A Dangerous Woman

by Susan Ronald

  Aside from gossip, good food, and conversation, her Thursdays were also an opportunity to show her acolytes her priceless objets d’art—ancient unguent boxes and lachrymatories from Egyptian tombs—her Impressionist art recently acquired at auction or chez Wildenstein, as well as illuminated manuscripts and medieval engravings. She often retold the story of how she had even “ripped out three pages of engravings” to give to an admiring visitor. Jünger was suitably impressed.20 The following year, for his birthday, Jünger would be presented with an Impressionist painting at Florence’s by Goepel. It is unclear if Florence or Goepel had been the purchaser.21

  * * *

  In November 1943, Jean Paulhan knocked at the door of his crusty septuagenarian writer friend Paul Léautaud to invite him to his first lunch chez Florence on November 22. “Well!” Léautaud exclaimed in his journal. “I don’t regret going to this luncheon at this Madame Gould’s. Pretty, pressing against you when she speaks to you, around thirty-five years old, chestnut brown hair, tall, thin, supple, poured into a tight-fitting long dress in the old style, more elegant than today’s fashions … When coffee was served, she sat next to me and stared with her singular cat-like eyes. I told her that I liked cats most of any animal and with her face ever so close to mine she said, ‘I have the eyes of a cat, look at them.’ Singular eyes, I repeated to her, but there is more of the she-cat in them, a sort of languor and warmth.”22 Although a latecomer to the festivities, Léautaud would become the eyes and ears for posterity into Florence’s gatherings.

  At the outset, Florence was less charitable about Paulhan’s inclusion of Léautaud, who became the acerbic chronicler of her salon. “How could Jean Paulhan decide to invite Paul Léautaud to my lunch?” she exploded one day at Marcel Jouhandeau. Her cohost’s reply was that Paulhan “is a magician. He’ll show you many other wonders.”23

  Soon, however, Léautaud tired of Florence’s eccentricities, of her loud laughter, and of being received, along with other men, in her boudoir. “Truly, let me say immediately, I have no taste at all for these meetings. These shrieks, this need to talk, this feeling of being invited as some sort of rare object,” Léautaud moaned to his journal. “I am used to being alone, eating alone, my nose in my plate, reading a newspaper if I have one, or eating with someone I need only speak to if I must.” He thought Florence was endowed with “an unending stream of words … impossible to halt her flow or place one word.” Marie-Louise Bousquet hardly fared better, with Léautaud describing her as “this Madame Bousquet whom I met at that American’s home” who was “overly exuberant,” meaning odious in Léautaud’s book. As for Florence’s fancy medical friend Dr. Arthur Vernes, he was presumed initially as wise, but Léautaud soon changed his mind, dubbing him “an idiot and pretentious.” Cocteau was “affected and false” as ever, and the actual salon seemed more akin to “a bordello or an orgy” than a literary gathering.

  Occasionally, Florence dispensed largesse in the form of coal for the coldest winters of the century on record. When Léautaud felt obliged to repay her generosity, he went to great lengths to provide her with some warmth in the form of coal, too. Weeks passed. At last, when he procured a few kilos and offered them to Florence, she replied that it wouldn’t be necessary as she had an eighteen-ton truck arriving the next day filled with coal, just for her.24

  It is not surprising that the only thing that kept Léautaud coming week after week and month after month was the food. He eked out his meager existence by writing articles for the collaborationist press, and, like so many in Paris, was always cold and starving. So, when Florence gave him a pound of leftover roast beef from lunch to take home, he knew he had hit the motherlode.25 At least he would have one good meal a week, he wrote, and he so looked forward to her “goodie bag” that he could share with his beloved cats, not to mention her “impossible” gifts of real coffee and chocolates.

  Léautaud was not alone. Even the secretive Jean Paulhan was honest about his reasons for visiting Florence. He wrote that these “guilty secrets” were dishonest, but that it was hard to renounce life’s little pleasures.26 Marie Laurencin took advantage of Thursdays to stock up for the week, too, as well as to sketch Florence to later paint her.

  Léautaud not only left a chronicle of Florence’s salons, but also a fifty-year chronicle of literary life in France. A rare treasure. Florence’s true gift during her lifetime was her fifty-year-long salon, first at the Hôtel Bristol, then at avenue Malakoff, and finally at the Hôtel Meurice. Modeled in her eyes after those of Winnaretta Singer de Polignac, who died in London in 1943, it became the seat of her power both during and after the war. While she would be questioned about her salon by the OSS in the aftermath of the liberation, it was her involvement in one of the biggest banking scandals of the war that would be her undoing.

  24

  FLORENCE THE BANKER

  Women are like teabags, you don’t know how strong they are until you put them in hot water.

  —ELEANOR ROOSEVELT

  Despite the occupation, Florence had an enviable freedom of movement throughout France that was unparalleled for most German officers, much less French collaborators. To a certain extent, that could be explained by the vast Gould entertainment empire, since, even with Warzinski as her Aryan supervisor, she had the magic touch in keeping things running much as before—save for hiring Jewish staff and entertainers. Having friends in high places, like Vogel and Knochen, was incredibly useful. Yet there was more.

  Florence expanded her personal financial interests opportunistically wherever possible, not only in black-market activities like the gray mice network, but also in partnering with a new cast of characters in other, unrelated fields, including textiles. Florence, like anyone, could see that most women in France had begun to look shabby after years of occupation, and more than likely reasoned that anything she could do to restore a modicum of chic and style would be worth the price. Still, it would take peace, Florence was heard to say while powdering her nose, before the displeasing clip-clop of those wooden clogs on the pavements would cease. It was the Germans who had ordered that leather was better used for all things military rather than to adorn ladies’ feet. The clicking shut of her compact signaled an end to the observation, just as it indicated the end of her literary lunches.

  With Vogel’s help, Florence took risks and associated openly with people—other than the Nazi hierarchy—who would be deemed as undesirables should the Allies win the war. Her shrewd business judgment, always led by self-interest and money—and oh, how she loved money—had become impoverished by her very successes in overcoming the German occupation.

  Among her undesirables were gangsters and bankers—in an age when it was still possible to tell the difference. Some were quite important bankers Florence had met through her many years working with the Gould investments. Still, the Gould name opened every door in America, making them targets for the Third Reich. An investment banker, and German resident alien in America, August T. Gausebeck, president of Robert C. Mayer & Co., an investment brokerage company located at 50 Broadway in New York City, was the banker who would succeed in embroiling the Goulds in his treasonous activities as early as 1941.

  Since 1933, Gausebeck’s Mayer & Co.’s mantra was to help the Third Reich obtain foreign exchange to lift Germany out of its financial doldrums caused by the hyperinflation of the early 1920s. Gausebeck had fulfilled his banking functions for his homeland since the bloody days of the Great War, and by 1936, Germany’s wealthiest investors backed Mayer & Co.’s various projects to obtain foreign exchange in accordance with Hermann Göring’s Four-Year Plan. The first imperative of that plan was to fund the new German Luftwaffe.

  Gausebeck knew from personal experience that Germany’s greatest industrialists lusted after a stronger Germany. Gustav Krupp and Fritz Thyssen—German parallels of the American robber barons of the late nineteenth and early twentieth centuries in remaking the country—were foremost among Nazi Germany’s supporters. Socially, politic
ally, and economically, they were the equals of any Rockefeller, Morgan, Vanderbilt, or Gould. Unlike their American counterparts, they actively participated in the asset stripping of Hitler’s enemies.

  German industrialists applauded Finance Minister Hjalmar Schacht’s newest scandalous money-making idea: importing foreign goods, then blocking payments to the exporter. Schacht would renegotiate the initial deal with barter agreements of German-manufactured goods as payment to the unsuspecting importers. It was financially criminal.1 A combination of these blocked payments were handled through Swiss banking trusts, Gausebeck’s Robert C. Mayer & Co., a German-inspired investment company called the New York Overseas Corporation, the British investment bank J. Henry Schroder, and eventually the Chase National Bank. All were complicit in the theft of millions from Jews fleeing Germany.

  Their pièce de résistance was something called the Rückwanderer Mark Scheme that lasted from 1936 to 1941. Literally meaning “returning home,” the Rückwanderer Mark was designed to allow Germans living abroad who wanted to return to Germany—on a temporary or permanent basis—to buy Rückwanderer Marks at an advantageous exchange rate. Gausebeck was in on the deal from the get-go when the Reichsbank allowed any returnees to Germany to exchange half of their dollars at the favorable RM 4.10 rate, even though the real exchange rate was only RM 2.48. How could the German government afford such largesse? Simple: the surplus was paid from blocked accounts and assets once owned by refugees fleeing Germany, mostly Jews.

  The refugees lost an additional twenty-five percent minimum through a mechanism called a “flight tax,” which was often as elastic as a rubber band. The elasticity stemmed from the official practice of (a) restricting refugees to one small suitcase to take with them and (b) valuing any nonmonetary assets for two or three cents (pfennigs) on the Reichsmark. “The German government,” the FBI noted, “thereby netted a profit in dollars of nearly 90 percent.”2 Companies trading Rückwanders needed to pay wholesalers, among which were a host of travel companies, including American Express, the Hamburg-Amerika Line, and the Swiss import-export firm Interkommerz, run by Henri Guisan, son of the commander-in-chief of the Swiss army. Jean Guisan, a close family relation and Florence Gould’s young friend who cashed her checks in Switzerland, was also related to the French General Alphonse Georges, who was fighting in North Africa.3

  Florence was aware of Gausebeck’s scam when she entered into a business relationship with him, but paid no attention to the detail. Instead, all she saw was the opportunity to make oodles of money. The devil, as always, was absolutely in the details. By 1940, Jean Guisan was on the board of the Goulds’ Société Anonyme Immobilière Gauloise, Société Lunchs et Glaciers, and Société Immobilière des Sports, employing around 20 million francs of the Goulds’ capital.4 Henri Guisan’s Interkommerz would eventually make a fortune on providing wood for “hutments” in Germany, better known as the wooden barracks at the concentration camps at Sachsenhausen and Dachau. By 1943, Interkommerz was investigated by the British, and put onto the proclaimed list of “neutral” firms doing business with the Axis countries. It was then barred from Allied markets. In August 1944, Hermann Göring Works sold its shares in Interkommerz through Switzerland.5 Florence was keeping very bad company indeed.

  * * *

  The Neutrality Act in the United States prohibited loans and gifts to belligerent nations. J. Edgar Hoover, FBI director, was told in October 1939 that “Representatives approach investors and indicate to them that Germany will undoubtedly win the war … and that marks will undoubtedly increase many times in value.”6 Hoover was onto the scam like any mollusk clinging to a juicy rock. What attracted his attention was Gausebeck, that German resident alien who was secretly funding the anti-Semitic campaign of Father Charles Coughlin on the radio; Coughlin had sponsored the Wagner-Rogers Bill of 1939 that aimed to bring 20,000 Jewish children to the United States with Nazi money.7

  In July 1941, Treasury Secretary Henry Morgenthau, investigating the entire Rückwanderer scheme separately, froze German assets and outlawed the scheme’s continuance. Still, it was left in place for its counterintelligence value. Every purchaser of Rückwanderers was individually investigated by the FBI. The first arrest made was that of August T. Gausebeck, who had become, quite bizarrely, the consul general of Bolivia in New York, and was described as a dangerous criminal.8

  The only problem was that by June 1942, Chase and other American banks possibly enmeshed in schemes to help Nazi Germany were deemed “untouchable” by the new attorney general, Francis Biddle,* on the grounds of conspiracy, espionage, or acting as agents of an enemy power. Still, the case rankled with the young Justice Department lawyer in charge, Frederick Rarig, who kept plugging away to indict Chase National.

  Gausebeck, meanwhile, was arrested on December 9, 1941, and held in custody until May 9, 1942, when the Swiss government intervened on his behalf, and he was deported back to Germany.9 Gausebeck remained in Berlin with his wife throughout 1943, courted by many, but waiting for an opportunity worthy of his significant talents.

  * * *

  Florence carried on regardless, not caring that the tide of the war had turned, despite it being obvious to many Germans that Hitler’s Reich would lose. Until her involvement with Gausebeck and Guisan, she had merely entertained the enemy in her home; bought “ownerless” art; provided setup, running costs, and women for a high-class prostitution ring; consorted with and traded in the black market with the Germans—hardly serious offenses given what others were doing. Gausebeck, Guisan, and three other men would change all that by luring her into a banking proposition in Monaco.

  While most people knew that the neutrality of the principality was a mere silken veil, even a fiction, Florence rightly believed that any investigation of her war profiteering would be the last—rather than the first—action the Allies would contemplate. Still, if there were to be a battle for Paris, meaning that the Allies were going to win the war, prudence dictated that she obtain residency for herself, Frank, and even her troublesome sister, Isabelle, in Monaco. Besides, there was always the tantalizing lure of SBM.

  * * *

  The hotel and casino company remained unfinished business for Florence—her only corporate “failure”—but it was never forgotten. Besides, hadn’t she cozied up to two men in the textile business earlier in the occupation, since they had already put themselves in pole position to win control of SBM? But there were other attractions to Monaco. Its low tax regime, no wartime restrictions, no blackouts, no interruptions to public gatherings, balls, or casino gambling all made Monte Carlo an oasis, a thriving hub of pleasure. It was her kind of place.

  Still, to invest and reside in the rarefied world of Monaco, Florence would need partners with connections in high places, partners who could cloak her activities: enter the two textile entrepreneurs in whose shady pies Florence already dabbled a finger. Each was quite different from the other. The suave, American-influenced stock speculator Pierre Du Pasquier—an avenue Malakoff neighbor—was the president of the textile and ancillary services house Experta, based in Lille. He also owned Du Pasquier & Co., Inc., in New Orleans, an American exporter of cotton to Experta. Du Pasquier was also a friend of Prince Louis II of Monaco and the French government representative in the principality.10 The other textile merchant began life as a street trader in Moscow and worked his way up to a purveyor of cloth to the czar’s army. Since the war began in 1939, he had provided cloth to the Kriegsmarine. His name was Michel Szkolnikoff. He was an exiled rag-and-bone merchant turned millionaire thanks to his associations with the biggest Marseille gangster Paul Carbone and the German security police chief, and Florence’s good friend, Helmut Knochen.

  Du Pasquier was at the top of the food chain of investors and industrialists, controlling a twenty-five percent stake in the object of Florence’s desires, SBM. He was also on its board of directors. Szkolnikoff, through his business associate at Société des Textils du Nord, Marcel Boussac, also a friend of Florence’s,
held shares in SBM, too. Szkolnikoff was not without other German friends in high places, including the ubiquitous General Carl Oberg.11 Yet both Szolnikoff’s and Du Pasquier’s business affairs were controlled by the German trust company Deutsche Waren Treuhand-Aktiengesellschaft,* which gave instructions to both men on behalf of the Third Reich.12

  The final piece in this complex jigsaw in which Florence became embroiled in Monaco required a crook influencing the seat of power. Prince Louis II was frail and old, and fretted over the loss of his properties in France. He was also entirely under the thumb of his minister of state, Émile Roblot. A small nervous man and chain smoker, Roblot had startled eyes that darted constantly behind his thick, milk-bottle glasses. At the age of fifty-two, Roblot became the plenipotentiary minister of Vichy to Monaco. He was, nonetheless, a man on the make, and was quick in spotting any opportunity to cash in on millions. As early as 1941, Du Pasquier tried to put together a new international bank based in Monaco that would be a fifty-fifty Franco-German enterprise. Together with Roblot, he even sought to provide Switzerland’s navy with Monaco’s quay as the port for the “cruelly deprived” Swiss as part of the deal.13 The object of such a bank from a German perspective was the decade-long search for consistent foreign exchange. When the war began to ebb away from the Reich, its endless search for the reserve currencies of dollars or British pounds redoubled.

  In May 1943, during the Italian occupation of Monaco, Du Pasquier was instructed to start buying luxury hotels and casinos on behalf of Mussolini. Top of the list was SBM. When Knochen and his superiors got wind of the Italian plan, the German reminded Du Pasquier that Szkolnikoff was already handling this same plan directly on behalf of the Reich. Again, hotels and casinos were viewed as prime sources of foreign exchange. Szkolnikoff was buying hotels on behalf of the Germans with unprecedented speed and an unexplained cash windfall. So, then, why were the Goulds’ hotels and casinos left unscathed? It boiled down to the fact that the Goulds represented far more than mere foreign exchange: They were long-term targets as the highly acceptable face to Nazi trade within the United States.