Chasing Gold: The Incredible Story of How the Nazis Stole Europe's Bullion (12 page)

Despite Germany’s famous reputation for organization and efficiency, the Nazis did not have an overall organization for capturing gold in the central banks of the countries they conquered or from private citizens. It was done in a haphazard fashion and by several different agencies. The Germans were very successful in getting that booty in the early years in countries such as Austria and Czechoslovakia before other nations learned what they were doing. Later, central banks of various countries took care to protect their treasure, and if possible sent it out of Europe to Canada or the United States so that it would be an ocean away from Hitler. Gathering up private gold from citizens, whether Jews or non-Jews, was more difficult because people were dispersed, and valuable property could be easily hidden, except in ghettos.

The centralized place for holding all gold, whether public or private, was the Reichsbank. It had the vaults where it could be safely stored, and also the bank to handle it. Nazi organizations sent their valuable goods there. As the war dragged on, however, some of the more powerful agencies, such as the Foreign Ministry and the
Schutzstaffel (SS)
, the Nazi security unit, had their own stashes, which by the end of the war were substantial, thanks to the countries and the people they conquered, including gold seized from Jews.

The paramilitary
Devisenschutzkommando
(Foreign Exchange Protection Commando), which was controlled by Göring and was under the Four Year Plan, was in charge of collecting valuables such as gold, jewelry, currency, and diamonds from individuals in conquered countries. It was generally known by its initials DSK and reported directly to Göring. The Reichsbank held the property, but he was given anything he wanted. DSK commandos went to banks in newly invaded countries and, accompanied by an employee and a notary, opened and inspected safety deposit boxes. They confiscated such items as gold coins or bars, foreign currency, diamonds, and stock certificates that were later mostly sold on the open market. The DSK units also did some house searches for valuables. Although it was a paramilitary unit, soldiers often wore civilian clothing. They often gave a nominal payment in Reichsmark to people whose valuables they had taken.

The DSK operations started with Austria, the first victim of German aggression, and were also carried out in Czechoslovakia and Poland. It reached its peak of efficiency under the direction of the
SS
officer Herbert Staffeldt during the May 1940 invasions of the Low Countries and northern France. Between May 1940 and September 1943, the DSK confiscated $144 million in the Netherlands, $876 million in Belgium, and $21 million in northern France.
²⁰

Göring retained personal control over stolen art and took his favorite pieces to his hunting retreat Carinhall. While the gold went to the Reichsbank, he could get as much of it as he wished. He reorganized the operation just before the German invasion of the Soviet Union. Nazis units there did similar work, but the people were not as wealthy as in Western Europe, so there was less to steal. The DSK played only a minor role after 1942.

With the Four Year Plan taking over more and more control of the German economy, attacks on Jewish citizens increased. On April 26, 1938, the government required them to declare their property and the estimated value of their private goods. In February of the following year, another decree required that they turn in their jewelry, silverware, and gold to the Municipal Pawn Shop in Berlin. The securities went to so-called currency banks. Jews were paid a pittance of the value. In the first quarter of 1939, the Nazis began melting down confiscated jewelry, so that the gold could it made into bars and be passed along as Reichsbank property.

Göring thought his appointment meant Schacht’s role as Plenipotentiary for War Economy would be eliminated, but it wasn’t, and bureaucratic turf wars ensued. The first squabble between the two was over mining. Göring issued government ordinances without asking Schacht’s opinion or even sending him a copy of the new legislation.

The proud Schacht was outraged, and for a while he fought a rearguard action by simply staying away from the Ministry of Economics and working only out of his beloved Reichsbank. His staff quipped that he was on a sit-down strike. General Wilhelm Keitel, a Göring supporter, complained in a memo that Schacht was “not exercising his office as the Plenipotentiary General [and] decisions on essential problems of mobilization and conduct of war remain unacted upon.” Göring soon gave direct orders to Schacht’s Economics Ministry staff, but Schacht responded on December 11, 1936 with a letter under his title as the Plenipotentiary for War Economy telling the staff to take orders only from him.
²¹

On December 24, 1936, Schacht sent General Blomberg a long letter explaining the increasing difficulties he was having getting foreign exchange. Many countries were now refusing to trade with Germany because of Nazi racial policies. The Reichsbank president wrote: “The economic and illegal treatment of the press, the anti-church activities of certain party organizations, and the lawlessness that centers in the Gestapo harm our rearmament task.” At the same time, Schacht stated that he was not abandoning the country’s national goals “in the least.”
²²

General Thomas told investigators after the war that “from 1936 on, Schacht used every opportunity” to encourage von Blomberg to reduce the tempo and size of rearmament. Schacht condemned what he called “the excessive rearming of Germany.” In both 1937 and 1938, the bank president told Blomberg he was going to resign from the government. The general sent Thomas to Schacht to persuade him to stay in office. In a speech to senior officers at the War College, Schacht outlined all the economic reasons not to go to war.
²³

General Blomberg remained a staunch ally of Schacht even while he was staging his boycott. On February 22, 1937, the general wrote Hitler, “If you, my Führer, agree with my view regarding these jurisdictional questions, it may be possible to induce Reichsbank President Dr. Schacht, whose cooperation as Plenipotentiary for the War Economy is a great significance, to resume his former activity.”
²⁴

Schacht and Göring signed a reconciliation accord on July 7, 1937, and the next day, Schacht sent a letter to General Blomberg saying he would cooperate. Göring, though, still thought that he had authority over Schacht. In any case, the accord changed little when it came to the workings of the Nazi government.
²⁵

Schacht still valued highly his position at the Reichsbank, where he remained firmly in control. That was the post he really wanted to keep, in part because Göring was uninterested in its obscure technical issues. Schacht also enjoyed the international hobnobbing and travel that the job entailed. After nearly a year of internecine warfare, Schacht on October 5 wrote a long letter to Göring pointing out that “fundamental differences exist in our economic policies, which I hope will induce the Führer to place the further direction of economic policies solely in your hands.” He sent a copy to Hitler. By that time, Schacht knew that Göring was lobbying Hitler to get rid of him, including from his position as head of the Reichsbank. Göring responded on August 22 with an equally long, point-by-point rebuttal.

Schacht’s four-year term as president of the Reichsbank was coming to a close in March 1937, just as he was becoming increasingly worried that the economy might overheat and cause a new burst of inflation. The man who had stopped runaway prices in 1923 did not want to go into history books as the one who brought them back fifteen years later. He first decided to stop the last three billion Reichsmark installment of Mefo bills that were to finance the next stage of rearmament. As far as he was concerned, the government should now pay for additional rearmament through new taxes or loans, although he didn’t think that Hitler would ever take those steps. Schacht even argued that the government should begin paying back the first Mefo loans, which were soon coming due. War Minister Blomberg agreed with him, saying that the initial objectives of the arms build up had been fulfilled by 1937, so there was no need for further Mefo spending.
²⁶

Twice in early 1937, Hitler sent Hans Heinrich Lammers, the head of the Reich’s Chancellery, to Schacht to ask him to sign on for a new term as president of the Reichsbank. Twice the banker told him he did not want to be reappointed. Schacht explained that he could no longer condone the country’s loose credit policy, saying that it would eventually lead to inflation. When Hitler heard that, he was furious because it was unthinkable for anyone to turn him down for anything. Schacht’s reputation as an economic wizard was still strong, and the Führer worried that the German public would be shocked if he fired him. When Hitler learned that Schacht was telling people, “I must have the right of action in my hands,” he responded angrily, “I must have the right of action in my own hands.” Schacht finally agreed to extend his term at the bank for just one more year and to issue, in early 1938, the last three billion Reichsmark of Mefo bills.
²⁷

The deteriorating relations between Hitler and the economic czar who had helped bring him to power exploded in August 1937, in front of top government officials at the Berghof retreat. Hitler and Schacht were meeting in the salon. It was a warm afternoon, so the windows were wide open. Several top aides, including Albert Speer, were outside on the terrace and could hear what was transpiring. Hitler began shouting at Schacht, who replied in an equally loud voice. Schacht maintained that he had to resign because of the conflicts with Göring, and the Führer attempted to get him to stay, saying, “But Schacht—I’m fond of you.”
²⁸
The confrontation shocked the outsiders because no one ever shouted at Hitler. Schacht continued to insist that he wanted to resign. Hitler finally urged him to make one more attempt to work with Göring.

After the heated exchange ended and Schacht left, the Führer joined the group outside. He bellowed to them that Schacht was “holding up my rearmament program.” At one point Hitler said the entire military project would probably cost 30 billion Reichsmark, but quickly added, “Don’t tell Schacht because he’ll faint.”
²⁹

In early November 1937, Göring and Schacht had a final showdown. The Reichsbank president was now determined to get out of his job as Minister of Economics. Schacht refused to take instructions because he considered Göring “a fool in economics.” Göring told him bluntly, “I must have the right to give you orders.” Pulling together all his famed arrogance, Schacht replied, “Not to me, but to my successor.”
³⁰

Schacht at about this time put out feelers to American officials about defecting to the U.S. He contacted Donald Heath, the first secretary of the American embassy in Berlin. He also reached out to Merle Cochran, an old friend who was on the staff of the American embassy in Paris. Cochran passed that information along to Treasury Secretary Morgenthau. The Roosevelt administration, though, didn’t act on it.
³¹

Schacht wrote Hitler on November 16, asking to be relieved of his job at the Economics Ministry “in the interest of uniform government management.” Ten days later, the Führer accepted the resignation. Schacht also lost his post as Plenipotentiary for War Economy, but he remained president of the Reichsbank. Hitler also gave him the title Minister Without Portfolio. Schacht’s reputation as the man who stopped Germany’s runaway inflation in 1923 was too strong for him to be simply thrown out into the cold. In a letter to Schacht that was made public, Hitler wrote, “If I accede to your wish, it is with the expression of deepest gratitude for your so excellent achievement and in the happy consciousness that, as president of the Reichsbank board, you will make available for the German people and me for many years more your outstanding knowledge and ability and your untiring working strength.”
³²

When Göring took over Schacht’s office at the Economics Ministry, he was stunned by how modest it was and bellowed, “How can a man have big ideas in such a small room.” Then he sat down at the desk, telephoned his predecessor, and announced triumphantly, “I am now sitting in your chair!”
³³

Schacht remained a favorite guest at the home of William Dodd, the American ambassador in Berlin, and enjoyed the prestige of dining at the embassy. The Reichsbank president continued to be reckless in his comments about the Nazis and called Hitler “crazy.” Dodd in December 1937 told Schacht that the Gestapo was planning an attempt on his life, but he dismissed the threat.
³⁴

Schacht’s successor at the Economics Ministry was the trusted Nazi Walther Funk. The manner in which he learned the news was indicative of the diminished role the job would have. One night he ran into Hitler at the opera during intermission, and the Führer simply told him he was going to succeed Schacht and told Funk to see Göring to get the details.

A former economic journalist, Funk had been an editor at the
Berliner Börsenzeitung
, a center-right business newspaper. He joined the Nazi party in 1931 and rose quickly to become a major link between the business world and Hitler. Funk had attended the Führer’s meeting with business leaders in 1933, when Schacht and Göring hit them up for contributions to finance the party’s election campaign. After the Nazis took power in January 1933, Funk became the new government’s press spokesman and was then named state secretary, the number two job, in Joseph Goebbels’s Ministry of Public Enlightenment and Propaganda.
³⁵

A fat man with a pudgy face and nearly bald, Funk, according to Albert Speer, had a reputation for a “dissolute love life.” Schacht said Funk had been dismissed at the business paper because he was homosexual. Speer also claimed that the
SS
had a detailed dossier on Funk and had blackmailed him. During the Nuremberg trials following the war, Funk kept his fellow prisoners amused by telling them stories about his erotic excursions to Casablanca, where he said he went “to experience new variants of passion.” The Nazis were vehemently anti-gay, but he survived within their ranks.
³⁶
Schacht had contempt for the new economics minister and claimed he had “not the slightest conversation with Funk when he followed me, not before and not after.” Göring treated him as an errand boy.