by Bower, Tom
Schnyder missed the irony in Isenbergh’s voice. Instead, the official, suppressing his personal opinion, bemoaned Switzerland’s predicament with Poland. “We were pressed into accepting the agreement by the Poles,” sighed Schnyder, suggesting a helplessness that Allied negotiators had never discovered.
“It’s a cruel irony that the Poles who persecuted the Jews should receive the Jews’ money,” mocked Isenbergh, understanding the simplicity and duplicity of the Swiss character. Behind the appearance of civility was a layer of obstinacy, and beyond that was solid egoistical incomprehension of anyone else’s opinion.
Inevitably, Schnyder offered his own agenda. If the secret was exposed, he said quietly to Isenbergh, Switzerland would have no alternative but to treat all heirless assets in the same way: “You would have the moral satisfaction but nothing more.” However, if Isenbergh stayed discreet, the remaining heirless assets would be used for resettlement as the committee wanted. “I’ve been working on a plan for the heirless assets along the lines you desire. It will be complete in a matter of months.” Only silence could ensure its success, confided the official. For a moment Isenbergh was silent. If Schnyder’s offer was genuine, there were advantages, but joining Switzerland’s damage-limitation exercise was an unattractive option, especially since Schnyder’s plan bore traces of eyewash. And, even if he was honest, one official could not change Switzerland’s policies. “It’ll all come out in the end,” Isenbergh said, “and all the other governments will want the same deal.” Public opposition and a negative vote in the Swiss parliament, he now believed, were the only chance of forestalling ratification. That required the exposure of the secret clauses. “Publicity will be harmful,” cautioned Schnyder as Isenbergh departed at the end of their ninety-minute meeting.
Schnyder’s report to Petitpierre was accurate. His warning, he admitted, had been unsuccessful. Isenbergh, he predicted, would publicize the secret clause. Recognizing his predicament, Petitpierre launched a final—and to him distasteful—ploy to limit the damage. The minister agreed to meet George Brunschvig and Paul Guggenheim, representatives of Switzerland’s Jewish community. In July, Brunschvig had timidly declined to attend the meeting with von Steiger and subsequently, to avoid provoking new anti-Semitism, he had opposed any public protest. Yet even Brunschvig had been appalled by the duplicity of his countrymen, especially by the Political Department’s subsequent request for his “discreet handling of that affair.” Petitpierre’s patience as his two visitors recounted their anger concealed his contempt, especially for von Steiger. The minister of justice, scribbled Petitpierre in a memorandum, had foolishly promised the Jews that the heirless assets would be used for humanitarian purposes “on the same day as he agreed to the [Polish] agreement.” Von Steiger was evidently careless and, to Petitpierre’s further annoyance, had become critical of the agreement. Now, his two Jewish visitors were irritatingly unmoved by his blandishments. Petitpierre could not understand why he was fighting old battles. The attitude toward Switzerland in Washington and New York, as Paul Keller, the trusted new president of Switzerland’s National Bank, had reported, was “respectful and understanding.” After speaking to American bankers and economists, Keller, a former professor of economics, had written that the “malaise” was history and the anti-Swiss antagonists had “disappeared.” Willard Thorp, the assistant secretary of state for economic affairs, had agreed with Keller that “a healthy Switzerland in central Europe” helped the United States. Yet the Jews, thought Petitpierre angrily, were still interfering and causing trouble. That aroused the minister’s hostility. Having listened to his visitors’ protest, he blandly bade them farewell.
Isenbergh, undeterred by the threats and scornful of the courtesies, had begun lobbying the handful of potentially sympathetic Swiss parliamentarians—all of them, until his approach, unaware of the secret clause. All foresaw how Petitpierre would justify his agreement. Referring to the 1891 law, the foreign minister would rightly insist that under Swiss private international law an heirless inheritance belongs to the country of last domicile or nationality. “But that would mean,” cried Isenbergh, “that Germany could claim the heirless assets of the citizens its predecessor had murdered.” Not even the immorality of allowing murderers to profit from their crimes could prompt many Swiss politicians to criticize Petitpierre. Only pressure from the State Department could help. Rubin hoped to win his old department’s sympathy.
Theodore Achilles, the policy officer responsible for relations with Switzerland, was Rubin’s first call on December 6, 1949. Elsewhere in the building, anxious officials were still reeling from the disclosure ten weeks earlier that the Soviet Union had tested an atomic bomb. The balance of power had tilted away from Washington, and the department was faced with constant crisis sparked by widespread communist agitation in Europe, the final victory of the communists in China, and the demagogic denunciations of “communist” officials in the department itself by Senator Joseph McCarthy. Compared with that bedlam, Rubin’s complaint about Switzerland could make little impression on Achilles. Nevertheless Rubin persisted: “Their obvious double-dealing is jeopardizing all the other heirless assets in Switzerland.” Starkly unhelpful, Achilles declared, “The department will not issue further instructions to protest.” Warning against any public protests by the American Jewish organizations, which would “make the Swiss more recalcitrant,” Achilles suggested that the only course was to rely upon the Jewish groups in Switzerland.
Rubin’s frosty reception was followed by a shock. His regular access to confidential State Department memoranda and even diplomatic messages from European governments about Jewish affairs suddenly ceased. The Jewish groups, victims of McCarthyism and innuendo, were now unwelcome. In Bern, Isenbergh decided that the policy of self-imposed silence had run its course. Bereft of allies, he turned to Michael Hoffman, the local New York Times correspondent. A telephone call to the journalist seemed to be his last chance of mobilizing an international protest. Hoffman’s article, published on December 7, exposed the secret clause and reported that the heirless assets of two million Polish Jews were allegedly only worth SF500,000. Within days, outrage spread among the Jewish groups in New York. The Poles and the State Department speculated in public that between $5 million and $50 million of Polish heirless assets were deposited in Switzerland. Objections from Bern that those estimates were “absurdly high”—Swiss bankers were already whispering to ministers that the true figure was $150,000 (SF645,000), markedly reduced from the original SF2 million—inflamed the anger.
Galvanized by the deception, James Rice, a lawyer employed by the American Jewish Distribution Committee, appealed to Willard Thorp, the assistant secretary of state, to raise the fate of the heirless assets with Switzerland. Thorp had no appetite for the subject. During the summer, he had led an American delegation in the disastrous negotiations with Stucki to settle the differences about the Washington Accord. Disagreements with the Allies had flustered him. In Neal Goodchild’s opinion, Thorp’s conduct was “excessively feeble” and, compared with the “vigorous and intelligent” de Panafieu, the senior French delegate, Thorp had noticeably wilted before Stucki. Wounded and confused in the aftermath, Thorp sought to rescue his reputation by inaction. Any thought of the Jews’ interfering was anathema. “The situation is very delicate,” warned Thorp. The Jewish organizations, he told Rice, should resist publicly and privately criticizing the Swiss because it would upset the Allied negotiations on reparations. Recovering the heirless assets, he directed, was no longer important, and irritating the Swiss might jeopardize their final contribution of SF30 million to the IRO. “The State Department will not criticize the Polish agreement,” he declared. “It may be immoral but it’s not illegal.”
“But you’ve sent instructions to the Bern legation to protest,” countered Rice, disclosing information gleaned by Isenbergh.
“Those were sent in haste and ill-considered,” snapped Thorp. “The legation has already replied that it would
take no action. Those instructions have been withdrawn.”
Rubin was aghast. Without State Department support, the Jewish organizations were practically impotent. He telephoned State Department officials who might understand that justice and respect for obligations accepted by the United States demanded further efforts despite the complications. The replies were not encouraging. In New York, Jerome Jacobson and others in the AJDC suspected that Rubin’s loyalty to his old department had blinded him to its dishonesty. Thorp’s warnings about the “delicacy” of the Allies’ negotiations with Switzerland for reparations sounded suspicious, because the U.S. diplomats had deliberately not been sent instructions from Washington. Although it was unknown except to a few senior officials, Washington had decided that the negotiations with Switzerland were pointless and should end. “The British,” wrote Jacobson about the stalemate, “apparently were correct in their insistence that the department was dragging its feet. All this is, indeed, a very sad business.”
Nevertheless, fearing that if the reparations negotiations did collapse, American Jewery would be blamed, Isenbergh was told to “encourage the Swiss [Jews] to take the initiative” in organizing a protest, but he was “not to get carried away and become directly involved with the Swiss.” New York was determined “to keep our own hands out.” Acting on those instructions, Isenbergh’s approach to George Brunschvig was more unsettling than usual. Convinced that his telephones were being tapped and fearing the Swiss police, Brunschvig had in the previous months employed unusually guarded and excessively polite language in his public statements. Now he resisted Isenbergh’s notion of publicly lobbying Swiss politicians. “There is no real hope of stopping the agreement,” he objected. Yet, subjected to Isenbergh’s persistence, he reluctantly agreed to make a quiet approach to sympathetic politicians. All would eventually remain silent.
Isenbergh’s last hope was Jacques Salmanovitz, the Jewish owner of the Société Générale de Surveillance, a notary and trust company in Geneva with connections to the Balkan countries. Since the 1920s, Salmanovitz had discreetly cared for his clients’ gold, jewelry and cash by undertaking to deposit the valuables—in numbered accounts or under SGS’s name—in banks and safe-deposit boxes. During the war, Salmanovitz had been hailed by OSS as “our great friend” for providing information, not least a list of Jewish clients who had entrusted SF8.4 million and about $90,000 to the notary pending their arrival from the Balkans. Yet Salmanovitz, to Isenbergh’s surprise, was inexplicably unwilling to join a public protest. The Swiss Jews, fearing anti-Semitism, had no vested interest in embarrassing Switzerland’s financial community into releasing the heirless assets.
Denied the support of Swiss Jews, Isenbergh and James Rice, arriving from New York, approached John Vincent, the new minister at the American legation in Bern. Intolerant of the willful insincerity he had encountered in Bern, Vincent, unlike his languid predecessor, was anxious to protest about the secret clause. The difficulty, he confided, was not the hoary fear that criticism made the Swiss more stubborn, but the absence of enthusiastic support from the two Allies. The British were still piqued about the creation of Israel, while France’s ambivalence had only recently been reconverted into lukewarm interest. “I’ll try my best,” Vincent promised his visitors, “to persuade the Allies to join a protest.”
The French Foreign Ministry was embarrassed. Over the previous two years, despite their responsibilities, French diplomats in Bern had remained silent. But since the creation of Israel the Quai had sought reconciliation with the Jewish lobby, so the department now bowed to Vincent’s initiative. The protest, personally delivered on December 20, 1949, by Henri Hoppenot, the French ambassador, asked Switzerland what measures had been taken to discover the heirless assets and whether the Polish agreement contained a secret clause on heirless assets. To Hoppenot’s delight, Alfred Zehnder, the Swiss official who accepted the letter, “not without a degree of embarrassment,” confirmed that Swiss citizens would benefit from the heirless assets but confided, in Switzerland’s defense, that the total of heirless assets, “would not exceed SF500,000.”
The American note two days later was more precise. “If the agreement,” wrote Vincent, “does in fact contain such a provision, it would not appear to be consistent with the declarations previously made by the Swiss authorities regarding the disposition of heirless assets found in Switzerland.”
Petitpierre was unconcerned by the protests. Two years had passed since the Allies had last mentioned heirless assets, and he had little doubt that the resurrection of the question had been inspired by Jewish groups. The protest from Paris contained a colorful concoction explaining France’s silence for two years. “We did not take any measures on heirless assets,” stated the Quai d’Orsay provocatively, “partly because there are no heirless assets on our territory and partly because the Paris Agreement of June 14, 1946, applied only to neutral countries.” Unlike Switzerland, according to the Quai, France had not sequestered property belonging to others: “France has sacrificed much for the victims of Germany, has handed over all the gold it found in Germany, and has refused to accept the German assets found in the neutral countries.” Petitpierre was not impressed. In the margin of the French letter, the reader had scrawled heavy exclamation marks. The Allies’ interest, the Swiss foreign minister was sure, would soon pass. Even the prospect of that day’s parliamentary debate and vote about the agreement aroused little disquiet. Other ministers at that day’s council meeting had agreed that “bending the rules” was justified, although it should be done “only in exceptional circumstances.” Rather than tell the truth, Petitpierre would obfuscate and rely upon the customary obedience of members of parliament.
Just as planned, later that morning, Petitpierre denied in the parliament that there had been “a secret letter.” Concealing his own recent attempts to suppress the secret, he told the two members who asked about heirless assets that the clause was merely “confidential” and that the failure of disclosure had been an unfortunate “error, a blunder of a subordinate.” Within two hours, despite more serious criticism about Switzerland’s relations with the communists, the agreement was ratified by 98 to 18 votes. One aspect of Petitpierre’s secret was still safe. The connection between the heirless assets and compensation for Swiss property remained shrouded.
Hours later, the British minister delivered a protest note similar to Vincent’s. The crusaders were not grateful. Ignoring the waning interest in Washington, Rubin said that the “unfriendly attitude” of the British and French had been “a great encouragement to Swiss selfishness.” The Polish agreement, he feared, would be a precedent for similar agreements with other countries. Isenbergh agreed. The prospect of extracting any money from the Swiss was “by no means good. Yet we must try.” Both still seriously underestimated the prejudice infecting Bern.
Thomas Tull, a British diplomat trusted by Alfred Zehnder, heard the unvarnished parochialism on December 29, 1949. That morning, the New York Times reported a leak from Zehnder that the Polish heirless assets were not worth more than SF500,000. Odd, thought Tull, to include a secret clause in an international agreement for such a small sum. Seated in Zehnder’s office, Tull heard the Political Department’s senior official contrive a scenario to justify the secret clause that even the Briton, in his report to London, decided was absurd. “The Polish heirless assets,” pronounced Zehnder, “had belonged for the most part to members of the former ruling classes in Poland who had been liquidated, so far as we know, by the Polish communist government and not by the Nazis.” Switzerland, he said, could not hand out money on the basis of religion or race to Jewish organizations.
Shortly after Tull’s report reached London, the Foreign Office telegraphed a copy to the State Department. Rubin was allowed to read the confidential message. “That point about the Jews,” he exclaimed, “is particularly nasty.” Zehnder seemed to be infected with anti-Semitism. Reading further down the report, Rubin came upon a piece of unexpected candor. After p
arliament had ratified the Polish agreement, Zehnder had told Tull, the Swiss government would have authority to compel the banks to disclose the relevant heirless assets. If, contrary to expectation, the assets belonged to victims of the Nazis, there would still be time to take it up with the Polish government. That admission, Rubin saw at once, contradicted everything the Swiss had pleaded over the past four years about banking secrecy. The odor of rottenness, unwittingly revealed to Tull, was intolerable. And finally there was Zehnder’s hand-wringing, hand-on-heart, deep-felt compassion. The Political Department director, reported the British diplomat, felt “uneasy” about the Polish agreement, as did Petitpierre, who “had been much concerned” in case there was a breach of “a gentleman’s agreement” made by Stucki in 1946. The hypocrisy was breathtaking. In public, to reassure the Polish communist government, Petitpierre’s officials were saying precisely the opposite.
In a press release issued in early 1950, the department dismissed the 1946 letters as “not binding” and the Jews’ “sentimental arguments” for receiving the heirless assets as “not convincing.” Poland, said Petitpierre, “can argue the same [as the Jews], since it was invaded by the Germans, needs money for reconstruction, and suffered Nazi occupation.” To confirm Troendle’s assurances in Warsaw, the department also contradicted Zehnder’s leak. Polish heirless assets, announced the official statement, were worth a maximum of SF2 million. Any estimate above that figure was a “gross fantasy” because the number of heirless deposits was “very small.” To Rubin it seemed clear that the banks were protecting their secrets. Unknown to outsiders, Oetterli was aggressively lobbying Petitpierre’s officials.
In early 1950, the bankers heard that the government was negotiating a trade treaty with Czechoslovakia. The worst fears of the Bankers Association were being realized. Suspecting that the agreement would also include an heirless-assets clause, the association warned the government not to interfere in their business or endanger their clients’ privacy. In anticipation of pressure by other foreign governments for answers to a question that had lain satisfactorily dormant, it was agreed that a delegation of bankers should meet Rudolf Bindschedler, the Political Department’s lawyer, on January 10, 1950.