Chasing Gold: The Incredible Story of How the Nazis Stole Europe's Bullion (46 page)

In point seventeen of the nineteen-point document, Churchill wrote, “Last of all I come to the question of finance. The moment approaches when we shall no longer be able to pay cash for shipping and other supplies.” The key words were underlined.

Churchill then made his pitch: “If, as I believe, you are convinced, Mr. President, that the defeat of the Nazi and Fascist tyranny is a matter of high consequence to the people of the United States and to the Western Hemisphere, you will regard this letter not as an appeal for aid, but as a statement of the minimum action necessary to the achievement of our common purpose.”
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Roosevelt and Hopkins discussed Churchill’s cable for hours aboard the
Tuscaloosa
, and the day after they returned to Washington, the president at a press conference took the first step toward a new American foreign policy. Reaching for a homey metaphor, he told reporters: “Suppose my neighbor’s home catches fire, and I have a length of garden hose four or five hundred feet away. If he can take my garden hose and connect it up with his hydrant, I may help him to put out his fire. I don’t say to him before that operation, ‘Neighbor, my garden hose cost me $15; you have to pay me $15 for it.’ I don’t want $15. I want my garden hose back after the fire is over.”
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On January 10, 1941, the administration introduced legislation in Congress officially named “An Act Further to Promote the Defense of the United States.” It became known as Lend-Lease. Instead of buying weapons, the Allies going forward would get them for free. Theoretically the foreign countries were going to return them later, but that never happened. The bill was patriotically listed as H.R. 1776. The next month, Churchill helped the political process along when he said, “Give us the tools, and we will finish the job.” Roosevelt signed Lend-Lease into law on May 11, 1941. The primary recipient was Britain. Churchill later called Lend-Lease “the most unsordid act in the whole of recorded history.”
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In his year’s end fireside chat on December 29, 1940, Roosevelt urged American industry to join in a mammoth national program to build weapons for the world’s democracies to fight the evil posed by the Axis powers of Germany, Italy, and Japan. He warned, “Never before since Jamestown and Plymouth Rock has our American civilization been in such danger as now.” Then he made his pitch: “We must have more ships, more guns, more planes—more of everything. And this can be accomplished only if we discard the notion of business as usual. We must be the great arsenal of democracy.”
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After the legislation was enacted, the Reichsbank’s Emil Puhl was in Basel for a monthly meeting of the Bank for International Settlements. He stopped in at Thomas McKittrick’s office and asked, “What does this Lend-Lease mean? We don’t understand it.”

McKittrick explained how the new policy worked and added, “We’re getting our industrial organization in shape for our entry into the war.”

Puhl’s face dropped so dramatically that McKittrick thought he was going to faint. Finally the German muttered, “My God. If you’re right, we’ve lost the war.”
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Philippe Pétain’s new French government ruled only forty percent of the country, while the Germans occupied the rest, including Paris. The capital of the rump French state was the small provincial town of Vichy, while the French central bank’s headquarters was located forty-five miles away in Clermont-Ferrand. Initially, it was uncertain who had authority over France’s institutions. The Nazi part of the country was clearly under the Wehrmacht’s boot, but Pétain’s authority in Vichy was questionable because it was not known whether the French public or civil servants would answer to his new regime.

It was also not clear to whom France’s far-flung empire answered. Pétain appointed Admiral George Robert High Commissioner of the French Antilles, and he technically had authority over the French gold in Martinique. The American and British navies, though, had battleships just off shore to make sure it didn’t go anywhere. An important part of the French central bank’s staff now worked outside the country, and no one knew their future. French bank officials working abroad eventually set up an informal group that dealt with the institution’s international issues independent of mainland France. General Charles de Gaulle, who was operating out of London, put together an army that called itself the Free French, which continued the fight against Germany. Thanks to British help, it began gathering strength.

The Bank of France’s staff was proud of their heroic efforts under difficult circumstances, but they learned a few horror stories about things that had gone badly wrong during the evacuation. Bags of gold had been left on railroad platforms. Two officials from the bank’s office in Bayonne simply showed up with six bags of gold, eighty-eight sacks of paper currency, and 130 containers of coins. How many more cases were there like that? The ship
Clairvoyant
had arrived with just one ton of gold. Fortunately and almost miraculously, all the gold ships from Brest and Lorient made it safely to Casablanca and under orders had gone on to Dakar.

Bank officials now also had time to investigate how much gold had been lost or stolen along the way. They learned to their dismay that a case of gold weighing a total of 110 pounds had fallen into the harbor in Brest during the loading. Six bags of coins had also seemingly been lost. A few sacks had broken open during transport, and 166 gold pieces were stolen on the
El Kantara
, although the perpetrators were later caught. The
Ville d’Alger
lost at least 10 sacks, and a case was missing from the
Ville d’Oran
. In June 1941, the bank finally admitted that nearly a half-ton had been lost during the evacuation. Given the massive amount that was handled in chaotic circumstances, the whole operation was a remarkable achievement. On June 28, Moreton received a message from the French Admiralty telling him that officials had finished an inventory of the gold that had arrived in Dakar. It weighed in at 1,097 tons.
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On July 3, Charles Moreton met with Admiral Ollive, who said that the French Admiralty had warned him about the danger of a British attack on the ships in Dakar. The French navy had decided to move all the gold as soon as possible to a safer inland location. The bank’s René Gontier, who had arrived from Brest on the
El Djezaïr
, had already left for Dakar to monitor the transfer, but he needed some help. Ollive asked Moreton to assist him, offering to get him there overland by car and plane.
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French naval intelligence was correct, and at almost the same time as the two Frenchmen were discussing their next moves, a British naval task force bombed the French fleet anchored at Mers-el-Kébir on the Mediterranean coast of French Algeria. At the time, much of the surviving French fleet had been docked there. The attack resulted in the deaths of 1,297 French servicemen. A battleship was sunk and five other vessels were badly damaged. Churchill had told the French that he was worried about their fleet ending up in the hands of the Germans, although Admiral François Darlan had given his personal assurance that would never happen. He said that if necessary, he would send it to Canada. Churchill, though, didn’t trust the admiral or perhaps wanted to make a political point by showing that the British lion could still roar. Cordell Hull, the American Secretary of State, later had a long discussion with the prime minister about the event and wrote in his memoirs, “Since many people throughout the world believed that Britain was about to surrender, he (Churchill) wanted by this action to show that she still meant to fight.”
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The attack was not Britain’s finest hour.

At 3:00 in the morning of July 5, a military car picked up Moreton at his hotel and took him seventy miles to Port Lyautey near Rabat in Morocco. The following morning, the banker had a five-hour car ride to a small military outpost, where he picked up another vehicle that took him to a second military camp. He reached there at 7:00 the next morning. Then he boarded a seaplane already carrying fourteen men. It had just reached cruising speed, when a British aircraft attacked it, but then departed. After that close call, Moreton’s pilot told his passengers that he was not sure he had enough fuel to make the trip. The plane eventually landed after eleven hours in the air at Port Etienne in Mauritania, where everyone spent the night. The brave travelers left the next morning on a treetop flight that rarely rose above 1,000 feet and finally landed in Dakar at 4:30 in the afternoon.
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After Moreton arrived, he went immediately to the ships and helped Gontier and the others finish that day’s work moving the gold. The French military was taking it off the ships in the port and moving it by train to a garrison in the town of Thiès forty miles inland. The bullion had started arriving on July 4. The navy had wanted to unload the five ships at the same time, but Gontier insisted that for security reasons they handle only one vessel at a time. Troops started with the
El Kantara
and then unloaded the
Victor Schoelcher
. The
Ville d’Alger
was handled last. Moving heavy cases in the middle of summer in tropical Africa was difficult, and the men could not work more than eight hours on a shift. While having dinner aboard the ship, an officer gave Moreton five 20 franc gold coins that had fallen out of a ripped sack somewhere along the way.
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The French central bank gold was now spread far and wide around the world. The largest amount, 735.7 tons, was in Dakar. In addition there were 476.5 tons at the New York Federal Reserve, 345.5 tons at the Canadian National Bank in Ottawa, 258.1 tons at the Bank of England in London, 254.2 in Martinique, and 10.4 tons in Casablanca. The French had rescued a total of 2,080.4 tons from the Germans.
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On the morning of July 8, Moreton and Gontier left in a military vehicle for Thiès to check out the final destination for the African gold. The heat was stifling, but they amused themselves watching monkeys run alongside their car. The mosquitoes and ants were not as much fun. Never far from their thoughts was the possibility of another British attack. When they arrived at the outpost, the two men saw that French soldiers had strung barbed wire around a large brick bunker where the gold was stored. Workers were still moving crates into the building. Moreton was intrigued by what he saw, and later wrote in a report on his trip: “Negroes of the most beautiful black that I had ever seen carried the boxes. They were completely nude except for a very small string between their buttocks.”
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Security was tight. It took two keys and two people to open the bunker’s main door. The last gold train arrived just after the bank officials. When everything was unpacked and counted, there were 20,576 cases from four countries: 14,424 French, 1,208 Polish, and 4,944 Belgian and Luxembourg.
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That same night, Moreton received a message telling him to return the next morning to Casablanca and report to Admiral Ollive. Twelve hours later, he took off on the long flight back to Casablanca. There was only one stop along the way, and the trip soon became monotonous. There was nothing but sand and then more sand to see below until the plane reached the Atlas Mountains. When he landed, Moreton had another confrontation with a French customs agent because he was still carrying the money he had been given weeks earlier, when he thought he might be going to Canada. He had no proof he was legally bringing it into the country. Finally, though, the official let him go.

During his next two months in Morocco, Moreton handled routine central bank business and handled non-gold shipments to the French National Bank headquarters in Clermont-Ferrand. He also sent five tons of gold to Lisbon to settle a debt of the French Foreign Ministry. Finally on September 30, Moreton left Casablanca by train on a four-day trip to Algiers, where he picked up the passenger ship
Lamoricière
, which took him to Marseilles. A week later, he arrived in Clermont-Ferrand. After four-and-a-half months of adventures unknown to the average bank civil servant, Charles Moreton’s war had ended. It was the kind of adventure that few bankers ever had, and he later wrote a long account of it for his grandchildren.
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Three articles in the Compiègne armistice agreement signed in June 1940 dealt with economic issues. The most important set out the procedure of French payments to Germany for the occupying forces. That amounted to 20 million Reichsmark ($4.8 million) per day. The Germans ruled that it was perfectly legal under Article 52 of the 1907 Hague Conventions Governing War.

The armistice also set up the Wiesbaden Commission to handle occupation issues. General Otto von Stülpnagel, a German officer, and General Charles Huntziger, from France, initially headed it. There were eventually two groups, one dealing with military issues and the other for economic questions. Hans Richard Hemmen, a career German diplomat who specialized in economic affairs and the newly appointed German Plenipotentiary Minister in France, headed the economic section. The French joked that he meant trouble since his name in their language means “to impede.” His counterpart on the French side was Yves Bréart de Boisanger, the new head of the French Central Bank. The economic commission initially met in Wiesbaden, Germany, but later also had sessions in Paris.
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