Nazi Gold Page 6
Cloaking of bank accounts in Switzerland had started in 1922 after a threatened tax on Swiss capital instigated a massive transfer of money to London. To protect their business from the government and attract the return of customers, Swiss banks offered to depositors confidential numbered accounts and the promise of concealment. Posing as the depositors’ ally, Swiss bankers could legally protect accounts owned by foreign Jews from demands illegally made on their behalf in Switzerland by Gestapo agents; and subsequently the same bankers could cite that law to rebut condemnation of their collaboration with the Nazis and criticism of their conduct toward Jewish refugees who had fled the Gestapo. In reality, the banks had silently exploited the law for their own profit and in collaboration with the Nazis. In these matters, the Germans had discovered that Crédit Suisse’s discretion was particularly reliable. Among the victims of that understanding was Laura Mayer, a Belgian living in Malmédy. Soon after the German occupation, Mayer was forced to sign transfers of her wealth held in Swiss banks. Her letters, clearly written under duress, were accepted from German officials by Crédit Suisse without inquiry. The bankers could not imagine that a reversal of German fortunes would expose their perfidy. After the war, Mayer would encounter a smoke screen of secrecy barring her inquiries in a manner that was still not understood by Klaus or the other Allied officials.
Unlike Mayer’s, the deposits in Swiss banks by Germany’s leaders were protected. Franz von Papen, the former chancellor, was reported to have placed SF500,000 in a bank in the Reifessenkasse, St. Gall; Joachim von Ribbentrop, the foreign minister, and Hjalmar Schacht, the former Reichsbank president, had used a female employee at the German embassy to deposit money in banks near Zurich; even Hitler was suspected of having used at least three different accounts, including that of Max Amman, his loyal publisher, for the royalties from Mein Kampf. No one, however, was as active as Hermann Göring, whose Swiss agents, especially Andreas Hofer, arranged for looted valuables, particularly paintings stolen from galleries and private collections across Europe, to be stored in Swiss bank vaults.
The more sophisticated Germans were laundering stolen money through Swiss banks by offering their loot at discount prices in exchange for secure deposits either in current accounts established under the names of Swiss nationals in Switzerland or in existing Swiss bank accounts in the United States. Swiss bankers had also become specialist dealers in stolen shares and securities. German couriers, using diplomatic protection, crossed regularly from France to deliver bags of stolen certificates to a network of untroubled custodians. One batch, spotted by British intelligence, had been stolen in the Paris office of the Westminster Bank and was delivered to the “notorious” Ted Hoch of the Swiss Bank Corporation (SBC). Hoch was managing a lucrative trade, obtaining from obliging lawyers, at $100 a shot, false affidavits attesting that the stolen foreign shares and securities belonged to Swiss nationals. Those stolen securities, resold on the Zurich and Geneva stock exchanges, were so cheap that British diplomats had protested to the Swiss government about the blatant dishonesty. A Swiss investigation in 1942 had confirmed SBC’s falsifications, but in the face of political pressure, it was dropped “in the public interest.” Papering over the embarrassment, Swiss officials reassured the British that “a better system of control could not have been devised.”
Reviewing that history, Klaus concluded that Switzerland’s laws encouraged both the trade and the crime. According to Swiss law, if possession remained unchallenged for five years, the thief was guaranteed ownership of his loot. Instinctively attracted to healthy profits, the Swiss contemplated no change of their laws, although their country, since the consolidation of the German occupation of Europe, had become a depository of loot.
Regularly, Allied intelligence sources revealed that Crédit Suisse, the Union Bank of Switzerland and the Basler Handelsbank were receiving currencies and gold worth millions of dollars from Germany either to be credited to secret accounts or to be transferred to other European neutral countries, to Shanghai or to South America. Bührle and other prominent banks, noted as “terminal stations,” were being used by German industrialists to hoard foreign currency. The Reichsbank’s ledgers recorded that at least RM15 billion ($6 billion) would be transferred into Switzerland, although the Swiss would claim it was just RM1 billion. In the opinion of Walter Sholes, the American consul in Basel, Switzerland’s bankers had transformed themselves into “pro-Fascist financial operators … who have not hesitated to work hand in glove with National Socialist and Fascist business interests.” Walter Ostrow, the U.S. Treasury representative in Bern, reported that Switzerland, as Germany’s international banker, was damaging the Allies by financing Germany’s purchase of critical war supplies from neutral countries. Echoing Sholes and Ostrow, Klaus had drawn up a powerful indictment based upon intercepts and agents’ reports revealing the close collaboration between the Swiss banks and the Germans, although the full manifestation of the bankers’ prejudice was concealed even from the likes of Klaus by a carefully continued image of tactful modesty and discretion.
Exploding myths and laws was integral to Klaus’s crusade. His ambition, to continue economic warfare into peacetime, threatened Switzerland’s tranquillity, although most Swiss were unaware of that plan. Uninhibited by any political opposition, Switzerland’s rulers had imposed total censorship and had carefully protected their people from foreign criticism and controversy. One among many unreported events was a petition signed in November 1940 by 200 Swiss leaders urging the government to observe stricter neutrality—which, considering the list of their complaints, implied a demand that Switzerland should display greater sympathy toward the Nazis. The signatories of the petition were representatives of Switzerland’s biggest banks, including Peter Vieli, director general of Crédit Suisse and chairman of the Bankers Association’s German Committee, and Paul Jaberg, director of the Union Bank of Switzerland, who also boasted a series of directorships among the nation’s insurance and manufacturing companies. Both banks controlled vast Swiss investments in Germany and in return offered a haven in Switzerland for German savings and a cloak for their customers’ nefarious activities.
Among those customers was Paul Schmidt-Branden, a former director of the Dresdner Bank in Berlin, resident during the war at the Park Hotel in Locarno, the beautiful lakeside resort in the canton of Tessin. Like other Germans enjoying the congenial atmosphere of the town, Schmidt-Branden discreetly brokered business for his Nazi clients—he helped Walter Funk, the Reichsbank president, transfer his private funds from the United States to the safety of Switzerland—but there were more sinister activities he undertook with Swiss bankers. In particular, he had recruited Swiss banking officials to reveal the accounts of Jews living in German-occupied countries.
Henry Löwinger, an Austrian Jew, was a victim of that arrangement. After his arrest in Vienna, he was visited by Gestapo officers with an offer based upon precise knowledge of his account at the Swiss Bank Corporation in Zurich. In return for his fortune, Löwinger was told, he would be allowed to cross into Switzerland. After agreeing, he and his wife, accompanied by Gestapo officers, drove to the Swiss border near Constance. Waiting on the border was his Swiss lawyer, who had arranged the SBC account. After signing the transfer of their fortune over to the Gestapo, the Löwingers walked into Switzerland, penniless but alive. “It was possible only because the Nazis had information from inside the Swiss banks,” complained Löwinger, suspecting that an official in the bank had been recruited or even planted by the Gestapo. Unknown to Löwinger, SBC’s relationship with the Nazis had been consolidated by its most senior managers and directors. Fifteen of the bank’s twenty-four directors were identified by the U.S. Treasury as pro-Nazi, closely involved in financing and easing the foreign transactions of Germany’s major industries. Investigators would conclude that the bank was “one of the principal accomplices of the Nazis.” Passing information to the Gestapo about a Jew’s secret account flowed naturally from that relationship.
On January 15, Switzerland’s trade agreement with Germany expired. The news that Swiss negotiators were traveling to Berlin to negotiate a revised agreement and were offering more loans to allow Germany to buy munitions and war supplies irritated the governments in London and Washington. Swiss nonchalance, Sir Clifford Norton reported to the Foreign Office, was based not merely on Switzerland’s need for German coal, ore and fuel but on the fact that ministers had been “over-persuaded [by] Swiss industrial interests … that Switzerland is in honor and self-interest bound to carry out the letter of the 1941 Agreement which suits these interests perfectly.” The Swiss, it appeared, were happy about their contribution to Germany’s policies.
In London, Dingle Foot, a junior minister at the Ministry of Economic Warfare, was instructed to persuade the Swiss to dampen their loyalty toward the Nazis, at least by reducing the number of Swiss specialists servicing Germany’s war machine. The threats available to Foot when he met Walther Thurnherr, the Swiss ambassador, on April 15, 1943, were unimpressive: a suspension of “navicerts,” which allowed safe passage across the sea for Swiss merchandise, and restrictions on imports of fodder and military supplies for the defense of Switzerland. Foot’s “severe warning” that Switzerland “had gone further than was necessary in meeting German demands” made such an imperceptible impression that Anthony Eden, the foreign secretary, personally intervened.
Allied armies in North Africa were on the eve of launching a massive attack against Rommel, and Eden was preparing for a critical visit to Washington. Yet the following day, April 16, Eden believed it worthwhile to meet Walther Thurnherr himself. Initially, the foreign secretary’s manner was polite. “The measure of Germany’s present difficulties,” he told the ambassador, “is the measure of Swiss strength. The harder the Germans bluster, the greater Switzerland’s strength.” The ambassador nodded. Encouraged by the diplomat’s apparent agreement, Eden added, “Switzerland should do all it can not to prolong the war.” But it gradually dawned on Eden that the Swiss were treating his “serious concern” with incomprehension. After Thurnherr had declared that he too was “preoccupied by the information reaching him,” he launched into a self-eulogy about the problems Switzerland faced in fending off Germany’s demands and still remaining neutral. Clearly, the diplomat did not understand the issue: Nazi Germany was an evil that needed to be destroyed. Allied servicemen were dying, yet Switzerland was not only supplying the Nazi war machine but was actually accepting Nazi loot, which had little bearing upon neutrality. To explain the moral issue, Eden realized, was pointless. Despite witnessing the dislocation, rationing and bomb damage inflicted on London, Thurnherr evidently felt no shame about Switzerland’s relationship with Germany. Although, unlike his countrymen, he was not immune to the war, the diplomat knew that the Swiss, without television pictures and with no experience of warfare, could not imagine how their neighbors were suffering and scarcely cared. In truth, few Swiss, including Thurnherr, could envisage the defeat of Germany. Eden therefore bid the diplomat farewell with a threat: If the new Swiss-German agreement was damaging to British interests, “our action is likely to be unwelcome to you.” The Foreign Office’s only recourse was to seek Washington’s support.
Five days later, on April 21, the American government issued its sternest protest. Announcing its “profound concern,” the administration “expressed its most forceful objections” that the Swiss negotiations with Berlin would cause a “substantial rise” in Swiss exports to Germany, strengthening Germany’s military potential and prolonging the war. To emphasize its anger, navicerts (as noted earlier, these guaranteed the free passage of Switzerland’s imports across the seas) were suspended. That gesture was the Allies’ only weapon.
Switzerland’s reaction was immediately gauged by Sir Clifford Norton. Regularly, Norton met Marcel Pilet-Golaz, the arrogant foreign minister who hardly troubled to hide his sympathy for the Germans, a sentiment shared by the majority of the Federal Council. By 1943, even Norton, a timid character, had become exasperated by Pilet-Golaz’s use of the words “loyalty” and “neutrality.” Loyalty, to Pilet-Golaz, meant Switzerland’s right to “make agreements with both sides and keep them loyally.” Concerning neutrality, Pilet-Golaz compared his country’s neutrality to that of the United States until the attack on Pearl Harbor—a deliberate distortion that ignored Washington’s decisive support for Britain until the Japanese attack. To Norton’s irritation, the minister further boasted that preserving Switzerland’s neutrality was itself a victory and justified his country’s profiting from the war. Yet Norton was also mollified by the politician. Pleading that he was truly pro-Ally but was hampered by the Federal Council, Pilet-Golaz had pledged that Switzerland would guarantee a “marked decrease” of exports to Germany during 1943. “I do not like the position in which Switzerland finds itself,” Pilet-Golaz told Norton, apparently sympathizing with Britain’s complaint, “but it is not our fault.” An embargo, explained the minister, would reduce Switzerland’s food imports, causing unemployment and unrest. Since he had made an identical pledge to reduce trade in 1942, which had later been dishonored, the Foreign Office and the State Department were resigned to the fact that the Swiss would always choose the Germans in preference to the Allies unless, as occurred on May 8, 1943, there was an opportunity to drive a wedge between Switzerland and Germany.
Walther Thurnherr, the Swiss ambassador, informed Eden that Switzerland’s trade negotiations with Germany had broken down and asked whether the sanctions could therefore not be lifted. Since Switzerland was continuing to supply munitions while a new treaty was discussed, the Allies’ response was tough. Supplies of food and fodder were banned for three months. Stung, Switzerland agreed to reduce war exports to Germany, especially ball-bearings, by 60 percent for the remainder of the year. Allied sanctions were relaxed, but the goodwill proved to have been wasted. In October, ignoring the Allies’ concerns, the Swiss signed a new trade agreement in Berlin, granting the Nazis a further SF270 million loan to buy Swiss munitions. British ministers were furious. Switzerland’s repeated promises to reduce exports to Germany, it was clear, would never be honored. “The more we damage Germany,” Foot told Thurnherr, “the more the Germans need the Swiss.” Thurnherr was unimpressed. “HMG [His Majesty’s Government],” continued Foot, “take an extremely serious view of this arrangement.” After the war, he threatened, “Switzerland would not be allowed by the Allies to recover their huge loans to Germany.” The ambassador naturally cabled a report of that conversation to Bern. It was read, filed, ignored and soon forgotten. Warnings uttered in London and Washington were the echoes of ghosts, not credible to the burghers of Zurich and Bern, who regarded the likes of Sam Klaus as the enemy.
Contemplating in Switzerland’s summer sunshine the history of the Allies’ relations with the neutral country over the previous four years, Klaus understood that one trade between Bern and Berlin—the smooth passage of gold ingots across the frontier—was a cornerstone of their intrigue. Standing in Bern’s Bundesplatz, looking at the underwhelming portico of Switzerland’s parliament, Klaus glanced to the left and found himself gazing at bland features of Switzerland’s National Bank.
A nation’s morality is occasionally betrayed by its architecture, but the edifices of Switzerland’s democracy, he reflected, revealed little of the national character. Yet if a swastika had been chiseled into the stone under the National Bank’s portico, it would have offered a fair hint of Switzerland’s sentiment toward the Nazis.
4
LOOTED GOLD
Dr. Alfred Hirs, the small, tac
iturn deputy president of Switzerland’s National Bank, was one of those Swiss who refused to meet Americans or Britons, especially types like Klaus. Utterly loyal to his country and his bank, the fifty-five-year-old Hirs by contrast always welcomed representatives of the Reichsbank, Germany’s central bank in Berlin, who were financing the war against Bolshevism. In that cause, Hirs, like so many Swiss of German ancestry, had regarded as guilty the Jewish refugees who were illegally entering Switzerland to save their lives, while the Nazis he greeted as men of honor. That prejudice was more than useful to Walther Funk, Germany’s minister of economics and president of the Reichsbank, and to his deputy, Emil Puhl.