How Luxembourg Jews were dispossessed during Nazi occupation

In a letter from the Litzmannstadt ghetto in Lodz, Poland, a deported Jew attempted to obtain an allowance from his bank in Luxembourg to which he was entitled under Nazi occupation rules. It is a particularly moving artefact, says historian Linda Graul, who is researching the dispossession of the Jewish population in the Grand Duchy during WW2.

Banks in occupied territories had been instructed to pay out only minimal sums to Jewish clients, allowing them to cover basic living expenses. But the man in Lodz was refused even this request. “By that time, the account had long since been liquidated. There was nothing left to be had,” said Graul, who is writing her PhD on the systematic confiscation of Jewish financial assets.

During the occupation, numerous Jewish businesses were expropriated and changed hands, such as a leather factory in Wiltz and a glove factory in Luxembourg City. Graul, however, focuses on assets, such as bank deposits or securities in her work, which is a result of an agreement between Luxembourg’s Jewish community, the government and the University of Luxembourg.

Luxembourg as a testing ground

Even before the German Wehrmacht’s invasion in May 1940, there was anti-Semitism among parts of the Luxembourg population, Graul said. Generally speaking, however, Jewish citizens were comparatively well integrated and represented in almost all areas of society.

“I wouldn’t say there were any professions still closed to Jews,” she said. With the liberal politician Marcel Cahen, a Jewish MP served in the Chamber of Deputies for the first time since the 1920s, and Alfred Lévy was one of the country’s most established bankers.

The position of Jews in the country changed rapidly with the onset of the occupation. From the summer of 1940, the inhabitants of the Grand Duchy were subject to German foreign exchange legislation, which had been introduced during the Weimar Republic to prevent capital flight. This meant that Luxembourgers could no longer transfer their assets abroad. Securities had to be declared to the Reichsbank, Graul said.

Researcher Linda Graul from the University of Luxembourg is investigating the confiscation of Jewish assets during the Second World War.  © Photo credit: Luc Deflorenne

The position of Jews in the country changed rapidly with the onset of the occupation. From the summer of 1940, the inhabitants of the Grand Duchy were subject to German foreign exchange legislation, which had been introduced during the Weimar Republic to prevent capital flight. This meant that Luxembourgers could no longer transfer their assets abroad. Securities had to be declared to the Reichsbank, Graul said.

In September 1940, the racial laws of the Third Reich were introduced in Luxembourg, which, among other things, defined who was to be considered Jewish. “These were, in some respects, tightened further in Luxembourg. The rules on mixed marriages, for example, were stricter here than in the original German law,” Graul said. “One might therefore ask whether Luxembourg served as a testing ground for the faster implementation of anti-Jewish legislation.”

A web of regulations

From autumn 1940 onwards, the Jewish population was required to provide details of their assets, which were meticulously recorded in registers. “This information was essential for the German authorities to even identify what they could expropriate,” Graul said.

Under the security order of October 1940, all Jewish residents of the country were required to open an account at one of five banks authorised for this purpose and deposit all their liquid assets into this account. “From then on, they were only allowed to access a certain monthly allowance from their own money, part of which could only be used for specific, predefined expenses,” Graul said.

For those affected, it was virtually impossible to make sense of the web of regulations. “Even if you wanted to follow the rules, you first had to gain access to the documents and understand what that meant for you personally,” Graul said.

The confiscation of assets was organised by Josef Ackermann, head of Department IVa of the Civil Administration, the authority responsible for “Jewish and emigrant assets”. Ackermann fulfilled the same role in the Koblenz-Trier area.

Escape abroad blocked

The Germans’ bureaucratic approach, which documented financial circumstances in minute detail, has the advantage for the historian that it has left behind a mountain of source material. “In my work, I rely primarily on sources from the perpetrators. But one must always bear in mind that every page in the account book, every inventory of assets, was the basis for the destruction of a person’s material existence,” she said.

The government-controlled Luxemburger Wort reprinted German propaganda on expropriation during the occupation. © Photo credit: Luxemburger Wort, Nr. 106 (1941)

The Germans’ bureaucratic approach, which documented financial circumstances in minute detail, has the advantage for the historian that it has left behind a mountain of source material. “In my work, I rely primarily on sources from the perpetrators. But one must always bear in mind that every page in the account book, every inventory of assets, was the basis for the destruction of a person’s material existence,” she said.

For many Jews, being denied access to their own assets meant that escape abroad was blocked.

“This made emigration massively more difficult. Most potential countries of refuge were only willing to take in persecuted Jews if they could support themselves. In most cases, there had to be a person in the host country who guaranteed to provide material support, so that an entry permit could be obtained at all,” Graul said. “If someone did not keep cash, securities or promissory notes in a bank but had hidden them at home, for example, and was able to flee, there was theoretically the possibility of taking these assets with them. But anything tied to banks was effectively frozen.”

While the German administration had pressured Jewish residents to leave during the first phase of the war, it put a stop to this with the start of the deportations.

Pressure on the banks in Luxembourg

The support of the banks was central to the smooth running of the expropriations. Soon after the occupation, parts of the Luxembourg banking system were directly integrated into German structures, Graul said. Spuerkeess, for example, was absorbed into the German savings bank system.

Private institutions in Luxembourg also came increasingly under German influence. Even before the occupation, there were close links between major Luxembourg financial institutions and large German banks. For instance, Dresdner Bank held shares in what is now the Banque Internationale à Luxembourg (known as the “Internationale Bank” during the occupation). The same applied to the “Generalbank” (now BGL) and Deutsche Bank.

“These shareholdings were gradually expanded during the Nazi era,” Graul said. “In some cases, representatives of the German civil administration also sat on the board of directors. The pressure on the banks was already quite intense.”

After the end of the occupation, the process of addressing the confiscation of assets dragged on for years. A clear legal basis for compensation was not established in Luxembourg until 1950.

(This story was first published in the Luxemburger Wort. Translated using AI, edited by Cordula Schnuer.)