The end of 1941 and the beginning of 1942 marked a turning point. Participation in the black market became more general on both the supply and the demand sides of the market. After the Allies invaded
French North Africa in November 1942 and the French forces there joined them, Germany implemented
Case Anton and occupied the remainder of
metropolitan France, known until then as the
zone libre. The remaining French army was disbanded.
Agricultural black market As it did in Ukraine, its other large agricultural acquisition, Germany relied on existing administrative structures to enforce its requisitions and supply restrictions. Sales by farmers to consumers increased considerably. Farmers withheld some of their production from the official collections of the (resupply service). Official nationwide production dropped 35% from the first three months of 1941 to the first three in 1942. In
Mayenne, 1943 collections brought in 47 million litres of milk and 1.4 million kilograms of butter compared to 125 million litres of milk and 5.15 million kilograms of butter in 1937. In nearby
Calvados, a major butter producer, butter became increasingly rare because of the German resource drain then disappeared from official channels and could only be found on the black or grey market. In
Eure-et-Loir in 1942, the vegetable collection brought in 4,300 (metric) tons compared to the projected 7,400. In the
Aisne, half of livestock declared were undervalued. Before the war the commune of
Sagy (Saône-et-Loire) supplied 200 tons of
beans to the wholesalers in
Louhans. In 1941–1942, the official harvest was only 10.8 tons; the rest was sold on the black market. Farmers were also reticent about declaring their harvest for collection because they considered it unfair. In
Chinon and Louhans, farmers contested the valuation of livestock and suspected butchers and officials of collusion. Ill-will was sometimes a rejection of the occupation and a form of passive resistance, but in the
zone libre it was principally rejection of the Vichy regime. The nomination of former agrarian leader
Jacques Le Roy Ladurie as Minister of Agriculture and Supply () in April 1942 did not dissipate this defiance. Price controls were less and less accepted, while constraints imposed by the supply system were rejected by many farmers. When they circumvented the rules, farmers did not feel they were cheating but simply selling, at the best price available, the fruit of their labour. In their eyes the Vichy regime was returning to ancient fiscal practices of an all-controlling state against which they needed to defend their economic well-being. The French countryside was filling with dissidents. Sales by farmers directly to consumers became more common, because consumer demand increased. Rationing was becoming stricter and official rations more inadequate, dropping to 1,100 or 1,200 calories a day for adults. Very often shortages were so dire that consumers could not obtain the limited quantities they were entitled to buy, making the black or grey market their only recourse.
Grey market: direct sales , anti-grey market cartoon in collaborationist publication
Candide, 19 May 1943 Starting in the summer of 1941, city-dwellers began to go, often on bicycles, directly into the countryside to buy food, short-circuiting the middlemen. This became known as the grey market. The journalist wrote in his personal journal, "It is better to buy at the farm at a high price than to buy from a middleman at an insane price". Sometimes dedicated bus services sprand up, or as in the case of Valence, a taxi service. In November 1941, the
Ardèche préfet noted that more than two thousand cyclists had come from
Valence in a single day for potatoes. Those who had family or relatives in the country of course had an advantage, while others were not always well received. To extend their reach beyond where they could go on bicycles and also to carry higher volumes, city dwellers began to catch trains in the morning carrying empty suitcases, get off at small-town stations, and return heavily laden the same day, especially on the Paris-Rouen, Paris-Chartres, and Paris-Orléans lines. In December 1942, police in
Épernay seized more than of wheat, of oats, of rye, of barley, of flour, of meat, and of lentils. Luggage searches were routine, but there were too many travelers for the inspectors to open every suitcase. The Paris train lines were particularly well-patrolled. Shipping food boxes was another method to make black market exchanges. Starting 13 October 1941, Vichy authorized farmers to ship food boxes to family members provided they were shipped by the farmers themselves and weighed less than . In October 1941 6,700 packages of food, roughly 13 metric tons, were leaving the sparsely populated agricultural department of Cotes-du-Nord every day. From September 1941 to September 1942, German requisitions of butter more than doubled from 9.1 to 24.9 metric tons, and in November the imposed 53 million francs in fines on the communities with the greatest shortfalls when the official harvest collections "collapsed". In 1942, more than 13 million food packages were shipped nationwide weighing more than in total. These family packages soon gave cover to shipments that were actually commercial, noted the
préfet of
Creuse. These family packages kept many city-dwellers alive. In a circular of 16 August 1940, the
French State encouraged the creation of business canteens, rare until then. Two circulars from December 1941 gave them priority in food distribution, but since they never stopped developing, they created parallel direct supply channels, sometimes managed by employees using obfuscated accounting records. Barter became more and more common. A fishwife of
Agde was cited in September 1941 for trading fish for potatoes, and workers from
Vuillafans in
Doubs exchanged nails from their factory for food.
Dunlop Rubber in
Montluçon gave tires, which were extremely rare, to its workers so that they could barter them for food and
Michelin in
Clermont-Ferrand bartered tires for food for its employees. In
Calvados, a pair of shoes was worth 20 kg of butter. These unofficial channels improved the average daily base ration by 400 to 700 calories. As these were only about 1,100 to 1,200 calories in 1942, these additional calories were important though still not enough for a properly fed population. Despite this general observation, many diverse examples existed, from worker canteens opened by big businesses to personal networks, especially in the country.
Commerce and industry As in agriculture, the black market became commonplace in all sectors of commerce and industry beginning in the second half of 1941. The restrictions were such that businesses could no longer function and remain within the law, except for those that produced for the occupier and therefore were able to obtain raw materials. The black market for raw materials got larger and larger. Businesses inflated their production estimates in order to obtain additional raw materials from official allocations.These surplus materials then fed various covert transactions. Having paid high prices for these materials, businesses sold part of their production for more than the official rate. It became normal to ask the buyer for a
kickback, in other words the difference between the official price recorded in official records and the prevailing true price. This fraud involved issuing fake invoices and keeping two sets of books. Businesses used various secret codes, like the clockmaker from
Doubs who used different-coloured tickets to indicate to the buyer the multiplying factor (4, 5, 6, or 7) of the official price that was needed to calculate the actual asking price for the item. announcing distribution of ration cards for January 1944, 18 December 1943 The industries most affected by the general practice of the were specialized local or regional industries that produced produced high-demand
consumer goods. A market was assured despite the high prices: cutlery, leather, lumber and textiles. Beginning in 1940, forgery and the sale of faked ration tickets became a favored black marketeer tactic, which increased demand for paper and printing professionals. A trial before the in March 1942 concerned 260,000 sheets of fake tickets, which would have bought 3 million kilograms of bread. These fake documents were often printed by real print shops, which made it easier to enforce the law. Distribution centres for cards, often in town halls, were sometimes looted.
Tacit tolerance Generalization of the black market came with a change in its depictions. Public opinion continued to decry the grand-scale black market in which some made their fortunes, but it condoned small daily compromises to survie, and therefore it no longer tolerated law enforcement targeting them.
No longer immoral Until the law of 15 March 1942, the régime did not distinguish between the black market and the grey market, and family supply was still illegal. For example, a farmer in
Creuzier-le-Neuf was fined in April 1941 by a court in
Cusset for having given 13 pounds of butter to some friends. '' newspaper of 29 October 1943, distinguishing the black market from the farmer grey market Still, the black market was increasingly considered legitimate. The retail, grocery and artisanal professional associations did not condemn minor , which were considered necessary given
supply chain problems and thin
profit margins. Only large-scale black market wholesalers were still condemned. This attitude implied criticism of the partition policy and a replay of the conflict between "the little guys" and "the big guys". Farmers were also defended.
Henri Dorgères, a director of the
Corporation paysanne, published in his
Le Cri du Sol newspaper in
Lyon letters from farmers who felt unjustly condemned for selling on the black market, and starting at the end of 1942, sent Pétain reports minimizing the implication of farmers in the black market. The discourse of Catholic Church changed in 1941. While the
La Croix newspaper clearly condemned all forms of black marketing until the summer of 1941, the bishop of Arras, , told the priests of his diocese in October 1941: "when the farmer has provided, at the legally-set price the required quota of foodstuffs, it seems to us that it is not illegal to ask a slightly higher price for any surplus he may still have." On 13 December 1941,
Emmanuel Célestin Suhard, Archbishop of Paris, emphasized the need to tolerate "modest illegal operations to obtain necessary food supplements, justified both by their small size and by the necessities of life." Still, not all prelates were so indulgent: the bishop of
Rodez, , condemned the black market on 29 and 31 October 1941, a position he continued to hold afterwards. . The notice states that Jews are not allowed to cross into occupied France. The social acceptance of small transactions led to a greater and greater rejection of enforcement and checkpoints. The proliferation of roadblocks in departements crossed by the line of demarcation like the
Cher, primarily resulted in arrests of city-dwellers on bicycles bringing home a few kilos of food they had bought at a farm. These checkpoints seemed more and more unbearable and unjust. In Paris, in its editorial of 5 February 1942,
Le Temps wrote: "Let them get their supplies when and how they can, by their own means, these unfortunate city dwellers for whom city markets most often offer only inadequate resources." Enforcement methods were questioned more and more, especially the one known as "provocation", in which the inspector pretended to be a customer. The population also accused the inspectors of corruption. A few cases did surface, but were rare among price control agents, though a little less so for supply control agents. Their unpopularity made it harder to set up inspection points, as in for instance at Vitet near
Bayeux, where on 28 July 1941, two hundred people (sailors, wholesalers and shopkeepers) tried to impede an inspection point and were only pacified by the intervention of the gendarmes. Growing acceptance of small black market transactions led to more and more rejection of enforcement and checkpoints. The proliferating roadblocks in departments crossed by the line of demarcation, like the department of
Cher, primarily resulted in arrests of bicyclists with a few kilos of merchandise bought at a farm. These checkpoints seemed more and more unbearable and unjust. In Paris, in its editorial of 5 February 1942,
Le Temps wrote: In general, the press presented the increasingly unfavourably.
Nuanced and refocused enforcement '' To avoid alienating public opinion, the Vichy regime lessened penalties for small infractions and concentrated on large-scale trafficking. In August 1941, a local news story demonstrated the need to be less severe. Unable to bear the shame, a farmwife committed suicide after her conviction by the
correctional court () of
Charolles for selling butter without a ticket at a price slightly above the official rate. This incident greatly upset the population of
Saône-et-Loire and set off an active correspondence between ministers. The law of 15 March 1942 established a distinction between deliberate profiteering on the black market, and small-scale illegal exchanges. It increased penalties for the former but not for the latter. Those who only wanted their families to eat were not to be targeted. The law established three levels of judicial sanctions. Grey market transactions were still sanctionable, but under the prior law and therefore to a lesser extent. Store owners or individuals who engaged in unauthorized commerce were much more severely punished, liable to two to ten years in prison and fines from 200 to 10 million francs. Large-scale trafficking remained under the created by the preceding law. This new policy was well received by the public. Still, in April 1942, police in the working-class town of
Saint-Claude in
Jura noted an increase in thefts of food, accompanied by a mysterious disappearances of cats. After the adoption of this law, the government reorganized enforcement. On 6 June 1942, it created the (DGCE), headed by Jean de Sailly. It was a section of the
Ministère de l'Économie et des Finances and the successor of the . Its authority included all economic regulation and all services were required to apply its directives, even if they were sections of a different ministry. Employee numbers increased and reached roughly 4,500 by the end of 1942. Under the law of 15 October 1942, the government abolished the and absorbed its agents into the DGCE, which permitted a big purge and the termination of a quarter of the agents. The law of 31 December 1942 ended this reorganisation. It centralized the collection of official reports on economic offences. These were then sent to the departmental director of the DGCE, who decided on a case-by-case basis whether to make an administrative decision or whether refer the matter to the judicial branch for follow-up. This reorganisation corresponded to new principles expressed by
Pierre Laval in a circular to the prefects. Agents were to stop combatting small and concentrate on large-scale trafficking. The gendarmes charged with investigating small markets were to "act openly and in uniform and to avoid unnecessary vexation." Agents assigned to fraud in industry were to understand and take into account the problems faced by businesses. DGCE became a true investigative service, which researched offenders and carried out in-depth investigations. In practice, the continued to focus on small transactions, because this was easier and, like other agencies, it lacked resources such as petrol.
Metrics The investigations of the DGCE created statistics, which, while partial and fairly approximate, permit an overall portrait in broad strokes of the black market.
Proportion of production The size of the black market varied by product. For 1943 agriculture, the black market in the narrow sense, in other words direct sales to traffickers at high prices, represented 10% to 20% of total production. Adding in the grey market and sales between friends increases the total to between 20 and almost 50% of total production (almost 50% for poultry, 35% for beans and eggs, 24% for potatoes, 22% for butter, 20% for meat.) Since farmers also produced for their personal and family consumption, the share of the official collection was less than that of the black market sales of poultry, dry vegetables or eggs. The meager size of the official collection was not primarily due to the black market, but rather to the significant portion of their production that traditional farm families consumed themselves. In industry, black market infractions didn't so much concern production, which for the most part followed authorized channels, as market conditions, particularly kickbacks. Anything could be found on the black market, but it seems to have been particularly well-developed for raw materials like wood, leather and paper. For paper, it reached half of all production in 1942. Manufactured consumer goods, like shoes, clothing, bicycles, tires, and hardware, were often sold on the black market as a result of their scarcity.
Higher and more volatile prices Because of the black market's clandestine nature, sellers often had a
monopoly and the growing imbalance between
supply and demand allowed them to set their own price. Prices on the black market varied considerably according to the time, place or people involved. When the seller personally knew the buyer, in agriculture or in industry, the price could often be lower. Where there were chronic shortages, the price of agricultural goods could be affected by the seasons, and clothing and combustibles could also be more expensive in mid-winter.
Operation Torch, the Allied landings in North Africa on 8 November 1942, made imports of oil, sugar and coffee more scarce, so their prices soared on the black market. Similarly, when communications were cut between Normandy and Paris after the
Normandy landings of 6 June 1944, the price of butter greatly increased. Prices were much higher in the big cities and with increasing distance from the place of production. In December 1942, a kilogram of potatoes sold on the black market for between 4 and 6 francs in
Angers, 10 to 15 francs in
Lyon, and 25 to 50 francs in
Marseille. The risk level from law enforcement was also a factor in prices. In general, agricultural products sold on the grey market or between friends were 1.5 to three times the official prices. On the black market it was closer to three to five times. Prices on the agricultural black market rose faster at first than the official rate before stagnating in 1943 and 1944 because consumers had less and less
disposable income. Industrial products on the black market were much higher than the official prices, reportedly five to ten times higher. For example, in the spring of 1943 in the
Montpellier area, a pair of shoes was worth around 4000 francs on the black market, while the legal price was 250 to 300 francs, and a man's work shirt sold for 500 francs versus an official price of 100 to 150 francs
Geographic distribution Statistics on fines imposed for economic infractions suggest certain geographic traits of the black market. At the level of the départements, agricultural goods often flowed to the or administrative seats of the département. Between départements, the underground networks often formed circuits between areas with complementary production, whether industrial or agricultural. At the national scale, producer regions linked to big cities like Paris or Lyon. Western agricultural regions such as Brittany and Normandy, which were reachable from Paris, supplied the capital with meat and other agricultural products. The extent of this flow was such that rations in the producing regions were greatly reduced. In 1942, the meat ration in the
Calvados was one of the smallest in France at 90 grams while, according to the , underground slaughterhouses appeared in stables, kitchens, basements, sheds or garages. Low-income families without ties to farmer producers suffered especially from this shortage. The Paris basin was an important regional hub of the agricultural black market: cereals from
Beauce and
Vexin, vegetables from the
Val de Loire, and meat from
Sologne or
Morvan were sucked into the underground networks to feed Paris. The agricultural near Lyon, such as
Saône-et-Loire or
Haute-Savoie, and near Marseille, like
Ardèche, played similar roles. Fraud in industry was particularly important in regions with the highest production of consumer goods. For textiles in the metropolis of
Lille-
Roubaix-
Tourcoing,
tanning in the
Millau region, and
hosiery in
Troyes and
clockwork in
Franche-Comté, inspectors found that between half and two thirds of all businesses were in violation of the law. center of the black market"
Le Matin, 14 April 1943 Paris was the centre of gravity of the black market; transactions there took place essentially everywhere, in hotel rooms, on the street, and in railway stations and the
Paris Metro. An active market in textiles operated at and bicycle tires sold for francs at the
Saint-Ouen flea market. Other big cities that were poorly supplied through legal channels, such as
Bordeaux or
Marseille, were also active centres of the black market. In Marseille, it was particularly omnipresent in the
Old Port of Marseille and
Le Panier. The
mafia, led by
Paul Carbone and
François Spirito, organized black market trafficking in league with the occupiers. As at the beginning of the occupation, the black market remained important in the vacation spots of the rich:
Nice,
Deauville,
Biarritz, and
Megève. Departments bisected by the line of demarcation, such as
Indre-et-Loire,
Cher or
Saône-et-Loire, whose urban and industrial centres fell in the occupied zone and were separated from their natural
hinterlands, also saw large-scale inter-zone trafficking on a regional and national level, usually based on bribes to German guards. The Belgian border had an active export market in contraband, because foodstuffs were even more expensive in Belgium than in France. Belgian cyclists travelled as far as the
Somme or
Aisne to resupply. The borders with Spain and Switzerland were somewhat better guarded but in Biarritz and all of the
Basses-Pyrénées, cattle were smuggled into Spain, where meat was extremely scarce. Smugglers also imported watches from Switzerland.
Beneficiaries In current public opinion and memory, merchants were
war profiteers who enriched themselves on the black market. After the war, those suspected of profiteering continued to be called
les BOF (butter, eggs, cheese) In fact, retail commerce suffered less than any other economic sector under the occupation, with its share of national revenue jumping from 16% in 1938 to 24.5% in 1946, while the number of sellers increased. The extent to which anyone got rich in the back market varied a great deal and was based on their position in the network: those furthest upstream and closest to the producer made the biggest profits. Middlemen, brokers, merchants and wholesalers set conditions for retailers, often demanding kickbacks and accumulating profits. For example, the principal supplier of flour in the Paris region systematically demanded payments from almost 200 bakers. In Paris, a June 1942 inspection found that of 100 tonnes of carrots delivered from
Seine-et-Oise, only 18 ever reached their official destination at
Les Halles. The rest was almost entirely sold on the black market to wholesalers for high prices, then resold to retailers. When small shopkeepers did not have a personal supply source, it was more true that they were subjected to the black market than that they profited from it. Some still managed however to create ties with farmer producers and short-circuit official networks, like the grocer from the
5th arrondissement of Paris who was able to build up his stock and make a net profit of 100,000 francs in 1942. Another grocer in
Surgères in less than a year came to run an underground network that supplied food to Bordeaux, then also Paris and Lyon. The called him a "great brewer of shady deals affiliated with a whole band of gangsters". In industry, middlemen also made the most profit. Kickback amounts got bigger and bigger and became systemic. For industrial enterprises, the black market was less profitable than working for the occupiers, except for certain sectors like the textile industry in Lille-Roubaix-Tourcoing, where some businesses manufactured illegal products like electric heaters. Some indices, like the increase in bank deposits and savings, show farmers becoming more affluent, but the benefits varied by sector and scale. The largest profits were made in wine production, cattle and dairy products. Profits were largest for the owners of larger businesses, who could most easily integrate into the black market networks. For small growers, who consumed a good part of their production themselves, the black market did little but partially compensate them for the difficulties caused by the scarcities of the time. Among those who profited from the black market, on their own scale, were also the last intermediaries of the networks, who carried out the final stage of delivery. The Paris police arrested people every day who were transporting meat, fruit, vegetables, tobacco or coffee in suitcases, on foot, bicycles or wheelbarrows, for example between the train stations and the addresses of their customers. They were generally from the most modest of social classes and earned extra money this way. This fragmentation of the supply chain allowed the larger traffickers to avoid arrest. == Patriotism (spring 1943-summer 1944) ==