| U.S. and Allied Efforts To Recover and Restore Gold and Other Assets Stolen or Hidden by Germany During World War II |
A. Discovery of SS Loot in the Reichsbank Treasure
The Reichsbank treasure discovered by the U.S. Army in the salt mines at Merkers consisted of more than just gold bars and currency. Lying in one area of the mines were 18 bags of silver and gold alloy bars and 189 parcels, boxes, suitcases, and trunks containing jewelry; gold and silver articles such as watches, wedding rings, cigarette cases, compacts, spectacle frames, candle sticks, and Passover cups; hundreds of pounds of gold dental crowns and fillings; and gold and silver coins. Also captured at Merkers was Albert Thoms, head of the Reichsbank’s Precious Metals Department, who identified the 207 bags and containers as comprising the "Melmer" account belonging to the SS. The implications of this SS horde were immediately recognized. Brigadier General Frank McSherry suggested that "this SS property contains evidence which might be useful in the prosecution of war criminals" and had the bags and containers stored in a separate room in the vaults of the Foreign Exchange Depository.
Over the next two years, through examination of Reichsbank records and interrogations of the German officials involved, the U.S. military government in Germany pieced together the story of the "Melmer" account. The most important sources of information were Thoms, Reichsbank Vice President Emil Puhl, and SS-Hauptsturmführer (Captain) Bruno Melmer, all of whom were interrogated by or at the request of the U.S. Army’s Finance Division.
Puhl told his interrogators that, sometime in the summer of 1942, Reichsbank President and Reich Minister of Economy Walter Funk informed him of an agreement between Reich Leader of the SS and Police Heinrich Himmler and Reich Finance Minister Lutz Schwerin von Krosigk whereby the Reichsbank was to receive shipments of confiscated jewelry and securities from the SS, which would use the cash proceeds from the conversion of these shipments to finance its industrial enterprises. Funk instructed Puhl to make the necessary arrangements for these shipments with Oswald Pohl, head of the SS-WVHA (SS Economic Administrative Main Office). After meeting with Pohl, Puhl turned over responsibility for dealing with the shipments to Frommknecht, the Reichsbank director for cash and vault, and to Frommknecht’s subordinate, Albert Thoms, chief of the bank’s Precious Metals Department.
Oswald Pohl confirmed that he met with Puhl in the summer of 1942. Pohl stated that he and Puhl worked in strictest secrecy to arrange for gold, jewelry, and foreign currency to be deposited in the Reichsbank, while gold teeth and crowns taken from concentration camp inmates would be melted down and the gold then transferred to the Reichsbank. After these arrangements had been agreed upon, all subsequent shipments from the East and from concentration camps were forwarded to the Reichsbank.
As head of the Precious Metals Department, Albert Thoms was able to provide many details about the SS shipments to officials of the Finance Division, which employed him to examine the captured Reichsbank records for traces of the looted central bank gold. Thoms recalled that, in the summer of 1942, Frommknecht sent him to Puhl, who informed him that the SS was about to begin delivering shipments to the Reichsbank that would contain not only gold, silver, and foreign currency, which was in the Reichsbank’s area of competence, but also jewelry and other types of property whose disposal would be the Reichsbank’s responsibility. Puhl told Thoms that in the interest of secrecy, the Reichsbank must dispose of these items itself.
Shortly after this meeting, Pohl’s deputy, SS-Brigadeführer (Brigadier General) August Frank informed Thoms that an SS officer named Melmer would deliver the first shipment in a truck. This shipment arrived on August 26, 1942, and other deliveries quickly followed. The tenth delivery, in November 1942, was the first to include dental gold, and subsequent deliveries contained large amounts of this material.
The deliveries were first deposited into an account designated "Melmer." The Reichsbank then sorted and inventoried the deliveries and disposed of them. Gold and silver bars and currency were bought by the Bank at full value from the SS and small items like gold rings were sent to the Prussian Mint for re-smelting. Jewelry and larger items were sent to the Municipal Pawnshop, which sold the better items abroad for foreign currency and sent most of the rest to the Degussa firm for re-smelting. Degussa was allowed to keep a certain amount of gold for industrial purposes, but any gold exceeding the permitted amount was sold back to the Reichsbank and credit for the proceeds was deposited in the SS account. Thoms noticed that a few of the deliveries contained stamps or other designations indicating that they came from concentration camps or from the cities of Auschwitz and Lublin.
SS-Hauptsturmführer Bruno Melmer confirmed Thoms’ statements. As head of the Finance Office in the Troop Administration Department (Amtsgruppe A/II) of the SS-WVHA, Melmer was instructed by Pohl to receive valuables confiscated as Jewish property that were shipped from Auschwitz concentration camp and the camps and killing centers in the Lublin District and to transfer them to the Reichsbank Berlin. The Reichsbank was "charged with realizing these valuables" and would credit the equivalent amount in Reichsmarks to an account of the SS at the Reichshauptkasse (Reich Main Accounting Office) in the Reich Ministry of Finance. The correspondence relating to these shipments was kept in the "Reinhardt" file.
Melmer recalled receiving these instructions in approximately May 1942, and soon thereafter, the first shipment arrived at his offices. After the first delivery, subsequent shipments were sent in sealed containers, which the Reichsbank’s Precious Metals Department opened, inventoried, and distributed to the appropriate Reichsbank departments or to the Prussian Mint or the Municipal Pawnshop. Eventually, the Reichsbank returned a statement to Melmer that gave the value of each shipment and reported that the equivalent value in Reichsmarks had been paid to the Reichshauptkasse.
Will Burger, who was the administration chief at Auschwitz Concentration Camp from June 1942 until April 1943, testified at Nuremberg that while he was stationed at Auschwitz, an order came from the SS-WVHA to send all dental gold and such valuables as jewelry, rings, and watches to Melmer. Burger further recalled that in approximately late 1943, when he was working at the SS-WVHA in the department that administered concentration camps, an order was issued to all the concentration camps besides Auschwitz to send dental gold and valuables to Burger’s department, which delivered them to Melmer. Auschwitz, however, continued to ship them directly to Melmer because the number of valuables it collected was so large.
Reichsbank records captured at Merkers and maintained and studied by the Finance Division provided additional support for the claims of Thoms and Melmer. For example, among the records was the receipt for the first three Melmer deliveries on August 26, September 4, and September 7, 1942. In addition to jewelry, silver, and foreign currency, the shipments included gold bars and gold coins. The total value assigned to the gold, silver, and currency in all three Melmer deliveries was 1,184,375.59 Reichsmarks, which the Reichsbank paid to the Reichshauptkasse on October 27, 1942. This receipt did not, however, assign any value to the jewelry in the shipments. Also found among the captured Reichsbank records was a November 24, 1944, cover letter from Thoms to the Prussian Mint forwarding items from the 46th Melmer delivery for smelting, including more than 30 kilograms of gold teeth.
By 1946, therefore, the U.S. Military Government knew from available records and from interrogations that, beginning in August 1942, the Reichsbank received and converted gold and other valuables that the SS had looted from Jews it enslaved and murdered in Poland and from Jewish and non-Jewish concentration camp inmates. In fact, Puhl’s role in arranging for "the receipt, classification, deposit, conversion, and disposal of properties taken by the SS from victims exterminated in concentration camps" formed the basis for his indictment in 1946 before the U.S. Military Tribunal at Nuremberg, which subsequently sentenced him to five years’ imprisonment. The origin of the gold and other valuables in these shipments was clear from the "Reinhardt" designation of the file in which Melmer kept the correspondence relating to his deliveries to the Reichsbank. The name of this file referred to Operation Reinhardt, the SS program for exploiting Jewish property and labor and murdering millions of Jews in killing centers in Eastern Poland. The Allies learned the details of Operation Reinhardt shortly after the war, and documents linking Oswald Pohl with the Reinhardt program contributed to the decision of the U.S. Military Tribunal at Nuremberg to sentence him to death.
Some of the Operation Reinhardt documents also revealed how gold and other valuables robbed from murdered Jews passed from the Lublin camps and Auschwitz via the SS Economic Administrative Main Office to the Reichsbank. On August 12, 1942, Himmler ordered all the Higher SS and Police Leaders in the Eastern Territories to send all precious metals and other valuables confiscated from Jews to the SS-WVHA, which would distribute them to the appropriate Reich agencies. In February 1943 Odilo Globocnik, the SS and Police Leader in Lublin and head of Operation Reinhardt, sent an interim report concerning valuables from Operation Reinhardt that had been delivered to the SS-WVHA "for transmission to the Reich Bank or to the Reich Ministry of Economy." In addition to foreign currency notes, jewelry, watches, silver bullion, and textiles, the report lists 1,775.46 kilograms of gold bullion and coined gold currency valued at 843,802.75 Reichsmarks. Globocnik’s final report on the total value of the valuables and textiles forwarded to the Reichsbank, Reich Ministry of Finance, and Textile Works in the course of Operation Reinhardt listed 2,909.68 kilograms of gold bullion valued at 8,147,104 Reichsmarks and minted gold currency valued at 1,736,554.12 Reichsmarks.
C. Estimates of the Value of Persecutee-Origin Gold Acquired by the Reichsbank From the SS
The OMGUS officials responsible for storing and disposing of the German treasure at the Foreign Exchange Depository recognized that the "Melmer loot" captured at Merkers represented only those parts of the SS shipments that the Reichsbank had not yet processed through its normal disposal channels. The OMGUS authorities were also aware¾ from both the captured Reichsbank records and from the information supplied by Thoms and Puhl¾ that the Reichsbank, in disposing of the SS shipments, bought the looted gold coins and bullion at full value and incorporated them into the gold reserves of the German Reich. Furthermore, the ingots smelted by the Prussian Mint from dental gold and small gold items also became the property of the Reichsbank, as did any gold smelted by Degussa in excess of its legal allotment. That the gold acquired by the Reichsbank from the SS shipments was eventually processed into a negotiable form is evidenced by the Reichsbank’s records of its releases to the Deutsche Bank (a private German bank): according to the U.S. analysis of these records, out of releases totaling 1,581,832 fine grams of gold, 673,493.3 came from the Melmer deliveries, of which 325,296.4 were apparently delivered by the SS to the Reichsbank in negotiable form, while 348,196.9 had to be resmelted by Degussa prior to release.
The contents of the SS shipments captured in the Melmer account at Merkers were housed separately at the Foreign Exchange Depository. With the exception of 25 gold and silver alloy bars, they were not inventoried by the team of experts sent by the U.S. Treasury Department and British Government in June 1945. An inventory was conducted in August 1945 of 6,427 gold coins discovered in the Melmer account, but an inventory of other valuable, non-monetary articles in the SS loot (e.g., precious stones, dental fillings and other scrap metals, jewelry, watches, tableware, etc.) was not completed until November 1946, when French jewelry experts valued them at approximately $580,000. A January 1947 inventory of the entire contents of the Melmer account simply compiles the types of items by approximate number or weight.
Valuations of the SS shipments liquidated by the Reichsbank, however, had to depend upon available Reichsbank records and the statements of Reichsbank officials. When interrogated by U.S. officials in Frankfurt on May 6, 1945, Thoms stated that there had been "60 or more" Melmer deliveries in all, about half of which were still stored at Merkers. Questioned about the total amount already credited to the SS account, Thoms estimated "very cautiously" that it contained 7-10 million Reichsmarks. From the Reichsbank records containing Melmer entries that were then available, the chief of the Financial Intelligence Branch of SHAEF concluded that the Reichsbank had purchased at least 1,278,417.2 fine grams of gold (worth about $1.4 million in 1945) from the Melmer shipments, of which 866,730.2 had been resmelted by Degussa. In his October 1945 report, Colonel Bernstein asserted that there had been 76 Melmer deliveries of which the first 44 had been processed, netting proceeds of approximately 23,455,782 Reichsmarks. Bernstein estimated the total value of all the Melmer deliveries to be about 36.17 million Reichsmarks, with gold and silver coin and bullion accounting for 10.67 million.
The Reichsbank Precious Metals Department records captured at Merkers included receipts for at least some of the SS shipments whose contents had been disposed of or "processed," although the receipts did not include the value of the "non-currency" contents of deliveries that were disposed of through other agencies. Based on these receipts, the Foreign Exchange Depository concluded that there were 78 deliveries of which about 43 were fully inventoried by the Reichsbank, and put the total value of the inventoried deliveries at 23,455,781.96 Reichsmarks, "of which RM 1,866,329.18 is gold coins, and RM 3,018,062.13 gold bars." "Thus it is possible to say that approximately $1.6 million in gold coins and bars were received by the Reichsbank in the first 40-odd deliveries of Melmer (SS Loot) received."
This $1.6 million worth of gold coin and bars represents only the amount reflected in the Reichsbank’s receipts for part of the contents of 43 inventoried Melmer shipments. From the Precious Metals Department’s receipts for Melmer deliveries, which did not include the "non-currency" contents of the shipments, and from the inventory of the Melmer account at Merkers, it can be concluded that the Reichsbank broke up the SS shipments and processed those items that were most easily disposed of first, while those items whose disposal was more complicated¾ because, for example, they required re-smelting or marketing by another agency¾ remained in the Melmer account until that agency could receive them. This conclusion is supported by the Reichsbank’s statement for the first three Melmer deliveries, which gives the cash value of the currency, gold, and silver in the shipments but not of the jewelry, which was "not yet examined and evaluated." Such a practice of cashing in those parts of the shipments that were most easily disposable also explains why the contents of the Melmer account at Merkers contained relatively little of the negotiable gold and currency that, judging from the Reichsbank’s statement for the first three SS shipments and from the Operation Reinhardt reports, comprised a significant portion of the Melmer deliveries.
The Reichsbank’s inventory of the valuables it stored at Merkers shows that the 207 shipments seized in the Melmer account originated from 20 SS shipments but did not represent the entire contents of those shipments. Since the FED identified a total of 78 SS shipments but only uncovered receipts for 43 shipments that had been processed by the Reichsbank, there were 15 shipments whose contents were evidently liquidated (as they were no longer in the Melmer account at Merkers), but for which no receipts were found. In addition to the $1.6 million in gold acquired from the 43 inventoried SS shipments, then, the Reichsbank must have acquired at least some gold from the 15 uninventoried shipments and probably also acquired some from the 20 shipments whose partial contents were found at Merkers. It is not clear, moreover, whether the Reichsbank receipts that were found by U.S. forces included gold items in the SS shipments that the Reichsbank only acquired after they had been resmelted.
D. Other Sources of Persecutee-Origin Gold in the Reichsbank
Although the Melmer deposits provided the most direct evidence that the Reichsbank received gold robbed from individuals the Nazis persecuted and murdered, the SS was not the only agency from which the Reichsbank received gold taken from private individuals and enterprises. In a September 19, 1945, statement, Thoms explained to his U.S. interrogators the Reichsbank’s role in the confiscation of the personal property of German Jews. According to a decree of February 21, 1939, German Jews had to turn in their valuable personal property to the Municipal Pawnshops, some of which came to the Reichsbank, which had its own pawn office. This material included gold coins and gold bars.
While the Reichsbank acquired the gold coins and bars taken from German Jews, the German Foreign Office assisted in liquidating the gems and jewelry confiscated both from German Jews and from individuals and businesses in the countries conquered by Germany by exchanging them abroad either for commodities essential to the German war effort or for the foreign currency needed to buy them. The Foreign Office regularly transferred via diplomatic pouch to its Legation in Bern packages of jewelry specifically referred to as Judenschmuck or "Jewish jewelry." The packages were given to a German agent in Bern who exchanged them for industrial diamonds, described as "vitally important" to the German war effort. The sale and export of industrial diamonds were banned under Swiss law. In at least one instance, the German Foreign Office arranged for gem diamonds to be sold to a Swiss citizen in Bern for Swiss francs.
Gold also came to the Reichsbank from non-German inhabitants in the areas of Poland annexed by the German Reich. According to the head of the Haupttreuhandstelle Ost, the Reich Ministers of Economics and Finance (Funk and Schwerin von Krosigk) had ordered that all the confiscated valuables, including "significant quantities of gold and silver items, jewelry and the like," be delivered to the Reichsbank. The same ministers were also negotiating with the Reich Minister for Armaments and War Production, Albert Speer, concerning the disposal of similar property confiscated in Western Europe. In addition, correspondence between the Reichsbank Berlin and its office in Kattowitz (Katowice) concerning smelted and broken gold, jewelry, and gold and silver articles indicates that the Trusteeship Office in Kattowitz had offered it to the Reichsbank for utilization. The Reichsbank Berlin instructed the Kattowitz office to accept smelted gold as long as it met the purchasing requirements of the Reichsbank but suggested that the Haupttreuhandstelle Ost send the remaining items directly to the Municipal Pawnshop in Berlin.
It is clear that just as it received and incorporated into the Reich’s reserves the gold looted from the central banks of the nations occupied by Nazi Germany, so did the Reichsbank receive and incorporate into its reserves gold looted from individuals persecuted and murdered by the Nazi regime. If the gold looted from individuals was not already in a negotiable form, it was resmelted into bullion. Some of this persecutee-origin gold was traded abroad, while some of it was still present in the $252.5 million worth of Reichsbank "monetary" gold that was captured by the U.S. Army and stored in the Foreign Exchange Depository in Frankfurt. Unlike the contents of the Melmer account or other captured caches of gold that was in clearly "non-monetary" form (e.g., dental fillings or jewelry), the resmelted persecutee-origin gold in the Reichsbank’s gold reserves was not visibly distinguishable from genuine central bank gold.
The need to determine how much gold Germany looted from European central banks and how Germany disposed of such gold led in 1946 to an intense effort by personnel of the Finance Division of OMGUS, with the help of Thoms and other Reichsbank officials, to study the captured records of the Reichsbank Precious Metals Department and the Prussian Mint records made available by the Soviets in Berlin. By analyzing these records, the French had succeeded in tracing the Belgian central bank gold that the Belgian Government had sent to France for safekeeping at the start of the war and that the Germans had subsequently confiscated. It was hoped that the records would likewise reveal the fate of gold looted from other nations and deposited in the Reichsbank. Thoms particularly maintained that the records would make it possible to trace all the gold bars in the captured Reichsbank gold reserves at the FED to their original accounts or deposits.
In tracking the Dutch gold, the FED analysts were able to identify specific smelting operations at the Prussian Mint in which gold looted from the Netherlands was resmelted. A 1946 FED analysis of one Prussian Mint operation in which Dutch guilders were smelted into gold bars shows that 37 kilograms of gold acquired by the Reichsbank from the Melmer deliveries were added to the guilders in this smelting. Of the resulting gold bars, 83 percent were eventually traded to the Swiss National Bank, the remaining 17 percent to the Banca d’Italia and the Banco Commerciale Italiana. Another 1946 FED analysis of a 1944 Prussian Mint smelting operation, in which Dutch gold bars were resmelted to disguise their origin, notes that six bars from Melmer loot, weighing 56 kilograms in all, were resmelted and renumbered at the same time. Six bars with the same numbers that evidently were assigned to these renumbered bars containing SS gold are included in the inventory of the gold bars that were captured by U.S. forces at Merkers and subsequently transferred to the Gold Pool. Thus these FED studies show that 37 kilograms of gold acquired by the Reichsbank from the SS shipments were traded abroad while another 56 kilograms of gold looted by the SS from its victims were part of the Reichsbank gold reserves captured at Merkers.
The fact that the studies tracking the gold looted from the Netherlands also identify specific amounts of gold from SS shipments that were processed into the Reichsbank’s reserves supports Thoms’ assertion that the Reichsbank records could be used to track specific gold bars to their original accounts or deposits. The FED records do not, however, indicate that any effort was made to identify specific bars in the captured Reichsbank reserves that originated from the Melmer account.
Planning to distribute the gold held in Frankfurt began in earnest after the Five-Power Conference on Reparation for Non-Repatriables agreed on June 14, 1946, to implement Article 8 of the Final Act of the Paris Reparations Conference in part by allocating to the Intergovernmental Committee on Refugees (IGCR) all "non-monetary gold found in Germany." The possibility that the Reichsbank gold reserves might include persecutee-origin gold that could qualify as non-monetary gold was not lost on the U.S. officials responsible for deciding how the gold held in Frankfurt should be distributed. In July 1946, the State Department sent Irwin S. Mason to the Foreign Exchange Depository to identify items there that might qualify for turnover to the IGCR. In reporting Mason’s findings to the Secretary of State, Livingston T. Merchant, Minister-Counselor for Economic Affairs at the U.S. Embassy in Paris, called particular attention to the 8,307 gold bars captured with the Reichsbank holdings at Merkers. According to Merchant, "these gold bars may, after proper assay and expert consideration, be determined to represent melted down gold teeth fillings and therefore [be] classifiable as non-monetary gold."
In August 1946 the State Department proposed that the Joint Chiefs of Staff issue a directive to OMGUS and the U.S. Forces in Austria to proceed with the transfer to the IGCR of captured non-monetary gold held in the U.S. occupation zones. Urging the "broadest possible interpretation" of the reference to "non-monetary gold in Germany" in Article 8 of the Paris Reparations Agreement, State proposed to define non-monetary gold as "all personal property which represents loot seized or obtained under duress from political, racial or religious victims" of Nazi Germany or its satellites, "which was or may hereafter be found, seized or confiscated by USFET or by local authorities acting under direction or control of US forces," with the following provisos: 1) the property could not be restituted to its rightful owner because the original owner was not identifiable or had died without heirs; 2) the property could not be restituted to the nation where it originated because its national origin was undeterminable; and 3) Jewish literature of cultural or religious significance, German currency, and real property in Germany should be excluded.
The preparations for transferring non-monetary gold to the IGCR coincided with the establishment on September 27, 1946, of the Tripartite Gold Commission (TGC) in Brussels by the U.S., British, and French Governments, to implement the provisions of the Paris Reparations Agreement with regard to restitution of gold to the nations whose gold reserves had been looted by Germany during the war. The TGC planned to distribute gold from a "gold pool" that was to be assembled from the various neutral nations that had acquired looted monetary gold from Germany and from the monetary gold that was seized in Germany and in the German diplomatic missions in Spain and Japan.
Responding to the State Department’s proposed directive for transferring non-monetary gold to the IGCR, OMGUS noted on October 2, 1946, that inventories of the holdings of the Foreign Exchange Depository were still being conducted and would probably require another year to complete. In view of the urgency of the refugee problem, however, OMGUS reported that "we are prepared to turn over shortly all SS-loot which appears to offer little chance of being restituted. Since a large part has already been melted down or made untraceable, this will include majority of SS loot. Although now formally held in name of Reichsbank or Reich Government, rather than SS, we will not recognize nominal transfer from SS, and will make available upon your Directive to Zone Commander as non-restitutable Nazi property. Other Nazi Party loot, including caches of jewelry as discovered and determined to be non-restitutable loot, will be treated in similar manner."
On November 16, 1946, the Joint Chiefs of Staff issued a directive, referred to hereafter as the Non-Monetary Gold Directive, from the State, War, and Navy Departments instructing the U.S. occupation authorities in Germany and Austria to make available to the IGCR "all valuable personal property which represents loot seized or obtained under duress from political, racial, or religious victims of Nazi Government or its satellite governments or nationals thereof" that was in the custody of U.S. forces in Germany and Austria, subject to the same conditions listed in the State Department’s proposal of the preceding August. The officials responsible for carrying out this directive quickly recognized that its definition of "non-monetary gold" as "all valuable personal property" looted from Nazi persecutees conflicted with the Paris Reparations Agreement definition of valuables to be restituted or assigned to the TGC. In discussions within the Finance Division of OMGUS on how to implement the Non-Monetary Gold Directive, the "question relative to monetary gold cont[a]ined in loot was discussed, and the ‘entire contents of boxes’ theory was favored, feeling that if a gold bar is found in a box of other loot, it is presumed that the gold bar is loot and not part of the gold pot." The Finance Division of OMGUS instructed the FED to compile a report on the valuables it was responsible for distributing and how the various directives should be applied.
In discussing what qualified as "monetary" gold to be distributed to the TGC, the FED noted that James W. Angell, U.S. Representative to the Paris Reparations Conference, defined monetary gold as "gold bullion and gold coins found in Germany" in a form of a "medium of exchange." Gold in a form "as to indicate its use for dental, artistic and adornment purposes" and coins of numismatic or historical value were excepted from this definition of monetary gold. Given this definition, the FED concluded that "it is possible that the term includes gold in such form even if found among the effects removed from racial and political victims of the Nazis. For example, in the portion of the Merkers Mine shipment described as S.S. loot removed from concentration camp inmates gold coins, unidentifiable as to ownership, have already been found to the approximate value of $65,000. In another concentration camp shipment the valuables are in separate envelopes bearing names and nationalities of inmates. The definition of monetary gold apparently leaves no alternative if the inventory reveals the presence of gold bars and coins in these envelopes, even tho claims in the names of surviving inmates or their legal heirs are subsequently received through governmental channels. In short the source has no bearing; it is the form that decides the category. If it is in the form [o]f a gold bar acceptable as a medium of exchange or if it is in gold coin form then it is monetary gold for disposal via the gold pot [emphasis in original]."
The FED recommended the following policy with respect to gold that, although "monetary" in current form, had been looted from Nazi persecutees:
"It would not be wise to apply the U.S. expanded definition of non-monetary gold to gold coins and thus encroach on the Gold Pot to the detriment of other nations. Therefore it is believed that gold coins and gold bullion, even though falling squarely within the scope of WX-85682 [the Non-Monetary Gold Directive], should be retained for the Gold Pot and not be delivered to IGCR. Furthermore since no country is on a free gold standard no individual lawful owners exist, other than a government. No Nazi victim could have been the lawful holder of monetary gold coins or bullion [emphasis in original].
At the same time, the State Department’s representative in Berlin was urging a different policy whereby all valuables (gold, coins, currency, jewels, or securities) that were suspected of being loot from racial, religious or political victims, "except in cases of exceptional value and restitutable" be classified as non-monetary gold and given to IGCR "regardless of any other directives which may be applicable, excluding objects of little or no value.¼ In cases of doubt or conflict, non-monetary gold fund should be favored."
After reviewing the FED’s report, OMGUS sought guidance from Washington regarding the report’s recommended policies, especially "what disposition is to be made on monetary gold falling under [the Non-Monetary Gold Directive]?" In addition, OMGUS inquired whether the United States should act unilaterally in transferring to the IGCR items clearly falling under the definition of non-monetary gold, since the French and British Governments were opposed to the U.S. expansion of Article 8’s reference to "non-monetary gold in Germany" to include non-gold valuables looted from persecutees and all such valuables that were found in Austria as well as in Germany.
The questions posed by OMGUS were taken up by the State-War-Navy Coordinating Committee. In response to the question of how "monetary" gold falling under the Non-Monetary Gold Directive should be distributed, the Committee decided on April 21, 1947, that monetary gold would "go entirely to gold pot." The Committee also agreed that, with respect to distributions to the IGCR, no prior agreement was required with the French and British regarding the definition of non-monetary gold.
Commenting on the decision of the State-War-Navy Coordinating Committee, the chief of the Foreign Exchange Depository noted: "We believe that the present form of the gold should be the governing factor inasmuch as it would be possible to resmelt all of the present non-monetary gold into monetary gold bullion. We think that the basis for distinction should be whether or not the gold is in such present form as to make it acceptable in international gold exchange deals."
Although the disposition of gold coins and bullion looted from Nazi persecutees was settled, questions still remained with regard to the currencies captured in the Melmer account and also in the 313 boxes of SS loot discovered by U.S. forces near Buchenwald. The State-War-Navy Coordinating Committee had decided to delay deciding how such currencies should be disposed pending a more complete inventory by the FED. In July 1947 OMGUS reported that the FED had listed 101 different kinds of currencies as qualifying for transfer to the IGCR under the Non-Monetary Gold Directive. OMGUS explained that many of these currencies had been in "35 ‘unprocessed’ Melmer loot deposits uncovered in Merkers Mine." According to "key Reichsbank personnel," the deliveries "represented loot from concentration camp victims," and therefore their contents satisfied the requirements for transfer to the IGCR. While the proper disposition of the currencies in these deliveries presented no problems, OMGUS sought guidance with respect to the 43 Melmer deliveries that had been processed upon receipt at the Reichsbank in Berlin, "that is, packing was broken, contents removed and assimilated in general assets of Reichsbank," including amounts of foreign currencies. OMGUS concluded: "The question arises whether, if IGCR is to receive currencies, they should also be informed of the processed Melmer deliveries and invited to submit claim for these amounts."
The War Department responded in September by authorizing OMGUS to transfer to the IGCR all currencies at the FED that were eligible for such disposition under the Non-Monetary Gold Directive. Addressing the specific concerns expressed in OMGUS’ July message, the War Department concurred "that 35 unprocessed Melmer deliveries be transferred to IRO and that 43 processed deliveries¼ not within non-monetary gold directive unless particular lots can be identified. Not considered feasible to reverse transaction reflected only by records." The War Department went on to state that it had no objection to "disclosure Melmer deliveries to IRO, however. Unless special reason to contrary, considered that disclosure should be made to avoid criticism secret decisions."
Although no official notification to the IRO has been found, the FED files do contain the draft of a memorandum from Colonel Brey, Chief of the FED, to the IRO, notifying it that the FED had received authorization to turn over currencies falling under the definition of non-monetary gold. The currencies to be turned over, however, would not include any that originated from concentration camps but "were subsequently assimilated into the assets of the Reichsbank as part of its cash thereby losing identity as concentration camp loot." The draft memorandum concluded: "It is not possible to constitute the non-monetary gold fund solely on a basis of Reichsbank book entries."
OMGUS used a similar argument in rejecting a claim submitted by the Polish Government for gold in the captured Reichsbank reserves that was looted from individual Polish citizens. Citing in particular the Operation Reinhardt records used in the Nuremberg trials, the Polish Military Mission in Berlin asserted in December 1947 that "gold and valuables looted from Polish citizens in extermination camps were transferred to the Reichsbank, Berlin" and subsequently captured with the Reichsbank gold reserves by the U.S. Army, which deposited them in the Foreign Exchange Depository. Replying to this claim, General Lucius D. Clay, U.S. Military Governor in Germany, stated that, although the FED did contain most of the holdings of the Reichsbank Berlin, "it has been impossible to identify any of them as having come from Poland, except that 30 [sic] unprocessed deliveries of non-monetary gold items¼ were traced back to concentration camps in Polish territory." Since the "inmates of these camps consisted of the nationals of practically every country in Europe," the contents of the 30 deliveries were deemed unrestitutable and had therefore been turned over to the IRO. Clay further noted that it "may very well be that part of the Reichsbank’s monetary gold was obtained from melting down of Polish concentration camp and other loot, such as might have been acquired in consequence of the ‘Action Reinhardt,’ and together with gold from other sources might have gone into the gold bars or been added to the reserve of gold coins held by the Reichsbank. However, we are faced with the impossibility of identifying the source of the individual items involved or even of computing on a percentage basis the participation of the various countries of origin involved." Consequently Clay concluded that under the Final Act of the Paris Reparations Conference, the Reichsbank gold could not be restituted to a particular country but had to be distributed to the Gold Pool.
In late 1947 and early 1948, questions again arose concerning the definitions of monetary and non-monetary gold. During the preparations for the first distribution to the "gold pot," the British occupation authorities in Germany asked OMGUS for its definition of monetary gold. OMGUS, in seeking guidance from Washington, noted that it had been using a "working definition" of monetary gold as "gold coins (excluding numismatic coins) plus gold in such form as to permit it by normal practice to be held as a part of the gold reserves of a central bank." OMGUS particularly sought guidance with respect to a claim submitted by the Czechoslovak Restitution Mission for ten gold bars that had no recognized mint markings and that had allegedly been produced by smelting gold jewelry confiscated by the German Vermoegensamt (Property Office) from concentration camp inmates and others in Czechoslovakia.
In November the Department of the Army directed OMGUS to use both the definition in Angell’s report and the definition employed by the TGC, namely that monetary gold is "all gold which, at time of its looting or wrongful removal, was carried as part of the claimant country’s central bank or other monetary authority at home or abroad." Employing the latter definition, the gold bars claimed by Czechoslovakia did not constitute monetary gold. If, moreover, they represented concentration camp loot, they were not restitutable to Czechoslovakia but should be turned over to the IRO, because "location of particular concentration camp where loot was assembled not regarded as bearing on ‘national’ source."
The TGC definition of monetary gold¾ that the gold must have been part of a country’s reserve at the time of looting¾ conflicted with the State-War-Navy Coordinating Committee’s directive that "all monetary gold go to gold pot and that no monetary gold, despite its source, be disposed of under [the Non-Monetary Gold Directive]," except for coins of numismatic value. In May 1948, the U.S. Army rescinded its previous instructions to incorporate the TGC language into the definition of monetary gold, pointing out that the Paris Reparations Agreement should govern "for purpose of recovery of monetary looted gold," whereas the TGC language applied to the claims submitted by countries seeking to receive a portion of such gold.
G. Distributions of Monetary and Non-Monetary Gold From the Foreign Exchange Depository
On September 5, 1947, OMGUS made the first and largest transfer of non-monetary gold held at the FED to the IRO. The goods transferred, whose total value was appraised at approximately $747,367, consisted primarily of the contents of the Melmer account and the 313 boxes of loot found at Buchenwald, including some gold alloy bars without mint markings "apparently derived from smelting down of various gold objects such as rings, teeth, etc." The currencies, securities, and gold coins found in the SS loot were not included in that transfer. The IRO shipped most of the newly smelted bullion and other non-monetary gold items to New York to be sold on the open market.
In October 1947 the TGC agreed that the FED would carry out the first distribution of its monetary gold holdings by turning over specified amounts directly to the Governments of France (on behalf of Belgium and Luxembourg) and the Netherlands. One problem that had to be addressed before final agreement could be reached on this distribution was that many of the gold bars in the Reichsbank’s reserves that had been smelted by the Prussian Mint were not of the appropriate weight and/or fineness to meet the requirements for "good delivery" bars. In addition, the origin of such bars was suspect, since it was by now well known that Germany had resmelted much of the gold it had looted. Consequently, although most of the bars had assay certificates from the Prussian Mint, there was evidently some reluctance to accept the information on the certificates and some skepticism about the FED’s ability to assay the bars accurately. However, since most of the gold bullion at the FED consisted of Prussian Mint bars, it was necessary to include them in the distribution. The TGC therefore decided that the bullion allocated to each of the countries included in the first distribution would be composed of 32.18 percent "good delivery" bars and 67.82 percent Prussian Mint bars.
Once the questions concerning the definition of monetary gold were clarified, the FED moved to complete the disposal of its monetary and non-monetary gold holdings. The final shipment of monetary gold to the account of the TGC at the Bank of England occurred on August 3, 1948, after which the FED reported that no monetary gold remained in its custody. The total amount of monetary gold distributed to the "gold pot" from the FED was $263,680,452.94, $10 million more than the entire amount of Reichsbank gold reserves captured by the U.S. Army as of September 1945.
The FED, however, set aside the assets that were to be turned over in the last major distribution to the IRO. A report on these assets mentioned that they included "miscellaneous watches, rings, cigarette cases, etc. which together with gold coin, bullion, and currency" were removed from the Reichsbank Berlin by the SS and Police to finance an Alpine redoubt. Only the jewelry and currency from this lot were designated to be turned over to the IRO, since the coin and gold bullion were "already placed in gold Pot"¾ despite the fact that they were part of a cache whose other contents had been designated loot taken from persecutees. The gold that OMGUS transferred directly from identified SS loot shipments at the FED to the TGC included at least the 6,427 gold coins seized in the Melmer account at Merkers and 10,709.667 fine ounces of gold bars and coins found in the intended SS Alpine redoubt.
A few items remained at the FED following these major distributions pending a decision as to whether they constituted monetary or non-monetary gold. Among these were the ten gold bars claimed by Czechoslovakia. The State Department’s Office of Finance and Development Policy reviewed the question of the bars in September 1949. Noting that the Czech claim mentioned gold teeth as one of the sources of the bars, the State Department suggested that this "points to Terezin, a notorious Nazi extermination camp in Czechoslovakia to which persecutees from all over Europe were shipped," and recommended that the bars be designated non-monetary gold and transferred to the IRO, particularly since this solution was preferable to the United States "from a policy point of view."
The State Department adopted the recommendations, and in December 1949 the Czechoslovak authorities were informed that their claim had been denied and that the ten bars would be turned over to the IRO. In January 1950 American, British, and French experts (Otto Fletcher represented the State Department) met with TGC officials in Brussels to review past definitions and procedures regarding the recovery and distribution of looted gold. This Brussels conference reached a decision that "monetary gold should be held to include gold which under German law and regulations was monetary gold."
In light of the decisions at the Brussels meeting, U.S. officials in Germany conducted a complete review of the monetary gold definition issue during the spring of 1950 and proposed to apply new principles relative to delivery of so-called "Law 53 gold" (a 1948 directive under which U.S. Military Government authorities assumed custody in the U.S. zone of occupation of Germany of all substantial amounts of currencies, securities, precious gems, and precious metals). The primary principle was that "all gold in form of bars or bullion regardless of size and whether previously obtained by owner from Reichsbank under license" would go to the TGC. In accordance with this principle, U.S. occupation authorities proposed to deliver ten bars of "Czechoslovak gold" and to assemble these bars with other Law 53 gold for early delivery to the TGC, possibly simultaneously with delivery of similar gold from the British zone of occupation. Although State Department officials in the Office of German Affairs strongly protested the decision to direct the ten Czechoslovak bars of gold into the TGC instead of the IRO for the support of repatriables, Otto Fletcher and the U.S. mission to the TGC in Brussels insisted that the tripartite Brussels conference decision of January 1950 clearly included the ten bars, that the "origin did not matter," that documentary evidence "did not prove conclusively concentration camp origin, and that British had reversed their decision regarding similar bars of gold of Yugoslav origin." In mid-August the British Foreign Office agreed with the State Department that the ten Czechoslovak bars (by this time valued at approximately $11,000) be sent to the TGC. It has not yet been possible to confirm when or whether the ten bars were eventually delivered to the TGC.
U.S. military authorities in postwar Germany learned in 1945 that, during World War II, the Reichsbank had incorporated into Germany’s gold reserves both gold that Germany had looted from European central banks and gold, including smelted dental fillings and jewelry, that the SS had robbed from Jews and Jewish and non-Jewish concentration camp inmates. U.S. authorities also learned that the Reichsbank had also acquired the monetary gold confiscated from German Jews in 1939 and from the non-German inhabitants of the Polish territories annexed by Germany after the start of the war. The Reichsbank, in fact, was the primary repository for the gold systematically acquired by Nazi Germany during World War II from governments, individuals, and public and private enterprises by means of conquest, confiscation, and plunder.
The goal of Nazi Germany’s assiduous efforts to acquire gold was to finance Germany’s war effort. Therefore, in order to acquire raw materials and other vital imports, Germany traded the majority of its gold, much of it looted from the occupied nations of Europe, to neutral nations, principally Switzerland. The conclusion that persecutee-origin gold was traded abroad can be drawn from the findings that the Reichsbank incorporated into the German gold reserves the gold it purchased from the SS and that Germany traded the majority of its gold reserves abroad during the war. Switzerland, the major purchaser of German gold during the war, admitted during the Allied-Swiss negotiations in 1946 that it had received $415 million of gold from Germany between 1939 and 1945, whereas Germany’s total gold reserves amounted to only $186 million (including hidden reserves) in July 1939 and only $225 million at the end of the war. It must be assumed that a significant portion of the persecutee-origin gold acquired by the Reichsbank from the SS was traded abroad. Indeed, a 1946 Foreign Exchange Depository study tracing Dutch gold, based on the records of the Prussian Mint, notes that 37 kilograms of fine gold from the "Melmer" gold was added to a 1943 smelting of looted Dutch guilders; of the resulting bars, 83 percent were traded to Switzerland, the rest to Italy. Captured records show that Germany also sent Switzerland via diplomatic pouch packages of jewelry looted from Jewish persecutees to be exchanged by a German agent for industrial diamonds and foreign currency essential to the German war effort. No proof has been found that the countries to which Germany traded gold robbed from persecutees knew of the origin of such gold.
The Reichsbank gold reserves captured by U.S. forces at Merkers included gold ingots and coins that had either been delivered directly to the Reichsbank by the SS in negotiable form or had been resmelted from dental fillings, jewelry, and other gold valuables. U.S. Government officials, including high-level OMGUS officials and policy-makers in Washington, were aware that the Reichsbank gold reserves held by the United States in the Foreign Exchange Depository in Frankfurt included gold that the Reichsbank had "processed" from the deliveries of SS loot it received from SS-Hauptsturmführer Melmer. A 1946 FED study of a Prussian Mint smelting operation notes that 56 kilograms of gold bars acquired by the Reichsbank from the SS were resmelted and renumbered. Bars with the same numbers that evidently were assigned to these renumbered bars are included in the inventory of the gold bars that were captured by U.S. forces at Merkers and subsequently transferred to the Gold Pool.
Although the captured Reichsbank records made it possible to trace specific gold bars in the Reichsbank’s gold reserves at the FED to their original account, it does not appear that an effort was made to identify bars that originated from the Melmer account in which the SS loot was deposited. Time constraints may have been a factor in the FED’s apparent failure to complete its study of the Melmer account. Certainly, the U.S. Government’s desire to deal quickly¾ even without prior agreement with the British and French—with the desperate economic situation in Europe by transferring non-monetary gold to persecutees and monetary gold to the nations devastated by the war influenced the FED’s recommendation to adopt the simplest definition of monetary gold¾ all non-numismatic gold coins and all gold bars that could "in normal practice" be "held as a part of the gold reserves of a central bank" should be deemed to be monetary gold, regardless of origin, and transferred to the TGC Gold Pool. Once the State-War-Navy Coordinating Committee in Washington adopted this recommendation in April 1947, the question of identifying persecutee-origin gold in the Reichsbank reserves was rendered moot. Proceeding on the basis of its definition of monetary gold, the U.S. Government transferred to the Gold Pool administered by the Tripartite Gold Commission all the gold coins and bars in the Reichsbank reserves at the Foreign Exchange Depository, including those that originated from the possessions of victims whom the SS robbed, enslaved, and murdered.
Comparison of the Reichsbank inventory of the Melmer SS account found at Merkers with the FED analysis of the available Reichsbank receipts for the SS shipments shows that the total value of the gold acquired by the Reichsbank from SS loot must have exceeded $1.6 million in 1946, or approximately 1.6 metric tons. It is likely that the actual amount of persecutee-origin gold acquired by the Reichsbank was much higher, since the final report of Operation Reinhardt notes that 2.9 metric tons of gold bullion and a considerable quantity of gold coins were sent to Berlin for transfer to the Reichsbank during the operation. Moreover, the amounts reported in the Operation Reinhardt report did not include any gold robbed from persecutees at Auschwitz or the other concentration camps outside the province of Lublin. It has not been possible to determine a more precise figure since the records of the Reichsbank Precious Metals Department, the complete Prussian Mint records, or the records of the Tripartite Gold Commission were not available. It may well be possible, by using the records of the Reichsbank, Prussian Mint and TGC, to identify gold bars smelted from persecutee-origin gold and to determine whether they were subsequently traded abroad by Germany or incorporated into the Gold Pool.
Whatever difficulties there might have been in tracing persecutee-origin gold incorporated into the Reichsbank’s gold reserves, OMGUS could have no doubt about the identity or origin of the SS loot found in the Melmer account at Merkers. OMGUS had stored the 207 containers from the Melmer account, along with the 313 boxes found near Buchenwald and other caches suspected of representing property looted from persecutees, separate from the other holdings at the FED and categorized them as "SS loot." Most of the contents of these loot caches were eventually designated non-monetary gold and transferred to the IRO for the benefit of persecutees, with one major exception: gold coins and bullion found in SS loot were deemed to be monetary gold according to the agreed definition based on the gold’s current form regardless of origin and were added to the Gold Pool. The gold transferred to the Gold Pool from identified caches of loot taken from Nazi persecutees included the 6,427 gold coins seized in the SS "Melmer" account and the 10,709 fine ounces of gold bars and coins captured in the intended SS Alpine redoubt, despite the fact that OMGUS knew the coins to be loot robbed by the SS from murdered Jews and other persecutees.
It is clear from U.S. Army records that, in storing and disposing of the vast treasure it captured in Germany and Austria, the U.S. Government was careful to segregate all gold and other valuables suspected of representing loot robbed from persecutees and to transfer to the International Refugee Organization all such valuables that met the U.S. definition of non-monetary gold. The research carried out for this report also leaves no doubt, however, that the U.S. Government knowingly contributed gold looted by Nazi Germany from individual persecutees to the Gold Pool that was subsequently distributed by the TGC. In determining how to dispose of the gold in its custody, the United States consciously decided with respect to gold coins and bars that their current form should be the ruling factor and that their origin should be disregarded.