Storming the Eagle's Nest

by Jim Ring

  Notes

  1. Bosworth.

  2. Bosworth.

  3. Joseph Goebbels, The Goebbels Diaries, 1942–43, ed. Louis P. Lochner (New York: Doubleday, 1948).

  4. Zuccotti, Holocaust Odysseys.

  5. Bosworth.

  6. Zuccotti, Holocaust Odysseys.

  7. Zuccotti, Holocaust Odysseys.

  8. Malcolm Tudor, British Prisoners of War in Italy: Paths to Freedom (Newtown, Powys: Emilia Publishing, 2000).

  9. Paul Schamberger, Interlude in Switzerland: The Story of the South African Refugee-Soldiers in the Alps during the Second World War (Parkhurst, South Africa: Maus Publishing, 2001).

  10. Cicely Williams, Zermatt Saga.

  11. Schamberger.

  12. Schamberger.

  13. Schamberger.

  14. Schamberger.

  15. Schamberger.

  16. Collier.

  17. Shirer, Rise and Fall.

  PART THREE

  NINE

  ‘Our predecessors made mistakes’

  HANS MEYER, Schweizerische Nationalbank

  1

  Lugano was a place to holiday. Once the capital of Switzerland’s southernmost canton of Ticino, it lay on the benign south-facing slopes of the Piedmontese Alps as they drifted down towards the Lombardy plain. To the south, east and west lay Italy, Ticino here just a finger of Switzerland in another country. Overlooked by the 3,035-foot Monte Bre and the 2,995-foot Monte San Salvatore, the city lay on the shores of Lake Lugano, one of the mirrored gems of the Alps that so glorify the surrounding peaks. It advertised itself as the sunniest place in Switzerland. In 1899 Baedeker’s Guide observed that ‘The environs possess all the charms of Italian mountain-scenery; numerous villages, churches, chapels and country-seats are scattered along the banks of the lake, and the lower hills are covered with vineyards and gardens, contrasting beautifully with the dark foliage of the chestnuts and walnuts in the background.’ Little had changed in the intervening years. Even in the autumn of 1943, four years into the war, the waterfront with its steamboat pier had a belle époque charm. Despite the blackout and the rationing, with its spectacular scenery, soft light and benign climate, there were far, far worse places to be. Since 1882, when the St Gotthard railway tunnel had opened for traffic, the city had exploited its position on the main line between northern Italy and central and northern Europe. As well as a vacation (Baedeker said it was ‘a very pleasant place for an extended stay’),1 it was a good place for a rendezvous or brief encounter.

  Alfredo Pizzoni and Ferruccio Parri and a handful of their compatriots arrived in Lugano on 2 November 1943. It was some three months since the fall of Mussolini, six weeks since his declaration of the Italian Social Republic at Salò and his installation in Rocca delle Caminate under the watchful eyes of the Leibstandarte SS. The two middle-aged Italians were not on holiday. They were leaders of the Italian resistance, the newly formed Comitato de Liberazione Nazionale (National Liberation Committee, CLN), and they were in Lugano to meet two men who had travelled south through the St Gotthard from Berne on the Strade Ferrate Federali. One was our old friend John McCaffery of SOE, the other the American newcomer: the pipe-smoking adulterer, Allen Dulles of the OSS.

  The pair did not have high expectations of the meeting. Italy had been a Fascist state for twenty years, virtually a generation. It was very difficult for the Allies to discern what sort of political forces might emerge after the castration of Mussolini: much as in Libya or Egypt today. Moreover, progress to date in fostering resistance – setting Italy ablaze – had been modest. Although the SOE had been at work in the country since October 1941, it had achieved relatively little. J Section, set up under Lieutenant Colonel C. L. Roseberry, had confined itself largely to subversion; a scheme to traffic war materiel to the clandestine opposition to Mussolini had been penetrated by Italian Military Intelligence. The Italian war record, starting with the Franco-Italian Alpine campaign of June 1940, also suggested that the ‘macaroni’ – as the French liked to call them – had little appetite for combat of any nature: conventional or guerrilla. They were too busy with personal grooming and the pursuit of love: la dolce vita.

  Still, the armistice signed in Sicily between the Allies and Badoglio’s forces two months previously had turned the tables. Italy was no longer an enemy state: she had metamorphosed into an occupied country. In the south, battle was now raging between the Allied forces of General Eisenhower and the Wehrmacht divisions of Generalfeldmarschall Albert Kesselring, around the ‘Winter Line’. ‘Smiling Albert’ – so called for his cheery demeanour – was the new Rommel: a hugely gifted commander who would have much to do as the Wehrmacht retreated grudgingly north towards the Alps. His winter line in the Apennines was just south of Rome, close to the medieval monastery of Monte Cassino. In the north the job of the SOE and OSS was to liaise with the nascent resistance movement in the Alps and the Apennines that might in due course support the US Fifth Army and the British Eighth Army as they pushed up towards the Italian capital, then north to Berchtesgaden and Berlin.

  This all meant that Dulles and McCaffery were obliged to do their homework. Pizzoni, it seemed, was a rather surprising thing for an Italian: a decorated war hero, educated in London and Oxford to boot. He was also a Milanese banker with a clear understanding of what it took to run an insurgency: money. With his close-set eyes and forceful manner, he was not to be tangled with; later he would bill himself Il Banchiere della Resistenza: ‘the Partisans’ Banker’. The bespectacled Parri was also a decorated First World War soldier, and a founding member of the Action Party: a liberal socialist as opposed to the communism espoused by many Italian partisans. He once described himself as a common man (uomo della strada), a regular guy (uomo qualunque). Journalist, academic, freedom fighter and the first post-war prime minister of Italy, he was hardly these things. He did, though, have an empathy with the Italian common man that made him the exception to the rule of recent Italian history. Like Marie Antoinette, Mussolini was above all that nonsense.

  As was so often the case in Allied liaison with national resistance movements in Europe, when the two sides met that day in November 1943, they found themselves at odds.

  Like Tito in Yugoslavia, the Italians knew they needed outside help; like Tito, Parri and Pizzoni wanted to rid themselves of the Germans; like Tito, they also wanted to create a new society out of the ruins of the old. Dulles and McCaffery were less interested in the latter. Besides wishing the Germans auf Wiedersehen, they wanted King Victor Emmanuel to retain his position as head of state, rather than being supplanted by the brave new republican and socialist state advocated by many Italians. On 21 September 1943 Churchill had told the House of Commons:

  It is necessary in the general interest as well as in that of Italy that all surviving forces of Italian national life should be rallied together around their lawful Government, and that the King and Marshal Badoglio should be supported by whatever Liberal and Left-wing elements are capable of making head against the Fascist-Quisling combination, and thus of creating conditions which will help drive this villainous combination from Italian soil, or, better still, annihilate it on the spot.2

  At odds over ends, the parties in Lugano also differed over means. Parri and Pizzoni envisaged a major resistance movement operating in large formations, manned by tens of thousands of partisans: in effect the military wing of a provisional government. McCaffery and Dulles prescribed smaller groups undertaking relatively small-scale sabotage activity of the sort that were showing results in France, not least in the Savoie and Dauphiné.

  Agreement was nevertheless reached in Lugano that the Allies would undertake four immediate airdrops and that the partisans would be given 50,000 lire. This reflected the fact that Dulles and McCaffery were more impressed than they had anticipated. In a telegram to his masters in Washington on 8 November 1943, Dulles declared, ‘I have met Attom of Motta [Dulles’s code for Parri and the CLN] … Zulu and I are convinced that Motta is a serious organiz
ation … Report by Attom places 20,000 to 30,000 scantily armed men as the total number of dependable fighting men that the resistance movement in northern Italy has available to it.’3 This could be a useful force.

  Dulles’s confidence was not altogether shared in London and Washington, two administrations that had seen little evidence to place much faith in the heirs of the Caesars. It was left to the Labour MP and Italian expert Ivor Bulmer-Thomas in the House of Commons to sally that ‘Italians have not really fought in this war because they were fighting a war which for them was hateful. Give them a good cause and they will show they can fight as well as any other soldier’.4

  In the late autumn of 1943, this was an arresting proposition. Time would tell.

  2

  Meanwhile, Allen Dulles hurried back to Berne and his Herrengasse desk. He had been in post for just over a year, and had certainly done enough to annoy his British opposite number, Claude Dansey, in London’s Broadway.

  The American’s network of spies already covered France, Italy and Austria, and had successfully penetrated, besides Germany itself, Yugoslavia, Czechoslovakia, Bulgaria, Hungary, Spain, Portugal and North Africa. He was already helping the maquis in France and – beginning with his work in Lugano – the partisans in Italy. He was also supporting those in Germany trying to assassinate Hitler. He had recruited the former Swiss President, Marcel Pilet-Golaz, as informant 518. Above all, his British reject Fritz Kolbe had proved a gold mine. Kolbe’s intelligence, duly validated through the good offices of Kim Philby, was now regarded as entirely reliable. Kolbe had supplied material including the V-1 and V-2 programmes, details of the revolutionary Me 262 jet fighter, Japanese campaign plans for South-East Asia, and the identity of a spy working in the British embassy in Ankara. It was no wonder that he would come to be seen as the most important spy in the whole European theatre.

  Now, on his return to the Herrengasse, Dulles found he had two intriguing issues closer to home. The first concerned a striking sandstone building in the Bundesplatz, a spy’s glance from Dulles’s Herrengasse apartment. Silhouetted against the Bernese and Valais Alps, the building’s façade was graced by a likeness of Mother Helvetia, suitably armed with shield and spear. It was the Bundeshaus, headquarters of the Swiss National Bank, and was in many respects as emblematic of Switzerland as the Matterhorn. ‘The Swiss,’ declared Chateaubriand rather uncharitably, ‘neutral during the great revolutions in the countries surrounding them, have enriched themselves on the destitution of others and founded a bank on the misfortune of nations.’5 Just a year into his mission and ninety-five after the death of the French sage, it had become apparent to Dulles that the doings of the bank represented a major issue for the Allies. Wars cost money and it was the Swiss who were helping to pay for the Nazis’ barbarous war. This was the now notorious matter of the Swiss and Nazi gold. Dulles’s other diversion was the rather more laudable humanitarian activities of his hosts.

  *

  German industry, by 1943 increasingly focused on the war effort, had a prodigious appetite for raw materials: chromium alloys for gun barrels, aluminium for aircraft manufacture, stainless steel for ball bearings and shell cases, diamonds for machine tools, oil, coal and gas for energy, and even common or garden iron ore for steel. Besides coal from the Ruhr and Saar, Germany had indigenous supplies of few of these strategic raw materials. Some were obtainable within the Greater Reich, notably oil from Romania; much of the material needed to be sourced from further afield: iron ore from Sweden, manganese from Spain, wolfram from Portugal, stainless steel from Turkey, industrial diamonds from South America. On 26 July 1943, Hitler had promoted Albert Speer, placing all war production under his ministry. Four months later on 13 November 1943, Speer gave Hitler an inventory of the Reich’s reserves of manganese, nickel, chromium and wolfram. As the Reich shrank from the east, supplies were in danger of getting short.

  These goods had to be paid for. The Reich’s trading partners abroad would not accept payment in Reich marks or German gold. They would, however, pocket Swiss gold or any other internationally accepted foreign currency. Swiss francs would do nicely. For the Nazis the solution was obvious enough. The Reichsbank had a deposit account with the Swiss National Bank. Dormant in September 1939, on 14 January 1940 the first gold from Germany was credited on the ledger. It arrived by rail from the border city of Basel, packed in boxes. At Berne station, high above the river Aare that ringed the city’s old quarter, it was transferred to trucks to complete the journey to the SNB headquarters on the east side of the Bundesplatz. The entrance to the bank’s underground vaults was guarded by Swiss soldiers, who looked on unblinkingly as the bank officials unloaded the bullion onto handcarts and wheeled the gold tenderly down to the vaults. There the bars were counted and registered and stacked on shelves. It was Aladdin’s cave, Shakespeare’s ‘Gold! Yellow, glittering, precious gold!’

  The gold was from Germany but strictly speaking did not belong to the Nazis. Germany’s gold reserves were much depleted by the beginning of the war and needed replenishing. Fortunately there was a ready source. First, the gold reserves of the countries that the Reich had occupied during the blitzkrieg years of 1939, 1940 and 1941. The Netherlands parted with $137m, Belgium $22.6m, Luxembourg $4.8m, Hungary $32m, about $100m in toto came from Albania, Greece, Yugoslavia and – eventually – Italy. Second, after 1941, a new source materialised: gold stolen not from large institutions but from the small banks, commercial companies and civilian populations living under Nazi control. Special teams euphemistically known as Devisenschutzkommandos (foreign exchange protection task forces) ‘broke into savings banks, looted private banks, emptied jewellers’ shops and private residences’.6 In due course the concentration and extermination camps added to this store, a productive source of wedding rings, trinkets and the fillings of teeth. At the Nuremberg War Crimes Tribunal, Rudolf Höss, the notorious camp commandant of Auschwitz, helpfully explained how the gold was plundered after the camp’s victims had been gassed. ‘Once the bodies had been hauled out [of the gas chambers], our special squads removed their rings and extracted the gold from the teeth of these cadavers … Special trucks were employed to transport it, and we packed the rings, watches, and bracelets separately. Exceptionally valuable pieces were later sold in Switzerland.’7 The total sum from these civilian sources was reckoned at a further $146m.

  It was true that these sources declared their provenance – either by way of a stamp indicating ownership or the equally telling fact that a filling looks like a filling, a wedding ring a wedding ring. This gold was accordingly smelted in the Prussian mint in Berlin, given a new seal, new numbers, and pre-war dates that assured the guileless acquirer of the bullion’s pristine pre-war provenance.

  This was the gold that, from January 1941, arrived in Switzerland in an ever-increasing stream from Nazi Germany – conservatively totalling 1.3 billion Swiss francs in the course of the war. The Nazis were reimbursed in Swiss francs and with this convertible currency they duly bought manganese, wolfram, tungsten, aluminium, oil, iron ore and – doubtless – cheap tin trays.

  *

  The colloquial term for this is money laundering. Other expressions might be used of those who knowingly handled gold not only looted from those countries occupied by Germany, but scavenged from the concentration and extermination camps. ‘While other neutrals limited or suspended their gold shipments from Berlin, the SNB obligingly left its doors open. Despite Allied accusations of German looting ringing in their ears, the SNB’s blithe acceptance of German protestations of innocence, even when uttered by officials who were old acquaintances from before the war, is hard to credit, far less condone.’8 It was, too, a practice condoned at the highest levels. The bank’s board was chaired by Ernst Weber, who himself reported to the bank council, headed by Professor Gottlieb Bachmann. Both were appointees of the Swiss finance ministry. When Bachmann evinced concern about doing business with the Nazis, Weber was reassuring: ‘The National Bank cannot have regard to
the provenance of the gold that is sold it by the Deutsche Reichsbank.’9

  Since the huge controversy over this story in the 1990s, the Swiss bank’s complicity in the traffic has been put beyond question: it was conceded by Switzerland’s own Bergier commission. This stated: ‘It is hardly surprising that the SNB’s decisions have – quite legitimately – been the subject of historical and moral assessment on frequent occasions, and that its decisions are judged as having been reprehensible.’10 In 1996 a new SNB board president, Hans Meyer, displayed refreshing candour, declaring ‘Our predecessors made mistakes.’11

  3

  With the opening of the Second Front against the Soviet Union in June 1941, the Reich’s need for strategic war materials grew, and with it the requirement for foreign exchange. Two years later in the summer of 1943 – just as Dulles was getting to know the German Foreign Office spy Fritz Kolbe – the Allies’ bombing campaign of Germany industrial centres was beginning to bite. Albert Speer, who had just become Reich Minister of Armaments and War Production, recorded:

  our Western enemies launched five major attacks on a single big city – Hamburg – within a week, from July 25 to August 2. Rash as this operation was, it had catastrophic consequences for us … Huge conflagrations created cyclone-like firestorms; the asphalt of the streets began to blaze; people were suffocated in their cellars or burned to death in the streets. The devastation of this series of air raids could be compared only with the effects of a major earthquake.12

  The consequence was that the Reich turned more and more for its war materials to further afield. By 1943, it was importing three-quarters of its wolfram and virtually all its manganese and stainless steel. To fund this, the Reich that year delivered to the Swiss a record figure of gold bars and coins, amounting to 529 million Swiss francs. The guards, porters and bookkeepers in the Bundeshaus worked overtime.