Chasing Gold: The Incredible Story of How the Nazis Stole Europe's Bullion (35 page)

Luxembourg had long sought economic relations with larger and stronger nations. Prior to World War I, it had a customs union with Prussia, but denounced it at the end of the war. Following the war the country tried to unite economically with France, but Paris had no interest. So it turned to Belgium, establishing an economic union in 1921, which included a monetary union.

The Grand Duchy had a central bank, the
Caisse d’Épargne de l’État du Grand Duché de Luxembourg
, although the institution did not have the authority or resources of other national banks. Prior to World War I, the Luxembourg government held no gold, but during the economic crises of the 1930s it began accumulating bullion. By the end of the decade, it had a stockpile of 357 bars of gold weighing 4.3 tons. The Caisse d’Épargne also held 93.5 kg of gold belonging to the J. P. Pescatore Fund. The founder of that organization was a wealthy Luxembourger who had made a fortune in French business and in 1892 established a home for the country’s elderly. The gold provided financing for it.
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Luxembourg gold was initially stored at home, but when war fears increased the government in 1938 sent it to Holland. Officials, though, ran into transportation problems, and the following year asked the Belgian government to take it over and to protect it the same way that they were handling their own bullion. Brussels agreed.

The
Banque Nationale de Belgique
, as it is known in French, or
Nationale Bank van België
, its name in Flemish, began a program after World War I to modernize and decentralize its gold holdings. Much of the metal stored in its Brussels headquarters was shipped to new facilities in three towns around the country. The new storage facilities were solidly built and had underground vaults made of reinforced concrete. Some gold was also shipped to Antwerp and Ostend, Belgium’s two main port cities, from which the national treasure could be moved quickly, most likely to London. Eventually only about fifteen percent of the country’s precious metal remained in the capital. Drawing on their experience in World War I, bank officials operated in the belief that in a new conflict they would have enough time to move the gold away from the fighting.

In the late 1930s, Belgium enjoyed a dramatic increase in its gold holdings because of an influx of hot money coming from France. The Popular Front government in Paris launched leftist economic policies that frightened wealthy citizens, who sent much of their private fortunes in gold bars and coins to Belgium and Switzerland. As a result, Belgian gold holdings increased by ten percent, and by the end of the decade the national stockpile totaled more than 600 tons, a large amount for such a small country.
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Following the Munich agreement in the fall of 1938, leaders of the Belgian bank became concerned about the safety of their holdings. The board also discussed whether in case of an invasion members should remain in the country or flee to France or Britain for the duration of the conflict. A large number of Belgians had escaped to France during World War I. In order to live there, though, they needed to convert their Belgian francs into French francs. Believing that was likely to happen again in a new conflict and would put a major burden on the country’s gold and foreign currency reserves, Belgian bank officials felt they had to keep large stores of bullion to pay for potentially huge sales of Belgian francs for French ones.

At the time, Georges Janssen headed the Belgian Central Bank. Born in 1892 and a lawyer by training, he had successful careers as both a barrister and a law professor before joining the privately held
Société Belge de Banque
in 1932. He was named head of the national bank in 1938. Janssen was not a politician and generally followed the instructions of cabinet members, especially the minister of finance. He suffered recurring bouts of phlebitis, which sometimes hampered his work. Camille Gutt, the finance minister when the war broke out in May 1940 and later the strongman of the cabinet-in-exile, described him as having a “slightly dictatorial temperament.”
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Following the Nazi seizure of Austria’s gold in March 1938, the Belgian bank appointed three top officials, Hubert Nassau, Louis-Jean Mathieu, and Henri Sontag, to draw up a plan to protect the country’s treasure. They recommended sending one-third of it to Britain, one-third to either Canada or the U.S., and keeping one-third in the country. The final portion was required by law to remain within the country’s borders as backing for the currency. Gutt and Janssen agreed to the proposal. At about that same time, Janssen contacted Montagu Norman about shipping gold to Britain. He agreed and assured Janssen that news of the Belgian gold’s move would remain secret and not be included in any public information his bank published. In July 1938, the first shipments left Brussels and Antwerp for London.
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The Belgian bank at the same time contacted officials at the New York Federal Reserve and began shipping bullion there. By the end of March 1939, Belgium had 308.6 tons at the Bank of England in London and 117.5 tons at the New York Fed. Some Belgian officials, though, worried about leaving their most valuable property there because their country had not paid back the U.S. for World War I loans. Brussels officials feared that the Americans might seize it as payment for bad debts. The cost of insuring and shipping it across the Atlantic was also increasing all the time, and U-boat attacks made shipping dangerous. As a result, officials finally decided to keep most of their bullion in Europe by moving it to neighboring France.
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Over five days in November 1939, the Belgians sent four shipments containing 178 tons of gold in 4,449 sealed cases to the French National Bank offices in Bordeaux and Libourne, both in the southwestern part of the country and thus far from Germany. The transfers were done as earmarked accounts, the same arrangement that Brussels had with the Bank of England. Under French rules, that meant once the gold was turned over to them, the Belgians had no further access to it. They could not even retrieve the banknotes that they had sent to their neighbor. Brussels officials were not given the key or combination to the vaults where their national treasure was located. Those bank reserves were now entirely under French control.
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When a new Belgian government took office in early 1940, Finance Minister Gutt decided that all of the gold remaining in the country should be shipped to southwestern France. Belgian bullion began arriving in France so quickly that Pierre Fournier, the governor of the French bank, informed Belgium in February that his staff no longer had time to verify the exact contents of all the containers. He said that in the future his office would only acknowledge the number of crates received with their seals intact. In May 1940, the Belgians sent 730 cases in three separate shipments to three different destinations, Bordeaux, Toulouse, and Mont-de-Marsan. On May 8, just two days before the German invasion, the Brussels central bank had inside the country only 7.5 tons out of its total holdings of 707.8 tons. The Belgian central bank now had 45.6 percent of its gold at the Bank of England, 31.3 percent at the Bank of France, 21.8 percent at the New York Federal Reserve and 1.2 percent at the South Africa Reserve Bank.
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The centerpiece of the Belgian strategy against a German invasion was based on its ultramodern Fort Eben-Emael, built between 1931 and 1935. Considered at the time to be the world’s best military fortification, even better than France’s Maginot Line, it was designed to protect three strategic bridges over the Albert Canal that ran from Antwerp, Belgium to Maastricht, Holland. Belgians believed that the canal provided them with a natural defense line. The fort was built in a jagged mountainous area near the junction of France, Belgium, Holland, and Germany, about twelve miles northeast of Liège, Belgium, and six miles south of Maastricht, Holland. The natural defensive barrier of the mountains, now augmented by the fort, reassured Belgium’s leaders that their Maginot Line would hold. Belgian military strategy was built on the premise that Fort Eben-Emael would hold out for five days until French forces could arrive. The fort, though, was still right in the path of a Nazi invasion.

During the spring of 1940, the Wehrmacht’s Koch Storm Detachment practiced a daring raid to neutralize the defense structure. At 3:30 A.M. on May 10, the morning the German western offensive began, eleven large gliders tethered to Ju-52 planes left in the dark from Cologne, seventy miles away. Forty-five miles into their mission and over the city of Aachen, nine gliders were released at 8,000 ft. They silently soared into Belgian territory and landed on top of the fort. The German soldiers attacked the fort’s turrets with explosives and flamethrowers. The Belgians responded with a heavy defense, but the fortress was now protecting the Nazis on top of it. In only a few minutes the battle ended. More than a thousand Belgian troops were taken prisoner, and the bridges over the Albert Canal were quickly seized. The road to the North Sea through Belgium was now open, and Nazi panzers began rolling toward the Belgian-French coast.
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On May 15, the Belgian cabinet left Brussels in a caravan of cars to establish a new base of operations in Ostend on the country’s North Sea coast. The city had lovely, wide beaches and also had the advantage of being only a short ferry trip to Britain. The government had previously agreed that if the cabinet relocated, the head of the central bank should remain with the ministers. The scene in the beach resort was sometimes surreal. One night Gutt invited Janssen and others to join him for a gastronomic feast on the grounds that at least the Nazis would not enjoy the food they were having. The menu included a truffle omelet, and they drank Champagne, toasting to the “final victory,” even though they knew defeat would come first.
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German planes bombed Ostend on the night of May 17-18, and the cabinet reluctantly decided to leave Belgian territory for France, stopping first in Le Havre. Gutt and Janssen early in the morning of May 18 headed to Paris. It took two days to get there because refugees blocked the roads. Janssen went immediately to the French National Bank and established his bank’s new headquarters there. In early June, and while both Fournier and Janssen were still in Paris, the French central bank president informed his Belgian counterpart that his country would be moving the Belgian gold out of the country with France’s bullion and asked if that was okay with them. Janssen gave his approval, but the details or destination were never discussed. He later tried to get more information, but the French told him little, explaining that the information was a military secret.
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King Leopold III, who had taken over formal command of the Belgian Army, had a showdown meeting with his own cabinet on the evening of May 24-25 concerning war strategy at Château de Wynendaele in West Flanders. Present were the four leading members of the government: Prime Minister Herbert Pierlot, Foreign Minister Paul-Henri Spaak, and Ministers Without Portfolio Arthur Vanderpoorten and Henri Denis. The ministers urged the king to leave the country with the government, but he refused. Pierlot bluntly reminded him that only the government, and not he, could surrender. The politicians were escaping to France, but the king wanted to remain in Belgium with his troops, whatever the outcome. His father Albert I had not left during World War I. He would do the same. Leopold added that he would consider a government-in-exile to be an attack “against me.” In his memoirs Spaak wrote that the king “gave off the cuff answers to our questions” and “had no clear idea of what being a prisoner would mean.” The ministers finally departed realizing that their country’s future had become a struggle between their view and the king’s.
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Belgium had only a small amount of gold physically in the country, but it still had a huge hoard of its national currency in Ostend. It had just arrived in trucks and some in hearses. The central bank had recently printed enough paper money to service the country’s economy for three to six months. The 500 million Belgian francs weighed 120 tons and were packed in 241 cases that rested in the cellar of a local bank. It was worth $70 million. By then it was impossible to ship cargo by train or truck to France. Hubert Ansiaux, the bank’s thirty-seven year old inspector, was now in charge of it. He rustled up a dozen helpers and a truck that had been left behind to deal with the currency.
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While trying to devise a plan to get his valuable property to Britain, the only destination left, Ansiaux on the late afternoon of May 25 was near the harbor in Ostend. All the ships had by then left for safer waters. He was rapidly running out of both hope and ideas. The Germans had been dropping magnetic mines there for days, and no ship would dare to dock. In desperation he and his team put together a last ditch plan to make a giant bonfire of currency bills right there at the dock. That seemed the only way to keep the money out of Nazi hands. Ansiaux was skeptical, though, because he knew that the tight blocks of currency would burn very slowly and might still end up with the enemy.

Then almost miraculously and before the match was lit, a Belgian pilot boat named simply the
A4
suddenly appeared outside the Ostend breakwater. The privately owned vessel normally led ships into harbors along the English Channel. The Belgian military had requisitioned it at the start of hostilities, and it was coming from the besieged French port of Dunkirk. Although the Germans had mined the Ostend waters, the
A4
had been demagnetized, so it was probably safe to land. The vessel, though, was virtually defenseless, having on board only a small canon and a machine gun. Carefully the
A4
eased its way into the dock. As soon as it was dark, Nassau’s small team loaded the ship. When it was filled to the gills, the boat slowly pulled out of the harbor with no lights on. As the
A4
sailed past Dunkirk at 10:00 P.M., the crew could see the city in flames. The Belgian ship arrived in the harbor of Dartmouth on the English coast at dawn on May 26. The ship had carried coal before the war, and now everyone aboard had a black face. Ansiaux immediately telephoned the Bank of England and asked what to do with his hoard of cash. The British replied that they would put it in their London vault, where it remained for the duration of the war.
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