Chasing Gold: The Incredible Story of How the Nazis Stole Europe's Bullion (59 page)

Morgenthau informed Roosevelt that he was working on a book about the German threat that he wanted to show him. The president’s reaction, which he relayed through Eleanor Roosevelt was, “Why a book now?” He later also asked the treasury secretary to delay publication.
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The president in early April 1945 left for an extended stay in Warm Springs, Georgia to recuperate from his travels. Morgenthau was anxious to make his case for a tough German policy directly to the president, so he traveled there to see his old friend in person. In his diary he wrote, “I was terribly shocked when I saw him, and I found that he had aged terrifically and looked haggard.” The treasury secretary made his pitch, and the president had a jovial talk. Roosevelt told some stories about Germans. He reminded the treasury secretary about a time when Germany’s Hjalmar Schacht cried about his poor country in the Oval Office. Morgenthau wasn’t interested in anecdotes, and said, “Look, Mr. President, I am going to fight hard, and this is what I am fighting for. A weak economy for Germany means that she will be weak politically, and she won’t be able to make another war.” FDR replied that he agreed with him “one hundred percent.”
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Franklin D. Roosevelt died the next afternoon.

By the beginning of 1945, the end of the Third Reich was near. The once famed Luftwaffe was history, and Hitler’s promised wonder weapons, the V-1 and V-2 guided missiles, or “flying bombs” as they were called, were too few in number and inaccurate to stop the British and American offensives on the western front or the Soviet one in the east. American, Soviet, and British planes relentlessly pounded Berlin. Even Joseph Goebbels, the German Minister for Propaganda and Enlightenment and the last true believer, recognized the war was over.
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On the morning of January 12, Soviet Marshal Georgi Zhukov, the hero of his country’s defense of Leningrad, launched the final offensive against the Third Reich from the east. His goal: Berlin. The Soviets had 6.7 million men under arms on the eastern front, twice as many as the beleaguered Germans.
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Fierce German resistance initially slowed Zhukov’s attack, but by early February the Soviets were at the Oder River, Germany’s eastern border and fifty miles from the capital.

A tempting target for Allied bombers was the Reichsbank building in the center of Berlin, where the Germans kept their gold. One of the city’s tallest structures, it stood out on the bank of the Spree River across from the Romanesque Berlin cathedral. Hitler had commissioned the structure in 1933 as an early edifice for his new Berlin. Famed Bauhaus architects such as Walter Gropius and Ludwig Mies van der Rohe entered the design competition, but Heinrich Wolff won. The massive structure of reinforced concrete covered with stone slabs had narrow windows and looked like a bunker. Hitler attended the groundbreaking in 1934, and the building went into service in 1940. It was considered virtually indestructible and a fitting home for Germany’s Fort Knox.

The Reichsbank headquarters was also an important target for Soviet forces attacking from the east. Lavrentiy Beria, the head of the secret police and Stalin’s closest aide, had assigned General Ivan Serov, his number-two man, to get to the gold at the Reichsbank. He was equal in rank to commanding military officers.
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In January 1945, Reichsbank President Walther Funk went to Hans Lammers, the head of the Reich Chancellery and Hitler’s gatekeeper, and asked to see the Führer to discuss moving Germany’s gold and the bank’s operations out of Berlin. A few days later, Funk received the reply that Hitler was opposed to that and also turned down a suggestion to move the central bank’s headquarters out of Berlin. Lammers said Hitler would tell him when it was time to do that.
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A massive attack on Berlin took place before noon on February 3, devastating the capital and the Reichsbank. Nearly a thousand U.S. B-17 bombers dropped thousands of bombs on the city, killing nearly three thousand Berliners and leaving 120,000 homeless.
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Large sections of the Reichsbank were now rubble, and the staff was forced to work in the cellar. The currency printer was destroyed, but the printing plates survived. Nonetheless, a severe currency shortage soon developed, causing the country’s already weak economy to slow down even more. The bank had to scramble to get paper money into circulation at its branch offices.

The bombing gave new urgency to protecting the Reichsbank’s gold. Funk returned to the Reich Chancellery that same day and this time insisted on seeing the Führer. Lammers let him. Funk explained the situation and said that his prime objective now was to continue to operate the country’s economy, which might be impossible if there were another bombing like that one. Hitler insisted that the bank headquarters remain in Berlin, but agreed that some of the staff could leave the capital.

Two days later, Funk wrote a memo to his staff telling them what was being done as a result of the “terror raid.” He said Hitler had told him, “No matter what the conditions, the Reichsbank must maintain for the whole of Germany a properly regularized banking system. That is essential for the prosecution of the war, the rationing of the population, and for the financing of the armed forces, state, and party.”
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Funk believed that the gold was essential not only to the continued financing of the war but also to provide the money for an eventual Fourth Reich that
SS
Boss Heinrich Himmler had proposed at the end of 1943. That was to be an
Alpenfestung
(Alpine Fortress) in the area that stretched from Bavaria to northern Italy. The plan was that Germany’s leaders would retreat to that mountainous area and wait for better times. Allied generals learned about the plan and took it very seriously.

After the war began going downhill in 1943, gold started to spill out into a variety of Nazi organizations. Each agency handled its bullion in its own way and to achieve its own goals. Foreign Minister Ribbentrop, who had obtained a major part of the stolen Italian bullion, used it to pay for diplomatic operations abroad and for foreign informants.
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Göring’s Four Year Plan and the
SS
also had their own stashes.

The vast majority of the gold, though, remained in the hands of the central bank. In July and August 1943, the Reichsbank had taken a minor step to decentralize it by shipping twenty tons to eighteen regional bank offices for safekeeping. Some of those, such as Stettin and Frankfur (Oder), were in the eastern part of Germany and were now in the path of the Soviet offensive.

Following the February 3 attack, the Reichsbank officials decided to send most of the remaining gold to Thuringia, a heavily forested area known as the green heart of Germany. It was in the center of the country just north of Bavaria. The central bank quickly delivered a shipment of gold to its office in Erfurt, the capital of Thuringia. Funk advocated moving the bank’s new headquarters there.
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The German economics ministry had already requisitioned the country’s salt mines so that they could be used for underground storage of valuable goods. The first shipment of state documents was sent to Thuringia in May 1944, and the following month, the state library in Berlin dispatched its most precious books, some dating back to the 1500s, to a mine there. By the spring of 1945, nearly two million books were stored and the library of the Prussian State Opera and the Library of Fine Arts were located in twenty-five depositories. The cities of Bremen, Lübeck, and Rostock stored public and private records in the village of Merkers, as did Henschel and Krupp, two major corporations that had strong ties to the Nazi war machine. At one point the Luftwaffe sent 40,000 bottles of liquor there to be used as a stimulant in case of military emergencies. After several incidents of workers getting drunk, however, the liquor was removed.
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Wintershall, Germany’s second largest chemical company after I.G. Farben, had several mines in Thuringia, including one named Kaiseroda in Merkers. Reichsbank officials selected that as the place to store both gold and currency because it was not only one of the largest mines but also had a stable humidity level, which would be important for safeguarding paper currency. Kaiseroda was located 2,000 feet underground and had 30 miles of tunnels, providing excellent protection from Allied bombs. Sitting in the middle of a green valley with hills in the distance, the plant looked like a small village, with a complex of red-brick buildings, bridges, and cobblestone streets. Its billowing smokestacks and giant elevator dominated the rural skyline.

The original plan was to evacuate only Reichsbank valuables, but officials from the Prussian state museums asked to safeguard some of its paintings and other artworks in the complex since it provided more protection than their own facilities. Eventually about one-quarter of the most important works of art from state museums, including engravings by Albrecht Dürer and paintings by Renoir, traveled along with the first shipment of gold. The paintings, often still in their frames, were put in wooden crates that sometimes held several priceless pieces. Eventually about a thousand items were shipped south.
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The Reichsbank staff packed up the gold and other valuables with as much care as possible under the wartime circumstances. Two gold bars were put into individual cloth bags, while gold coins went into their own containers. Bundles of German and foreign currency were put into small gunnysacks. Items were sent to various locations for handling, including gold and silver jewelry that
SS
guards had taken from concentration camp inmates, which had arrived too late to be sent to the Prussian state mint for smelting into bars.

On February 11, only eight days after the massive bombing that had devastated the Reichsbank building, a special gold train with twenty-two cars left Berlin. Dr. Witte, a member of the bank’s board of directors, and Albert Thoms, the head of its Precious Metals Department, accompanied the shipment. The train arrived in Merkers without any delay, but it took four days to unload and store it in the Kaiseroda mine. The valuables were put into a large storage room with a steel door that could be locked. The room was named simply “number eight.”
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Near the end of February, the Reichsbank closed its gold books in anticipation of the evacuation of the national treasury from Berlin. The closing balance for gold was $256 million.
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The end was near. A second Reichsbank train left Berlin on March 11, this time with only four cars. It carried about $2.5 million Reichsmark of bullion plus large amounts of foreign currency, including Norwegian kroners, Dutch guilders, French francs, and American dollars. Thoms again accompanied the shipment, and Reichsbank Director Frommknicht joined him. This time it took only two days at the mine to unload the smaller shipment.
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Thoms again returned to Berlin to pick up another shipment, but decided to return to Merkers with a truck, which would be more versatile than railroad cars. He left Berlin on March 23 and stopped briefly at Erfurt, but because the city was running out of food pushed on to Merkers. Also joining the Reichsbank group leaving Erfurt were Dr. Werner Veick, the head cashier of the Reichsbank’s Foreign Notes Department, Dr. Otto Reimer, the chief cashier of the Reichsmark Department in Berlin, and a bank employee whose job was to arrange transportation between Berlin and Merkers. The national shortage of currency was growing ever more acute, and the government could not even pay some soldiers in cash. The main job now was to move Reichsmark currency that had already been sent to Merkers back to the capital, so it could be distributed to regional offices. The bank’s previously efficient operation, along with the whole country, was sliding into chaos.
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Easter holiday is one of Germany’s most important holidays, lasting from Good Friday through Easter Monday. In 1945, it ran from March 30 to April 2. Even in wartime, Germans stopped for Easter, and only a few trains ran. The last gold shipment reached Merkers on April 3 at 4:00 in the morning.
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After spending only a few hours in Merkers, the transportation specialist from Berlin drove away from the Kaiseroda mine in a two-and-a-half-ton truck with 200 million Reichsmark in packages of hundred-mark bills plus an additional fifty or so packages of foreign currency. Before leaving, he explained that on his trip back to the capital he would stop at the regional Reichsbank offices in Erfurt, Halle, and Magdeburg to distribute currency.
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With the help of Polish POWs, German bank officials hauled out of the salt mine one thousand bags of currency that each contained one million Reichsmark. The plan was to load it all onto a railroad car in nearby Bad Salzungen and take it to Berlin. The Germans later learned that Allied bombers had destroyed a bridge the train was supposed to go over, closing another escape route. After working all day underground moving bags of paper money, Veick and Frommknicht were dead tired and decided to return to a casino where they were staying for the night. “We’ll have to see what tomorrow brings.”
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