May 19, 2024
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The Black Market and the Jewish DPs in Post-War Germany

“The presence of the visible victims of the Holocaust on their soil presented the Germans and Austrians with a prime opportunity to show some signs of remorse for what they had done to the Jews,” asserted Abraham S. Hyman, adviser on Jewish affairs to John J. McCloy, United States high commissioner for Germany. “Instead, they were morbidly obsessed with their own misery and allowed themselves to believe they were the chief victims of the war and that they had a prior claim on the sympathies of the world.”

Germans resented the Jewish DPs (displaced persons) and seized every opportunity to disparage them to the American military, who already viewed the DPs as an irritant, and their presence in Germany and Austria a needless inconvenience. The staff of the American military government had been trained for war, not to govern civilians. Kevin Conley Ruffner, a historian for the CIA, said, “The victorious American forces degenerated into a largely poorly trained and ill-disciplined force mainly interested in living a soft garrison existence.”

Jewish involvement in the black market further exacerbated their disdain for the Jews. After the war, there were two illegal markets: the gray market and the black market, due to the inability of the government to provide sufficient rations. Basic food staples, such as milk and eggs, were available on the gray market.

American Soldiers in the ‘Great Bazaar’

Although the Germans blamed the Jews for the entire black market, this was their primary venue to barter for food, clothing and whatever else they could not find from other sources. Furthermore, the American soldiers were the most flagrant participants in the black market, “a great bazaar, where everything and anything was offered for sale or barter,” as Ruffner and others have documented. Berlin and Vienna became the “epicenters of this temporary economy,” he explained. “Cigarettes, chocolate, liquor and small foodstuffs constituted the most easily disposable commodities. American soldiers purchased 10 packs of cigarettes for 50 cents at the PX and sold them for $100.”

The soldiers sent thousands of dollars they had obtained from their illicit gains to the U.S. In July 1945, Ruffner said, “the army’s finance office in Berlin disbursed $1 million in pay, yet soldiers sent some $3 million to addresses in America.” Officers were the biggest offenders, leaving their desks to conclude lucrative transactions according to historian Edward N. Peterson.

‘Search and Seizure’

As of mid-1948, Chaplain Abraham Klausner, estimated that at the minimum, 30% of the Jews were involved in the black market. Nevertheless, Jews living in the DP camps became the target of “frequent mass raids” known as “search and seizure” raids by the U.S. military. During these raids, Hyman said helmeted U.S. Military Police, with walkie talkies, descended on the camp—generally at dawn—rousing the people from their sleep, and ordering them out. At times, the military would surround the camp with tanks and half-tracks, while they began their pursuit. These are military tactics used to overpower a hostile force, not a group of Holocaust survivors. Even so, the camp residents “felt sorrier for the soldiers, for the humiliating tasks they had been assigned, than for themselves.”

These “grotesque” operations never discovered any “big operators,” Hyman said. At best, they found food the Jews had bartered, which they traded from items they received for the U.S. Army and the Jewish voluntary agencies, to supplement what their diets lacked: fats, proteins, fresh fruit and vegetables.

Hyman attributed this outrageous behavior to the army’s obsession with its main mission of helping “in Germany’s economic recovery.” By disregarding the harm the black market caused the German economy and by “using the camps as the base of their operations, the Jews gave the impression that they dominated the black market…” Jews were “probably not more numerous than their non-Jewish counterparts… [but] they were more brazen….” Having been stripped of their possessions and left orphaned by the Germans, they felt no obligation to consider the harm the black market might be causing the German economy.” In a certain sense, Hyman believed the Jews helped bring this situation upon themselves.

A Final Note

Hyman pointed out that General Lucius D. Clay, commander in chief, U.S. Forces in Europe and military governor of the United States Zone, Germany, from 1947 to 1949, praised the exemplary record of the Jewish DPs when he said: “The behavior of the Jewish displaced persons has not been a major problem at any time since the surrender of Germany…. In view of the conditions under which they lived in Germany and their past suffering at hand, their record for preserving the law and order is to my mind one of the remarkable achievements I have witnessed during my more than two years in Germany.”


Dr. Alex Grobman is senior resident scholar at the John C. Danforth Society, member of the Council of Scholars for Peace in the Middle East, and on the advisory board of The National Christian Leadership Conference for Israel (NCLCI). He lives in Jerusalem.

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