At 6:00 P.M. on May 13, six British destroyers began the final evacuation of Hook of Holland. HMS Windsor rescued members of the Dutch government as well as British, Belgian, Norwegian legation staffs and 400 refugees. Remaining soldiers and citizens continued to fight heroically, to the consternation of the Germans, who still could not believe the Dutch resistance. On May 14, Hitler decided to end the northern offensive quickly. The more important operation aimed at France was due to reach its crucial point in a few days, and he wanted that to stay on schedule. So he sent out War Directive 11, stating coldly, “Political as well as military considerations require that this resistance be broken immediately.” It called for the “rapid reduction of Fortress Holland.” Göring ordered an air bombardment of Rotterdam similar to earlier Nazis attacks on civilian targets in Guernica, Spain and Warsaw, Poland. German planes carpet-bombed the city with 1,150 110-lb. and 158 550-lb. explosives. Huge sections of the town were leveled, and there were immediate reports of 30,000 deaths. The figure was later reduced to about 850. One of the few buildings that survived the Nazi air attack was the Witte Huis, which is still standing proudly in the center of the city today.36
At dusk that night, General Winkelman, the commander of the Dutch military, ordered his troops to stop fighting. The next morning at 10:00, German and Dutch officers signed a capitulation order.37
Under the Dutch-German armistice agreement, the Dutch were charged with cleaning up the country’s many waterways, which were now cluttered with the flotsam and jetsam of the invasion. German officials at the time knew nothing about the gold resting at the bottom of the Nieuwe Waterweg. The Netherlands National Bank on June 1, signed a contract with a salvage company to search the area where the pilot boat had sunk. Divers pulled up 75 bars on the first day of the rescue operation and 169 on the second. They were all turned over to the Rotterdam bank. A month later, a German merchant who had a shop nearby told the new Nazi harbor commander in Rotterdam about the golden Pilot Boat 19 disaster. The Dutch by then had salvaged about 750 bars. A German court ruled that the gold belonged to the Reich. In October 1940, the Dutch Central Bank said in view of that they were not going to continue the salvage operation. By then they had found 816 bars.
After the war, the Nieuwe Waterweg was deepened and expanded; and during that work more gold bars were uncovered and local workmen got some of the treasure. Six bars have never been accounted for and might have been stolen. In any case, they were never found. The channel is today much deeper than it was in 1940, and no one believes that any gold remains at the bottom of the waterway.38
After the Nazis consolidated their hold on the country, they began sending the gold left at the Rotterdam branch to Berlin. The first shipment of 536 bars weighed 6.7 tons. Six more shipments were later made, with the last one departing on October 18, 1943. During the next two years, the Dutch shipped 192.7 tons of gold to Berlin.
In the Netherlands, as in other occupied countries, the Nazis captured privately held gold. Dutch citizens were forced to sell their bullion coins and small bars to the Dutch central bank, which paid them in guilders. The bank had to pass them along to Berlin. The Dutch, instinctively law-abiding people, complied with few protests. Citizens sold 35.5 tons of gold to the state bank.
Germany’s Devisenschutzkommandos were also active in collecting private Dutch gold and other valuables held in private banks. With a bank employee always present, they opened every safety deposit box in the country. The process took a year to complete and resulted in a haul of nearly ten tons of gold bars plus ƒ4.2 million in gold coins and millions more in American, French, Swiss, Belgian, and German currency. All that private wealth was handed over to Göring’s Four Year Plan, but was stored at the Reichsbank.39
As the war dragged on, the Nazis found new ways to confiscate Holland’s remaining gold and foreign currency. On March 24, 1941, Arthur Seyss-Inquart, the Austrian Nazi who became Reichskommissar of Holland, demanded that the country pay 500 million Reichsmark for so-called occupation costs. For starters, ƒ75 million had to be paid within two weeks in gold. The Dutch eventually sent ƒ1.2 billion per year to Berlin as occupation payments for the entire war.
Starting in March 1942, Berlin also demanded that the Netherlands help pay for the cost of Germany’s invasion of the Soviet Union. This was called their contribution to the “fight against Bolshevism.” The allotted Dutch amount was 50 million Reichsmark per month, with 10 million of that paid in gold. Since the invasion of the Soviet Union had started nine months earlier, the initial installment was 90 million Reichsmark in gold.
Central Bank President L.J.A. Trip resigned in protest to Nazi policies in March 1941, but the Germans simply replaced him with a compliant successor, Meinoud Rost van Tonningen, a leader of the Dutch Nazi party and also secretary-general of the finance ministry. In March 1943, he sent a message to Seyss-Inquart that virtually all the treasure that had been left in the vaults or in private accounts was now in Berlin.
Small amounts of gold were found in December 1944 and February 1945 in regional central bank offices in Arnhem and Meppel. In Arnhem the Nazis discovered 32 bags of gold coins that weighed a little less than one ton, and in Meppel they got 1.4 tons. The Arnhem gold went directly to Berlin, but that in Meppel did not because the Germans thought the Soviets would confiscate it when they reached Berlin. It went instead to the regional Reichsbank branch in Würzburg in Bavaria. The last Dutch gold arrived in Germany on February 26, 1945.
The Dutch lost a total of 145.6 tons of gold to the Nazis, the second largest amount of any nation after Belgium. That consisted of 104.9 tons taken from central bank vaults, 28.8 tons robbed from the public, 9.6 tons from Pilot Boat 19, and 2.3 tons from Arnhem and Meppel. The valiant Dutch and British efforts under the most dangerous and difficult circumstances possible succeeded in saving 70.6 tons.40
Chapter Sixteen
BELGIUM AND LUXEMBOURG TRUST FRANCE
Throughout history Belgium has been Western Europe’s bloody crossroads. During the Middle Ages it was one of the world’s richest regions and a major center of the industrial revolution. Unfortunately, it has also been the region where the Germanic and Latin cultures collided and fought brutal wars. Wellington defeated Napoleon at Waterloo just outside of Brussels. Armies of Germany, France, and Britain in World War I, fought to a stalemate there, and as the poem recounts, “In Flanders Fields the poppies blow/Between the crosses, row on row.”
Belgium has been a nation state only since 1830, when its often-quarrelsome citizens in the two regions of Wallonia and Flanders united just long enough to throw out their Dutch rulers. In that era Britain was a superpower, and London guaranteed Belgium’s independence and neutrality as well as that of Luxembourg, its neighbor to the southeast. The Belgians, though, selected Leopold from the House of Saxe-Coburg and Gotha in Germany to be the first King of the Belgians. The new country was an uneasy mixture of Catholics and Protestants, industrialists and farmers, and Flemish and French speakers. It regularly suffered through recurring political crises, and between June 1936 and September 1939, Belgium had six different governments struggling unsuccessfully to deal with both an economy that had not recovered from World War I and the rise of Nazi power next door. The young Leopold III believed staunchly that the country’s neutrality was its only hope for escaping a repetition of World War I, while Belgian politicians mostly looked to London and Paris for protection.
The Grand Duchy of Luxembourg is a small and hilly agrarian country located at the spot where France, Belgium, and Germany meet that had a population in 1940 of about 300,000. Powerful neighbors had often overrun the country. Celts and Romans as well as France, Poland, Spain, Austria, Holland, Belgium and Prussia have at times ruled the tiny nation. During World War I, it tried to be neutral, but German troops occupied it. Nevertheless, Grand Duchess Marie-Adélaïde remained with her people in her country during that entire conflict.
Luxembourg had long sought economic relations with larger and stronger nations.
Prior to World War I, it had a customs union with Prussia, but denounced it at the end of the war. Following the war the country tried to unite economically with France, but Paris had no interest. So it turned to Belgium, establishing an economic union in 1921, which included a monetary union.
The Grand Duchy had a central bank, the Caisse d’Épargne de l’État du Grand Duché de Luxembourg, although the institution did not have the authority or resources of other national banks. Prior to World War I, the Luxembourg government held no gold, but during the economic crises of the 1930s it began accumulating bullion. By the end of the decade, it had a stockpile of 357 bars of gold weighing 4.3 tons. The Caisse d’Épargne also held 93.5 kg of gold belonging to the J. P. Pescatore Fund. The founder of that organization was a wealthy Luxembourger who had made a fortune in French business and in 1892 established a home for the country’s elderly. The gold provided financing for it.1
Luxembourg gold was initially stored at home, but when war fears increased the government in 1938 sent it to Holland. Officials, though, ran into transportation problems, and the following year asked the Belgian government to take it over and to protect it the same way that they were handling their own bullion. Brussels agreed.
The Banque Nationale de Belgique, as it is known in French, or Nationale Bank van België, its name in Flemish, began a program after World War I to modernize and decentralize its gold holdings. Much of the metal stored in its Brussels headquarters was shipped to new facilities in three towns around the country. The new storage facilities were solidly built and had underground vaults made of reinforced concrete. Some gold was also shipped to Antwerp and Ostend, Belgium’s two main port cities, from which the national treasure could be moved quickly, most likely to London. Eventually only about fifteen percent of the country’s precious metal remained in the capital. Drawing on their experience in World War I, bank officials operated in the belief that in a new conflict they would have enough time to move the gold away from the fighting.
In the late 1930s, Belgium enjoyed a dramatic increase in its gold holdings because of an influx of hot money coming from France. The Popular Front government in Paris launched leftist economic policies that frightened wealthy citizens, who sent much of their private fortunes in gold bars and coins to Belgium and Switzerland. As a result, Belgian gold holdings increased by ten percent, and by the end of the decade the national stockpile totaled more than 600 tons, a large amount for such a small country.2
Following the Munich agreement in the fall of 1938, leaders of the Belgian bank became concerned about the safety of their holdings. The board also discussed whether in case of an invasion members should remain in the country or flee to France or Britain for the duration of the conflict. A large number of Belgians had escaped to France during World War I. In order to live there, though, they needed to convert their Belgian francs into French francs. Believing that was likely to happen again in a new conflict and would put a major burden on the country’s gold and foreign currency reserves, Belgian bank officials felt they had to keep large stores of bullion to pay for potentially huge sales of Belgian francs for French ones.
At the time, Georges Janssen headed the Belgian Central Bank. Born in 1892 and a lawyer by training, he had successful careers as both a barrister and a law professor before joining the privately held Société Belge de Banque in 1932. He was named head of the national bank in 1938. Janssen was not a politician and generally followed the instructions of cabinet members, especially the minister of finance. He suffered recurring bouts of phlebitis, which sometimes hampered his work. Camille Gutt, the finance minister when the war broke out in May 1940 and later the strongman of the cabinet-in-exile, described him as having a “slightly dictatorial temperament.”3
Following the Nazi seizure of Austria’s gold in March 1938, the Belgian bank appointed three top officials, Hubert Nassau, Louis-Jean Mathieu, and Henri Sontag, to draw up a plan to protect the country’s treasure. They recommended sending one-third of it to Britain, one-third to either Canada or the U.S., and keeping one-third in the country. The final portion was required by law to remain within the country’s borders as backing for the currency. Gutt and Janssen agreed to the proposal. At about that same time, Janssen contacted Montagu Norman about shipping gold to Britain. He agreed and assured Janssen that news of the Belgian gold’s move would remain secret and not be included in any public information his bank published. In July 1938, the first shipments left Brussels and Antwerp for London.4
The Belgian bank at the same time contacted officials at the New York Federal Reserve and began shipping bullion there. By the end of March 1939, Belgium had 308.6 tons at the Bank of England in London and 117.5 tons at the New York Fed. Some Belgian officials, though, worried about leaving their most valuable property there because their country had not paid back the U.S. for World War I loans. Brussels officials feared that the Americans might seize it as payment for bad debts. The cost of insuring and shipping it across the Atlantic was also increasing all the time, and U-boat attacks made shipping dangerous. As a result, officials finally decided to keep most of their bullion in Europe by moving it to neighboring France.5
Over five days in November 1939, the Belgians sent four shipments containing 178 tons of gold in 4,449 sealed cases to the French National Bank offices in Bordeaux and Libourne, both in the southwestern part of the country and thus far from Germany. The transfers were done as earmarked accounts, the same arrangement that Brussels had with the Bank of England. Under French rules, that meant once the gold was turned over to them, the Belgians had no further access to it. They could not even retrieve the banknotes that they had sent to their neighbor. Brussels officials were not given the key or combination to the vaults where their national treasure was located. Those bank reserves were now entirely under French control.6
When a new Belgian government took office in early 1940, Finance Minister Gutt decided that all of the gold remaining in the country should be shipped to southwestern France. Belgian bullion began arriving in France so quickly that Pierre Fournier, the governor of the French bank, informed Belgium in February that his staff no longer had time to verify the exact contents of all the containers. He said that in the future his office would only acknowledge the number of crates received with their seals intact. In May 1940, the Belgians sent 730 cases in three separate shipments to three different destinations, Bordeaux, Toulouse, and Mont-de-Marsan. On May 8, just two days before the German invasion, the Brussels central bank had inside the country only 7.5 tons out of its total holdings of 707.8 tons. The Belgian central bank now had 45.6 percent of its gold at the Bank of England, 31.3 percent at the Bank of France, 21.8 percent at the New York Federal Reserve and 1.2 percent at the South Africa Reserve Bank.7
The centerpiece of the Belgian strategy against a German invasion was based on its ultramodern Fort Eben-Emael, built between 1931 and 1935. Considered at the time to be the world’s best military fortification, even better than France’s Maginot Line, it was designed to protect three strategic bridges over the Albert Canal that ran from Antwerp, Belgium to Maastricht, Holland. Belgians believed that the canal provided them with a natural defense line. The fort was built in a jagged mountainous area near the junction of France, Belgium, Holland, and Germany, about twelve miles northeast of Liège, Belgium, and six miles south of Maastricht, Holland. The natural defensive barrier of the mountains, now augmented by the fort, reassured Belgium’s leaders that their Maginot Line would hold. Belgian military strategy was built on the premise that Fort Eben-Emael would hold out for five days until French forces could arrive. The fort, though, was still right in the path of a Nazi invasion.
During the spring of 1940, the Wehrmacht’s Koch Storm Detachment practiced a daring raid to neutralize the defense structure. At 3:30 A.M. on May 10, the morning the German western offensive began, eleven large gliders tethered to Ju-52 planes left in the dark from Cologne, seventy miles away. Forty-five miles into their mission and over the city of Aachen, ni
ne gliders were released at 8,000 ft. They silently soared into Belgian territory and landed on top of the fort. The German soldiers attacked the fort’s turrets with explosives and flamethrowers. The Belgians responded with a heavy defense, but the fortress was now protecting the Nazis on top of it. In only a few minutes the battle ended. More than a thousand Belgian troops were taken prisoner, and the bridges over the Albert Canal were quickly seized. The road to the North Sea through Belgium was now open, and Nazi panzers began rolling toward the Belgian-French coast.8
On May 15, the Belgian cabinet left Brussels in a caravan of cars to establish a new base of operations in Ostend on the country’s North Sea coast. The city had lovely, wide beaches and also had the advantage of being only a short ferry trip to Britain. The government had previously agreed that if the cabinet relocated, the head of the central bank should remain with the ministers. The scene in the beach resort was sometimes surreal. One night Gutt invited Janssen and others to join him for a gastronomic feast on the grounds that at least the Nazis would not enjoy the food they were having. The menu included a truffle omelet, and they drank Champagne, toasting to the “final victory,” even though they knew defeat would come first.9
German planes bombed Ostend on the night of May 17-18, and the cabinet reluctantly decided to leave Belgian territory for France, stopping first in Le Havre. Gutt and Janssen early in the morning of May 18 headed to Paris. It took two days to get there because refugees blocked the roads. Janssen went immediately to the French National Bank and established his bank’s new headquarters there. In early June, and while both Fournier and Janssen were still in Paris, the French central bank president informed his Belgian counterpart that his country would be moving the Belgian gold out of the country with France’s bullion and asked if that was okay with them. Janssen gave his approval, but the details or destination were never discussed. He later tried to get more information, but the French told him little, explaining that the information was a military secret.10
Chasing Gold: The Incredible Story of How the Nazis Stole Europe's Bullion Page 25