Nazi Gold

by Douglas Botting

  Slowly this material was arranged into a rough narrative line. Early efforts to produce a book proved abortive. Then one summer, at Agatha’s waterfront taverna in Nissaki, a small village on the remoter north-east coast of the Greek island of Corfu, Ian Sayer struck up an acquaintanceship with Douglas Botting, whose earlier efforts to crack the Reichsbank mystery were already known to him, and the present collaboration was born. The research had taken eight years. The writing of the book – a task of considerable complexity and magnitude – was now to take two more years. While the resulting work can reasonably claim to be the most definitive study of this remarkable case to date, it is not an exhaustive one. The story of the Reichsbank mystery remains in part a mystery. No one was charged with complicity in the robbery and few have volunteered to confess. There are gaps in the evidence. Some archival material has been destroyed, some has proved extremely difficult to locate, some could not be printed because of the laws of libel.

  The research behind this book had begun as an attempt to discover the truth about the world’s greatest robbery. It was never envisaged that it would eventually reveal a story of corruption in the American occupation of Germany and of deliberate cover-up by the US European Command in Berlin and the Department of the Army in Washington. The authors had never set out to indict American military government in Germany after the war. Both authors were fully aware of the huge contribution made by the government and people of the United States to the defeat of Nazism in World War Two and the salvation of western Europe in the years that followed. They were also aware of the sincere and dedicated efforts made by a great many Americans working in military government towards the restoration of order, decency and hope in the American Zone of Germany in the period of havoc and penury immediately after the war. Nevertheless the evidence that emerged revealed much that was wrong with the US Occupation and a degree of corruption on the part of a portion of American military government personnel that was highly relevant to the story of Nazi Gold and could hardly be overlooked. Some American readers of this book may perhaps feel as a consequence that the book is anti-American in tone. The authors contend that this is not so. It simply attempts to tell the truth as clearly as the complex and often opaque raw material will allow and in the process sheds new light on a little-known byway of modern history.

  From conception to publication Nazi Gold has taken ten years in the making. That it ever reached completion at all is due largely to the help of a great many people, whose names are listed in the Acknowledgements, and whose contributions are gratefully acknowledged here. Particular thanks are due to Mary Sayer, for her steadfast encouragement and active support of the project throughout all its stages; to Melanie Bryan, who kept the complex mass of research material from ever lapsing into chaos and anarchy and typed thousands of pages of research notes and draft versions of the book; to Gail Lynch and Pamela Shaw, who fished so patiently and to such excellent effect in the Washington archives; to Alastair Brett of the Sunday Times, who through thick and thin continued to have faith in the book and was an unfailing source of strength; to Antony Terry, who lent the great weight of his experience and expertise as the former Sunday Times correspondent in Germany and who conducted interviews and undertook research for the project in Europe; to Andrew Thompson, the Sunday Times man in Buenos Aires, who courageously persevered with his delicate and difficult lines of inquiry in spite of the adverse working climate brought about by the Falklands conflict; and to Katy and Anna Botting for finding the gold-holes of the Walchensee treasure and for their enthusiasm and good cheer when the going was rough.

  Since this book was completed in 1983 there have been many new revelations regarding Nazi gold, This revised edition embraces all the major developments which have occurred since then including the continuation of the US government’s conspiracy to suppress the truth surrounding the disappearance of large quantities of missing Nazi treasure from the former US occupation zone in Germany.

  18 September 1998

  Ian Sayer

  Douglas Botting

  Authors’ Note

  The Reichsbank robbery was not a single robbery headed by a single mastermind but a series of separate incidents involving different portions of the Reichsbank gold and currency reserves between May 1945 and March 1947. It might help the reader to envisage the Reichsbank treasure as a dead whale attacked by sharks. There are big sharks and little sharks and they take big bites and little bites. They are all devouring the same carcass at about the same time but they are acting independently, not in collusion.

  To help the reader comprehend the magnitude of the sums of gold and currency mentioned in this book we have given both the 1945 values and their corresponding 1998 values. We have calculated that the purchasing power of the £1 sterling is approximately 21 times greater in 1998 than it was in 1945. Similarly, the 1998 value of $1 is 8.9 times greater. The prevailing rate for gold (in September 1998) was $295 per ounce or 8.4 times the 1945 value, although the relative purchasing power is considerably higher. To simplify the figures in this story the value of all other foreign currencies has been converted to its 1945 US $ equivalent.

  Acknowledgements

  The authors are profoundly grateful to many people and institutions in a number of countries throughout the world who unstintingly gave up a great deal of their time and energy to answering – by letter, telephone and personal interview – a remorseless stream of questions about complicated events of many years ago. To all of these people – and especially to those who on occasion ungrudgingly allowed their privacy to be invaded – the authors extend their very genuinely felt gratitude and appreciation. In addition to those mentioned in the Introduction thanks are due to the following:

  PRIVATE INDIVIDUALS

  UK: Mike Bennett, Michael Cuddy, David Fowell, Roy Furness, Brig Sir James Gault (deceased), Gene Gutowski, Sir Frank McFadzean, Norris McWhirter, Andrew Mollo, Fred Nolan, Winston Ramsey, Mrs T. Reedy, Eric Runacres, Keith Salter (deceased), Harry Seaman, Colin Simpson, Anthony Smith, Dr D.A. Spencer, Peter Pringle, Lorana Sullivan, Franklin Wood

  USA: Robert M. Allgeier, Ward S. Atherton, Theodore H. Ball, Jack Bennett James S. Billups, Edward E. Bird, Vernon J. Blondell, Charles I. Bradley (deceased), William G. Brey, Earl S. Browning, Paul O. Bruehl, Ralph Carlin, Lawrence Carls, Lucius D. Clay (deceased), Pat Conger, Harry Cottingham, Henry D. Cragon (deceased), John M. Curran, H.A. Deck, Walter R. Dee, Alan Dinehart Jr, Werner C. Duke, William E. Eckles, Hal Faust, H.H. Frey, Frank C. Gabell, David A. Gallant, Frank Gammache, Dale M. Garvey, Hobert R. Gay, Mrs H.R. Gay, Alfred Geiffert III, Hon William Geiler, Gordon Gray, Louis Graziano, John E. Grindell, Alphonse Hartl (deceased), Edwin Hartrich, Thomas Hasler, Charles R. Hayes, James H. Hea, Joseph W. Hensel, Robert R. Hensley, Arthur Horn, Walter N. Israel, Edward A. Jesser, William A. Karp, E.P. Keller, Jack Ketcham, Leo de Gar Kulka, Thomas M. Lancer, Morton K. Lange, Anthony W. Lobb, Russell R. Lord (deceased), Gail Lynch, Milton S. Marcus, Max L. Marshall, Paul H. Marvin, F.J. McDonnell, Bernice McIntyre, Werner Michel, Charles B. Milliken, William J. Moran, Thomas V. Mullen, Robin E. Mullins, Woodrow L. Nelson, Lester M. Nichols, Melvin W. Nitz, Eli Nobleman, Albert ‘Nick’ Nokutis, Charles M. O’Donnell, Harry J. Painter, Oliver S. Patton, Rev G. Hurst Paul, Mrs Alice Pcccarelli, Frank Purcell, Roger Rawley, Tom Rccdy, Jonathan B. Rintels, Mrs Kenneth C. Royall, Fred Schnackenderg (deceased), Val Seeger III, George M. Seignous, Pamela Shaw, Robert B. Shawe, John W. Sheffield, Raymond T. Shelby, George C. Sheldon, Bruce B. Simmons, Albert Singleton, Leonard H. Smith, Herbert L. Snapp, Charles W. Snedeker, Sidney N. Steinbach, Arthur C. Timbo, Frank L. Tracy, Ed Valens, Murray Van Waggoner, Hans von Euen, Clarence J. Wardle, Arnold H. Weiss, William C. Wilson, Clifton H. Young, Thomas H. Young, Leon Zackrewski, Lester C. Zucker.

  GERMANY: Tom Agoston, Chrisd Belwe, Eugene K. Bird, Don Brooks, Karl Dönitz, Dr Sieglinde Ehard (née Odorfer), Barbara Freem, Willie Gerl, Leo M. Goodman, Klothilde Hallmann, Dr Robert M.W. Kempner, Andrew Kennedy, Eric Knight, Ernest L
angendorf, Hans Neuhauser, Dr Maximilian Ott, Gunter Peis, Franz Pfeiffer, Josef Pinzl, Michael Pössinger, Elmer G. Pralle, Ardo Rousselle, Robert R. Seeger, Albert Speer, Jakob ‘Jaky’ Stubel, Kenneth G. Van Buskirk, Hubert von Blücher, Henriette von Schirach, Armin Walter

  AUSTRIA: Hans Fischer, Fritz Rauch, Dr Phillip Schenk, James W. Shea, Josef Veit, Simon Wiesenthal

  ITALY: Walter (Mucki) Clausing

  SPAIN: Mrs Chiquita Sitwell

  MEXICO: Juan A.A. Sedillo

  SOUTH AFRICA: Lüder von Blücher

  SWITZERLAND: Terence Taylor

  ZIMBABWE: Don and Susan Miller, Andrew Searle, Lizbeth Searle, Brigadier M.H.F. Waring (deceased)

  VENEZUELA: Ivar Buxell

  ORGANISATIONS

  USA

  DEPARTMENT OF THE ARMY: US Army Criminal Investigation Command, Falls Church, Virginia; Major Brigham S. Shuler, Chief of Public Affairs; Captain Terry McCann; Major Harlan J. Lenius, Chief of Public Affairs; Major John E. Taylor, Chief of Public Affairs; Russell A. Powell, Chief, Release of Information Division; Leonard F. Gunn, Acting Chief, Release of Information Division, G.M. Anderson, Chief, Release of Information Division; US Army Judiciary, Falls Church, Virginia; James D. Kemper Jr, Clerk of Court; Mary B. Dennis, Deputy Clerk of Court; Office of the General Counsel; Bland West, Deputy General Counsel (Military and Civil Affairs); Office of the Adjutant General and the Adjutant General Center; Col Rome D. Smyth, Director, Administration Management; US Army Military History Institute, Carlisle Barracks, Pennsylvania; Joyce L. Eakin, Assistant, Director for Library Services; John J. Slonaker, Chief, Historical Reference Section; Office of the Chief of Information, Public Information Division; Lt-Col Hugh G. Waite, Chief, News Branch; US Army Intelligence Agency, US Army Intelligence and Security Command, Fort George G. Meade, Maryland; Thomas F. Conley, Chief, Freedom of Information Center; James L. Selechta, Chief, Freedom of Information Division

  DEPARTMENT OF DEFENSE: Naval Investigative Service, Alexandria, Virginia; Captain L. E. Connell, Director, NIS; Department of the Air Force, HQ Air Force Office of Special Investigations, Washington, DC; Rudolph M. Schellhammer, Director of Plans, Programs and Resources; Lt-Col Thomas M. Slawson, Deputy Director of Plans, Programs and Resources; Robert T. Walker, Information Release Division. Director of Plans, Programs and Resources

  GENERAL SERVICES ADMINISTRATION: National Archives and Records Service, Washington, DC; James J. Hastings, General Archives Division; William H. Cunliffe, Assistant Chief, Modern Military Branch, Military Archives Division; George G. Chalou, Assistant Chief, Reference Branch, General Archives Division; Frederick W. Pernell, Reference Branch, General Archives Division; William G. Lewis, Reference Branch, General Archives Division; Jance L. Hargett, Chief, Research Branch, General Archives Division; Steve Bern

  DEPARTMENT OF THE TREASURY: Office of the Secretary of the Treasury, Washington, DC; Dennis M. O’Connell, Acting Chief Counsel, Office of Foreign Assets Control; J. Robert McBrien, Special Assistant, Special Legislation and Projects, Office of Enforcement; Stanley L. Sommerfield, Acting Director, Office of Foreign Assets Control, Robert W. Vayda, Assistant to the Director (Legislative Programs); Henry C. De Seguirant, Assistant Director of Personnel (Executive Manpower and Employment); US Secret Service, Office of the Director Thomas A. Troubly, Freedom of Information and Private Acts Officer

  DEPARTMENT OF STATE: Department of State, Washington, DC; Ely Maurer, Assistant Legal Adviser; Homer R. Nue, Records Specialist, Office of Management, Bureau of Personnel

  US DEPARTMENT OF JUSTICE: Federal Bureau of Investigation, Washington, DC; Clarence M. Kelley, Director; E.L. Grimsley; Allen M. McCreight, Chief, Freedom of Information, Privacy Acts Branch, Records Management Division; CIA, Washington, DC; Gene F. Wilson, Information and Privacy Co-ordinator; George W. Owens, Information and Privacy Co-ordinator; Alien Property Unit, John R. Franklin, Chief

  MISCELLANEOUS: Immigration and Naturalization Service, Milwaukee, Wisconsin; National Personnel Records Center (Civilian Personnel Records), St Louis, Missouri; State of California, Department of Health Services, Office of the State Registrar of Vital Statistics; National Personnel Records Center (Military Personnel Records), St Louis, Missouri; Mission of the United States, Berlin Document Center, Berlin, Germany; Daniel P. Simon, Director Veterans Administration, Milwaukee, Wisconsin, B.E. Pile, Veterans Services Officer; Federal Reserve Bank of New York, New York; Carl Backlund, Chief, Correspondence Files Division; Library of Congress, Washington DC; Military Bookman, New York

  EUROPE

  Embassy of the USA, Bonn, Germany, W.D. Frank, Personnel Officer; E.M. Kelly, Curator, Bank of England, Administration Department, Museum and Historical Research Section; Paul D. Mortimer-Lee, Bank of England, Economics Intelligence Department; Metropolitan Police Office, New Scotland Yard; Public Records Office, Kew, Surrey; Landeszentralbank in Bayern, Munich; Deutsche Bundesbank, Frankfurt; Deutsche Dienststelle (WAST), Berlin; Bundesarchiv, Aachen; Auswärtiges Amt, Bonn; Wiener Library, London; Imperial War Museum Library, London; British Museum Library, London; British Museum Newspaper Library, London; City Business Library, London; Westminster Central Reference Library, London; Ministry of Defence Library, London; US Army Library, Heidelberg, Germany; Stars and Stripes Library, Darmstadt, Germany; Feltham Public Lending Library, Feltham, Middx; History Bookshop, London

  ILLUSTRATIONS

  The photographs are from Ian Sayer’s collection. Thanks are due to the following for providing photographic prints: US Army Signal Corps (for photos of the Merkers Mine); US Army Intelligence Agency (for photo of Dr Walther Funk); Berlin Document Center (for photo of Brig-Gen Josef Spacil, Lt-Col Friedrich (Fritz) Rauch, Helmut Groeger, Hubert von Blücher); Albert Singleton (for photos of Displaced persons in Mittenwald, Three ex-officers recovering weapons, Three ex-officers bringing down the weapons); Ottmar Katz (for photo of Tree stump which marked one of the secret treasure caches); Rolf Höhne (for photo of The main gold hole on the Steinriegel); Alfred Geiffert III (for photo of Major William Geiler, Capt. George Garwood and Capt. Walter Dee and of American soldiers on the forestry track beside the gold hole); Francis White (for photo of Helmut Schreiber); Col Charles M. O’Donnell (for photo of Col Russell Lord with Brig-Gen Muller); Col Robert M. Allgeier (for photo of himself); Garmisch Police (for photo of Zenta Hausner); After the Battle magazine (for photos of Haus Hohe Halde and the apartment where Zenta Hausner was found dead); Frank Purcell (for photo of The boys from the CID at a wedding); William C. Wilson (for photos of Philip Benzell and Walter Snyder); Lt-Col Frank Tracy (for photo of Brig-Gen Muller presiding over a meeting)

  Part One: The Robbery

  1. The Destruction of the Reichsbank

  On the morning of 3 February 1945, an anonymous young American air force bombardier in the plexiglass nose of a B-17 Flying Fortress crossing Berlin on a course parallel to and a little south of the city’s most fashionable boulevard, the Unter den Linden, depressed his salvo-release bomb switch and, with the traditional bombardier’s cry – ‘Bombs away! Doors closing! Let’s get the hell out of here!’ – unwittingly set in motion the greatest robbery in history, and a mystery and a cover-up which threatened to involve the United States Army in Germany, and the Pentagon and the Department of the Army in Washington, in a scandal that predated Watergate by nearly 30 years.

  Until that fateful morning there had been no major air raid on the German capital for nearly two months. For much of the winter continuous cloud had covered the city for days on end and the British and American heavy bomber groups had turned their attention to easier targets nearer to home, leaving the Berliners free to concentrate their anxieties on the Russian armies, then pushing rapidly and with overwhelming force towards the banks of the River Oder, only 55 miles to the east. Unfortunately for the Berliners the arrival of the Red Army on the Oder coincided more or less exactly with a break in the weather over Berlin, and for the morning of 3 February the weather forecast was clear skies followed by intermittent cloud and rain la
ter – conditions good enough to permit a massive daylight air strike against the city in support of the Russian push. By destroying military installations, government buildings and transportation centres – especially the Tempelhof marshalling yards – the Allies aimed to bring about a complete disruption of German preparations for a counter-attack against the Russian positions. To achieve this the 9th US Army Air Force launched the first 1,000-bomber raid ever to be directed on Berlin in daylight.

  Though 3 February was a Saturday it was still a working day in the German capital. Shops, banks, offices and ministries were open for business and the streets were crowded with office workers and bewildered German refugees who had fled to the capital from the advancing Russians in the cast. The Berliners’ first intimation of danger was an announcement on the radio. It took the usual form: ‘Attention! Heavy formations of enemy aircraft approaching from the area Hanover-Brunswick.’ Later, as the bombers drew nearer, the ominous wail of the air raid sirens announced the first public warning, followed in a short while by the general warning. The railways and tram cars stopped. The office workers tumbled down into their cellars. The refugees ran aimlessly from street to street in a vain search for shelter. The crews of the flak batteries elevated their guns, warmed up their radar sets and fused their shells. At the Zoo the sound-detecting devices on the huge flak towers began to swing round like giant cars. Hospitals, fire services, civil defence and police were put on alert. Hot soup and shrouds were sorted in readiness and emergency mortuaries prepared. As the leading bombers appeared over a seemingly lifeless city towards ten the guns began almost as one.