by Bower, Tom
The AJC’s efforts in Paris had proved equally “futile.” Not surprising, perhaps, since French police had deported over 100,000 Jews to concentration camps during the war. The French government had refused to help the survivors and heirs of the 45,000 Jews who had previously lived in their zone. Instead, the Nazis’ victims suffered discrimination. With official French encouragement, the Germans authorities established “common funds” to collect the heirless assets of Jews and keep the money for the benefit of the local Germans. Confiscated Jewish property was to remain in the possession of former Nazis, even if, say, the original owner sought to reclaim a home. Penalized by their lack of money, documents and assistance, returning Jews were barred from their own homes by the same Nazis—supported by the French government—who had originally expelled them onto the streets. Protests were deliberately stalled by the French on the ground that assisting Jews “constitutes an act of discrimination.” When the French restitution office closed in March 1951, only 2,762 cases had been investigated, leaving 98,675 applications abandoned and undecided.
Since the Allies had at the Paris conference delegated France to bring pressure upon Switzerland to extract the reparations for the Jewish refugee organizations, Stucki satisfactorily drew the inference that the Swiss, following British and French policy, could favor German interests and their own interests instead of the Jews’. But he had reckoned without the passion of the crusaders.
In August 1947, under pressure from Jewish groups to demand an interim payment for the refugees, the State Department again protested to Petitpierre that at least $5 million should be advanced for the refugees. Washington expected the Foreign Office and the French to support that demand. But the U.S. protest was condemned by the Foreign Office as a “bad mistake” because it gave Switzerland “a chance of evading the major issue.” Officials feared that the Swiss would make a “beau geste as regards Jewish refugees”—a generous gesture enhancing Switzerland’s reputation—while seeking an excuse to prevent the sale of German property. That alarmed the Foreign Office, whose principal motive was to deny the American Joint Distribution Committee the relief money to promote clandestine immigration into Palestine.
In Bern, Selous, always sympathetic toward the Swiss, had deliberately left Stucki with the impression that the British were not too eager for the $5 million to be paid. The British, Stucki understood, supported his official justification for not handing over the money from the sale of German assets. “It’s not our fault,” smirked the Swiss, “that the sale has not yet begun.”
Relishing these exhibitions of Anglo-French prejudice and eager to display his talent for playing the international broker, Stucki seized the opportunity of a regular meeting with Homberger to express his real feelings concerning the pressure upon Switzerland to hand over the SF50 million. “I’ve no doubt that behind this broad and strong offensive against us are Jewish groups provoking trouble in Washington, in Paris and among the smaller Allies.” Unconsciously, Stucki was using the vocabulary familiarly used by the Nazis. When Goebbels had ranted about Jewish provocation, he had used the word aufhetzen—just as Stucki was now doing. “Supporting the Jewish attack,” continued Stucki, warming to his listener’s prejudice, “are commercial interests. After all, the first SF50 million is for the Nazis’ victims and 90 percent is going to the Jews.” Stucki speculated about the advantages of paying the money immediately: “We’d pacify the ‘hunger’ of these groups and it would show our goodwill.” The Swiss government, he admitted, had agreed to pay the SF50 million if the Allies asked. “But,” he added rhetorically, cherishing the opportunity to exploit the Allies’ disagreements, “it’s not clear whether the Allies would make an approach.” Looking at Homberger, he concluded with delight, “The British position in Palestine, it appears, would not be improved if this money falls into Jewish hands. Let’s find a discerning Englishman to help us.”
Receptive to Stucki’s tone, and especially to his criticism of the Jews’ “provocation,” Homberger lashed out at the Allies’ occupation of Germany. “It’s absolutely appalling to watch that awful, careless, senseless policy they’re pursuing,” whined a man who recalled the recent Nazi past with nostalgia and whose contribution to Europe’s reconstruction was to propose that “our best policy is to wait and see.” The industrialists’ leader, irritated by the notion of giving SF50 million to refugees, was unconcerned by the Jews. “The provocation by those organized groups,” he told Stucki, also using the Goebbels expression aufhetzen, “shouldn’t affect us. We’ve probably made so many concessions to the Allies that they think they can trample all over us.” On that issue, there was unanimity. The plight of the Jews was irrelevant, and the fate of the SF50 million depended upon the united force of the Allied demand.
By the end of August, Stucki was confident that the Allies’ criticism had been muted and the SF50 million had “become an amusing question.” Gerald Selous, his trusted Briton, had confirmed that the British government, anxious to prevent Jews from chartering ships to transport refugees to Palestine, was “in no hurry” for the funds to reach the Jewish groups and was untroubled if Switzerland failed to honor its pledge. All that remained to be done if the Political Department was completely to restore its close relations with the Allies was to persuade the U.S. government that the disagreements about the Washington Accord should be ignored. The policy of stubbornness of little Switzerland drew closer to success by the decision of Vyacheslav Molotov, the Soviet foreign minister, to abandon the summit of the four Allies in Paris on July 2, 1947, and return to Moscow.
Molotov’s abrupt departure from Paris shattered the dream of a peaceful postwar settlement in Europe. Two years of political bickering and ideological intrigue about the government of Germany had crippled the continent’s economy. In Paris, the three Allied foreign ministers and an army of officials huddled together pondering the outcome of an unpredictable war of nerves. Salvation was delivered by George Marshall, the U.S. secretary of state, the mastermind of a detailed plan to pour billions of dollars into Europe to stave off imminent disaster. To Petitpierre’s delight, the State Department invited Switzerland to join the discussions about implementing the plan. Switzerland, crowed the officials in the Political Department, had been readmitted to the European community.
“We can defeat any Allied onslaught,” boasted Stucki, “and the French agree with us. Shares in Switzerland are rising. The future of Germany has changed.” With satisfaction, he noted that no one was asking about the SF50 million anymore. Like all Swiss, he viewed the American trials in Nuremberg of German industrialists, bankers and former Nazi government officials on charges of international plunder and the employment of slave labor as a contemptible example of victors’ vengeance. A request from the United States for information about loot hidden by Austrian and Hungarian war criminals was derided by Ott. “War criminals” no longer existed, and the Allies lacked the power to crush Swiss obstructions, he chortled. Significantly, the Compensation Office did not draw the same conclusion about the heirless assets. Stucki still seemed bound by his undertaking.
In January 1947, the Finanz-Revue, a newspaper representing Switzerland’s financial sector, had published an editorial supporting the case, in the name of Switzerland’s good reputation, for distributing the heirless assets, on the ground that “it would not be understood if these accounts remained in Swiss banks without the banks’ knowing who owned the money.” Reflecting the same sentiment, Olivier Long, working in the Political Department, produced in March a draft law requiring banks, insurance companies and others to notify the department of all assets of depositors “of whom there has been no sign of life since May 9, 1945.” The punishment for failing to declare the assets was a fine or imprisonment.
Rumors about the draft law aroused anger among the bankers. Telephoning Stucki’s office, Alberto Caflisch, the Bankers Association secretary, announced that he was “very annoyed” by the preparations for a census of all assets. His bluster was calculated. Caflisc
h knew that not only were the bankers unwilling to reveal the unclaimed Jewish assets, but, more important, there were enormous wartime deposits by Nazis and Germans, probably of loot stolen from Jews and others, lying in dormant accounts. Either the depositors had been killed in the war or, quite possibly, they could not safely leave Germany and enter Switzerland in the current circumstances. To care for the Germans’ interests, a major concern for the banks, it was vital to sabotage the government’s scheme. To avoid the law, Caflisch suggested, the banks would conduct a voluntary census that would be passed to the department in confidence. His offer was accepted at the end of May, but with a warning. If the banks failed to complete a census, said Stucki’s assistant de Rham, the government would be bound to introduce a law requiring a census to “satisfy the undertakings given in Washington.”
Eight weeks later, capitalizing on the dramatic change of atmosphere after the breakdown of the Allies’ talks in Paris, Caflisch approached the government hoping to persuade ministers to abandon a meaningful census. At a meeting with the Political Department on August 21, he volunteered that the Bankers Association’s members would conduct a census but “without any guarantees.” Pointedly, the banker told de Rham, “We are sure that the result will not be a serious basis for any discussions.” Adolf Jann, the intimidating managing director of the Union Bank of Switzerland, who had been the wartime secretary of the Bankers Association and was present to support Caflisch, agreed: “If the amount is big, the Allies’ appetite will grow bigger; if it’s small, they’ll doubt its validity.” Caflisch nodded. The number of depositors who had died without heirs, he said with remarkable authority, “is between 3 and 5 percent.” De Rham was left in no doubt about the efficacy of the proposed census and why the bankers were no longer inclined to cooperate. “The era when the accord was signed,” said Caflisch, “has changed. America is no longer as strong and there’s no reason to go down on one’s knees because of stupid questions. On the contrary. It’s convenient to profit from circumstances and tell them quite clearly that this question must be reconsidered.” De Rham was too insignificant to disagree, especially after Caflisch threatened war if “such a stupid measure” was ordered. Any answer to a census, de Rham rapidly became disposed to agree, would be satisfactory and there would be no upset if the amount was small.
Any qualms still harbored by de Rham and his departmental colleagues about Switzerland’s promise to find the heirless assets were quashed on receipt of a letter from Paris. In a new reply to Switzerland’s letter asking the amount of heirless assets found by the French government, Paris stated that a search among the nation’s banks had revealed “no heirless assets.” Considering that 83,000 French Jews had been murdered and that the French had been major clients of the Swiss banks, the statement lacked credibility. To the Political Department, the abrupt denial also signaled the Allies’ loss of interest in the topic. “I confirm,” wrote Walter Hohl from the Ministry of Justice to Stucki, “that, concerning the heirless assets, it is not necessary to take any further action until the Allies raise the matter.” The bankers naturally agreed. Switzerland, wrote the association, more as an order to the Political Department than as an opinion, should not take any further initiatives. By then, the association had revised an earlier estimate that the total of heirless assets held by its members was SF208,000 and told the government that its members had found heirless assets worth SF482,000. To suggest that the wealthiest among the six million murdered Jews had deposited just over $100,000 in Swiss banks was less than credible but was the alleged result of a careful search among the association’s four hundred members. To terminate the discussion, the association told the government that any future queries from the Allies should be met by repeating the counterquery: asking what those governments were doing to find heirless assets in their own countries. To the bankers and the Political Department that appeared to close the whole matter.
Distraught that, just two years after the horrors of the Holocaust had been exposed, the Allied governments and the Swiss government seemed united in their indifference to the fate of the survivors, the Swiss Federation of Jewish Associations delivered a long plea to the Political Department. Reminding officials of the unprecedented murder of millions of innocents, the federation warned that the heirless assets would disappear, to be kept by those who happened to be entrusted with them. “Millions of Swiss francs are involved,” asserted the federation, adding that the deposits were scattered among Swiss corporations, which held the money as a favor for foreigners, and only a law could uncover the truth. The federation requested a meeting with Petitpierre. Within the Political Department, there was no appetite for a meeting with the Jews. The Allies, the foreign minister was told, “do not seem very interested in this question.” Even a U.S. diplomat had told the department, “This issue is of no great interest in America.” The department’s decision was inaction: “We’ll leave this dormant and pick it up only if the Allies raise it.” The Swiss Jews were told that Petitpierre was unavailable. The next step, carefully contrived within the department, was to test whether Washington would tolerate the unceremonious burial of the accord.
Inspired by a leak from Petitpierre, the New York Times published a dispatch from Bern on September 14, 1947, stating that Swiss officials no longer believed the accord would be implemented and had “virtually abandoned” their objective of destroying German financial power in Switzerland. Sowing more mischief, Stucki leaked to a journalist the claim that Washington had rejected a Swiss offer of $11 million for the refugees, which was untrue. Switzerland had not made an offer but was passively waiting for the Allies’ request. As the misinformation started to gain credibility, Stucki watched the gathering confusion with delight. Jewish groups attacked the U.S. government for rejecting an offer and in turn disbelieved the administration’s denials. U.S. diplomats in Bern relayed their suspicions about the original source of that story to Washington. Cursing British perfidy, the State Department summoned Lord Inverchapel, the British ambassador, for a reprimand. The Swiss, he was told, would have to abide by the accord they had signed and, moreover, the British could not ignore “the humanitarian principles” to which they also were committed. Inverchapel departed without comment, “preferring to let sleeping dogs lie.” Foreign Office reaction to the unwarranted reprimand was truculent. “The Americans, of course,” commented Neal Goodchild, “have been unable to act without us and so nothing has been done.” Unashamedly he described how Britain, anxious not to “weaken our bargaining position” with Switzerland, would be willing to consider an American proposal only if it was “economically advantageous to HMG.” Smoothing Britain’s relations with Switzerland was the priority, despite the obligations under the Washington Accord to obtain money for the refugees: “We are unfortunately committed to … this scheme and we can hinder it only by raising technical objections such as those which have so far held up the release of the 50 million Swiss francs.” Petitpierre was adroitly exploiting British sympathy.
Since May 1946, the crusaders had gradually become convinced that Paul’s failure to include sanctions in the Washington Accord had encouraged Swiss obstinacy. Rubin in particular was angry about the Swiss denial of an “informal agreement” to exclude Jewish property from the compulsory sale. There had been, Swiss diplomats insisted, no such conversation. Rubin and his colleagues gathered at a meeting in the State Department on November 25, 1947, and regretted that their only option for securing Swiss cooperation was a diplomatic protest. That admission of weakness was combined with the crusaders’ last hope: the appointment of Nat King, a forty-year-old Texan engineer turned lawyer, as the Safehaven diplomat in Bern. Because King had served during the war in Argentina and London as a Safehaven officer, Rubin clung to the hope, as he briefed the diplomat, that the energetic lawyer might succeed in discomfiting the Swiss. But King’s personality did not bode well. “A big, bumbling fellow,” thought Rubin, “without any emotional commitment.” King’s singular achievement by the end of his
tour was to write a book describing Swiss restaurants.
King was greeted in Bern by James Mann’s announcement that his investigation of the Swiss banks’ handling of stolen securities had exposed Max Ott’s persistent deception. For two years, Ott had assured Mann that the Allies could rely upon the affidavits supplied by banks attesting to the legitimate Swiss ownership of shares. Repeatedly, Ott had assured Mann that “a better system of control could not have been devised.” Under threat of prosecution for commercial espionage, the Swiss had forbidden Allied citizens to undertake any investigations while apparently refusing to conduct any of their own. Ott’s excuse was that Allied information was invariably wrong. But in a confidential, internal report Stucki had disclosed, “Regrettably, the Compensation Office has discovered that a large number of affidavits were false.” His excuse was not for Mann’s eyes. “It is understandable that some Swiss, holding assets for German friends, faced a conflict of interests and did not obey the law.”