Nazi Gold Page 8
Throughout 1944, reports from Germany and Eastern Europe had chronicled the remorseless murder of the Jews. News agencies dispatched reports of ghettos being emptied and the inhabitants murdered. The fate of the Jews was confirmed by Swiss relief agencies in stark terms. “Deportation means the most brutal annihilation of the innocent,” recorded the annual report of the Swiss Labor Relief Agency for 1942–43. Swiss newspapers published eyewitness reports of degradation and distress as the Jews were herded to their death in fields, camps and rail wagons. In September 1943, a Swiss newspaper had repeated an estimate from New York that five million Jews had so far been murdered. In New York and London, the fate of Europe’s Jews was widely discussed. Even the Neue Züricher Zeitung had bluntly concluded in December 1943, “The Jewish Question has become a Jewish slaughter.” Reflecting the skepticism of the Swiss government’s censorship department, which criticized the reports as “foreign atrocity propaganda of the worst kind,” Eduard von Steiger, the minister of justice and the police, repeated to complainants that Switzerland could not afford to allow more than 600 refugees to enter the country every month.
Five months later, that obduracy had become untenable. Intelligence reports from the exiled governments and eyewitness accounts by escapees from Auschwitz and other camps were accepted even by former skeptics as irrefutable proof of mass murder. In May 1944, the reports from Hungary that Adolf Eichmann was organizing the deportation of over 700,000 Jews to Auschwitz were widely disseminated in New York, London and Geneva. In Budapest, Carl Lutz, the Swiss vice-consul, was appalled by the impending tragedy. Heroically, despite reprimanding letters from his distrustful superiors in Bern, Lutz issued 21,000 letters of protection for Jews, five times the number issued by Raoul Wallenberg, the Swede. Nevertheless, daily, after May 14, 1944, over 10,000 Jews were being shipped to Auschwitz. In just over three weeks, 355,000 would be murdered. Reports of the crime were published in Switzerland despite the censor’s criticism that they bore “propaganda value.” The Swiss did not react in the same ways. While more refugees were being given sanctuary, some cantons continued to refuse to provide any shelter. But, bowing to pressure from American Jews, von Steiger agreed that thousands of Jews would be given refuge. Overnight, Switzerland became one venue of the negotiations between representatives of the Jews and the senior SS officers in Hungary. The motive of the SS officers was money. Saving the lives of rich Jews, astute SS officers recognized, was a lucrative sideline and the natural safe haven for their ransom was Switzerland.
Negotiating under the supervision of Heinrich Himmler and Adolf Eichmann was SS Colonel Kurt Becher. Becher was an opportunist, born in Hamburg in 1909, whose career started in Dachau, progressed to the murder of Jews in Poland and Russia and climaxed in 1944 in Hungary. In Budapest, Eichmann was negotiating with Jewish representatives to exchange the lives of one million Jews for 10,000 trucks. The result of Eichmann’s negotiations was a train carrying 1,686 Hungarian Jews that arrived in Switzerland from Hungary via Belsen on June 29, 1944. With Heinrich Rothmund’s approval, the Jews were admitted to Switzerland, and others would follow later. Becher had negotiated the conclusion of that transaction—on the St. Margarathen bridge spanning the Swiss-German border—with Saly Mayer, the head of the Swiss Federation of Jewish Communities (SIG), and he discussed further deals in the Hotel Baur-au-Lac in Zurich with Roswell McClelland, an American diplomat representing the War Refugee Board. Ostensibly, the SS officer and the American were discussing humanitarian issues, but in reality Becher, the businessman, was seeking to profit from the Holocaust.
As a sideline, Becher was extorting money from Jewish families for his use after Germany’s inevitable defeat. Later identified by American interrogators as “charged with providing safe haven for Nazi funds,” Becher was collecting and hiding the valuables confiscated from Jews on the eve of their deportation to Auschwitz and offering the richest Jews their lives in exchange for their fortunes. Among the beneficiaries were the Weiss family, the owners of Hungary’s biggest industrial complex, who were escorted to safety in Switzerland and Portugal by Becher’s subordinates after transferring their entire wealth to the SS. The tariff fixed by Becher for other Jews to secure their safe passage to Switzerland was up to SF300,000, deposited under the supervision of a German officer in a Swiss account. Becher’s charm secured from the Swiss consulate in Budapest the invaluable entry visas for the Jews, and Swiss banks unquestioningly arranged the transfers and accepted the deposits.
Among the Swiss “bankers” handling the ransoms in Switzerland was Baron Eduard von der Heydt. Living in Ascona, the former German banker of the kaiser was suspected of having obtained Swiss nationality in 1937 as a cover for protecting the assets of Nazi industrialists, politicians, diplomats and intelligence chiefs. In 1944, von der Heydt’s employees disclosed that “large quantities of gold,” smuggled into Switzerland under diplomatic protection, had been buried in the cellars of his grand house. Swiss police confided to OSS officers that their search of his hotel room in Zurich, on suspicion that he was a banker for German agents in North and South America, had unearthed lists of Germans suspected of bringing valuables to Switzerland.
Von der Heydt and Becher were protected, as Marcel Vaidie, the French finance attaché, in Bern commented, by the secrecy shielding all Swiss banking operations. “In the past,” Vaidie reported to Paris, “Swiss banks have been involved in shady transactions.” The Americans’ demand for controls, he noted, had always been rejected and now the Swiss excuse was “inadequate manpower” for carrying out the controls. “The Swiss thesis,” he added, “is supported by unconvincing arguments and their position appears to be weak.”
The knowledge that Nazis were depositing their profits from the Holocaust in the same Swiss banks that since the outbreak of the war had been havens for the German loot pouring into Switzerland—more than ever since the German defeat at Stalingrad in January 1943—galvanized the crusaders into demanding that the Swiss bankers implement a code of behavior first proposed by British and American officials to representatives of the Swiss Bankers Association in Lisbon in July 1944.
“The Allied governments,” noted the Foreign Office in the aftermath, “wish to make it clear to the S.B.A. and to the Swiss banks generally that they reserve complete freedom to impose all appropriate sanctions on any bank or financial institution engaging in transactions inimical to Allied interests.” The association’s leaders, anticipating an enjoyable annual conference in Zermatt, ignored the warning. Believing that under international law Switzerland was not bound to obey either of the combatants, the bankers told the Allied officials that they refused to withdraw any offers of loans to the Germans; that they anticipated long discussions with the Allies about their directives to Swiss banks; and that they demanded that the Allies recognize the ownership of any asset, meaning German loot, imported into Switzerland before June 1, 1944, regardless of how the owner had obtained the property. Neutrality, insisted the bankers, their self-satisfaction growing rather than diminishing, implied treating both the Allies and the Germans equally. Demanding a dilution of the resolution agreed at Bretton Woods, they offered one concession: the voluntary self-regulation of their own conduct. In sum, the Swiss had adopted a looters’ charter amounting to a repudiation of Allied interference.
Unlike that of the British, the reaction among U.S. Treasury officials was outrage. Orvis Schmidt, the big, effusive director of Foreign Funds Control and an energetic crusader, raged among his colleagues that the Swiss banks’ demand for “equal treatment” was a ruse to protect their profits and the German loot. The Swiss government was willfully obstructing the Allies by refusing to halt the flow of loot into the country or to control the country’s banks despite the explosion of deposits by the murderers. With the fate of the war having swung so dramatically in the Allies’ favor, Schmidt and the crusaders pushed at Morgenthau’s open door, urging the adoption of a tougher stance. Switzerland’s proposals for voluntary self-control were rejected as
“so inadequate in almost all material respects as to offer no basis of agreement.” The resolution at Bretton Woods demanded that Switzerland “take immediate measures,” and the bankers’ reaction, the crusaders calculated, would be the litmus test of Switzerland’s commitment to Safehaven.
In early September, as American troops swept through southern France toward the Swiss border, the Bankers Association suddenly agreed to a seemingly tough code of behavior. Realizing that, with Switzerland’s access to the sea under Allied control, it would be astute to acknowledge that new restrictions were “unavoidable,” despite the limitations that would be imposed on their activities, the bankers decided to feign retreat in order to prevent the imposition of Allied sanctions against Swiss offenders. The Bankers Association’s statement of intent seemed all-embracing.
“Collaboration in any form with the Germans,” the association announced, “must be avoided in all circumstances.” In the future, the bankers agreed, they would exercise “great care” and terminate “fictitious account balances,” “anonymous accounts” and the “blurring of the real picture” of any transaction. To comply with those undertakings, the Swiss agreed to cease trading any foreign securities without affidavits, to refuse all deposits from Germany or occupied Europe, to stop leasing new safe deposits and to grant no new loans or credits or complete any currency transactions with Germans. Finally, the Bankers Association promised to investigate any “doubtful” cases of affidavits certifying the non-German ownership of securities and punish any member of the association for dishonesty. Endorsing that scheme, the Swiss government urged Washington to rely, like the British, on the Bankers Association certification.
To the British, the offer seemed satisfactory and a diplomatic success, but, to Whitehall’s surprise, the U.S. Treasury balked. Not trusting the Bankers Association to prevent German cloaking, Schmidt demanded that the association’s certificates and behavior be guaranteed by the Swiss government or by the National Bank. Alternatively, the Swiss government was to appoint the association as its official agent. The U.S. Treasury had identified the problem with great precision and expected the Swiss government to produce a solution. Instead, the reply from Bern was negative. Blaming the “political situation” and the independence of the cantons, the Swiss told the Treasury Department that the Bankers Association was not prepared to devolve its responsibility and authority on to the government. The ultimate authority in Switzerland clearly resided with the bankers.
Safehaven had reached a watershed, but the inevitability of military victory encouraged the crusaders to believe that Swiss resistance would be crushed. Their flag was raised on September 13 when Roosevelt and Churchill met in Quebec, Canada. High on the leaders’ agenda was the Allies’ treatment of occupied Germany. To Churchill’s surprise, Roosevelt introduced a plan that had been unveiled in Washington on September 2 by Morgenthau. The treasury secretary’s policy was draconian. To prevent the repetition of history, Morgenthau proposed that the sinews of German militarism were to be destroyed: The country was to be deindustrialized, its factories demolished, its mines flooded and millions of its people sent to Russia as laborers. What remained would be a nation of peasants and cuckoo-clock manufacturers who could pose no threat to peace.
Stunned but anxious to avoid an argument after Morgenthau pointedly remarked on Britain’s dependence on the United States for staving off bankruptcy, Churchill gave his agreement to the plan over dinner. Days later, as the implications for Europe were understood, both Roosevelt and Churchill retreated from the plan. For the moment, Morgenthau retained his influence, but the legacy was an irreconcilable split between State Department and Treasury officials, and greater distrust in London of the crusaders.
Those tensions coincided with the crusaders’ obtaining increasing evidence of Switzerland’s willful collaboration with the Nazis. Few were more pertinent than a report from a “reliable” French intelligence source, circulated in Washington in November 1944, about a secret meeting held on the eve of the liberation of Paris. On August 10, 1944, representatives of Germany’s industrial giants, including Krupp, Messerschmitt and Rheinmetall, had met senior SS officers at the Hotel Rotes Haus in Strasbourg. Their purpose was to discuss the very plan that Sam Klaus had anticipated. Senior Nazi Party officials had admitted that the war was lost and urged that the new strategy was to survive and win the peace. Large sums of money should be sent abroad in secret in the care of sympathetic bankers and industrialists. Among the named Swiss banks were the Basler Handelsbank and Crédit Suisse. Eventually, according to the plan, that money would be used to finance the Nazi Party’s attempt to build a new empire. Emphasizing the importance of cloaking the German deposits to make them seem “absolutely independent,” the SS’s expert insisted that success depended upon restricting knowledge of the plot to a few people. The rewards, the SS officer promised his audience, would follow once the party had rebuilt its strength.
State Department analysts did not doubt the credibility of the report. Captured German documents suggested that the Nazis’ postwar plans were already in operation, and others were “ready to be launched on a widespread scale immediately upon termination of hostilities in Europe.” The department’s briefing continued, “It is clear that the Germans have done everything within their power to build up in the neutrals … an impressive financial stake which can be used to revive Germany’s industrial and military potential after the war.” By false invoicing, stockpiling goods in Switzerland, transferring funds under apparently innocent guises of “dummies” and “cloaks” and deferring payments on phony contracts, the Germans had secreted their loot.
To frustrate that plot and overcome Switzerland’s continuing stubbornness, on December 6, 1944, shortly after the Red Army consolidated its advance toward Germany, the State Department circulated its first definition of Safehaven. The proposal, officials explained, was to register all known enemy assets outside Germany and survey enemy individuals and their activities around the world if they might be part of an attempt by Germany to preserve economic, political or military potential.
In early January 1945, as new intercepts revealed that Swiss banks, especially Crédit Suisse, were regularly transferring German loot and gold to Argentina, new drafts of the Safehaven program outlined the crusaders’ intention to surround, intimidate and virtually invade neutral countries—especially Switzerland—to root out the Germans and their loot.
The State Department’s more moderate list of demands, published on January 15, pinpointed Switzerland’s obligations. The neutral was to prevent the export of any German property, to prevent the concealment of Nazi loot, to restore loot to its owners and to disclose all German assets to the Allies, whose authority over all German property was to be unchallenged.
In a long letter to American missions in neutral countries, each embassy was directed to appoint a Safehaven officer to coordinate and solicit help from local intelligence services and to utilize contacts with local banks, businesses and government. The Safehaven officer was provided with a list of the data required. Every property right and patent, every form of financial instrument and investment, and all forms of possessions stored in banks or in safe deposits or cloaked under false names were to be uncovered and recorded. In the hunt for information, every scrap of paper, every record book and every piece of correspondence was deemed to be valuable, including the check, stubs, deposit slips and receipts. Every suspect technician, financial expert and manager—any of whom could be disguised as a common laborer—was to be interrogated. To “secure the objectives,” Switzerland was, on State Department instructions, to be squeezed by every means, including the threat of a maritime and land blockade, a freeze on all financial transactions and blacklisting from all international organizations. The American embassy in London was to be the coordination center, and Safehaven officials were to cooperate closely with the British.
To Troutbeck the instruction was a declaration of war against neutral countries—and utter madness. Al
l his apprehension about the crusaders was confirmed. Similar fears among his colleagues were reinforced by an assessment of the crusaders’ fervor from the British embassy in Washington. “Any resurgence of enemy activity” in the neutral countries, reported a diplomat, “is to be quelled in its inception.” Impelled to bring “the utmost pressure” on the Swiss government if it failed to confiscate German property or to restore property to the legitimate owners, the crusaders were “prepared to use direct pressure upon the neutral governments … where voluntary cooperation proves insufficient.” Britain, emphasized the diplomat, was expected to join the crusade. Troutbeck did not bother to record his personal feelings about that suggestion. Maintaining the facade of Allied unity was more important than argument. “We cannot disinterest ourselves in the problem,” agreed a War Cabinet committee on February 27, 1945, because Washington was “deeply interested in this question.” But even reading the State Department’s directive produced exhaustion. The sheer quantity of work to collect the information required was daunting. The Germans were hardly likely to volunteer their secrets, and much of the relevant intelligence material was scattered around Washington and Whitehall. Compared with the Americans, the British wearily admitted, they simply lacked the dedicated staff even to start a hunt in London.
Confirming the pessimism, William Sullivan, the British commercial secretary in Bern, reported that, after months spent trying to penetrate and understand the secrets of the Swiss and Liechtenstein banks, he had to admit “the impenetrability of the racket.” Nothing, not even a list of companies, was published. Finding the truth, he confessed, would be impossible.