A second Hungarian gold case involved the country’s central bank bullion. The Hungarian National Bank decided to move its personnel and the country’s thirty-two tons of gold out of Budapest and sent it west by train toward the advancing Americans. The destination for the bank officials was the town of Spital am Pyhrn in Austria. Two hundred Hungarian policemen and 500 bank employees were there to guard the stash, but most of all to make sure that they surrendered to the Americans and not the Soviets. Bank officials sent messages to the American forces telling them that they were holding it in the cellar of an old monastery that was guarded by a Hungarian Royal Police unit. When Patton’s Third Army arrived in Spital am Pyhrn, it took over the national treasure without a fight. A Hungarian colonel also handed over the historic Holy Crown of Hungary or Crown of Saint Stephen, the country’s most precious object, to an American colonel. It was later decided not to put the Hungarian gold into the general pot of Nazi gold to be dealt with after the war. Instead American military officials with great fanfare returned it to the Hungarians in August. It consisted of 2,669 gold bars on a train that Allied forces claimed had been Eva Braun’s private car that carried it to Budapest. It was widely believed that the delivery was really made to better relations with the Soviets, since Hungary was going to be in Moscow’s zone of influence, and so they were really turning the gold over to the future communist rulers of Hungary. St. Stephen’s Crown, though, was not included in the transfer.5
Perhaps the most bizarre episode in the chaotic days at the end of the war involved some Yugoslav gold. Nazi occupiers in April 1941 had installed the Ustaša, a revolutionary movement with German support, to head the Independent State of Croatia. Post-war intelligence reports said that the Ustaša had anywhere from $600,000 to $35 million in Nazi gold. The organization had its own army that terrified the countryside with a brutality that shocked even Heinrich Himmler. The Croatian State Bank had just under one ton of gold in Switzerland, which was handed over to Marshal Tito, the new ruler of Yugoslavia, in July 1945. It had an additional ton in a Swiss bank, and that was also turned over to the new government. On the night of May 7-8, 1945, and with the end in sight, the Ustašas reportedly grabbed a quarter ton of gold from the Croatian State Bank and then set off in two directions. Some of them left in a truck headed for Austria. The vehicle broke down near the small town of Wolfsberg, where Ustaša officers broke open a case and handed it to comrades trying to escape. Then they reportedly turned over the rest to a Franciscan monastery run by a fanatical Catholic group that had strong ties with the Vatican. The Croatian Roman Catholic priest Krunoslav Dragonovi allegedly took it to Rome in July and turned it over to the pope. The Croatian delegation at the 1997 London Gold Conference insisted, “These facts exclude any possibility that the NDH (Ustaša) gold was stored in the Vatican.”6
The cache of Yugoslav bullion has since been lost in claims and counter claims. Emerson Bigelow, a U.S. Treasury official with connections to American intelligence groups, on October 21, 1946 sent a message to the U.S. Treasury Department saying that “approximately 200 million Swiss Francs was originally held in the Vatican for safekeeping. According to rumor, a considerable portion was sent to Spain and Argentina through the Vatican’s ‘pipeline,’ but it is quite possible this is merely a smokescreen to cover the fact that the treasure remains in its original repository.” That has been called the “Bigelow Report,” but is actually only a three-paragraph note that reads more like gossip than solid intelligence. The following year, William Gowen, an agent of the Office of Strategic Services, sent a message to Washington saying that the gold had been sent to the College of San Sirolamo Degli Illirici, which is located within the walls of the Vatican. Swiss banks supposedly helped with the transfer. That again was never verified. There is no doubt, though, that the Vatican and the U.S. Army Intelligence Corps helped some Ustaša leaders escape to Argentina.
The Vatican has kept its silence about the Yugoslav gold story, and no one outside the church knows where it went and how much was involved. The Eizenstat Commission in the late 1990s used all the weight of Washington to break the Vatican’s silence as part of its study of the World War II gold, but church officials steadfastly refused to participate. A lawsuit was also filed in the U.S., but that too could not break Vatican secrecy.7
In the early months of 1945, gold was spilling out all over Germany, with top Nazis grabbing some in the hope that it might help them and their families survive. Many top officials had their private stashes. Joachim von Ribbentrop, who had grabbed tons of Italian gold, sent part of it out of Berlin. Eighty-one sacks were placed in the cellar of Schloss Fuschl, a castle near Salzburg, Austria. More went to the Liebenau monastery just outside Worms and to a castle in Mühlhausen in Thüringen. Some also went to a factory in the village of Gaissau Hintersee in the Salzkammergut area near Salzberg, Austria. Ribbentrop finally sent several tons to Schleswig-Holstein in the north, where he planned to make his last stand. Later, 1.8 tons of coins belonging to the Foreign Ministry turned up near the town of Itzehoe thirty miles north of Hamburg.8
Gestapo leaders had their own stores of gold and foreign currency. Ernst Kaltenbrunner, the number-two man in the SS and one of the authors of the Final Solution, in mid-April was named the commander of the German forces on the southern front. He quickly set up his headquarters in the village of Altaussee in the central part of his native country, where he used to ski. He shipped his hoard out of Berlin on a special train in the final days of the war. When American soldiers captured Kaltenbrunner in a mountain lodge, he was carrying papers that identified him as Dr. Unterwegen. He had thrown away his Nazi identification into a nearby lake shortly before American soldiers arrested him.9 His young mistress Countess Gisele von Westrap told the Americans that he had two chests of gold, but she did not know where they were located. Later 130 pounds of gold were discovered near the mansion where Kaltenbrunner had lived. American G.I.s discovered abandoned gold in the strangest places. They found nearly two thousand Austrian gold coins plus bars of gold in an abandoned hay wagon next to a railroad station in a small town in Austria.10
Other SS units took some of the Reichsbank’s Melmer gold for their own use. In October 1944, the SS moved gold coins worth an estimated $25 million to Bad Sulza near Weimar, and another truckload of gold and foreign currency to Salzburg in late April 1945. Both shipments were to be used for food and bribery by Nazis going to ground. Otto Skorzeny, an SS Lt. Colonel sent a staffer to Salzburg to get more money, and he returned to the SS headquarters in the town of Radstadt with 50,000 gold francs.11
Germany quickly descended into economic chaos. Since the Reichsbank had a difficult time sending new currency to its regional offices around the country, the wheels of commerce slowed down. Factories ran short on raw materials, and companies could not pay employees. Soldiers were not paid either. Bartering became widespread, as farmers traded milk or eggs for whatever they could get in exchange. With roads and bridges bombed out, traffic moved slowly. The unit known as Organisation Todt, which was building facilities in France for the new V-1 and V-2 rockets that Hitler still hoped would bring victory, had to use gold to keep its operation functioning.
In March 1945, Reichsbank Vice President Emil Puhl was shuffling between the Southern Germany city of Konstanz, where the bank had a branch office, and Switzerland. He was desperately trying to sell Nazi gold to either the Swiss or the Bank for International Settlements. He wrote letters to Walther Funk in Berlin about how it was becoming more and more frustrating to get anything done. He complained about his loneliness and not knowing what was happening to his family, and the pressure the “Anglo-Saxons” were putting on the Swiss to stop gold sales. On March 19, he wrote in a four-page letter, “In general it is much worse that I even imagined in my most pessimistic expectations.” He had stopped at the Bank for International Settlements in Basel before going to the Swiss capital in Bern and wrote that he was “very disappointed” by the situation he found there. President McKittrick,
after extensive consultations with the American embassy in Bern, told Puhl he would no longer accept gold from the Reichsbank. That killed agreements to send two shipments to the BIS, one for six tons and one for a ton and a half. The Swiss National Bank, though, was still willing to take bullion despite Allied pressure, but it was not delivered from Konstanz before the the war ended.12
On April 6, Puhl wrote a more upbeat ten-page letter after the Swiss agreed to sign the agreement to buy Nazi gold. He wrote: “It is pleasing to note again and again in all these events how strong the cultural ties are that connect our two countries, even if the political opinion of the broad mass is not in our favor today.” He lamented, though, that he had lost contact with this wife and youngest son who are now in “enemy-occupied territory.”13
Although the Reichsbank had gotten the bulk of the country’s gold out of Berlin in early 1945, there was still a lot floating around the capital at a variety of organizations. Lt. Colonel Friedrich Josef Rauch, who was known by the name Fritz, was the adjutant of Hans Lammers, the head of Hitler’s Reich Chancellery, the center of the Nazi state machinery. A veteran Nazi who had participated in the Munich beer hall putsch and fought in the Balkans, Rauch was relatively new to his powerful position in Berlin. Nonetheless, he convinced Lammers that the government had to get all the remaining valuables out of Berlin before either the Americans or Soviets got there. He proposed sending it to the area of Southern Germany and Northern Austria, a region he knew well since he was born in Munich. Diehard Nazis such as he still hoped to establish there the National Redoubt that Heinrich Himmler had proposed.
The Reichsbank had in Berlin some gold plus plenty of currency and the material for printing new money to keep the economy functioning. Other organizations also had their private war chests. The Devisenschutzkommandos of Hermann Göring had plenty of jewelry and foreign currency taken from people in invaded countries. Himmler’s SS, which ran the concentration camps, also had its riches. Rauch wanted to move all that south.
Lammers quickly approved the proposal and took the plan to Walther Funk, who was already trying to get the last Reichsbank bullion and currency out of Berlin. Lammers and Funk together took their plan to Hitler, who was now in dark depression in his bunker. He had already decided to die in Berlin, but agreed to let them take the remaining treasure out of the city.
Reichsbank officials led the operation to get as much as possible of the nation’s remaining riches to Bavaria. Officials found two freight trains, the Adler (Eagle) and the Dohle (Jack Daw), and assigned eighty employees to accompany the valuables to Munich. When the two trains were hooked together at the Lichterfelde-West train station, only half of them were on board. The rest were taking their chances and staying in the capital. The trains carried 25 boxes and 365 bags of gold, millions of dollars of foreign currencies including British pounds and American dollars, plus 500 million Reichsmark, 200 packets of blank paper, and 34 boxes of printing plates to make even more German currency. The foreign money came largely from Göring’s Devisenschutzkommandos. Hans Alfred von Rosenberg-Lipinsky, a bank board member, directed the whole operation. There now remained in the bombed-out Reichsbank headquarters only 2.5 tons of gold.14
The next day, Walther Funk also left Berlin along with August Schwedler, an SS officer and also a Reichsbank board member. They departed in a car driven by Funk’s chauffeur, Bernard Miesen, who brought along his wife and three children. The group pulled out of Berlin at five o’clock in the afternoon on April 14 and joined a caravan that ultimately included six trucks carrying gold and other goods. In total there were fifteen people. They traveled through the night, arriving in Munich at 11:00 the next morning. Funk did not stop there, though, going instead to his country home near the village of Bad Tölz.15
During the next few days, the driver took Funk and Schwedler on several trips around the area so that they could get the lay of the land and decide where to hide the gold. They first went to the Reichsbank office in Munich, which was located on Briennerstraβe, one of the four royal boulevards in the heart of the city. There they discussed plans to protect the gold that would be arriving soon. They also went to Berchtesgaden to meet with Hans Lammer, who had escaped from Berlin by claiming poor health.
The Reichsbank gold train from Berlin to Munich quickly turned into a nightmare. Because of both mechanical problems and the war conditions, it crept through Dresden and the spa town of Marienbad. The wagons were a tempting target for Allied bombers, and the leaders of the convoy feared they might lose the whole shipment. When the gold train pulled into Freising, a town just north of Munich, the entire city and the railroad station were on fire. One wagon broke down and had to be replaced. The train eventually split into two units, with the Dohle remaining behind for repairs. Some of its cargo was off-loaded into trucks that headed for Munich. Traveling was slow because the roads were filled with dead cattle and horses as well as fleeing refugees. Trucks also had difficulty finding gasoline. One of the shipments that arrived finally by truck included twenty vehicles that carried four thousand gold bars.16
The early choice for a place to store the gold was a coal mine in Peiβenberg, a small town about sixty miles southwest of Munich. It had an extensive network of caves dating back to the seventeenth century. Schwedler decided to check it out while waiting for the trains to arrive. Their driver took him and three Reichsbank staffers to Peiβenberg, where they met with mine officials and inspected the facilities. They found water in several of the tunnels and realized that this was not the site to store their bullion, much less the paper currency, which would quickly become waterlogged. Schwedler took three mysterious bags with him into the mine, but then returned with them to the car. He went back to Funk’s mountain hideaway to discuss the situation with the bank president, who by then was drinking heavily. They agreed that Peiβenberg was not the place to store the gold.17
Lt. Colonel Rauch, who had already been in Bavaria for a while, had decided that the best temporary location for the gold was the barracks of the Gebirgsjägerschule (Mountain Infantry School) in Mittenwald. This was a village located at the foot of the North Tirol Alps sixty miles south of Munich and near Garmisch-Partenkirchen, the mountain resort that had been host to the 1936 winter Olympics. The poet Johann Wolfgang von Göthe once described Mittenwald as a “living picture book.” The Gebirgsjäger was an elite light infantry unit and part of the Waffen–SS. Members wore a distinctive Edelweiss insignia on their sleeves and caps. The commander of the Mittenwald troops was Colonel Franz Pfeiffer, a war hero and recipient of the coveted Iron Cross.
The two colonels decided to store the gold at first in a bowling alley in the basement of the officer’s club. The first shipment of bullion arrived in Munich on the Adler and was quickly sent there. Once it had arrived, bank officials who had traveled with it from Berlin immediately did an inventory. There had been 365 bags of bullion when it left Berlin, with two bars in each container. One of the bankers said it was an easy number to remember because it was the same as the days in a year. When officials finished their inventory, however, they were missing one bag. The Reichsbank staff searched the whole area and recounted, but they were still one short. No one could figure out how it could be missing. The controls since they left Berlin had been very strict. Bank officers questioned everyone, including the staff at the school and all who had been on the train. Nothing showed up. A few days later, someone lit a fire in the bowling alley’s stove, and it began to belch smoke. Two bars of gold were wedged in the chimney. Most likely a member of the Berlin staff had planned to come back later to recover the two bars.18
The gold from the Adler was still waiting for a long-term hiding place, when the Dohle train finally pulled into the Munich-West train station on April 25 with the remaining load. It was too late to move it in trucks to Mittenwald, so it remained there for the night. The next day twenty-five more crates of bullion were moved south by truck.19 All the Berlin gold was now at the Gebirgsjägerschule.
A final
hiding place, though, still had to be found. Funk met again with Lammers in Berchtesgaden near midnight at the end of April to discuss what was going on with the gold and also what they were both personally going to do in view of the impending arrival of the Americans. This time the central bank president arrived with the three bags that Schwedler had been carrying before. Currency was in two of them and two bars of gold were in the third. Before leaving, Funk turned the sacks over to a local Bavarian official.
Funk, Lammers, and Schwedler finally met at the Berghof and discussed what to do with the gold, which was clearly not safe in the long run at the Gebirgsjägerschule. With everything closing in on them, they decided to give Rauch responsibility for taking all the valuables into the mountains and burying them.
Lammers and Funk after that basically waited for Allied forces to arrive, and they were soon arrested. Funk had been drunk much of the time. German soldiers drifted away from their units, as men tried to make private deals by surrendering to the Americans. Skirmishing broke out between SS loyalists committed to fighting to the very end and the Freedom Action Bavaria movement, an anti-Hitler group that wanted to get rid of the Nazis before the Americans arrived. The battle for Munich, which had already been badly damaged by bombing, began early in the morning of April 30 and was over by the end of the day. Wehrmacht soldiers received papers stating that they had been legally relieved of duty.
Schwedler, though, stayed on the job. Nearly a week later, he and the driver went back to Mittenwald for more meetings with Pfeiffer and Rauch. Bavaria now was in total chaos, and to make matters worse winter had returned. Temperatures dropped rapidly, and there were six inches of snow on the ground.20
Although the two officers knew that the end was at hand, they decided to move the remaining Reichsbank gold and foreign currency one more time to a safer place than the Gebirgsjägerschule. The destination was an area near the Walchensee (Lake Walchen), Germany’s largest and deepest lake. Some fifteen miles due north of Mittenwald, it was a remote location that the Americans would only find later. The two colonels were now in charge of the gold operation. Funk simply waited to be arrested, and Schwedler only rarely checked in on what had happened.
Chasing Gold: The Incredible Story of How the Nazis Stole Europe's Bullion Page 45