The relentless Nazi pressure on the French and finally the willingness of the Vichy government to accommodate Berlin cost the Belgians heavily. The gold arrived just at the time the Nazis were running out of resources to finance their war machine. The Belgians lost 198.4 tons of gold to the Germans once France fell, the largest amount of any country during the war.26
The Germans also had their eyes on the Polish gold, claiming that it too should be sent to mainland France and then to Berlin. The French again used a strategy of delay to hold off the Nazis, claiming first that the Polish government-in-exile had run up a huge debt with them that was greater in value than the gold they held. The French thus argued that the bullion actually belonged to them and was the property of neither the Germans nor the Poles. Without citing any specific amounts, Bréart de Boisanger in the Wiesbaden talks maintained there was only “a relatively small amount” of Polish gold. At one point in the negotiations he got his courage up enough to say, “The French government is not going to give the Polish gold to anyone.”27
The fate of the Polish gold eventually turned into a debate that only lawyers could love. The Vichy French argued that since the Germans had decreed that Poland no longer existed as a country, there was no longer a Polish central bank. The Germans, on the other hand, changed their argument and now argued that the French government should return 1,200 cases of gold not to them but to the Polish government in Warsaw, which of course they controlled.
In March 1941, Hemmen suggested that the Polish gold be sent to the French National Bank offices in Clermont-Ferrand, but that never took place. The following September, the Germans demanded that the Polish gold in Kayes be sent to Algiers and transported to mainland France “in the same way as the Belgian gold.” That, however, also never happened.28
The German ability to get gold out of Africa was greatly reduced after the Anglo-American invasion of North Africa in 1942 that eventually drove German and Italian armies out of the area. The Nazis were by then more concerned about defending the military gains they had made in Europe than getting their hands on the remaining Polish and French bullion sitting in the heat of Senegal.
With the Germans out of Africa, the Polish government in London and the Polish National Bank sent Stefan Michalski to meet with representatives of the Free French forces in North Africa about taking over custody of the Polish gold. The two sides easily worked out a plan for the French to turn it over to the Polish government in exile.
In the spring of 1944, a convoy of six American naval vessels including the escort cruiser USS Block Island was on anti-submarine patrol near the Cape Verde Islands just off the coast of Africa. They were called hunter-killer groups, and their main job was to sink U-Boats; their weapon of choice was depth charges dropped to destroy or disable the submarines underwater. Occasionally they hit a whale. On March 23, Lt. Commander Edward N. W. Hunter on the USS Breeman and Lt. Commander S. H. Kinney on the USS Bronstein received orders to leave that group and proceed to Dakar. The two captains assumed they were going to check out signals from a German submarine. Soon they received a secret message ordering them to pick up a cargo of gold and take it immediately to New York City on the safest and most direct route possible.
The two ships pulled into dock at Dakar in the early afternoon of March 25, and the two captains checked in with the Vice Admiral William Glassford, the chief of the American naval mission there. The French had already brought the Polish gold from Kayes to Dakar and were ready to load it. After the workday at the French naval base was finished and only a few officers were still there, a caravan of French army trucks rolled up to the dock with loads of gold. Soldiers with bayonets guarded the transfer, while Senegalese sailors carried the heavy containers that each held four bars packed in sawdust. All the boxes had an iron band with a seal and the initials BP (Bank Polski). The Senegalese workers deposited them on the deck, and then American sailors gave Michalski a receipt for the crates. The American sailors, as so many people before them, were stunned at the weight of a box of gold. So they rigged up a block-and-tackle to lower them below deck.
The Breeman and the Bronstein left Dakar just before midnight the same day and headed directly for New York City at the speed of eighteen knots. They arrived at the Brooklyn Navy Yard in the late afternoon of April 3. The following day, Brinks armored trucks picked up the $60 million in Polish gold and moved it to the Federal Reserve vault in Manhattan. It had been quite an odyssey since leaving Warsaw on September 6, 1939.29
Chapter Twenty-Two
BALKAN DISTRACTIONS
After wrapping up his rapid victory over the Low Countries and France in late June 1940, Hitler turned his attention to his next target: Great Britain. Churchill knew what was coming and on June 18 warned the British parliament and public in perhaps the greatest speech ever made in the English language. He said: “The Battle of France is over. I expect the Battle of Britain is about to begin. Upon this battle depends the survival of Christian civilization . . . Let us therefore brace ourselves to our duties and so bear ourselves that, if the British Empire and its Commonwealth last for a thousand years, men will still say, ‘This was their finest hour.’”1
No one had successfully invaded Britain since the Battle of Fishguard in February 1797, and that was a short-lived thing. The last real invasion took place on October 14, 1066, when William the Conqueror, the Duke of Normandy, was victorious at the Battle of Hastings.
Before sending ground troops across the English Channel, Hitler wanted to see if he could achieve his objective in the air, and turned that job over to Hermann Göring, the head of the Luftwaffe. After his success in the Battle of France, he had a new title: Reichsmarschall. He brashly told the Führer that in five weeks he could rid the skies of the Royal Air Force. It would take four days, he promised, to defeat the Royal Air Fighter Command in Southern England. He would then start a four-week offensive, and Nazi bombers and long-range fighters would destroy military installations throughout the country and obliterate Britain’s aircraft industry. Code name for the invasion: Unternehmen Seelöwe. (Operation Sea Lion). It would be the first military operation fought exclusively in the air. Just in case air power did not do the job, however, the many canals of Belgium in the fall of 1940 were filled with Nazi boats ready to undertake a naval invasion.2
The Churchill government quickly prepared for an all-out defense of the homeland. The cabinet on June 30 approved using poison gas to fight off German troops if they came ashore. That would have been in violation of the 1925 Geneva Protocol that outlawed chemical warfare, but Britain was ready to do it if it were the only way to defeat a Nazi invasion. The government also organized 1.5 million volunteers into the Home Guard, a secondary line of defense behind the military. Beaches were mined, and anti-landing barricades were built. Britain took over the contracts to buy aircraft the French had ordered in the U.S., which meant there would be no shortage of planes. Perhaps most importantly, the Royal Air Force had a new and powerful secret weapon: RADAR, an acronym for RAdio Detecting And Ranging. For years scientists in several countries had been working on a way to establish an early-warning system that would alert defenders to incoming airplanes. British scientists perfected the technology in early 1940.
Hitler on August 1 issued War Directive No. 17, which ordered the Luftwaffe “to overpower the English Air Force with all the forces at its command and in the shortest possible time.”3 A few British planes made a token attack on Berlin in August, and Hitler retaliated by ordering a massive bombing of London. Young RAF pilots who took to the air were both brave and successful. Despite heavy losses, they held their own. Late that month, Churchill told Parliament in another of his stirring speeches, “Never in the field of human conflict was so much owed by so many to so few.”4
Göring missed his deadline by a long shot; and when the air war dragged on into the fall Hitler contemplated alternative military moves. He once again thought time was not on his side. The United States might soon come into the conflict on the
British side, even though he figured it would take its military two years to gear up. Still heady after his rapid successes in the spring, the Führer also began to consider doing what he had vowed never to do: wage war on two fronts. He rationalized that he could temporarily put aside the invasion of Britain and quickly defeat the Soviet Union, which he considered to be militarily a house of cards that would collapse easily. Then he could turn back to Britain and finish it off.
In October 1940, Hitler toured his newly conquered Western Europe realm to meet with his allies. He never liked to fly, although he had been forced to do so during his early days in politics. Now he ruled much of Western Europe, and he could travel by train. His private rail car made its first stop on October 23, in the French-Spanish border town of Hendaye in France. In a meeting at the train station, Hitler pressed General Francisco Franco to join the war against Britain, promising that Spain could take over Gibraltar. A key Hitler objective was to get Britain out of the Mediterranean. Franco dodged, insisting that he was more interested in obtaining territory in French Africa. The Nazi leader was also anxious to get a naval base on Spain’s Canary Islands to wage the Atlantic war, but the Spaniard stalled him on that as well. The meeting ended in deadlock with forced smiles. Hitler later complained to Mussolini, “Rather than go through that again, I would prefer to have three or four teeth taken out.”5
Hitler’s train next took him to the village of Montoire-sur-le-Loir in central France, for a meeting with Marshal Philippe Pétain, the country’s new head of state. The location was selected because of its proximity to the Paris-Hendaye rail line. The two men shook hands on the railroad platform, and that picture would haunt the French war hero to his grave. During their confab in Hitler’s private car, Pétain tried to get German help in putting down de Gaulle’s rebellion in French Africa, but he gave no support for the Führer’s agenda. So no success there, either.
The next train stop was Florence for a session with Mussolini. The two men had met at the Brenner Pass only three weeks earlier, and two conferences in such a short period reflected their growing estrangement. Each leader had been playing coy, providing little information about his future plans. Hitler had not let on at the earlier meeting that he would be going into Romania only a few days later to protect his oil supplies. Mussolini was furious when he learned that. He bellowed to Count Galeazzo Ciano, his son-in-law and foreign minister, “Hitler always faces me with a fait accompli. This time I am going to pay him back in his own coin. He will find out from the newspapers that I have occupied Greece.”6
Mussolini planned to invade Greece on October 28. Six days before, he sent Hitler a letter informing him of his plans without specifying a date. In order to be not too offensive, he backdated his message to October 19. The Führer learned about the contents by phone on October 24, while he was in France. He then demanded an immediate conference. Mussolini casually suggested October 28. When Hitler got off the train that morning in Florence, Il Duce greeted him with the happy announcement, “Führer, we are on the march! Victorious Italian troops crossed the Greco-Albanian frontier at dawn today.” Their meeting was tense and unproductive, and Mussolini’s invasion quickly turned into a fiasco.7
With the Soviet Union at the top of Hitler’s agenda, Germany faced a messy situation on his southern flank in the Balkans, which stretches from Yugoslavia and Romania in the north to Greece and Turkey on the Mediterranean. The Balkans were a relatively small place where trouble seemed to just happen. Squabbling powers there had drawn Europe’s big powers into World War I. Hitler believed he had to protect his southern flank before turning his armies on Moscow.
The Balkans had been a key part of the German economic strategy after Hjalmar Schacht unveiled his New Plan of 1934, which reoriented the Nazi economy toward that region. It was economically poor but rich in the raw materials that the German war machine desperately needed. The Balkan states were geographically close to the Reich and accepted payment in gold. The region produced the crucial raw materials, especially copper, that Harry Dexter White had identified for Morgenthau as crucial for Germany’s war machine. Emil Wiehl, a German Foreign Office economic specialist, in 1939 had said, “Copper is a life and death matter.” A shortage of it in early 1940 hurt both the Luftwaffe and the army, and forced the German navy to curtail U-boat production. Yugoslavia also produced aluminum. Hungary was an important source of bauxite, an aluminum ore. Turkey had large deposits of chromium, exporting 40,000 tons annually to Germany, as well as tungsten, both of which are vital ingredients for making high-quality weapons out of Germany’s low-grade iron ore. But the most important war materiel of all was Romanian oil. The country was Europe’s second biggest producer after the Soviet Union, and Germany’s largest supplier. Despite the success of German chemical companies in making synthetic fuel from coal, petroleum was still essential to keep Nazi tanks rolling, and vastly cheaper than the synthetic option. Between February 9, and March 10, 1943, the Germans sent Romania a total of 30 tons of gold to pay largely for petroleum. In February, Berlin transferred an additional 10.4 tons to Switzerland for Romania, using stolen Belgian gold. Nazi Germany paid a total of $53.8 million for Romanian oil. Some of that bullion also found its way to the U.S. In January 1941, Romania sold 13.8 tons of gold to the New York Fed.8
The Soviet Union, though, was also increasingly active in the Balkans. German Foreign Minister Ribbentrop invited his Soviet counterpart Molotov to a November meeting in Berlin, where he proposed that Germany, Italy, Japan, and the Soviet Union divide the world into large spheres of influence. The talks deadlocked largely because the foreign ministers both had their eye on the Balkans. Molotov insisted the fate of Romania and Hungary was important to Moscow, and wanted to know “what the Axis contemplated with regard to Yugoslavia and Greece.”9 Once back in Moscow, Molotov sent Ribbentrop a formal reply saying that the Soviet Union would join the other three nations only if it could sign a mutual defense pact with Bulgaria and establish a base for land and sea operations near the Dardanelles, which connects the Black Sea and the Mediterranean Sea. Talk of four spheres of influence died a quiet death.
In September of 1940 Hitler postponed plans for the invasion of Britain. On December 18, 1940, Hitler signed off on Operation Barbarossa, the invasion of the Soviet Union. The opening line of the war directive: “The German Armed Forces must be prepared, even before the conclusion of the war against England, to crush Soviet Russia in a rapid campaign.”10
Before the Nazis could turn to Barbarossa, however, they had to clean up the situation in Greece and Yugoslavia. Both countries were worrisome not only because the Soviet Union considered that area to be its backyard but also because the British had an active presence and close relations with both nations. The Germans feared that either London or Moscow could cause trouble in the south at a time when they wanted to be launching a powerful invasion of the Soviet Union through central Europe.
Greece in October 1940 easily halted the Italian invasion and pushed Mussolini’s troops back into Albania. Greece, however, was both politically unstable and diplomatically fickle. King George and many Greeks favored an alliance with Britain, but General Ioannis Metaxas, the country’s dictator, leaned toward the Axis powers. The question was whether the king or the general would stage a coup first.
Yugoslavia was equally in turmoil. Hitler put heavy pressure on Prince Paul, the regent for seventeen-year-old King Peter II, which included a visit to Berchtesgaden. Nazi threats worked, and the country became a member of the Tripartite Pact on March 25. The following day, however, Yugoslav Royal Air Force officers with British inspiration staged a coup in the name of King Peter. After the rebellion, Churchill said the country “had found its soul.”11
On March 27, 1941, Hitler signed War Directive No. 25 ordering a massive attack on Yugoslavia. It stated: “Yugoslavia must be “regarded as an enemy and beaten down as quickly as possible.” The invasion, which included troops from Germany, Italy, Hungary, Romania, and Bulgaria, began on April 6
with the carpet-bombing of Belgrade. The offensive ended on April 17 in Yugoslavia and on April 27 in Greece.12
The Germans were still worried about the British presence on the island of Crete, and on May 20, 1941, they launched Unternehmen Merkur (Operation Mercury), an airborne invasion, the first in military history. Both British and German military leaders valued the island because of its proximity to Egypt, the Suez Canal, and the route to India. German paratroopers suffered heavy casualties, but the main airfield on the western side of the island soon fell into Nazi hands, and the whole island was subdued in ten days. Because of the heavy casualties, however, Hitler nixed future airborne invasions.
A memo of the New York Federal Reserve reported on April 19, 1941, that Greece’s gold reserves had been generally estimated to be about 28 tons.13 By the time the Axis armies invaded, the National Bank of Greece had shipped twenty-five tons of gold out of the country to the safety of other central banks, with most of it going to the Bank of England via Egypt. The British sent a navy ship to undertake the operation. Greece had seven tons safely in New York. Some, though, still remained in the hands of private banks and individuals. The national bank as a precaution packed ten cases of valuables that could be readily moved on short notice. They contained both gold and silver coins. The boxes were bound with a steel strapping and marked with the bank’s seal in wax and the letters ETE for the name in Greek of the national bank. There was nearly a ton of gold, and ton-and-a-half of silver.
On April 12 and with Axis units consolidating their hold over the country, the Greek National Bank assigned two officials, Nicolas Lavas and Panayotis Tsimicalis, to take over authority of the ten cases and move them to Crete. They soon left the mainland for the Bank branch in Heraklion, the largest city on the island.
Chasing Gold: The Incredible Story of How the Nazis Stole Europe's Bullion Page 35