Nazi Gold Read online

  Ostensibly, Frölicher’s duty was to care for the property of German railways, German diplomatic buildings and other state-owned assets in Switzerland. But he extended his remit to include caring for the interests of the 20,000-member pro-Nazi Deutsche Kolonie living in Switzerland, the Nazi sanatoria in Davos, the German assets demanded by the Allies, and all the valuables and loot owned by Germans hidden across the country. Legally, the whole fortune had been frozen by the decree of February 16, 1945, and ought to have been transferred to the control of the Compensation Office. But, to Frölicher’s satisfaction, he regularly received from Stucki’s office the minutes and reports of the joint commission appointed to implement the Currie agreement. Glancing through the records, he could spot those German interests requiring protection and argue that the property targeted by the Compensation Office was owned by Swiss nationals rather than German, or he could endorse a bank’s refusal to release any assets. Unlike German Jews, who were denied any assistance in finding their property, Aryan Germans found that Frölicher assisted their cause, not least by urging Stucki and Schwab not to distinguish between Germans and German Jews. “That prevents any harsh treatment of the Germans,” explained the official, pushing at an open door among his colleagues in the Political Department, who were nonchalantly shrugging off criticism that prominent Nazis resident in Switzerland were receiving better treatment than the Jews. With the department’s blessing, Frölicher wanted money intended for Europe’s reconstruction and for the Jewish refugees to help unrepentant Nazis enjoying Switzerland’s security and comfort.

  Switzerland’s perpetuation of wartime discrimination particularly struck the Swiss Association of Jewish Refugees. Writing to Petitpierre, the association’s president asked the minister to explain one incongruity. “During the war,” he wrote, “the Swiss police had effortlessly identified every single Jew. Why is it now so difficult to do the same?” Moreover, before and during the war the Swiss had applied Nazi racial laws to decide whether an individual was a Jew. Why did Switzerland not now want similarly to accept the Nazis’ Nationality Law of 1941? After all, the Swiss government had accepted and applied that very same law during the war. “Public authorities must remain consistent,” mocked the association, “and cannot change their position!” The anonymous official in the Political Department who read the letter recorded his reaction. In the margin of the letter, alongside the association’s plea that “surely the declaration by an individual that he is Jewish can suffice,” he scoffed. “That would suit the Jews very well!”

  Max Schwab was uneasy about the confusion. To seek a resolution he met Political Department officials on September 10. Personally, he explained, while he rejected the argument that German Jews had lost their nationality, he was prepared to allow limited exceptions to the freeze: namely, for the Jews but not for anti-Nazi Germans. Each application, however, would require investigation, and the decisions would not be publicized. Initially, that proposal was opposed by Robert Jezler, of the Police Department, who shared Heinrich Rothmund’s anti-Semitism. Effectively, Schwab’s initiative was vetoed. But, unexpectedly, one month later, Jezler changed his mind. The banks, which had sought to profit from the Jews, were one source of his disorienting somersault.

  In 1942, the Volksbank, deluded by the myth that the Jews were rich and the bank’s earnings would be enhanced by a windfall, had volunteered to accept deposits from all those Jewish refugees allowed to remain in the country. The bank had been surprised and disappointed. The Jews’ deposits were small. In the summer of 1945, to recover its anticipated profits, the bank had imposed exorbitant fees for administering the deposits, by then inaccessible because of the freeze. The police had become irate and frustrated. Wanting to drive the Jews out of Switzerland as fast as possible, Jezler had become obstructed in the execution of his policy by the foreigners’ excuse that it was impossible for them to travel unless they had access to their money. Reversing his argument, Jezler wrote to Schwab on October 12 that the Jews were not intended to be targets of the freeze and that the banks, rather than extorting money, should show “generosity” to anti-Nazis. The Compensation Office “should adopt a more open-minded and generous policy.” The freeze was not intended to harm the Jews, and it would be “politically and morally justified” to release all of their assets just as the Jewish groups requested. “If we accept that solution, we avoid treating identically the tyrants and their victims,” wrote the former persecutor of Jews, who nevertheless explained that the police would “not find it easy” to identify a Jew. Jezler’s final argument hinted at the source of his reversal: “Financially it’s not very important. Only a few of the refugees possess more than SF20,000.” Banking secrecy existed within clearly defined limits.

  To settle the confused dispute, Schwab asked two eminent professors to submit their interpretations of the law. To his discomfort, their opinion supported the Jews. Dr. Hans Reisser, a retired government lawyer, submitted that Switzerland had always accepted the validity of Nazi laws and that during the war the statelessness of the Jews had been recognized by Swiss law. Switzerland, he added, had even exempted the Jews expelled by the Nazis from the laws freezing their funds. Accordingly, the Jews were still stateless and no Jewish property, he advised, should be frozen. Clearly puzzled by the debate, Reisser added, “In June [1945] we agreed that it would be wrong for stateless Jews also to lose their assets.… It was also agreed that stateless people should be free to ask the DIV for new passports which would be stamped ‘stateless.’” Uninfluenced by political pressure, Reisser resisted the abandonment of Switzerland’s traditional posture of rigid adherence to the law.

  Supporting his colleague, Dr. Adolf Schnitzer, the second lawyer consulted, recommended that Switzerland should rely on the refugees’ declaration of Jewishness. Reading that advice, an anonymous official in the Political Department commented in pencil, “Never rely on them.” The cheating Jews, he declared, should never be trusted.

  Disquieted by the absence of legal endorsement, Schwab summoned a conference at the Hotel Bernerhof on December 17 to establish the government’s policy. Initially tilting toward alternate sides of the fence, at the end of the day, supported by the pro-Germans in the Political Department, he chose to ignore the lawyers’ advice. The freeze, it was decided, would apply to all Jews and anti-Nazis—although, depending on any proof provided, there could be exceptions. Effectively, the Holocaust was to be disregarded and Switzerland’s wartime policy toward “stateless” Jews would be reversed. Jews and Nazis were to be treated identically.

  8

  THE PAWNS

  Salvation for the Jews depended upon Moses Abramovitz, the thirty-three-year-old New York economist and crusader, still inspired by Roosevelt’s legacy. In July 1945 at Potsdam, Abramovitz had argued that 2 percent of reparations, including the German assets in Switzerland, should be used to relieve the plight of Europe’s refugees. Four months later, on November 9, he arrived in Paris for a conference of fourteen nations to establish, in accordance with Article 8 of the Potsdam Agreement, a Commission on Reparations. His ambition was to secure the allocation of money “for the rehabilitation and resettlement of non-repatriable victims of German action”—namely, the Jews.

  The leader of the United States delegation, James Angell, a professor of economics at Columbia, was not much committed to the ideal of helping Jews. Fortunately, Angell relied upon his deputy, Abramovitz, for advice, to write his speeches and to negotiate the agreement with the other nations. Since all the other nations had suffered financial hardship from the war and were instinctively loath to approve any reduction of their share of reparations from Germany, their sympathy for refugees could not, Abramovitz knew, be assumed. “We’re doing our best,” he told the lobbyist of the Jewish Agency, perpetually prowling the corridors and berating the American delegates with the image of helpless Jews suffering in the camps, “but there are thirteen other countries here who don’t want to see their share of the pot reduced.”

  Th
e other delegates had arrived with varying antagonisms and prejudices. Abramovitz’s tactic was to arouse their emotions by composing tear-inducing speeches for Angell about the death camps, the gas chambers and the discovery by the American army of hoards of wedding rings and gold fillings extracted from the corpses and abandoned by the SS in caches and Reichsbank vaults. “The emotion will change them,” Abramovitz promised. Although the investigators estimated the value of that nonmonetary gold to be no more than $5 million, it was a symbol of inhumanity that would neutralize the most selfish demands. That gold if no other, it was agreed, belonged to the stateless Jews. To that money the Americans added the heirless assets.

  Mention of the extermination camps always affected David Waley, the Treasury official, but Whitehall’s instructions to the British representative were to oppose reparations for Jews and to condemn special pleading for the victims of Nazism. There were, Waley was briefed to argue, far fewer stateless refugees than suggested and, while stateless persons should be given special help, their numbers should be reduced, not least by sending German and Austrian Jews back home “if possible.” Embarrassed by the prejudice shown by his London colleagues, Waley had been limited to uttering a private caution. The Americans, he warned, “obviously attach considerable importance” to the proposals submitted earlier by Sy Rubin and Chaim Weizmann, the president of the Jewish Agency, and the British should resist opposition unless there were “really strong reasons.”

  Rubin had returned to London in September to discuss the fate of the heirless assets. Still unaware that most of the heirless assets in Switzerland did not originate with German Jews and therefore did not fall under the Safehaven program, Rubin suggested to Jack Troutbeck that the Allies could assume that the heirless assets were “almost entirely” the property of German Jews, and should negotiate to obtain that money entirely for the benefit of the increased number of 250,000 destitute and stateless Jews languishing in the Displaced Persons camps.

  Rubin’s proposal, initially welcomed, was followed by a long and emotional letter to the Foreign Office from Chaim Weizmann. After reciting the unprecedented suffering of the Jews, the murder of six million, and the loss of assets worth “over £2 billion,” Weizmann turned to the heirless assets in Switzerland. “It should need no argument,” he suggested, “to prove that property rendered masterless by crime should not … fall to the governments which committed the crimes, or to any other governments, or to strangers having no title to it.” He asserted that those properties “belong to the victim and that victim is the Jewish people as a whole.” Up to that point, Troutbeck could accept Weizmann’s argument. Although there was no reason in law to regard the surviving Jews as “heirs” of those who perished, Troutbeck could divine no reason to prevent the heirless assets from passing to the Jews. But Weizmann’s conclusions were anathema. “The heirless assets,” the Zionist insisted, “should be used to help Jews settle in Palestine.” Similarly, any reparations from Germany, such as machinery, he proposed, should also be sent to Palestine.

  The suffering of the Jews had not awakened much emotion in the Foreign Office during the war, and in the aftermath the sympathy had, if anything, declined. Unwilling to antagonize the Arabs, the Foreign Office opposed Jewish emigration to Palestine while lamenting Britain’s slender prospects of extracting a share of the German assets in Switzerland to alleviate its financial predicament. “I feel little confidence that there will be anything for the U.K. by way of reparations from Switzerland,” complained Playfair in the Treasury. “If the Swiss succeed in keeping all the German assets, we shall have to give up more than our fair share of what becomes available to other claimants.” Yet he declared a “natural and personal sympathy” for Weizmann. While characterizing as “fictional” Weizmann’s description of the Jews as “a nation,” he nevertheless believed that the U.S. proposal to use the reparations for refugees was “realistic” and possessed “great attractions” for winning public support. “It corresponds,” Playfair wrote, “to a strong sense of natural justice.” Giving money to Jews in Palestine, he told Foreign Office officials, should be considered in a positive spirit in the interest of fairness.

  Playfair’s entreaties fell on deaf ears. Rubin and Weizmann’s “monstrous suggestions” were condemned as “special pleading,” and as having “dangerous implications” for other claimants whose prospect of “having to compete with the Jews would be rather alarming.” Weizmann’s combination of heirless assets, reparations and Palestine drove Whitehall into opposing the allocation of any reparations, including the heirless assets, to the Jews. The mood in Whitehall became unremittingly hostile.

  New submissions to the Foreign Office by Jewish refugee organizations and the Board of Deputies of British Jews about the rights and interests of the German Jews and the need for general assistance to Jews were perfunctorily acknowledged. Compensation to Jews for their losses out of reparations, minuted H. S. Gregory, “has no logical justification whatever the sentimental appeal may be. In fact it would mean that we should be paying for what the Nazis did.” Jack Coulson argued that Britain should seize all German-owned property in Britain to pay off German debts, including property owned by German Jews. Disdaining any help for the German Jews, Gregory encouraged his colleagues “to keep out of this as long as you can.” German Jews, he thought, should be pushed back into Germany. Troutbeck’s replies to the Jewish organizations, acknowledged only after long delays, blamed “administrative conditions” for failing to implement their “difficult” requests.

  To encourage the Jews to return to their homes and so limit their claim on reparations, the Foreign Office disputed the existence of “stateless Jews.” Within the Foreign Office, officials had agreed in June 1945 that the Jews had never lost their nationality because the Nazi law of 1941 had been revoked—an opinion that was conveniently shared by Max Schwab and the Swiss government. Nothing was publicly said about that assumption, but after the submissions by Rubin and Weizmann had been categorized as “a mistake,” the Foreign Office’s policy became uncompromising: there were “extremely few truly stateless persons” in Europe. Accordingly, a request by the Jewish Agency to meet British officials was rejected and Weizmann’s letter remained unanswered.

  Outraged by the British suggestion of forcibly sending German Jews back to live among their persecutors, Abramovitz sought allies to defeat Whitehall’s bigotry. His best ally, he discovered, was Waley. The Englishman understood that ultimately his Whitehall masters would be compelled to bow to American pressure and, after consulting Playfair, confided to Abramovitz that Whitehall’s retreat depended upon Angell’s persuading all the governments concerned of America’s resolution to obtain money for the Jews.

  Abramovitz’s problem was Angell’s inability to deliver a fluent speech that would persuade the doubters and the antagonists, especially the British. His solution was to seek Waley’s help. While they were closeted together in a solitary office, the Englishman composed the speech that the American delegate would deliver to influence the Foreign Office in London. The result was an unapologetic plea by Angell for the survivors of the Holocaust: “It would be neither just nor humane to insist that Germans and Austrians who had to flee from their homes because of political or religious persecution should now return to live among the people who persecuted them so bitterly and who are responsible for the murder of so many of their relatives or political associates.” Equally, it would be wrong, said Angell, to repatriate Jews from Eastern Europe forcibly: they would be threatened if they returned to their communist-dominated countries.

  Angell proposed that $25 million should be allocated to the stateless refugees, to be financed by using all the nonmonetary gold found in Germany and 0.5 percent of the German assets secured in the neutral countries. The neutrals, especially Switzerland, were to be asked to hand over German assets and the “funds deposited … by victims of Nazi action who have since died and left no heirs.” To assuage the British, although Jews would be entitled to 90 perc
ent of the money, the directive to the international committee to be established to administer the fund would omit any mention of migration to Palestine. Twelve nations were persuaded by Angell. Only the British seemed to be opposed.

  Faced with isolation, Waley was reluctantly instructed by London to support Angell’s scheme and to renounce any suggestion of forcible repatriation of Jews. The agreement, pledging $25 million and the heirless assets to Jewish refugees, was signed on December 21. Privately, some British officials were furious. The Jews, remarked Gregory of the agreement, would not be satisfied with just $230 for each refugee, and the “blackmail from the Jewish community in the States will begin all over again.” The agreement and the negotiations with Switzerland, he added, raised “concern” about those American officials “imbued with some spirit of the Crusaders, inclined to see sinister figures and machinations at every turn.” With the approval of like-minded colleagues, he condemned the crusaders for sitting in judgment on the Swiss. Among the crusaders automatically included in Gregory’s condemnation was Bernard Feig, the U.S. Treasury representative in London responsible for Safehaven.

  Feig was sitting in judgment not only on Switzerland but also on Britain. Safehaven was in “crisis,” he believed, and the prospects of success were “rapidly diminishing.” The blame, he thought, lay with Switzerland’s sabotage and dishonesty. The Swiss undoubtedly felt “smug” reading British press reports that there was no risk of sanctions. The sweetening atmosphere toward Switzerland was evidenced in the U.S. Treasury report of an elaborate luncheon hosted in Zurich in January 1946 by Peter Vieli, the director of Crédit Suisse, in honor of Lauchlin Currie. Vieli spoke eloquently about Switzerland’s loyal contribution to Europe’s peace and reconstruction, and yet in 1940 he had signed a petition urging the Swiss government to show greater sympathy toward the Nazis. Pertinently, Crédit Suisse, like Switzerland’s other banks, still refused to seize German assets and loot. Even the British, Feig knew, had evidence of that rebuff.