TRAITORS, TRAFIQUANTS, AND THE CONFISCATION OF ‘ILLICIT PROFITS’ IN FRANCE, 1944–1950

Abstract

State measures to confiscate the ‘illicit profits’ earned from commerce with the enemy and the black market in Occupied France are generally considered to have been an abject failure. Economic collaboration and illicit commerce had been widespread. The need to ‘purge’ the profits from black market transactions and economic collaboration was considered essential at Liberation. An examination of the confiscation effort from archival sources shows that the purge achieved limited success, but that complete success was rendered impossible by factors that limited other post-war purges: the shortage of trained personnel and investigative resources, the need for hard evidence for legal procedures (rather than vigilante justice), the efforts of collaborators to cover their tracks, and the evolution of public opinion, which was quickly disappointed by the slow pace of confiscations. Although success was limited, the effort to punish the profiteers it could convict had been necessary, as a matter of elementary fiscal justice and an essential step in the restoration of the authority of the state.

Art as a Wartime Investment: Conspicuous Consumption and Discretion

“…To spend his money he buys artworks, even though he hates paintings. Recent academic work on the black market in Occupied France also stresses the concealment role played by artworks (Mouré and Grenard, ; Mouré, , ) and luxury goods (Grenard, ). Mouré and Grenard () highlight that buying real goods to conceal illegal profits was common ‘long before the Liberation’, suggesting that the impact of these activities may have already been visible at an early stage of the Occupation.…”

Price formation on clandestine markets: the case of the Paris gold market during the Second World War

“…Oosterlinck, ‘Art’. Buying real goods to conceal illegal profits was common ‘long before the Liberation’; Mouré and Grenard, ‘Traitors’, p. 978.…”

One-off wealth taxes: theory and evidence

“…A government decree of 18 October 1944 mandated the confiscation of profits arising from trade with the enemy, as well as black market activities (Ordonnance tendant à confisquer les profits illicites, 1944). However, faced with the massive scale of the informal economy during the occupation, the symbiotic relationship between the French and German economies over this period, gaps in record-keeping, the ingenuity of wealthy individuals potentially affected by the ordinance, and limited investigative resources on the part of the state, these confiscations bore little fruit (Mouré and Grenard, 2008). This bolstered both the fiscal and the ethical case for a more general charge on wealth, and wealth accumulated during the war in particular.…”

“…While the amounts raised constituted a significant amount of revenue by ordinary standards, in relative terms the ISN generated a lower level of receipts than almost all other European capital levies of this era (Robson 1959). By comparison, procedures to confiscate illicit profits had imposed penalties amounting to 147 billion francs by 1950 (albeit only around a quarter of these monies had been recovered by this point) and many contemporary observers viewed this as a failure (Mouré and Grenard, 2008). Anecdotally, the ISN appears to have been much resented by those caught in its net, not least on account of the 'considerable' compliance burdens it imposed on taxpayers and their advisers (Rosier, 1948).…”