Nazi Gold

by Douglas Botting

  Merkers fell to the 90th Division at 11 o’clock on the morning of 4 April. It was not a place that meant anything at all to anyone in Third Army, and in the normal course of events it could have been a long while before the Americans undertook any systematic search of the mines there. But a day or two later a chance encounter by two American military policemen in Merkers village led to the accidental discovery of the mine and its fabulous contents.

  One of the first things the Americans did in Merkers was to establish a curfew and restrict the movement of civilians in the area. On the morning of 6 April two military policemen, Privates First Class Clyde Harmon and Anthony Kline, were driving round Merkers on a routine jeep patrol intended to enforce army orders against civilian circulation when they overtook two women on a road outside the town. Since both women were French displaced persons, and one of them was pregnant, the MPs decided to give them a lift. The women were first taken to the command post for questioning, then driven back into Merkers by a Private Mootz. On the way they passed one of the entrances to the Kaiseroda mine and one of the women exclaimed: ‘That’s the mine where the gold bullion is kept.’ So the story came out. By noon the news had passed all the way up to the Chief of Staff and within a few hours had been confirmed by other displaced persons and a British sergeant – one of 200 prisoners of war from the 51st Highland Division employed in the mine – who had helped unload the gold when it first arrived. When it was learnt that ‘reportedly the entire reserves of the Reichsbank in Berlin’ were hidden in the Kaiseroda Mine, immediate steps were taken to secure the 30 miles of galleries and the five entrances to the mines. The 712th Tank Battalion was detailed to guard the entrance at Merkers and the whole of the 357th Infantry Regiment, comprising some 600 to 700 men, covered the other four.

  The Americans went into the mine on 7 April. In the space of a minute a double-tier lift took a party of 90th Division’s headquarter officers, accompanied by German mining officials, to the bottom of the main shaft, 2,100 feet – the best part of half a mile – beneath the surface. Rarely in history could an invading army have stumbled on an Aladdin’s Cave of treasure comparable to this one. Stacked against the walls of the main passageway lay huge piles of sacks – 550 in all – containing German paper currency totalling the best part of a billion Reichsmarks. Moving down the tunnel the inspection party came to the main vault. The vault was blocked off by a brick wall three feet thick with a heavy steel door set in the middle of it. Army engineers were summoned and with a modest half-stick of dynamite blasted a hole through the brick wall to the other side. The party then climbed through the hole, entered so-called Room No 8 and peered about them.

  They found they were in a great cavern hewn out of dry salt rock 150 feet long, 75 feet wide and 12 feet high. The floor of the cavern was covered knee-high with over 7,000 numbered bags, laid out in rows. The Americans counted 20 rows in all, some of them two or three sacks high, stretching right to the back of the cavern. Inside each bag were gold coins or gold bars, weighing between 55 and 81 lb to the bag. There were over 8,527 gold bars altogether, weighing 100,352 kilos (98.76 tons) and valued at more than $112,000,000. The minted gold coins – later officially valued at more than $126,000,000 – included a million Swiss francs, a billion French francs and 711 bags of US $20 gold pieces, $25,000 to a bag. Altogether the gold bars and coin weighed 250 tons. Baled paper money was stacked against one wall, and at the back, crammed into suitcases, trunks and boxes, was a large quantity of gold and silver plate looted from private homes and institutions all over Europe. All the articles had been flattened with hammers to save storage space, then tossed into the containers until an opportunity came to melt them down into gold and silver bars. There were sacks of gold teeth fillings and gold dental bridges and suitcases crammed with diamonds and pearls and other gems ripped from the victims of the SS death camps, as well as looted eye glasses, spectacles, watches, wedding rings and cigarette cases.

  A senior Reichsbank official captured by the Americans, a Dr Werner Veick, estimated that the total currency reserves captured in the Merkers mine amounted to:

  2,700,000,000 Marks in paper money worth over $1089,148,850

  2,000,000 US dollars

  98,000,000 French francs

  £110,000 in British money

  4,000,000 Norwegian crowns

  and smaller amounts of Turkish pounds, Spanish peseras and Portuguese cscudos.

  A tentative American estimate at the time put the value of the entire hoard at about $315,000,000 – which made it one of the greatest deposits in the world. A more systematic count later put the value of the gold alone at $238,490,000.

  The reserves were not the only treasures the Americans seized that day in the Kaiseroda Mine. An enormous number of paintings and other pieces of art, 400 tons in all, were stored in one of the other tunnels, some of them wrapped in paper and burlap, others simply stacked together like sheets of plywood. The paintings had been collected from 15 German museums and included works by Rembrandt, Titian, Van Dyck, Raphael, Dürer and Renoir. The entire collection was beyond price, but the most priceless of all the items was not a painting but a diminutive 3,000-year-old ancient Egyptian statuette representing Queen Nefertiti, the single most precious art object in Germany. Other finds were made in neighbouring mines in the Merkers area, including 400 tons of records from the Reich Patent Office, sufficient to fill 30 railroad cars and potentially as valuable as the gold, along with German Army High Command records, two million books from Berlin, the Goethe collection from Weimar and much else.

  The discovery of the gold and monetary reserves of the Third Reich – or a substantial part of them – was sufficiently important for the Supreme Commander of the Allied Expeditionary Forces, General Eisenhower, and his two senior generals, General Omar N. Bradley (commanding the US 12th Army Group) and General Patton, to take time off from the war to have a look for themselves. They were met at the mine head by two more generals, Generals Eddy and Weyland, and also a Colonel Bernstein from the Finance Section of SHAEF (Supreme Headquarters Allied Expeditionary Force). Patton’s ADC, Colonel Charles R. Codman, recalled the nightmare descent:

  The party was ushered into a primitive freight hoist [he wrote to his wife], operated by an unprepossessing German civilian. General Patton began counting the stars on the shoulders of those about him as the jittery elevator rattled with ever-accelerating speed down the two thousand feet of pitch-black shaft. He glanced up at the single cable now barely visible against the diminishing patch of sky.

  ‘If that clothesline should part,’ he observed thoughtfully, ‘promotions in the United States Army would be considerably stimulated.’

  A voice from the darkness, that of General Eisenhower, ‘OK George, that’s enough. No more cracks until we are above ground again.’

  When the five generals stepped out into the dimly lit tunnel at the foot of the shaft, the GI on guard took one look at the inordinately heavy concentration of top brass in front of him, saluted, and in the subterranean silence was heard by all to mutter: ‘Jesus Christ!’

  The party moved on down the tunnel into a high vaulted cavern full of art treasures. Patton cast a bored glance at a few paintings. ‘The ones I saw were worth, in my opinion, $2.50,’ he was to recall in his memoirs, ‘and were the type normally seen in bars in America.’

  Pointing to a dozen large bales of Reichsmarks in a corner by themselves, Eisenhower demanded: ‘What are those?’

  A German mine official explained that they were earmarked to meet future German Army payrolls.

  ‘I doubt,’ interjected General Bradley, ‘the German Army will be meeting payrolls much longer.’

  The generals entered Room No 8 and looked around in awe at the captured gold from the Reichsbank reserves that filled the vault. ‘If these were the old freebooting days, when a soldier kept his loot,’ Bradley quipped to Patton, ‘you’d be the richest man in the world.’ And later, back on the surface, Bradley leaned across to Patton and asked him, hal
f seriously: ‘George, what would you do with all that money?’ Patton chuckled. Half his men wanted the gold made into medallions, he said – ‘One for every sonuvabitch in Third Army.’ Eisenhower laughed at that, never dreaming how oddly prophetic Patton’s remark would turn out to be, or just how much of the Reichsbank reserves would finally adhere to the exceptionally sticky fingers of a few of his Third Army comrades-in-arms.

  It was clear that the treasure could not stay in the caves at Merkers indefinitely. Patton insisted that Eisenhower send someone up to take responsibility for the vault. Guarding it was tying up a whole regiment, he said, and knocking hell out of one of his divisions. It was decided that the entire hoard should be transferred immediately to a place of safety, and the Reichsbank building in Frankfurt, which had fallen to the Americans on 26 March, was chosen for that purpose. At 9 o’clock on the morning of 14 April the move began, under conditions of rigid security. Down in the mine, jeeps with trailers hauled the treasure from the vault to the shaft, where the loaded trailers were put on board the lifts and brought to the surface. Working non-stop for 20 hours American troops brought the entire contents of the mine to the surface – gold, currency, works of art, in a total of 11,750 containers – inventoried them and loaded them on to thirty-two 10-ton trucks. The next morning the convoy set off for Frankfurt escorted by five platoons of infantry, two machine-gun platoons, ten mobile anti-aircraft guns and an air cover of spotter planes and Mustang fighter bombers. In Frankfurt two infantry companies cordoned off the Reichsbank while each item was unloaded, checked off and moved down into the vaults of the bank. The operation was completed during the night of 15 April. In spite of the extraordinarily heavy guard, the rumour persisted for years afterwards that one truckload of gold or works of art vanished in transit to Frankfurt. But it was the gold and currency reserves still in German hands that were to suffer this kind of indignity. These surviving reserves now became the subject of considerable concern to both Americans and Nazis alike.

  The Americans expressed grave doubts that the Merkers hoard represented the entire German gold and currency reserves in existence and these doubts were confirmed after the interrogation of the Reichsbank officials captured at Merkers. A special team of US Treasury and Bank of England experts under Colonel Bernard Bernstein raced up to Frankfurt and from there fanned out into occupied Germany in an urgent quest for other hoards. The Gold Rush, as they termed it, was on.

  2. The Flight to the Redoubt

  The capture of the Reichsbank reserves at Merkers had proved a devastating blow to the Nazi leadership. Propaganda Minister Goebbels was beside himself with fury and wrote in his diary on 8 April, the day after the capture: ‘Sad news from Mühlhausen in Thuringia. Our entire gold reserves amounting to hundreds of tons and vast art treasures, including the Nefertiti, have fallen into American hands there. I have always opposed the removal of gold and art treasures from Berlin but, despite my objections, Funk refused to take advice. Probably he was talked into it by his staff and advisers. Now by criminal dereliction of duty they have allowed the German people’s most treasured possessions to fall into enemy hands. If I were the Führer I should know what now has to be done.’

  But Goebbels misjudged Hitler. Far from demanding Funk’s head, the Führer allowed himself to be talked into yet another major evacuation of what remained of the Reichsbank reserves – the gold and foreign currency still in German hands in the special storage points in central and southern Germany.

  Though it was Funk who put the proposal to Hitler, it was not his original idea. This seems to have come from a 39-year-old Colonel in the Schutzpolizei, or Security Police (a branch of the regular police force), Friedrich Josef Rauch, popularly known as Fritz, who since 1942 had acted as adjutant to the Chancellery Secretary, Reich Minister Hans-Heinrich Lammers, one of the twenty most powerfully placed men in the Third Reich, and had recently become Hitler’s personal security officer. Rauch is destined to loom large in the story of the Great Reichsbank Robbery, though his role appears at first sight at odds with his impeccable credentials – impeccable, that is, by the standards of the National Socialists.

  Friedrich Rauch was born in Munich on 1 September 1906, the son of a senior police inspector. At the early age of 15, while still at school, he joined a right-wing paramilitary organisation, the Freikorps, and in this he received his first military training. A year later in November 1922 he joined the Nazi Party (then only two years old) with membership number 11053, and later became a member of the SA, the Nazi Party’s private army. In 1923 he was awarded the highly prized Blutorden (Blood Order) for his participation in the march to the Feldherrnhalle in Munich during Hitler’s first unsuccessful ‘Putsch’ of 9 November.

  From an early age Rauch was a convinced and fervent supporter of the Nazi cause. ‘Even as a boy,’ he was to write in a curriculum vitae for his employers in 1940, ‘the unhappy outcome of the World War and the quickening decline of the German nation affected me very deeply. As a result, there was awakened in me very early an interest in political matters. I have remained firmly attached to the National Socialist outlook.’ Until Hitler seized power in 1933 Rauch’s Nazi convictions were a handicap rather than a springboard to his career as a young policeman in the Munich police force. ‘In my official career,’ he wrote, ‘I laboured under the odium attaching to me as a known National Socialist.’

  Things looked up in 1933 when Germany turned Nazi. Six foot tall, upright in bearing, an outdoor type without suspect intellectual pretensions, a keen and accomplished horse rider, skier and mountaineer with all the right political and nationalistic views, Friedrich Rauch was just the kind of man the New Order welcomed to its ranks. He was promoted to inspector, then to captain in the Security Police, and in 1940 he was seconded to Berlin for security duties on the staff of the Head of the Reich Chancellery, Dr Lammers. At the same time he was admitted to the Allgemeine SS with the rank of SS Captain (Hauptsturmfiihrer). In December 1940 Rauch left headquarters duties in the capital at his own request and joined the Flak Regiment of one of the most prestigious formations of the Waffen-SS, the SS Division Leibstandarte ‘Adolph Hitler’, which had its origins in Hitler’s élite personal guard battalion in Berlin. For the next six months he was on active service at various fronts in Rumania, Greece, Bulgaria, Yugoslavia and (very briefly) Russia. A letter Rauch sent back to his superior general in March 1941 from the Dobrudja area on the Black Sea coast of Rumania, gives a good idea of his line of thought at this time. He was then a commandant of a sizeable town – a post, he claimed, ‘that will be of value to me in my future work with the Security Police’. Rauch wrote:

  The morale in the unit is fabulous. The resolution to die for the sake of victory imbues officers and men to the innermost recesses of their hearts. The fighting spirit of the [Nazi] movement, arm in arm with other soldierly virtues, will win victory in the war we are fighting for Germany’s greatness and her right to live. That is what points the way for all of us – the quiet and determined conviction resulting from these beliefs. I am very glad that I was granted the opportunity of taking part in this great event as a front-line soldier . . . We all await the decisive events for which we long.

  On 4 July 1941, barely a week after that most decisive of all events – the German invasion of Russia – Captain Rauch was back in Berlin, this time for good, bringing with him a medal, the Yugoslav National Order 5th Class. Once again he took up his Security Police work with the Reich Minister and Head of the Reich Chancellery, Dr Lammers, who soon formed a glowing opinion of his protégé. ‘Rauch has proved himself first rate,’ Lammers wrote in a personal assessment to Rauch’s superiors at Security Police headquarters towards the end of the month. ‘His grasp of his duties, his disposition and his natural characteristics cannot be faulted. His upright military bearing, on and off duty, his excellent and tactful manner of relating to superiors (members of the Reich Government, the Diplomatic Corps, etc), his way of dealing with subordinates and his social behaviour show him
as particularly suited to his present post. He has the ability necessary for making oral reports to me and for dealing in writing with the matters which he has to handle, the power to grasp information rapidly and the necessary knowledge in the sphere of administrative life and the laws affecting public bodies.’

  By early 1942 Rauch was a Major of Police and by the spring of 1944 he had reached the rank of Lieutenant-Colonel, his promotion ratified in a certificate signed by Hitler himself and countersigned by Himmler. ‘IN THE NAME OF THE GERMAN PEOPLE,’ the certificate ran, ‘I nominate you, Friedrich Rauch, as Lieutenant-Colonel of Police. I ratify this document in the expectation that the above-named will fulfil the duties of his office with loyalty to his oath of service . . . At the same time I assure him of my special protection. The Führer [signed] Adolf Hitler.’

  It was this same Colonel Rauch, dyed-in-the-wool Nazi, conscientious Third Reich bureaucrat and fanatical patriot, who dreamed up the idea of shipping the remaining Reichsbank reserves lock, stock and barrel down to the so-called Alpine Fortress, the National Redoubt in the Alps, where a few diehards believed that National Socialism would make its last Wagnerian stand. In this impregnable natural fortress, Rauch contended, the treasure of the Third Reich could be used to finance the continuation of the war or the formation of a Fourth Reich – ideally on the side of the Anglo-Americans against the Russians – when the war was over. Rauch put his idea to his immediate superior, Dr Lammers, who liked it so much that he put it in turn to Economics Minister and Reichsbank President Funk. Funk, too, was impressed and decided that he would put the matter to the Führer himself.