Chasing Gold: The Incredible Story of How the Nazis Stole Europe's Bullion (20 page)

With the Schacht distraction now gone, Hitler’s attention quickly turned to his next target. On April 3, 1939, he issued a directive for war preparations to begin on
Fall Weiss
(Case White), the code name for the invasion of Poland. First, however, Hitler wanted to eliminate the danger of fighting a two-front war against Britain and France in the west as well as the Soviet Union in the east.
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On May 23, 1939, Hitler met again with top military leaders in his study at the Chancellery in Berlin. It was almost a repetition of the strategy session held in the same room on November 5, 1937, when he laid out plans for the takeover of Austria and Czechoslovakia. His target this time: Poland. Fourteen German military officers listened to his plan to wipe the country literally off the map of Europe. Lieutenant Colonel Rudolf Schmidt, the Führer’s adjutant on duty, took notes. Hitler concluded his long diatribe by saying, “We are left with the decision: to attack Poland at the first suitable opportunity.
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The Poland offensive would be quite different from his two earlier aggressions. The goal this time was not simply to bring ethnic Germans into his Reich. Now he wanted more blatantly to find
Lebensraum
, or living space, in Eastern Europe for the enlarged
Vaterland
. Germany, he argued, needed more space to achieve agricultural self-sufficiency. Moreover, in Hitler’s mind, Poland was an artificial state that had ceased to exist when it was partitioned between the Russian Empire, Prussia, and Austria in 1772 and was only reestablished by the anti-German treaty of Versailles 123 years later. Following Hitler’s thesis of the master race, the inferior Slavic people should be eliminated, and their land settled by superior Germans. This meant nothing less than the annihilation of thousands, if not millions, of Poles, starting with their religious, cultural, and political elites.

Despite his easy successes in Austria and Czechoslovakia, Hitler had no illusions. “We cannot expect a repetition of the Czech affair,” and added, “There will be war.” He still hoped to avoid a conflict with Britain, but told those gathered that it would probably be impossible. “The war with England and France will be a life-and-death struggle,” he said.

The German arms buildup since Hitler had come to power six years earlier had been staggering and had been funded with the help of the nearly $150 million in Austrian and Czech gold that had been seized and by the secret financial machinations of Hitler’s economic wizard Hjalmar Schacht, who was now out of office. When the Nazis took power in January 1933, the German army had only six divisions, three infantry, and three cavalry, but now it had fifty-one, including four motorized and four tank units. In 1933, Germany had a skeleton air force. Now it had twenty-one air squadrons and 7,000 first-line planes. Moreover, Göring’s Luftwaffe during the Spanish Civil War had developed new techniques of air warfare and gained valuable combat experience. In 1933 the Reich’s navy had one heavy cruiser and six light ones. By 1939, it had four battleships, one aircraft carrier, six cruisers, twenty-two destroyers, and fifty-four submarines. It also had 6,000 tanks, and 1.25 million men in arms. Hitler was ready to throw all that military might at Poland.
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Before attacking Poland, Hitler first wanted to eliminate the possibility that the Soviet Union would enter the war. Only four days after the Munich agreement, Werner von Tippelskirch, the German counselor in Moscow, sent a cable to Berlin, saying that as a result of the agreement the communist country was likely to “reconsider its foreign policy,” becoming less favorable to the western democracies and “more positive” toward Germany. Hitler, who had previously engaged in verbal warfare against the Soviet Union, stopped haranguing Moscow. German diplomats in Moscow were also instructed to make overtures about possible economic agreements.

Joseph Stalin was also looking for a way to avoid war with Berlin, realizing that his country was still weak following the Russian Revolution and the economic chaos resulting from the introduction of communism. After Munich, Stalin doubted that the western countries would ever have the backbone to stop Hitler and was anxious to make his own deal with the German leader. Stalin realized that his Jewish foreign minister, Maxim Litvinov, a revolutionary veteran and colleague of Lenin, would have to go if there were to be a deal. So on May 3, 1939, Stalin replaced him with Vyacheslav Molotov, a faithful, and non-Jewish, party hack. In early May, the French ambassador in Berlin sent a cable warning the French government that the Soviets were seeking an “understanding” with Germany. One of Molotov’s first moves was to meet with the German ambassador in Moscow to reinvigorate discussion of a long-delayed economic treaty.
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Britain’s Neville Chamberlain had resisted pressure from within his own Conservative party to form an anti-German coalition, but finally in late May a British and French delegation left for Moscow to open talks on a military agreement to oppose Hitler. The group, though, was in no mood for quick action and arrived in the Soviet capital after a long sea voyage. Two weeks later, talks were going nowhere fast. The Soviet Union’s deceptive diplomacy was to deal simultaneously with the French and British as well as with the Germans, although neither side knew that.

Negotiations for a trade agreement between Berlin and Moscow began in July, the same month that German Foreign Minister Joachim von Ribbentrop instructed one of his top diplomats to take two Soviet diplomats to a ritzy Berlin restaurant and propose a major improvement in relations. During the meal the German official told them that any such deal would be dead if the Soviets made an agreement with London and Paris. Outside of that, the German insisted that there were no outstanding issues between the two countries from the Baltic Sea to the Black Sea.

Following that diplomatic icebreaker, Germany quietly and quickly stepped up its game. On August 3, Ribbentrop dispatched a message to his ambassador in Moscow, who was due to see Molotov the next day. Ribbentrop instructed the ambassador to tell the foreign minister that Germany was interested in “concrete talks” about remolding German-Soviet relations. On the evening of August 14, the German foreign minister sent the ambassador another message with instructions that it should be read to Molotov. The cable stated: “There exist no real conflicts of interests between Germany and Russia . . . I am prepared to make a short visit to Moscow in the name of the Führer to lay the foundation for a final settlement of German-Russian relations.” The next day, Molotov played it coy, implying he was not interested in rushing to an agreement. Nonetheless, he asked casually if the Germans might be interested in a non-aggression treaty. The German ambassador had no instructions about that and gave only a vague reply.

On August 25, Walther Funk sent a memo to the Führer saying, “I have in a wholly inconspicuous manner converted into gold all assets of the Reichsbank and of the German economy abroad on which we could possibly lay our hands.”
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At the time, Hitler was meeting with his generals at his mountain retreat in Bavaria to work out final details for a Polish invasion. It was now due to start on August 26. The Russians finally replied to Ribbentrop on August 19, saying that he could come to Moscow on August 26 or 27. For the Germans, however, that was too late, so they pressed for an earlier meeting. Hitler sent a personal message to Stalin asking if Ribbentrop could arrive on August 22 or “at the latest on Wednesday, August 23.” Stalin replied that that Ribbentrop could come on the latter date.
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The German foreign minister arrived on schedule, and that same day the Germans and Soviets signed a non-aggression treaty. The most important part of it was a secret protocol that set out Europe’s new borders after the dismantling of Poland. The Soviets got Finland, Estonia, Latvia, part of Romania, and eastern Poland. The Germans took western Poland and Lithuania. The accord was later amended so that the Soviet Union took possession of Lithuania in exchange for giving up more Polish territory to Germany. On the afternoon of August 25 and after learning of the Moscow agreement, Hitler delayed the day of attack on Poland to September 1.
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The world was stunned by the news of an accord between the two countries that historically had never had anything good to say about each other. Two days after learning of the non-aggression treaty, the British hurriedly signed a mutual-assistance treaty with Poland. The French already had in place a 1921 agreement to defend Poland, but no one knew how, of even if, they would honor it. Hitler was briefly concerned, and German units were temporarily halted in their war preparations.

On August 31, however, Hitler issued Directive No. 1. The attack was to start September 1 at 4:45 A.M. The time in the typed document was written by hand and with a red pencil.
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Propaganda Minister Joseph Goebbels quickly orchestrated a charade of Poland’s supposedly outrageous offenses to justify a Nazi invasion. Already on August 11, he had sent an order to newspaper editors that their front page every day had to contain “news and comments on Polish offenses against ethnic Germans and all kinds of incidents showing the Poles’ hatred of everything German.” Heinrich Himmler, the head of the
Schutzstaffel
Nazi protection squadron, had some of his men dress up in stolen Polish uniforms and attack a radio station in Gleiwitz in Upper Silesia near the Polish border. Nazi concentration camp inmates wearing Polish uniforms were shot and left at the radio tower as proof of the attack. Journalists were taken to the site and shown the alleged victims.
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With political tensions mounting, British and French leaders urged the Poles not to make any provocative moves lest they give the Germans an excuse to invade. That only delayed Polish military preparations, and the country was poorly prepared for what hit it on September 1.

Britain and France were obliged by their treaties to wage war immediately upon a German invasion. The two countries again tried to stop a conflict with a flurry of diplomatic cables just as they had during the Austrian and Czech crises. The Italians attempted anew to play the role of mediator, but Hitler was determined this time to have his war and turned back all peace efforts.

The German invasion was a masterpiece of the new type of warfare that combined airplanes, tanks, infantry, and artillery units. Journalists around the world adopted the German term for the strategy, calling it
Blitzkrieg
or lightning warfare. Germany’s Luftwaffe quickly controlled the skies, while its ground army launched a major offensive in the north across the Danzig Corridor toward the German enclave of East Prussia as well as a second one toward Warsaw.

The Polish army opposing the new German army was built around the proud cavalry that had waged a victorious war against the Soviet Union in 1919-1920. It had sliced through enemy lines and inflicted heavy damage. Marshal Józef Piłsudski, the Polish commander in that war, was one of the country’s greatest strategists. He had died in 1935, and Poland never again had his equal. From 1926 to 1939, a group of military officers known as the Piłsudski Colonels dominated Polish political and military life. When war dangers mounted, Warsaw began spending heavily on the military, but Poles on horses were no match for Germans in tanks in this new era of modern warfare.

After two days of futile diplomacy, the British set a final deadline, demanding that the Germans stop the invasion by 8:00 A.M. Sunday morning, September 3. It was a beautiful day in Berlin. William Shirer, the CBS News reporter in the city, wrote in his diary, “It was the sort of day the Berliner loves to spend in the woods or on the lakes nearby.” With no signs of a German pullback, Prime Minister Chamberlain finally went on the BBC at 11:15 A.M. and announced, “The country is at war with Germany.”
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France declared war that afternoon. Neither country, though, backed up its diplomatic moves with military action. Some German generals had been concerned that the French would attack their poorly guarded western border. They need not have worried. Shirer also wrote further, “In 1914, I believe, the excitement in Berlin on the first day of the World War was tremendous. Today no excitement, no hurrahs, no cheering, no throwing of flowers, no war fever, no war hysteria.”

While war dangers were growing ever stronger in the late 1930s, Polish officials squabbled about how to handle the country’s gold holdings. Some military officials claimed it no longer served its traditional role as the backing for the national currency and that it should be used to buy war materiel. At the end of 1937, military authorities demanded that part of the country’s bullion be recognized as a national treasure and remain within the borders of the country. Zygmunt Karpi
ski, the governor of Narodowy Bank Polski, the Polish national bank, argued that as a precaution, given the country’s precarious spot between an increasingly aggressive Germany and the equally ideologically persistent Soviet Union the country’s gold should be shipped abroad. In June and July 1939, the Polish Central Bank sent about half of the country’s gold from Warsaw to regional bank offices in Brest, Lublin, Siedlce, Zamo
, and also to the military fortress in Brest. The minister of finance, though, until mid-August opposed shipping it outside the country. The Poles eventually sent some to the Swedish Central Bank, which exchanged it for Swedish gold in London. So part of the Polish nest egg was at least now in Britain. The Polish Treasury advocated sending more bullion to Britain, Switzerland, and the U.S., but no new or further action was taken.