Nazi Gold

by Bower, Tom

  On April 20, 1951, all three of the Allies consented to drop the issue, subject to a letter signed by the three Allied representatives and Stucki. Formally, the Allied governments noted that the new agreement did not mention heirless assets because the Swiss government had stated, “there exist in Switzerland no assets of this nature.” If such money was found in the future, the letter continued, “the Swiss government will study with forbearance the possibility of donating these assets to the assistance and aid of victims of Nazism.” Petitpierre dispatched a statement to the Allied diplomats confirming, “There are no heirless assets in Switzerland.” The minister promised that if in the future any heirless assets were found, the money would be used for refugees. In his own letter, Stucki confirmed that during the negotiations the Swiss government had “declared that there are no heirless assets,” and he too promised that if any were found they would be donated for reconstruction.

  The Bankers Association had good reason to believe that, if Petitpierre was prepared to repeat an untruth to the three Allies, its victory was complete. To underline the futility of the crusaders’ continuing their campaign, the association handed the American Jewish Committee a survey conducted among its members about dormant accounts. For all practical purposes, the Bankers Association concluded, such accounts “do not exist.” In a final riposte, the association damned most claimants who alleged an inheritance in Switzerland’s banks as relying on nothing more than their imagination. The crusade had again suffered a defeat.

  14

  KEEPERS OF THE FLAME

  Occasionally, Rudolf Bindschedler suffered spasms of conscience about the heirless assets. Disdainful of Max Oetterli and suspicious of the banks, the legal adviser in the Political Department heard troubling rumors and read reports that aroused his concern. In April 1953, one case in particular was, with customary understatement, underlined in the department’s file as “informative.”

  The case involved Otto Trachsel, a German who nearly forty years earlier had opened a savings account in a remote Swiss Alpine village bank. Trachsel had died and in 1949, by chance, his son found his father’s savings book. In 1953, the son asked the bank for his inheritance. The bank replied that in 1935, after his father had not been heard from for twenty years, the account had been closed and the bank had assumed ownership of the money. Without any apology, the bank admitted that it did not believe it was legally obliged to hand over the money. Bindschedler, to his disquiet, discovered that the bank had no other object than self-enrichment. In 1935, it had placed an advertisement in a local and little read newspaper, listing seventy-seven names of depositors whose dormant accounts would be closed if there was no contact within ten years. In the meantime, the bank had made no effort to contact Trachsel or any of the other depositors. Once the period had passed, the bank transferred all the money to its own reserves and, as permitted by Swiss law, destroyed the records.

  Trachsel’s letter, accompanied by irrefutable evidence of the deposit, could not be ignored, but the bank’s reply revealed, in Bindschedler’s opinion, an unfortunate attitude. The son was offered the SF3,430.65 that had been on deposit in 1935, but without any interest on the capital. The lawyer was concerned that the Swiss Banking Commission had failed to protect innocent depositors. Moreover, the bank’s behavior undermined Oetterli’s ceaseless claim that secrecy was necessary to protect the clients’ interest. “This case,” Bindschedler wrote to Oetterli, “is particularly shocking and will rekindle the interest in the laws on heirless assets.” Oetterli, as usual, scoffed. Bindschedler, he believed, represented a tiny minority influenced by Israel. The reports from Swiss diplomats in Tel Aviv were to blame for the Political Department’s nervousness. “The Israelis’ imagination about the so-called Jewish heirless assets,” reported Karl Seifert, the Swiss ambassador in Tel Aviv, “has grown intensively.” Blaming “emotional motives” and the need for foreign exchange for fueling “demagogic interpretations,” Seifert warned that relations could be damaged. That prediction suited Oetterli perfectly.

  Oetterli’s stance depressed the crusaders. “Our prospect of getting anything out of Switzerland,” noted Jerome Jacobson of the AJDC, “on the strength of the Five Power Agreement (negotiated in Paris in 1946) alone is pretty hopeless.” Eight years after the war, the stalemate appeared complete. On one side, the Swiss government refused to honor Stucki’s promise and resisted invitations for discussions from the Jewish organizations. On the other, the State Department ignored pleas to bring pressure on the Swiss. Without allies, Rubin and other representatives kept a forlorn vigil, anticipating Switzerland’s unanswerable rhetoric: “What is the United States doing about heirless assets in American banks?” Congress, Rubin lamented, was considering legislation that undermined all the Jewish organizations’ work since 1944. But, unseen, the worm was turning.

  The minutes of the ferocious encounter on November 17, 1952, between Oetterli and two leaders of Switzerland’s Jewish community in the office of Markus Feldmann, the new minister of justice, had been filed in a growing collection of government papers. Oetterli’s blustering attempts to stop the ministry from drafting a law on heirless assets—work that had started on January 22, 1952—had failed. Honest in his commitment to George Brunschvig, Emil Alexander, the ministry’s legal adviser, was still considering legislation that would compel banks and other financial institutions to register all dormant accounts and deposits. Subordinates were preparing drafts for his consideration. Alexander sensed that, with the exception of the bankers, those without a vested interest deplored the uncertainty as intolerable and damaging. Oetterli’s opposition, however, handicapped Alexander. Some justification for the bankers’ opposition had surfaced during the year. The Hungarian government, asserting its entitlement to the heirless assets of its nationals, had submitted the names of allegedly dead citizens to Swiss banks to retrieve their deposits. The banks had discovered that some of those listed were, unknown to the communists, living in the West. Even replying to the Hungarian regime could endanger those clients’ relatives. Noncooperation was the only safe policy. In contrast, even Stucki had been heard saying to Petitpierre, “There must be cases where no inheritors are alive.” After all, the Compensation Office had discovered that SF16.5 million of frozen German assets were heirless. Anxious to distance himself from von Steiger’s policy, Feldmann sympathized with those who suspected that the bankers were motivated simply by a desire to keep the money, but his opinion was tilted more by developments in West Germany.

  Without moral qualms, Konrad Adenauer’s government had in its early days denied any responsibility for the crimes of the Third Reich and ridiculed the notion that the new republic should bear any responsibility for the debts of its predecessor. Flouting international opinion, the new chancellor had recruited close advisers whose previous loyalty to Nazism was unexamined and unmentioned. In return for securing the Nazis’ support after 1949, Adenauer had honored the pension allowances of former SS officers, regardless of their murderous service, while refusing help to destitute German Jews. A polite protest from the Allies noting that Germany “has taken no measures affording significant compensation to the victims of Nazi persecution” was roundly rebuffed by Adenauer. “Most Germans,” he told the Bundestag, “had resisted the Nazis.” The country, he added, possessed only “limited resources” and could not afford restitution. Under pressure from the Americans, Adenauer slightly modified his defiance, at least in public. In 1953, after emotional negotiations, the West German government had finally agreed to pay reparations to Israel. Markus Feldmann appreciated the inevitable repercussions. “Undoubtedly this will activate the question of heirless assets in Switzerland,” he told Alexander. Others, especially Oetterli and Homberger, were unconvinced.

  With increasing confidence, German industrialists and other former Nazis began pressurizing the chancellor to recover their confiscated assets, especially in the United States, estimated to be worth $500 million. Adenauer’s appeal to President Eisenhower in F
ebruary 1954 for the return of German property intentionally coincided with the creation by the Senate Judiciary Committee of a subcommittee under Senator Everett Dirksen of Illinois to investigate the Trading with the Enemy Act. Dirksen and Senator William Langer of North Dakota—Illinois and North Dakota both had large German-American populations—had already won the support of John Foster Dulles, the secretary of state, to return the German property. To encourage West Germany’s rapid rearmament and its participation in the fight against communism, Dulles, dismissing the international agreements, proclaimed that the United States recognized private property even in wartime and that confiscation of German (and implicitly Swiss) property had been wrong. Dirksen and Langer went further. Repudiating the eighteen-nation Paris Agreement, their report condemned the seizure of German property as an immoral, un-American communist plot masterminded by Harry Dexter White. Everyone rightly expected that their bill to return confiscated German property would be approved by the House and Senate. (Eisenhower, however, would veto the bill in August 1954.)

  In Bern, Markus Feldmann’s attitude toward the heirless assets had gyrated, his position depending on external developments and the bankers’ threats. West German rearmament had whetted the appetites of Swiss munitions manufacturers for resuming their lucrative wartime trade with Germany, while the banks, proclaiming themselves as a safe haven for investors worried about another war, issued threats in a bid to protect their lucrative secrecy. For the hyperactive minister, the Jews and their money were an easily forgotten nuisance that unfortunately could not always be ignored. Fourteen months after the confrontation in his office, on February 12, 1954, Feldmann reluctantly summoned a meeting to discuss his department’s draft law ordering a census. To prevent an undignified fight, Feldmann had asked Judge Plinio Bolla, representing the Bankers Association, and Professor Paul Guggenheim, of the Jewish community, to present memoranda outlining their cases.

  Bolla’s case was predictably uncompromising. Reciting the bankers’ gospel, he pronounced the existing legislation to be adequate and predicted that special legislation would undermine the secrecy laws and the Swiss constitution and would legalize confiscation. While disputing the size of the heirless assets, he argued that, should any exist, they would be subject to international law just like the assets of the Polish Jews. In the code that implied that Switzerland had been victimized by foreign and Jewish interests, Bolla urged the government not to succumb to the same political blackmail as had operated in Washington six years earlier.

  Guggenheim’s submission was equally predictable. Switzerland, he wrote, remained “isolationist and lacked understanding” about the uniqueness of the Holocaust, adopting a “business-as-usual” attitude while the banks were hiding large sums of money. The banks’ behavior since 1945, he continued, and the Polish treaty were hardly reassuring: “Passivity is not suitable to protect private property.” The only solution, he concluded, was to compile a register based on an external investigation of dormant accounts and missing people.

  Bolla’s written reply reeked of contempt. There was, he declared, no problem. Dismissing any notion that banking secrecy could be infringed, the judge derided independent investigation as impossible because there could be no agreement about what was to be registered, and any dishonest bank or fiduciary could easily evade the requirement. Any heirs, he continued, had already staked their claims, and the amounts of heirless assets were so “trivial” that no bank would ever keep those unclaimed deposits. “Why,” asked Bolla in familiar and false rhetoric, “should the Swiss be required to compromise their principles and not the American banks?”

  In the face of such irreconcilable opinions, Feldmann’s options were limited. Without any obvious compromise, either he could compel the banks to disclose the heirless assets or he could retreat. The invitation to Bolla and Guggenheim to meet personally in his office signaled the minister’s retreat. In contrast to the invitation in November 1952, when the ministry had declared that there would be a law, Feldmann’s present invitation suggested that the new talks would discover “whether it is possible to solve the problem of heirless assets without changing the law.” Yet, in the days before they met, Feldmann retreated even further. Persuaded by the bankers, the minister told George Brunschvig that his request for legislation was still delayed by “some preliminary work.” Nevertheless, the minister would agree to chair a meeting.

  Five bankers and two representatives of Switzerland’s Jewish community, Paul Guggenheim and George Brunschvig, faced each other in Feldmann’s office. Brunschvig was always disquieted by these confrontations, but his courage had grown as his anger increased. Over the past months he had received anonymous denunciations claiming that bankers had enriched themselves by diverting into their own accounts the funds of Jews who had made their deposits before 1939 but had not been heard from since. “An official of American Express in Zurich,” one informant had recently written, “has just bought himself a huge flat and comfortable car out of the deposit of a Viennese Jew who died.” Other rumors mentioned strange activities in the vaults of banks. Safe-deposit boxes, untouched for more than fifteen years, were being opened for an “inventory.” All belonged to foreigners, mostly Jews. Mysteriously, their contents—jewels, cash, paintings and gold—had been stored “for administrative reasons” elsewhere in the bank and had then disappeared. Bank employees later spoke of a “sudden huge inheritance” from a distant relative, but the truth was known. Stories about the wholesale theft in banks of property belonging to murdered Jews were widespread around Switzerland. Not all this property was heirless. In many cases, there were undoubtedly heirs, but they were unaware of the boxes’ existence or were denied access by the banks. But the flood of anecdotal evidence, Brunschvig decided, would not convince the bankers. And he feared their hatred of Jews.

  Shamelessly, Jakob Diggelmann, the senior director of Bank Leu, who had deigned to express regret for his bank’s close cooperation with the Nazis, opened with a threat to Guggenheim: “If, despite our warnings, there is a decree, we will fight for a referendum.” Everyone understood. Diggelmann would protect banking secrecy by arousing anti-Semitism, under the veneer of defending Switzerland’s sovereignty. But Guggenheim was not as easily intimidated as Brunschvig: “We’re speaking a different language from the banks. Six million have died. In many cases there are no heirs to their money. That needs special measures.”

  “We’re certainly speaking two different languages,” said Diggelmann brusquely, deliberately ignoring the background of their meeting. For Diggelmann and the other bankers, the Holocaust was in every sense irrelevant. Only self-interest counted: “We’ll never agree if there is any suggestion of changing the law. We are protecting the deposits for the legitimate owners.”

  “The bankers’ explanations will never reassure us,” repeated Guggenheim, undeterred. “I haven’t always received proper answers from the banks about the property of missing people.”

  Agreement was impossible, and Feldmann refrained from negotiating a compromise. “The opposition by the Bankers Association to any legal measures appears insurmountable,” Feldmann told Petitpierre after rejecting, at the bankers’ request, a new Israeli approach to discuss the heirless assets. Reading Feldmann’s new hard-line stance, Bindschedler, the Political Department’s lawyer, commented, “Predictable if the Police Division is involved!”

  Max Troendle, the energetic minister of trade, welcomed Feldmann’s hard line, but in September 1954 he was irritated to discover that, although five years had passed, the heirless assets had still not been transferred to “Clearing Account N” for the benefit of the Poles. His query to the Political Department was silenced by an admonition to “leave it to the banks.” Troendle did not protest. Even the Political Department feared asking the banks for a progress report. “Perhaps the banks have forgotten about the matter,” wondered Bindschedler. “It would be the responsibility of the Bankers Association to remind the banks and avoid any public discussion.” Even Bind
schedler seemed to have forgotten that he was reflecting on an international treaty signed by the government, but he was aware that no one was exactly eager to challenge the power of the banks.

  One year later, Feldmann was still procrastinating. A letter from Guggenheim suggesting the appointment of a trustee to care for all the heirless assets had lain unanswered on his desk for six months before he asked the Bankers Association for its comment. Also on Feldmann’s desk was a letter from Stucki regarding the case of Chaim Dunajewski, a Russian Jew who, while living in Hamburg in 1930, had deposited SF1.2 million in three Swiss banks as protection from the communists. It had been frozen as a German asset in 1945, and the Compensation Office decided in 1955 that Dunajewski was not German and that his twenty-five-year silence suggested that he had been murdered by the communists after his return to Russia. The Compensation Office therefore unfroze the money, prompting Stucki to write to Feldmann. The banks, he complained, “after the expiry of time for giving notice of unclaimed assets” could behave dishonestly. “There is the possibility, even the probability,” he wrote, “that after the expiry of the time limit the banks will quite simply keep the money.” Stucki sought the minister’s approval for inviting the Compensation Office to ensure that the money was declared as an heirless asset. Rejecting the request, Feldmann ordered that the banks should be allowed to wait until a potential inheritor appeared. Nor, ruled the minister, should the money be transferred to a trustee. Finally, nothing was to be announced or even mentioned that might alert potential claimants. The banks could keep the money, forestalling the chance of a claim. Stucki had been ordered to maintain the conspiracy of silence.