Nazi Gold

by Douglas Botting

  4. That Funk be interviewed. What relation is there between valuables evacuated to Munich and those sent to Salzburg by order of Kaltenbrunner?

  5. That Groeger and Schreiber who helped recover the valuables of 52A (currency recovered from the Klausenkopf) be questioned to see if more details can be developed.

  6. That Reckow of Berlin Staatskontor be contacted again to check whether list submitted is completely accurate (i.e., whether there is a possibility that some of the currency may have been returned to Berlin). Also whether currency in this list constituted practically all of currency left in Reichsbank or whether sizeable sums remained.

  The last sentence is a particularly significant one, for it seems to indicate that for the first time American financial officialdom was fumbling towards the unpalatable concept that more currency may have been hidden in 1945 than was contained on the Reichsbank’s inventory.

  Strictly Reichsbank currency was the only currency which had any degree of accountability, because its origins were of an official nature, unlike the semi-official funds of such organisations as the German Intelligence Service, which were provided without accountability and not listed on any inventory. Not all foreign exchange in the Reichsbank’s custody was on the Reichsbank’s books, and this was obviously where the trouble started in assessing just what else had disappeared. The $2,000,000 worth of foreign currency posted as missing by the FED was only known to be so as the result of a process of accountancy – comparing a list of what went out from Berlin in April 1945 with a list of what came into Frankfurt a few months later. The accuracy of the estimated debit balance therefore depended entirely on the completeness of the two sets of figures to be balanced. If, as has been suggested, the list of currency that went out from the Reichsbank in Berlin was incomplete, it follows that the $2,000,000 worth of currency that was missing and believed to have been stolen was merely the tip of the iceberg. In a final secret report to the Office of Financial Affairs, Civil Affairs Division, OMGUS, entitled ‘US Dollars Found in Germany’ and dated 28 March 1949, Frank J. Roberts, now Acting Chief of the FED, concluded: ‘It is appreciated that the data and exhibits as submitted, though voluminous, by no means present a clear picture of the disposition of the foreign exchange after it left the Reichsbank, Berlin. Obviously a considerable portion has never been found.’

  Nor was it ever found. The missing dollars were not part of the shipment of dollar currency that had been sent from the FED to the Federal Reserve Bank in New York in the previous January. Nor were they part of any of the additional deposits accepted by the FED right up to 29 November 1950, or of further shipments to the United States in 1951. Nor were any of the dollars that had ended up in the Land Central Bank in Munich in 1945 – or any other valuables known to have been there still in May 1947 – ever actually seen again after that date.

  The role of the Land Central Bank in Munich in the story of the Reichsbank reserves and associated funds is an odd one. At least US $427,075 (worth $3,800,967 in 1998) recovered from the Reichsbank foreign currency reserves are known to have been deposited in this bank – $19,840 from Berchtesgaden and $407,235 from Garmisch. A total of 10,405 English pounds (worth £218,505 or $364,903 now) is also known to have been deposited there, along with two bars of bullion worth $30,000 ($252,000 today). In addition, a further $400,000 (worth $3,560,000 today) found at Oberau, together with a large but unquantifiable quantity of gold bullion recovered from the Mittenwald area by the local Provost Marshal, Sergeant Singleton, was reported to have reached the American fiscal authorities in Munich, and it is possible that an extremely large consignment of US dollars recovered on the Garmisch-Oberau road by Major Rawley of the 10th Armored Division was channelled to the same destination. In other words, nearly a million dollars’ worth of Reichsbank treasure (now worth a formidable $8,359,936) and possibly a great deal more, was delivered to the Land Central Bank during the course of the summer of 1945 and from there, at a later date, removed by a person or persons with the ability or authority to dispose of such funds.

  At the time of the American occupation there was only one person who had the requisite knowledge and power in Munich and that was Colonel Russell R. Lord, Chief of the Finance Division of CMGB, the superior – and the intimate – of one of his most important departmental heads, Major John R. McCarthy, in charge of the Investigation and Enforcement Branch. Between them, these two soldiers of fortune were to carve up the financial fiefdom of Military Government in Bavaria as their own domain and in due course endure the closest scrutiny and incur the deepest suspicion of a whole series of secret investigators from the Army’s Criminal Investigation Department, the Inspector-General’s Department and the Counter Intelligence Corps in their attempt to unravel the true facts about the great Reichsbank robbery and the financial and criminal irregularities that ensued in Munich and Garmisch-Partenkirchen.

  Given the circumstances, it was a supreme irony that both Lord and McCarthy should have become regular visitors at the house next door to the von Blüchers, in whose garden a sizeable portion of the missing Reichsbank reserves was buried shortly after the end of the war. For when Mathias Stinnes was led away to internment in October 1945, a Captain Pope, one of Lord’s officers from Property Control in Munich, who was a good friend of Mathias’s wife, Tucki, became a frequent visitor to the Stinnes house at 40 Gsteigstrasse in Garmisch, and both Lord and McCarthy were often at the house as visitors, commuting from there to work in Munich. Colonel Lord always professed ignorance of anything to do with missing currency or bullion. ‘I heard about it,’ he told the authors in Owosso, Michigan, in January 1978, ‘but I didn’t know anything about it. You could probably get 10,000 rumours. I read about it in the Stars and Stripes even. Well, they never knew. To tell the truth, there were a lot of red herrings suggested by the Nazis during the de-Nazification programme to keep everybody off balance, so I never knew how much was true and how much wasn’t.’ As for McCarthy, Colonel Lord had this to say: ‘He worked in investigating for financial intelligence. He wasn’t a Treasury man, but he worked in investigating funds that were taken from one bank to another – that sort of thing.’ (Authors’ italics)

  Neither Colonel Lord nor Major McCarthy was in any doubt as to what his proper duties were. In October 1946 they were briefed in these by no less a person than General Eisenhower himself, then Army Chief of Staff in Washington, who visited Munich in the course of an inspection tour of US Army installations and headquarters in the American zones of Germany and Austria. Eisenhower was particularly explicit about the function of Major McCarthy in the Finance Division. ‘The mission of the Investigation and Enforcement Branch of Finance Division,’ ran Eisenhower’s briefing notes, ‘is to develop facts and evidence from information obtained and to see that proper action is taken against those persons found guilty of violating Military Government Laws dealing with Properties and Finance.’ In the light of McCarthy’s nefarious activities later in this story, Eisenhower’s notes for this meeting are the height of irony – an irony doubly compounded by Eisenhower’s cable to President Truman a day or two later: ‘You will be pleased to know our troops are upholding the finest traditions of the American Army.’

  By early 1947 the status of the deposits held at the Land Central Bank in Munich was becoming a cause of some concern to the Finance Division. On 5 March a representative of OMGUS Finance Division, David Schwarz, went over Colonel Lord’s head and convened a meeting with officials of the Land Central Bank in Munich without inviting him. This was like letting the internal auditors loose on a firm without bringing in the managing director. Lord was offended and suspicious and his response was swift. In a memo to the Director of Finance Division of OMGUS he protested tetchily: ‘As Mr Schwarz did not contact this office while in Munich we are in no position to advise or supervise on the work laid out as we have no first-hand knowledge of the discussions and requirements laid down to the Land Central Bank officials . . .’

  Four months later the FED took steps to hav
e a closer look at the contents of the Land Central Bank’s vaults. In July 1947 the heads of the Currency Section and the Depository Section of the FED began checking the sources of various assets held for Military Government in German banks in order to see whether they properly belonged in the FED. An inspection of the Land Central Bank in Munich revealed a number of deposits in sealed bags and other containers. These were not opened, but though there was very little information on the source and historical record of these items, it was felt that many of them were clear candidates for the FED – as, for example, two gold bars weighing 25 kilos and a deposit containing various gold items weighing about 144 kilos. The inspectors pointed out to Colonel Lord that fuller information should be forthcoming on other items to determine whether they should be in the FED.

  By November 1948 the Head of the Currency Section, Joseph A. Angotti, was able to report to the FED that the Land Central Bank in Munich was holding, in addition to a quantity of foreign exchange recorded on the accountant’s books (mostly rather useless currencies like Russian roubles, Hungarian pengos and Polish zlotys), a quantity of foreign exchange in considerably more desirable currencies which mysteriously were not recorded on the accountant’s books, including sums of $251,165, $19,840, $50,905, $104,956, £10,000 and £405 – familiar totals which had, of course, emanated from Garmisch and Berchtesgaden in August 1945. Angotti explained that these probably represented captured or confiscated funds. He pointed out that captured funds were the property of the US Army and that often so-called confiscated funds were really captured funds too. Angotti believed that this was the case with the items in the Land Central Bank in Munich, and he recommended that the funds listed there be collected by the FED. This does not seem to have been done.

  Two months later US currency recovered in Germany was loaded under guard on 14 sealed containers in the hold of the USS General Harry Taylor homeward bound for New York from Bremerhaven. The Munich dollars whose chequered career we have tried to follow from their vault in the ruins of the Berlin Reichsbank, via the bowling alley in the Mittenwald Kaserne, the bunker on the mountainside overlooking Lake Walchen, the inside of Colonel Pfeiffer’s rucksack, the tomato bed of the von Blüchers’ garden in Garmisch, the back of the Zionist Captain Neumann’s jeep, to their penultimate resting place – Colonel Lord’s inner sanctum in the Land Central Bank Munich – were not on board that ship.

  Shortly after the arrival of the dollar currency in the USA, the United States Department of Justice (the body now responsible for the dollars recovered from Germany) raised some questions about the currency believed to have been held in the Land Central Bank in Munich. On 3 February 1949 Murray Van Wagoner, the Land Director of Bavaria, was obliged to write to the Deputy Military Governor of the US Zone, Major-General George P. Hays, pursuing this elusive matter. ‘The United States Department of Justice has requested certain information from the Land Central Bank in connection with deposits made under Military Government Law No 53 . . . The Land Central Bank was unable to furnish the information desired to the United States Department of Justice.’ And at this mysterious point official documentation dries up.

  When the US authorities, as a result of growing native German interest in the matter, were asked for information and assistance in a letter from the Land Commissioner of Bavaria in 1948, they replied: ‘US policy has reached the stage that we no longer have an interest in the possible recovery of the property involved.’

  So far as the fate of the Reichsbank assets deposited in the Land Central Bank was concerned, there remained one last possibility – that some had never been removed from the bank at all, either officially or unofficially, but were still on deposit there when Allied Military Government came to an end and West Germany became a sovereign state in May 1949. The assets in question would then have been at the disposal of the Land Central Bank or the Ministry of Finance of the new Federal Government of Germany.

  In July 1979 the Land Central Bank in Munich was approached with a request for their help in determining the ultimate disposition of Deposits Nos 7, 10, 14, 15 and 18 – items of recovered Reichsbank treasure held in the account of the American Military Government for Bavaria until at least November 1948. The enquiry met with a positive and favourable response until the matter was passed on to the German Federal Bank (Deutsche Bundesbank) in Frankfurt. A lengthy silence then ensued until a reminder elicited the following curious reply dated 9 January 1980:

  Thorough and inevitably time-consuming investigations at the Land Central Bank and this office have revealed that some records appertaining to the matter in question still exist. Since these records refer to specific details and persons we feel unable, to our regret, to make them available to you, as the official secrecy regulations to which we are subject require us not to disclose such details to third parties. This secrecy requirement takes precedence over historical or literary interests.

  Broadly speaking, however, one can say that the deposited assets which were not claimed by the military government were returned to the persons originally entitled to them (where these could be traced) after their general release in 1955. Worthless assets were destroyed some time ago. Undeliverable assets were sold at public auctions in accordance with the general provisions governing undeliverable objects held by public authorities and the proceeds were transferred to the Minister of Finance. [On 21 February 1955 the Allied High Commission for Germany formally released all assets deposited at the Land Central Banks under the provision of SHAEF and Military Government Law No 53.]

  If the US authorities had known just how much property had been involved they might have been less indifferent. But they never did know. There were, as we shall see at a future stage of this story, a number of official investigations conducted into the affair of the Reichsbank treasure and its aftermath; but because of the unwieldy nature of the military system, the lack of co-ordination between the different elements in the American Occupation bureaucracy in Germany, and the extraordinary difficulties put in the way of the investigators, the full extent of the Reichsbank robbery was never discovered.

  No central file was ever kept on the Reichsbank affair which integrated the progress and the results (if any) of the separate and unco-ordinated investigating bodies. In a sense this present book now serves the place of that non-existent central file. For the first time ever it is possible to integrate in a single list the long succession of hits and heists, gunpoint snatches and petty purloinings, disappearances and discrepancies that nibbled and gnawed and gobbled away at the helpless carcass of the Reichsbank reserves before and after the collapse of the Third Reich. The perpetrators were German, Russian and American soldiers. Their motives were a mixture of political stratagem (General Spacil), vis victis (the Red Army), and private opportunism and greed (most of the rest). Little of what was stolen was recovered and none of those responsible was ever indicted or brought to trial.

  Here, then, is our summary of the principal robberies of the Reichsbank reserves described in this book, with the 1945 values of what was taken converted into dollars where necessary, followed by the 1983 dollar equivalent.

  1. 90 bars of gold and 4,580,878 gold coins taken from the Reichsbank in Berlin by the Red Army in May 1945.

  Total 1945 value: $3,434,620 1998 equivalent: $28,850,808

  2. Gold Currency Bonds (Westphalia, Weimar, Industrial) taken from the Berlin Reichsbank by Major Feodor Novikov of Red Army Intelligence on 15 May 1945.

  Total 1945 value: $400,000,000 1998 equivalent: $3,560,000,000

  3. Jewels, diamonds, securities, and foreign currency worth $9,131,000 taken at gunpoint from the Berlin Reichsbank by General Josef Spacil on 22 April 1945 and handed over to Colonel Skorzeny for safekeeping.

  Total 1945 value (after deducting known recoveries amounting to $492,401): $8,580,143 1998 equivalent: $76,363,272

  4. 11 bags of SS foreign currency taken from the Munich Reichsbank by Reichsbank official Rosenberg-Lipinski on 24 April 1945 and 12 sacks of SS foreign curren
cy totalling over $2,000,000 taken from the same place on the same day by SS General Gottlob Berger, $1,816,805 of which was recovered from St Johann in May 1945.

  Total 1945 value: $218,727 1998 equivalent: $1,946,670

  5. 85,000 Swiss francs taken by a Dr Österreich and an RSHA official from the Munich Reichsbank on 25 April 1945.

  Total 1945 value: $19,859 1998 equivalent: $176,745

  6. $5,000 taken by Reichsbank official Mielke from the Kaserne at Mittenwald on 25 April 1945, of which $4,000 was probably found hidden on the Klausenkopf by Lieutenant Roger Ernst, US Army, in August 1945.

  Total missing, 1945 value: $1,000 1998 equivalent: $8,900

  7. $67,120 US dollars taken from the Savings Bank (Sparkasse) at Berchtesgaden by Karl Theodor Jacob on about I May 1945.

  Total 1945 value: $67,120 1998 equivalent: $597,368

  8. 2 gold bars worth $30,000 ($252,000 in 1998) together with 19,840 American dollars ($176,576 in 1998) and 10,000 English pounds (£210,000 or $350,700 in 1998) taken from Berchtesgaden Savings Bank and deposited in the Land Central Bank, Munich, from which they subsequently disappeared.

  Total 1945 value: $89,840 1998 equivalent: $779,276

  9. One truck-load of foreign currency estimated maximum value of $8,000,000 recovered by Major Roger Rawley on the Oberau road in June 1945 and handed over to Major Kenneth Asa McIntyre, Town Major of Garmisch-Partenkirchen. A portion of this recovery was last seen in Major McIntyre’s office.

  Total 1945 value: $8,000,000 1998 equivalent $71,200,000

  10. 11 boxes weighing 150 kilos each, and believed to contain gold, delivered to Einsiedl from Berchtesgaden on 25 April 1945.

  Total 1945 value: $1,856,705 1998 equivalent: $15,596,322