In September last year two bars of , stamped with the Nazi seal a swastika and an eagle — found their way to the vaults of the . They are the 1 ill N only gold bars in the Bank that have \ \ n \ s been marked with a swastika. n [ 1 _ r, i or Nick Durey and Peter Rodgers trace ) 1 i \. | the history of these two gold bars u n U-

ON A COLD spring morning in 1945, a party " Hauptkasse" and containing two the American army overran , gives of German soldiers and government officials, gold bars, each stamped with a swastika and them a historical value beyond the £180,000 billeted at a military training school in an eagle. worth of gold they contain. Their origins can Bavaria, decided to light the stove in the offi­ One of the Reichsbank officials was sus­ be traced to before the beginning of the cer's mess for a little warmth. The wood was pected of stealing and concealing the bars; a Second World War and are best described in laid and the fire kindled, but instead of a nice year later he committed suicide in Munich. the book, , by Ian Sayer and warm glow, all that came out of the stove was The very same pair of Nazi gold bars found , published in 1984 by choking blue woodsmoke which seeped from their way last September to the vaults of the Granada. the cracks and joints of the flue-pipe and filled Bank of England. They are the only bars in the When the book first came out, the authors the room. Bank marked with a swastika. had no clue to the whereabouts of the two gold It was obvious that the flue was obstructed, The unusually well-documented story of bars, whose history they had traced in such and a quick search revealed a well smoked the two bars, which were part of a consign­ detail. The bars' existence was only publicly canvas bag, stencilled with the words ment the Germans were attempting to hide as confirmed this spring, when the Bank of

THE OLD LADY SEPTEMBER 1997 The unloading was done under the cover of darkness and was no mean task. Each bar weighed about 26 pounds. The bars were packed, two to a bag, each bag tied and sealed with a lead seal. Three Reichsbank officials who had accompanied the convoy then counted the bags that were neatly laid out on the bowling alley floor. To their consternation and embarrassment they discovered one bag, containing two gold bars, was missing. A hurried search failed to find the missing bars

England released details of the gold it holds den in a local lead mine. However, the mine through the night the mule shuttle continued, on behalf of the Tripartite Gold Commission, was found to be flooded and so the decision as the bags were neatly laid to rest in their die inter-governmental body that holds mone­ was made to continue southward to the small appointed caches. A second night was needed tary gold recovered after the war from the town of Mittenwald in the Bavarian Alps to complete the task, but by dawn on 28 April ruins of Hitler's regime. where the Gebirgsjagerschule, the Mountain all the gold was back in its original geological Throughout the war, the Nazis had been Infantry Training School, was located. It location — below ground. stealing gold from the countries they occu­ arrived on 22 April. It was not until the party of troops returned pied. Amongst this loot was a considerable With the Americans fast approaching, the from the mountain that, much to everyone's quantity of gold taken after the fall of , gold had to be hidden with some urgency. A surprise, the two missing gold bars were dis­ which included part of the Belgian national space was cleared in an old bowling alley in covered. But no-one wanted to go back up the gold reserves which had been deposited with the cellar of the training school's officer mess. mountain to bury them with the others. They the Banque de France for safe-keeping. To The unloading was done under the cover of were therefore simply popped into a briefcase disguise the background and true ownership darkness and was no mean task, since gold is and taken to the nearby home of Walther of this gold, the Belgian bars were taken to the 70 per cent heavier than lead. Each bar Funk, the Economics Minister and Reichsbank in and resmelted — that is weighed about 26 pounds. The bars were Reichsbank President. melted and re-cast. Each bar was then packed, two to a bag, each bag tied and sealed It transpired that Funk was to be one of the stamped with the German eagle and swastika, with a lead seal. first Nazi VIPs caught after the German sur­ and a retrospective date of 1938. Three Reichsbank officials who had render. He fled to Berchtesgaden, (the resort By February 1945, the speed of the allies' accompanied the convoy then counted the where Hitler built his Alpine retreat), on advance was clear evidence that Germany had bags that were neatly laid out on the bowling 1 May, taking with him the two bars of gold lost the war. Reichsbank officials began to alley floor. To their consternation and embar­ which had been found in the stove. On Funk's make hurried arrangements to move their rassment they discovered one bag, containing arrival in Berchtesgaden he handed the bars to reserves out of Berlin. About 90 per cent of two gold bars was missing. A hurried search Karl Jacob, the Landrat (or Prefect). Jacob in the gold held, together with a considerable failed to find the missing bars. turn passed them on to the head of the quantity of foreign currency notes, was trans­ Berchtesgaden Savings Bank. ferred to the Kaiserode salt mine at Merkers, The two bars were passed to the American in , some 200 miles south west of military authorities when they took control of Berlin, where it was subsequently discovered the area on 5 May. The bars were then sent by General Patton's army in late April 1945. on to the Munich Land as The balance of the gold, consisting entirely Deposit No 10 on a list of valuables held by of bullion looted from , including the the Bavarian Military Government for trans­ two gold bars now held in the Bank of A more permanent resting place now need­ fer to the Foreign Exchange Depository England, remained in the vaults of various ed to be found. A site high on the Steinreigal in , to which all captured money and Reichsbanks in central and southern Germany. mountain overlooking Mittenwald was select­ valuables were supposed to be forwarded. But In early April, Hitler ordered this remaining ed, and over a period of two nights two holes the bars never reached the FED. gold to be sent to Bavaria. As many as 780 large enough to accommodate the slightly These were confusing times, with large bars were collected at the Reichsbank in depleted hoard of 728 gold bars were exca­ amounts of looted assets recovered and Berlin and preparations were made for 730 vated from the rocky slopes. With the digging processed in a country whose infrastructure bars, worth over $10m at 1945 prices, to be complete, attention turned to bringing the had been ravaged by war. Just three weeks sent south in one delivery. (The fate of the 50 gold to its hiding place. The normal mode of after the two bars were delivered to the remaining bars remains a mystery to this day.) transport for German mountain troops was the Munich Land Bank, the Finance Division of The gold left Berlin by road on 14 April in pack animal. Sure-footed on rough and pre­ the US Group Control Council issued a a convoy of five or six Opel-Blitz trucks cipitous terrain, mules were an obvious choice detailed and very thorough document, classi­ belonging to the Berlin police. Because of the to move the gold up the mountainside. Late on fied secret, and entitled Report on Recovery worsening military situation, the convoy did the evening of 26 April, eight mules were of Reichsbank Precious Metals. The report not arrive in Munich until 19 April. The orig­ each laden with three bags of gold weighing clearly established that the two bars were inal intention had been for the gold to be hid­ nearly one and a half hundred-weight. All originally part of the shipment of 730 bars

THE OLD LADY SEPTEMBER 1997 117 from Berlin. It gave their precise weight, and The enquiry was passed to the Deutsche Early this year the Bank asked the TGC even quoted their bar numbers. Bundesbank in Frankfurt, which finally whether it could publish its full list of Nazi Yet for all this thoroughness, the finance replied on 9 January 1980 to the effect that gold dealings with the commission since the division of the US Group Control Council was although records did exist covering the war, including the fact that it held the two unable to locate the two gold bars, even deposit, official secrecy regulations took recently delivered bars. The Bank believes in though they were held in official US custody precedence over historical or literary research. full disclosure of its holdings of Nazi gold but in a bank vault run by the Finance Division of It went on to say that, broadly speaking, all is nevertheless acting for a customer, the its own military government almost on its deposited assets not claimed by the military TGC, and cannot disclose without permission. own doorstep in Munich. The report conclud­ government were returned to their original In early May the list was published. ed that the two gold bars in question were owners, where traceable, or were destroyed There was little interest at the time in the actually missing. on general release in 1955. disclosures, which were overshadowed by the By October 1948, the FED seemed to have Nothing then happened, and the trail went publication the same week of detailed reports accepted that they had gone for good. In a cold again for a number of years until in 1988 on the history of Nazi gold, by the Foreign & hand-written reply to a FED request for infor­ the Bank of England was approached by the Commonwealth Office and by the US mation about Reichsbank gold which had not Tripartite Gold Commission to arrange for Commerce Department. There was also a been recovered, Albert Thorns, former head of and transport of two gold bars from growing controversy over Switzerland's deal­ the Reichsbank's Precious Metals Frankfurt to . The TGC, as the body ings with Germany during the war and its fail­ Department, listed the two bars along with that looked after gold stolen from govern­ ure to come clean over dormant accounts in other bullion and coin lost when the Russians ments by the Nazis, was interested in the bars Swiss banks belonging to victims of the overran the Reichsbank vaults in Berlin. because the original owner was the Belgian Nazis. The bag containing the two gold bars then Central Bank. All this was taking place against the back­ began a lengthy sojourn in a forgotten corner Again, nothing happened. Although trans­ ground of a campaign by organisations repre­ of a dusty vault in the Munich Land Bank. port quotations were supplied by the Bank, senting Jewish victims of the holocaust to They were still there in May 1949 when allied the bars stayed in the Bundesbank. It appears secure the remains of the gold held by the military government came to an end and West that the TGC, the German central bank and TGC. Germany became a sovereign state. In the the US government — in whose military zone In fact, the quantity of Nazi gold now left meantime, the other 728 bars had been recov­ the bars had first been found — could not with the TGC is tiny compared with the orig­ ered on 7 June 1945 by US troops using metal agree on who would be liable for any rival inal amounts of looted gold recovered from detectors. These bars were transferred to the claims to ownership. the Germans, which by July 1948 totalled FED in Frankfurt. Only in 1996, half a century after the war, more than 306 tonnes, held at either the Bank There is a long gap in the story until July when reached a deal that allowed it to of England, the Bank of New 1979, when the Munich Land Bank was receive its entitlement of gold from the TGC, York or the Foreign Exchange Depository in approached with a request for information did the matter of the two bars come to the Frankfurt by the military government. The about the ultimate fate of various deposits surface again. This time, there was swift final total rose to 337 tonnes by 1974. which had originated from recovered agreement on the transfer, and in September In 1947, after the TGC had issued a ques­ Reichsbank treasure, including Deposit 1996 the Bundesbank released the bars to the tionnaire to potential claimant countries, No 10, a bag containing two gold bars. US government at a small ceremony in claims came in for just over 735 tonnes from Frankfurt. Albania, , Belgium, , The US Greece, Italy, Luxembourg, the , govern­ Poland and Yugoslavia. The TGC approved ment claims amounting to 514 tonnes, still consid­ returned erably more than the total gold pool available. them to the It was decided that each claimant government TGC in would receive approximately 64 per cent of accordance their validated claim. with the However, the process was never simple. 1946 Paris Even in the late 1940s, there was a heated Agreement argument, a good deal of it reported publicly on repara­ in newspapers, about the status of the gold tions from recovered, about how it should be allocated Germany. and how much should go to individual victims Since the of the Nazis rather than to the governments of Bank is countries they had overrun. It proved hard to banker for find a definition of monetary gold fully the TGC, acceptable to everybody. the bars The definition used by the TGC was: "All came to gold which, at the time of its looting or their cur­ wrongful removal, was carried as part of the rent resting claimant country's monetary reserve, either in place in the the accounts of the claimant government itself bullion or in the accounts of the claimant country's area of the central bank or other monetary authority at Bank that home or abroad." same An FCO report, published last year, said month. this definition was "deliberately narrow and Britain, the US and France are being pressed to hand this residual amount to the survivors of the Holocaust and their descendants. The decision is, however, entirely a matter for the governments concerned rather ' than for the Bank, which acts only as custodian for the gold. Meanwhile, the two swastika bars now in the vaults of the Bank are a grim reminder of a story that has still not quite come to an end official representing the Commission, said: intended; and any such gold included in bars aimed at excluding any private claims for "The Bank would propose to have all these of gold was regarded as monetary because its restitution, partly because in some countries it melted down and turned into good delivery origin was considered untraceable." had been illegal for private individuals to hold bars, but will not do this without the sanction It is not surprising, especially given the gold". of the Commission. There is no other means chaos at the time, that some of the decisions But another explanation the FCO gave for of telling their gold content." made in the 1940s about what was monetary the narrowness of the definition was that the A second letter by the same official says: gold and what came from victims appear "total value of the possible private claims "The Bank would wish to melt down these questionable now. Quite apart from the prob­ provable by documentary evidence was likely few indeterminate bags if we are going to lem of gold jewellery and other artifacts melt­ to be small in comparison with governmental consider them monetary gold. They will not ed into bars, it may well be that small amounts claims for the restitution of looted national do this unless they receive an order from the of material that should have been classified as gold reserves". Furthermore the total number appropriate authority, so the situation is victim gold were melted down and wrongly of "private claims" likely to be presented to held." The Bank has not found references to put into the monetary gold reserves, though the TGC, if allowed at all, might run into this matter in its own archives. the precise circumstances in which decisions many thousands and make it impossible in The complications do not end there. It is were made are hard to reconstruct, half a cen­ practice for the Commission to handle the job quite wrong, for example, to assume that all tury later. of allocating the gold. These practical argu­ coins found in the Nazi hoards are likely to There is little evidence that gold objects ments appear to have won the day, but sowed have been victim gold. The coin, much of it belonging to holocaust victims were received the seeds of a bitter argument that has been US dollars and sovereigns, would have been in the Bank, other than a very small quantity revived half a century later. regarded as monetary gold because of the described as "certain gold coins, medals and There was in fact a separate procedure for number, quality and good state of preserva­ tokens" which arrived in 1948. handling non-monetary gold recovered after tion, a large part in mint condition. It is stan­ Correspondence at the time suggested that the war. Responsibility was originally vested dard practice for national reserves to include there were about 10 bags. in the Inter-Governmental Committee on gold coin, and this is still the case with the Refugees, which later handed over this role to UK reserves. Indeed, all claimant countries the International Refugee Organisation. Its have received a proportion of their gold in remit was to ensure that non-monetary gold, coin, and the last of the coin held in the Bank and other amounts earmarked in a treaty on was distributed to Albania last year. the subject signed in Paris in 1946, would be In fact, almost all the original hoard of 337 returned to refugees. tonnes of bars and coin had in fact been dis­ tributed by 1982. Albania's allocation was Many gold objects such as jewellery were A recent history of the Bank by Elizabeth first held up by a counter claim from Italy for clearly non-monetary, and metal of that kind Hennessy refers to one particular bag contain- most of the gold involved, and subsequently found in Germany was placed at the disposal ina 26 different currencies, plus a number of by separate claims against Albania by all of the refugee committee. But once melted coins and medals. The TGC referred these three TGC governments. Of all the recovered down into bars, the origin of any given piece items to a curator at the British Museum who gold, only 5.5 tonnes is now left for final dis­ of gold is virtually untraceable. So it was per­ decided that none of the items had a numis­ tribution to claimant countries — 3.5 tonnes fectly possible — indeed, highly likely — that matic or historical value within the meaning at the Bank and 2 tonnes in New York. some of the bullion in German reserves had of the Paris agreement. originally been stolen from private individuals The three governments that control the The commission therefore decided that and turned into bars. TGC, Britain, the USA and France, are being these items should be melted into bars. This is A second FCO report, published on 6 May pressed to hand this residual amount to the described on pages 245-247 of A Domestic 1997, concluded: "It would be wrong to assert survivors of the Holocaust and their descen­ History of the Bank of England by Elizabeth that there was no possibility that some gold dants. The decision is, however, entirely a Hennessy, published by Cambridge bars deposited in the (TGC) pool, smelted by matter for the governments concerned rather University Press, 1992. the Nazis, contained gold items which had than for the Bank, which acts only as custo­ The bags were also referred to in recently- belonged to concentration camp victims. Two dian for the gold. Meanwhile, the two swasti­ published correspondence released from conclusions can, however, be drawn from the ka bars now in the vaults of the Bank are a Foreign Office archives, which quotes the records on this point: gold which was known grim reminder of a story that has still not Bank of England's views on the matter. The to be taken from concentration camp victims quite come to an end. correspondence, signed by a Foreign Office was kept separate and used for the purposes 119

THE OLD LADY SEPTEMBER 1997