Nazi Gold: The Real Story of How the World Plundered Jewish Treasures

When the Nazis came to power the most pressing issue was an unemployment rate of close to 30%. The economic management of the state was first given to respected banker Hjalmar Schacht. Under his guidance, a new economic policy to elevate the nation was drafted. One of the first actions was to destroy the trade unions and impose strict wage controls.

The government then expanded the money supply through massive deficit spending. However at the same time the government imposed a 4.5% interest rate ceiling, creating a massive shortage in borrowable funds. This was resolved by setting up a series of dummy companies that would pay for goods with bonds. The most famous of these was the MEFO company, and these bonds used as currency became known as mefo bills. While it was promised that these bonds could eventually be exchanged for real money, the repayment was put off until after the collapse of the Reich. These complicated maneuvers also helped conceal armament expenditures that violated the Treaty of Versailles.

According to economic theory, price control combined with a large increase in the money supply should have produced a large black market, but harsh penalties that saw violators sent to concentration camps or even shot prevented this development. Repressive measures also kept volatility low, reducing inflationary pressures. New policies also limited imports of consumer goods and focused on producing exports. International trade was greatly reduced remaining at about a third of 1929 levels throughout the Nazi period. Currency controls were extended, leading to a considerable overvaluation of the Reichsmark. These policies were successful in cutting unemployment dramatically.

Most industry was not nationalized, and businesses were still motivated by pursuing profits. However, industry was closely regulated with quotas and requirements to use domestic resources. These regulations were set by administrative committees composed of government and business officials. Competition was limited as major companies were organized into cartels through these administrative committees. Selective nationalization was used against businesses that failed to agree to these arrangements. The banks, which had been nationalized by Weimar, were returned to their owners and each administrative committee had a bank as member to finance the schemes.

While the strict state intervention into the economy and the massive rearmament policy led to full employment during the 1930s, real wages in Germany dropped by roughly 25% between 1933 and 1938. Trade unions were abolished, as well as collective bargaining and the right to strike. The right to quit also disappeared: Labor books were introduced in 1935, and required the consent of the previous employer in order to be hired for another job.

The German economy was transferred to the leadership of Hermann Göring when, on 18 October 1936, the German Reichstag announced the formation of a Four-Year Plan. The Nazi economic plan aimed to achieve a number of objectives. Under the leadership of Fritz Todt, a massive public works project, the Reichsarbeitsdienst, was started, rivaling Roosevelt's New Deal in both size and scope. It functioned as a military-like unit, its most notable achievements being the network of Autobahnen and, once the war started, the building of bunkers, underground facilities and entrenchments all over Europe.

Another part of the new German economy was massive rearmament, with the goal being to expand the 100,000-strong German Army into a force of millions. In comparison, a military buildup had also been a part of the New Deal (regarding the Navy) and Stalin's First Five Year Plan. The Four-Year Plan was discussed in the controversial Hossbach Memorandum, which provides the "minutes" from one of Hitler's briefings. Some use the Hossbach Memorandum to show that Hitler planned a war in Eastern Europe in the pursuit of Lebensraum, believing that the Western powers of the United Kingdom and France would not intervene, leaving him free to take over the USSR, the "natural enemy" of Germany. However, this intentionalist view is disputed.

Nevertheless, the war came and although the Four-Year Plan technically expired in 1940, Hermann Göring had built up a power base in the "Office of the Four-Year Plan" that effectively controlled all German economic and production matters by this point in time. In 1942, the growing burdens of the war and the death of Todt saw the economy move to a full war economy under Albert Speer.

Nazi Gold

'Nazi gold' refers to the assets in gold transferred by Nazi Germany to overseas banks during the Second World War. The regime maintained a policy of looting the assets of its victims to finance the war, collecting the looted assets in central depositories. The occasional transfer of gold in return for currency took place in collusion with many individual collaborative institutions, whose identities and the precise extent of transactions have been unclear.

Acquisition

The draining of Germany's gold and foreign exchange reserves would prevent the acquisition of war materiel, and the Nazi economy, focused on militarisation, could not afford to run dry of the means to procure foreign machinery and parts. Nonetheless, nearing the end of the 1930s, Germany's foreign reserves were unsustainably low; by 1939, Germany had defaulted upon its foreign loans and most of its trade relied upon command economy barter.

However, this trend towards autarkic conservation of foreign reserves hides a trend of expanding official reserves, which occurred as a result of looting of assets in recently-occupied Austria and Czechoslovakia, and Nazi-governed Danzig. It is thought that these three sources boosted German official gold reserves by US$71m between 1937 and 1939. To mask the acquisition, the Reichsbank understated its official reserves (in 1939, by $40m relative to the Bank of England's estimate).

During the war, Nazi Germany continued this practice, only on a larger scale. Germany expropriated $550m of gold from foreign governments, of which, $223m from Belgium and $193m from the Netherlands. This does not reflect the quantity stolen from private citizens or companies, which would necessarily inflate the figure.

Disposal

The present whereabouts of the Nazi gold that disappeared into European banking institutions in 1945 has been the subject of several books, conspiracy theories, and a civil suit brought in 2001 against the Vatican Bank, the Franciscan Order and other defendants.

The Swiss National Bank, the largest gold distribution centre in continental Europe even before the war, was the logical avenue by which Nazi Germany could dispose of its gold. During the war, the SNB received $440m of gold, of which $316m is estimated to have been looted.

Croatia

Among Nazi puppet regimes, the Ustaše-controlled Independent State of Croatia also maintained concentration camps and confiscated the assets of its victims in the campaign of ethnic cleansing to clear 'Greater Croatia' of Serbs, Roma, and Jews. Victims' assets were deposited in the Croatian treasury. In 1948, U.S. Army Intelligence reports confirmed that 2,400 kilograms of Croatian gold were moved from the Vatican City to one of the Vatican’s numbered Swiss bank accounts.

At the time of the collapse of the Independent State of Croatia in 1945, Ustaše agents were found at the British-occupied Austro-Swiss border with gold valued at 350 million Swiss Francs. Intelligence reports also suggest that more than 200 million Swiss francs were eventually transferred to Vatican City and the Istituto per le Opere di Religione (IOR) with the assistance of Roman Catholic clergy and the Franciscan Order. Such claims are denied by the IOR.

Nazi Gold: The Real Story of How the World Plundered Jewish Treasures