of Belgium during the war, not just of its central bank. Even so, there are good reasons why this book should appeal to a broader audience than only students of Belgian central banking history.
This is a universal theme. Van der Wee and Verbreyt go to great lengths to explain and understand the behaviour of the main protagonists in this drama - paying close attention to the complex context and highlighting the often incomplete information on the basis of which people had to make their decisions - and then they leave it to the reader to judge. This is one oft he great strengths of this book.
Piet Clement, Financial History Review, Volume 18, Part 1, April 2011

 

In showing how Belgium managed it, this magisterial survey presents a model history of finance during the Second World War which other countries would do well to follow: dispassionate yet fully committed, wide-ranging without being exhaustive, giving fair criticism but not picking every bone. If only we all possessed such powers of composition.
Joost Jonker, The Low Countries, 2011 nr 19

 

'The authors tell an important -; and fascinating story of the Belgian central bank and the Belgian government in Brussels and in London during the hazardous years of the Second World War.
It is authoritative,widely-ranging, objective, putting the Bank and the government in their full context of international relations.'
Peter Mathias, former Chichele Professor of Economic History at Oxford, Emeritus Professor at Cambridge University.

 

Of interest to students of Belgian history and researchers studying banking or other socio-political mechanisms, this volume is meticulously researched and provides a start to finish snapshot of a complex system in crisis.
Reference & Research Book News February 2011

 

The book is thus likely to be of interest to all researchers working on the Second World War and on war economy. It provides a clear and focused analysis of the functioning of the National Bank of Belgium during the war. This leads the authors to also discuss the problems related to the occupation costs and economic exploitation (notably via the clearing system imposed upon defeated Belgium). The book gives also a fascinating account of the means devised by the Belgian administration to finance the country's occupation.

Published by EH.NET (October 2010), Reviewed for EH.NET by Kim Oosterlinck, Faculté de Philosophie et Lettres and SBS-EM, Université Libre de Bruxelles.

 

'The authors tell an important -; and fascinating story of the Belgian central bank and the Belgian government in Brussels and in London during the hazardous years of the Second World War.
It is authoritative,widely-ranging, objective, putting the Bank and the government in their full context of international relations.'
Peter Mathias, former Chichele Professor of Economic History at Oxford, Emeritus Professor at Cambridge University.

 

Par l'ampleur de la documentation originale mobilisee, par l'objectif, largement atteint, de démêler l'écheveau d'une situation très complexe, et par la qualité de son écriture, l'ouvrage d'Herman Van der Wee et Monique Verbreyt s'est déjà imposé comme un classique.
Eric GEERKENS (Université de Liège), Revue Belge de Philologie et d'Histoire, 2013

 

Van der Wee and Verbreyt offer a well-researched and well-written account of a fascinating episode in the history ofthe National Bank of Belgium. True, the title of the book is somewhat misleading, as it suggests an all-encompassing history of Belgium during the war, not just of its central bank. Even so, there are good reasons why this book should appeal to a broader audience than only students of Belgian central banking history.
This is a universal theme. Van der Wee and Verbreyt go to great lengths to explain and understand the behaviour of the main protagonists in this drama - paying close attention to the complex context and highlighting the often incomplete information on the basis of which people had to make their decisions - and then they leave it to the reader to judge. This is one oft he great strengths of this book.
Piet Clement, Financial History Review, Volume 18, Part 1, April 2011

 

In showing how Belgium managed it, this magisterial survey presents a model history of finance during the Second World War which other countries would do well to follow: dispassionate yet fully committed, wide-ranging without being exhaustive, giving fair criticism but not picking every bone. If only we all possessed such powers of composition.
Joost Jonker, The Low Countries, 2011 nr 19

 

Of interest to students of Belgian history and researchers studying banking or other socio-political mechanisms, this volume is meticulously researched and provides a start to finish snapshot of a complex system in crisis.
Reference & Research Book News February 2011

 

The book is thus likely to be of interest to all researchers working on the Second World War and on war economy. It provides a clear and focused analysis of the functioning of the National Bank of Belgium during the war. This leads the authors to also discuss the problems related to the occupation costs and economic exploitation (notably via the clearing system imposed upon defeated Belgium). The book gives also a fascinating account of the means devised by the Belgian administration to finance the country's occupation.

Published by EH.NET (October 2010), Reviewed for EH.NET by Kim Oosterlinck, Faculté de Philosophie et Lettres and SBS-EM, Université Libre de Bruxelles.