Rasch was the leader of Einsatzgruppe C. In his Ereignismeldung of 17 September, 1941, Rasch insisted that the mass killing of Jews was an inefficient way of fighting partisans and that it would be better to kill the Jews more economically through forced labour. Wendy Lower has translated the relevant passages as follows and has added the archival location of the document to her translation:
Even if it were possible to carry out the immediate, 100 percent elimination of the Jews, with that we would still not have done away with the hearth of political danger. The work of Bolshevism is supported by Jews, Russians, Georgians, Armenians, Poles, Latvians, Ukrainians; the Bolshevik apparatus is in no way identical with the Jewish population. In this state of affairs, the aim of political and police security would be missed, if the main task of the destruction of the communist apparatus were relegated to second or third place in favor of the practically easier task of eliminating the Jews. . . . If the Jewish labor force is entirely done away with, then an economic reconstruction of Ukrainian industry as well as the development of the urban administrative centers will be almost impossible. There is only one possibility, which the German administration in the General Government has neglected for a long time: Solution of the Jewish Question through the extensive labor utilization of the Jews.Wendy Lower also discusses the second source of criticism, the regional commissar of Zhytomyr, Regierungsrat Kurt Klemm, who:
This will result in a gradual liquidation of Jewry-a development that corresponds to the economic conditions of the country. (Einsatzgruppe C Ereignismeldung, 17 September 1941, United States Holocaust Memorial Museum Archives (hereafter USHMMA) Acc. 1999.A.1096 (also available at NARA RG 242, T-175, R233, frame 2722384; bold text underlined in Rasch's original).
expressed concern about the loss of labor that resulted from the mass murder of the Jews and challenged his counterpart in the SS-Police who insisted that all Jewish laborers must be killed. Consequently, Klemm was summoned to Himmler’s headquarters near Zhytomyr, reprimanded, and then forced to resign in shame. [Klemm statement of 22 August 1962, Ludwigsburg, 204 AR-Z 129/67 band 3, p.830; Statement of Franz Razesberger, 19 January 1957, Ludwigsburg, 204 AR-Z 8/80, band 3, p. 207; band 3, p. 830; Klemm memo about uniform to Rosenberg, 12 July 1943, NARA RG 242, T-454/R 91/000873.]Ironically, the problems created by this non-rational killing of an economic resource subsequently impinged on Hitler and Himmler themselves in at least two ways. Firstly, as Lower discusses in Nazi Empire-Building and the Holocaust in Ukraine, the Nazis experienced acute shortages of labour for work projects that became the responsibility of Himmler's SS, such as the DG IV road project in the Ukraine. Lower shows how they ran out of skilled local labour to build Hitler's Werwolf bunker [Project "Eichenhain"] and Himmler's Hegewald HQ, so had to obtain the labour of Hungarian and Rumanian Jews. She has also made a crucial document discovery (p.151) that reveals Himmler's thinking at the time of these projects, which coincided with the time period of the Wannsee Conference:
In a memorandum to Rosenberg on the handling of the Jewish question, dated 10 January 1942, Himmler had specified that "measures to eliminate Jews should be taken without regard for economic consequences," but (as is evident in the Wannsee Protocol) he also accepted the policy of using Jewish laborers for street building and, more discreetly, in the construction of his own headquarters, and then killing them after the work was complete. [NA, RG 242, T-454/R 154/MR334]The effects of this policy were felt in the regions of Lower's study - Vinnytsia [Vinnitsia] and Zhytomyr [Zhitomir/Shitomir] - between 1941 and 1943. Of the 160,000 Jews (of which 45,000 had been brought in from Bukovina and Bessarabia) who died in the Vinnytsia oblast, an estimated 10,000 died through forced labour or through their liquidation following forced labour (Kruglov, Unichtozhenie evreiskogo naseleniia Ukrainy v 1941–1944 gg.:Khronika sobytii, p.14). For Zhitomir oblast, Kruglov estimates 55,000 deaths due to Nazi policies, as per Nick Terry's summary here.
Secondly, by 1943, Hitler had to acknowledge that "The Jews are all gone" and that this was forcing him to "train the Ukrainians how to mend boots." An extract from stenographic notes from Hitler's conversation with Keitel and Zeitzler of 8 June 1943 at the Berghof was collected at Nuremberg as document 1384-PS and appears in Nazi Conspiracy and Aggression ("Red Series"), vol III, p. 959, viewable at this link:
[Page 12] He said: Here, I lose 500,000 Jews. I must take them away, because the Jews are the element of revolt. But in my area, actually, the Jews were the only tradesmen. Now they want to set up high schools and grammar schools, thereby building here, a national Ukrainian state, that should in the future, fight against Russia. I am not even in a position to have the worker, who must work here, have his boots repaired. I can't do that because the tradesmen are no longer here. The Jews are all gone. What is more important, that I train the Ukrainians how to mend boots, or that I send them high schools so that they can build up the Ukrainian state?Finally, the complaints of OKV Rat Prof. Seraphim were addressed to the Chief of the Industrial Armament Department at the Wehrmacht Supreme Command (General Thomas) in a letter sent by the Armament Inspector Ukraine, Generalleutnant Hans Leykauf. Roberto Muehlenkamp has posted the German text with an English translation here. Five points should be noted. Firstly, the letter debunks (yet again) the Sanning thesis that the Soviets had depopulated the Jewish areas:
Regulation of the Jewish question in the Ukraine was a difficult problem because the Jews constituted a large part of the urban population. We therefore have to deal -just as in the General Government- with a mass problem of policy concerning the population. Many cities had a percentage of Jews exceeding fifty percent. Only the rich Jews had fled from the German troops. The majority of Jews remained under German administration.[my emphasis] The latter found the problem more complicated through the fact that these Jews represented almost the entire trade and even a part of the manpower in small and medium industries besides the business which had in part become superfluous as a direct or indirect result of the war.Secondly, the letter states that the policy of killing Jews was motivated by Nazi ideology, not rational, pragmatic thinking:
Summarizing, it can be said that the kind of solution of the Jewish problem applied in the Ukraine, which obviously was based on the ideological theories as a matter of principle, had the following resultsThirdly, it confirms the policy, reiterated by Himmler, that "no consideration was given to the interests of economy" during killing sweeps. Fourthly, the text confirms that there was a killing policy towards "superfluous eaters". Fifthly, it confirms that the policy lacked economic rationality:
If we shoot the Jews, let the prisoners of war perish, condemn considerable parts of the urban population to death by starvation and also lose a part of the rural population by hunger during the next year, the question remains unanswered: Who, then, is supposed to produce economic values here?In conclusion, therefore, it can be seen that even Nazis who were embedded within the regime's culture and 'habitus' could see that there was a non-rational genocide taking place which would ultimately damage their own interests.