Chasing Gold: The Incredible Story of How the Nazis Stole Europe's Bullion

by George M. Taber

  King Leopold III, who had taken over formal command of the Belgian Army, had a showdown meeting with his own cabinet on the evening of May 24-25 concerning war strategy at Château de Wynendaele in West Flanders. Present were the four leading members of the government: Prime Minister Herbert Pierlot, Foreign Minister Paul-Henri Spaak, and Ministers Without Portfolio Arthur Vanderpoorten and Henri Denis. The ministers urged the king to leave the country with the government, but he refused. Pierlot bluntly reminded him that only the government, and not he, could surrender. The politicians were escaping to France, but the king wanted to remain in Belgium with his troops, whatever the outcome. His father Albert I had not left during World War I. He would do the same. Leopold added that he would consider a government-in-exile to be an attack “against me.” In his memoirs Spaak wrote that the king “gave off the cuff answers to our questions” and “had no clear idea of what being a prisoner would mean.” The ministers finally departed realizing that their country’s future had become a struggle between their view and the king’s.11

  Belgium had only a small amount of gold physically in the country, but it still had a huge hoard of its national currency in Ostend. It had just arrived in trucks and some in hearses. The central bank had recently printed enough paper money to service the country’s economy for three to six months. The 500 million Belgian francs weighed 120 tons and were packed in 241 cases that rested in the cellar of a local bank. It was worth $70 million. By then it was impossible to ship cargo by train or truck to France. Hubert Ansiaux, the bank’s thirty-seven year old inspector, was now in charge of it. He rustled up a dozen helpers and a truck that had been left behind to deal with the currency.12

  While trying to devise a plan to get his valuable property to Britain, the only destination left, Ansiaux on the late afternoon of May 25 was near the harbor in Ostend. All the ships had by then left for safer waters. He was rapidly running out of both hope and ideas. The Germans had been dropping magnetic mines there for days, and no ship would dare to dock. In desperation he and his team put together a last ditch plan to make a giant bonfire of currency bills right there at the dock. That seemed the only way to keep the money out of Nazi hands. Ansiaux was skeptical, though, because he knew that the tight blocks of currency would burn very slowly and might still end up with the enemy.

  Then almost miraculously and before the match was lit, a Belgian pilot boat named simply the A4 suddenly appeared outside the Ostend breakwater. The privately owned vessel normally led ships into harbors along the English Channel. The Belgian military had requisitioned it at the start of hostilities, and it was coming from the besieged French port of Dunkirk. Although the Germans had mined the Ostend waters, the A4 had been demagnetized, so it was probably safe to land. The vessel, though, was virtually defenseless, having on board only a small canon and a machine gun. Carefully the A4 eased its way into the dock. As soon as it was dark, Nassau’s small team loaded the ship. When it was filled to the gills, the boat slowly pulled out of the harbor with no lights on. As the A4 sailed past Dunkirk at 10:00 P.M., the crew could see the city in flames. The Belgian ship arrived in the harbor of Dartmouth on the English coast at dawn on May 26. The ship had carried coal before the war, and now everyone aboard had a black face. Ansiaux immediately telephoned the Bank of England and asked what to do with his hoard of cash. The British replied that they would put it in their London vault, where it remained for the duration of the war.13

  Leaving Paris in front of the German invasion, central bank governor Janssen moved south, trying to stay in touch with French National Bank officials, who were also attempting to remain a few steps ahead of the invasion. Pierre Fournier first went to Poitiers in the west-central part of the country and then further south to Mont-de-Marsan. Communication between the two central banks, however, was terrible. On June 15, the Belgian sent a telegram to Fournier asking him for news about the gold, but the message never arrived. Two days later, though, the two bankers finally met in person.

  By then a million Belgian refugees were trying to run away from the war on France’s narrow country roads along with millions of fleeing French citizens. As feared, the Belgians were creating a financial crisis by exchanging their own francs for French ones so that they could pay for food and shelter. Janssen was caught in the dilemma of refugees demanding local currency for survival, while at the same time trying to protect his country’s gold. Because of the heavy demand for French francs, the value of the Belgian currency was collapsing. On May 10, 100 Belgian francs were equal to 144.4 French francs, but soon the Belgians for the same amount of money could buy only one-third as many goods as they could only a few days earlier. Four days later, French officials unilaterally set the exchange rate at parity. They explained that they had to protect their own currency and introduced strict rules regulating how much money people could exchange. The French bank also unilaterally withdrew 37 tons of gold that the Belgians had deposited to settled the heavy currency sales. Eventually the two countries reached an agreement that half of all Belgian government debt would be settled at the end of each month in gold, dollars, or foreign currency convertible to dollars. Repurchases of Belgian banknotes, though, had to be paid in gold. Between May 28 and June 18, Belgium turned 65 tons of gold over to the French.14

  Near midnight on May 27, King Leopold capitulated to the Wehrmacht without consulting his cabinet or his allies. The young king thought the French had already lost the war and felt he was doing what was right for his people. The German-Belgian ceasefire began the next morning at 11:00. William C. Bullitt, the American ambassador in Paris, sent a message to President Roosevelt that reflected the opinion not only of the Belgians but also of most Europeans, “Since a king without honor was nothing, the King no longer existed. The prime minister of Belgium denounced the king’s action this morning on the radio and announced that it was illegal since the act had to be countersigned by the prime minister. He called on all Belgians to go on fighting.”15 The prime minister, himself, though, was no longer in the country.

  The Belgian surrender left a twenty-mile wide hole in the Allied defense lines, which infuriated both Britain and France. French people, who only a few days earlier had befriended the refugees, began attacking them.

  The morning after the capitulation, Nazi General Walter von Reichenau, who had led the German 6th Army during the invasion, arrived at the Château de Laeken Palace, three miles north of Brussels. He was stunned to find that Leopold III had not fled to Britain. He called Hitler and asked for instructions. The Führer said his prisoner king should be incarcerated in the Royal Palace of Laeken three miles north of Brussels. Werner Kiewitz, a German colonel, was assigned to be the king’s military adjutant. Shortly afterwards, Leopold asked him to send Hitler a telegram requesting that it be “immediately demanded of France that the Belgian State treasure, which was by then in an unknown hiding place in France south of Bordeaux, be restored forthwith to Belgian hands.” There is no record that Hitler acted on his puppet king’s request.16

  Hubert Ansiaux, who was now in London, was meeting regularly with Bank of England officials and the Churchill government to find a way to get the Belgian gold out of France and onto a British ship just as London had done with the Dutch gold only weeks before. The nervous Belgians now also talked about transporting their bullion to the U.S., despite the cost and danger of a transatlantic shipment.

  On June 10, the Reynaud government left Paris in a panic for destinations south, stopping first in Tours and four days later arriving in Bordeaux. The Belgian central bank team followed them south. Conditions had become so bad that the Belgians could not stop for the night in the same small towns where the French were staying. Communication between them eventually broke down, just as the fate of the Belgian gold was going into an abyss.

  The French government of Paul Reynaud grew weaker as an anti-war coalition in his cabinet gathered strength. Reynaud finally resigned on June 16, and Marshal Philippe Pétain, the hero of World War I, replaced him
and quickly sued for peace. The Belgians were now more determined than ever to get their gold out of France and ideally out of French hands.

  At 6:00 A.M. on June 18, Ansiaux arrived in Bordeaux with a British naval officer aboard a private plane from London. Their plan was to put as much Belgian gold as possible on the British cruiser HMS Arethusa, which was then moored in Le Verdon at the mouth of the Gironde estuary north of Bordeaux. The two were in contact with British naval sources and believed that, if necessary, they could get more ships there to pick up additional bullion. Ansiaux met first with Gutt and Janssen, who were also there, and all agreed on the plan to load the Belgian gold onto British vessels.17

  Ansiaux also met with a French official with whom he had worked earlier while evacuating the Belgian gold to France. The Belgian learned that his country’s gold was not located in either Bordeaux or Libourne. It had all been shipped to another port, and the destination was a military secret. The fate of the Belgian gold was now entirely in the hands of the French navy.

  The frustrated Belgian finally rushed to find Finance Minister Gutt, whom he discovered sleeping in his car at the Place des Quinconces in the heart of Bordeaux. There were no longer any available hotel rooms in the city. After Ansiaux explained the situation, Gutt decided to confront Yves Bouthillier, who had just taken over as France’s finance minister. The Belgian already had contempt for him from earlier encounters, calling him Uriah Heep. Gutt went to Bouthillier’s office in Bordeaux full of rage, with the objective of getting back his country’s gold. The minister wasn’t there, but an elderly doorman whom he knew said that the minister always ate dinner with his aides at 10:00 P.M. at the Ecu d’Argent restaurant. Gutt arrived there an hour early and waited outside. When the minister finally stepped out of his car, Gutt grabbed him by his lapels and shouted, “I’m sorry to have chased you so far, but the matter is urgent. Where is our gold?”

  Continuing in the angry tone, Gutt charged that France had not lived up to its promise to protect the Belgian gold. He also shouted that a British ship was ready to evacuate it. He wanted the gold on that vessel. Bouthillier was rattled, and said he would be meeting with Admiral François Darlan, the head of the French navy, the next morning at eight o’clock and would tell him that a British ship was ready to evacuate the Belgian gold. Gutt had no confidence in the French minister and doubted Darlan would help him, but he left.18

  The indefatigable Ansiaux returned to the French bank and repeated his demand that the gold be transferred to the British ship. The discussion ended abruptly when a French official entered the room and announced that the navy ship carrying the Belgian and Luxembourg gold had just departed and was headed for open ocean. The gold of the two countries was totally in the hands of the French Admiralty, and everything was a military secret.19 Belgium and Luxembourg had entrusted their gold to the French government on a perilous journey to a destination unknown. The plight of the French, Belgian, Luxembourg, and Polish gold was just beginning.

  Chapter Seventeen

  THE FALL OF FRANCE

  At the apogee of the international gold standard era in the early nineteenth century, France was among the largest holders of that valuable metal, although its reserves fluctuated greatly depending on the country’s erratic economy. France suffered repeated bouts of inflation and frequent currency devaluations that wiped out people’s savings in paper currencies, which is why citizens were strongly attached to gold. Stories about peasants hiding their savings under mattresses were true, and the French trusted a gold Napoleon coin more than any bank or government. The country’s reserves in the early-to-mid 1930s reached a peak of more than $5 billion, when the world’s economies were tanking, but then fell in the mid-1930s, when the leftist Popular Front spurred wealthy investors to move their valuables to financially friendlier countries such as Belgium or Switzerland. France’s economy went south just as the Nazis began goose-stepping around Europe.1

  As war threats mounted, French government leaders used the country’s gold to buy weapons for a war that seemed inevitable. Clément Moret, the governor of the Banque de France, in January 1932 also started a program to reduce the amount stored in Paris and increase that held in his bank’s regional offices. In July 1938, bank officials drew up a six-day evacuation plan for getting all of the bullion out of Paris. Shortly after the Munich conference in the fall of that year, thirty trucks took most of the remaining gold out of the capital. In May 1939, bank officials decided to move the national treasure to the center of the country to a region north of the Garonne River and south of the Loire River on a line with the cities of Tours, Le Mans, and Flers. Most of the bullion was then distant from Germany, while still being within mainland France.

  On September 1, 1939, the day World War II began, the French bank had most of its gold in regional offices. In addition, it had 171.1 tons in London and 165.5 tons in New York City. Paris also had some special funds in the U.S., bringing the country’s total gold holdings to 2,770.3 tons. With war fears running high, the bank then began to concentrate the precious metal that remained in the country at its Atlantic ports.

  Only ten days after the invasion of Poland, the French treasury sent a message to the national bank instructing it to work with the French Admiralty to send some gold to the Middle East as soon as possible. The bank dispatched 57 tons on three shipments from Marseilles to Syria and Lebanon, which France ruled under an agreement dating to the end of World War I. On January 6, 1940, Paris shipped an additional 55 tons to Ankara, Turkey as part of a joint operation with Britain, which sent its own separately. The two countries, which had a military alliance with Turkey, gave it gold to buy arms in the hope that it would remain neutral in the new war.2

  The major French use of its national gold was to buy weapons in anticipation of a war against Germany. Jean Monnet’s mission to buy American weapons, primarily airplanes, was successful, but the real question was whether the military goods he was buying would be in place and have skilled military men to run them before the anticipated Nazi offensive. Those fears increased when the western democracies saw how easily the Nazis rolled over Poland. Monnet returned to Paris for consultations, and French leaders urged him to buy even more. He lamented that the American public still strongly opposed getting into Europe’s troubles. Roosevelt recognized the danger, but average citizens did not. Monnet later wrote, “Never, perhaps, has the role of the President of the United States been so important, or so lonely.”3

  The French navy set up a special task force of ships in late 1939 called Force Z to handle transportation of the gold. It initially consisted of three vessels. The naval code word for gold in secret internal communications was “macaroni,” and one early message asked: “Can you ship your macaroni to Halifax?” Ships carrying gold left from the French west coast port of Brest, dropped the payment off in Canada, and then returned to France with planes. The gold went by train from Halifax to the New York Federal Reserve. Three shipments between November 1939 and March 1940 moved a total of 347 tons of macaroni from France to the U.S. The French initially had a limit of 100 tons of bullion per ship, but over time that increased to more than twice as much. The first shipment started on November 11, when the French National Bank sent a convoy made up of the Marseillaise, the Jean de Vienne, and the Lorraine, to Halifax with 100 tons of gold. The following March three more ships, the Algérie, the Bretagne, and the Bérne, landed in Halifax with 147 tons.4

  In the first days after the invasion of the Low Countries in May 1940, the world’s attention was focused on the rapid fall of Holland and Belgium. The more important part of the German attack, however, was the slowly developing thrust of the Nazi southern flank. At a war-planning meeting in mid-December 1939, General Franz Halder, the chief of the German general staff, had pointed on a map to the densely forested Ardennes area and declared, “Here is the weak point. Here we have to go through!”

  General Gerd von Rundstedt, the commander of Army Group A, directed that operation, and under him were
two key officers, Heinz Guderian and Erwin Rommel. They were to lead the attack across the Meuse River in the Belgian town of Dinant and then drive deep into France.

  The Germans invaded along a forty-mile front, west of the Maginot Line. Guderian’s troops easily rolled through Luxembourg, and by 10:00 A.M. they were on the Belgian border. Rommel’s two panzer units were also soon into the Ardennes, where they moved more slowly than anticipated but kept pressing forward even at night. The headlights of their vehicles led the way in the dark. The Germans had the advantage of better communications because they had radio contact between tanks and aircraft. German tank commanders could order their air force to bomb specific areas just before an attack, and then go in for the cleanup. The French army had nothing like that. The Nazi operation on the first two days went according to plan; units passed through the Ardennes with only minor difficulty. Twelve hundred German tanks were soon heading toward France. On the evening of May 11, Rommel sent his wife the cheery message: “Everything wonderful so far.”5

  The German objective was Sedan, a city on the Meuse River with historic importance to both the French and the Germans. It was there in 1870 that Prussian units captured emperor Napoleon III and effectively ended the Franco-Prussian War. In 1918, French and American units defeated the Germans in the Battle of the Argonne Forest. Five days later that war ended.

  Near midnight on May 12, Rommel’s troops reached the Belgian side of the Meuse River. French forces were well entrenched on the other bank in front of the city of Sedan. Both sides brought in their air forces for support, but Nazi planes were much more effective. The intensity of the air battle increased in the afternoon, and dive-bombing Stukas terrified both French soldiers and civilians. At 3:00 P.M. the air attacks abruptly stopped, and German troops began to cross at three points along the river, using new tactics developed during training near the wine town of Bernkastel on the Mosel River. Rommel’s goal was to be ten miles past the river by nightfall. He encouraged his men by telling them that the enemy was in full retreat, and at one point jumped into the water to help pull a raft forward. By 4:00 P.M., German troops were largely on the French side of the Meuse.