When The Bank of England traded with Nazi Germany

The Bank of England allegedly sold Nazi gold through the Bank of International Settlements (BIS) to fund German war effort during World War II

Karthick Nambi
Jun 17, 2020 · 6 min read
BIS headquarters in Basel.Source-BIS.org

The British parliament was on an uproar due to a revelation by one of its members.

MP George Strauss posed a query to British Prime Minister Neville Chamberlain on the alleged involvement of the Bank of England and the Nazi government. The question was simple “Is it true the national treasure of Czechoslovakia is being given to Germany.”

For which the prime minister lied as “It is not.” The Bank of England’s alleged involvement in helping the Nazi government came to light due to recently declassified documents. These transactions happened via a bank not known to many as the Bank for International Settlement or BIS.

The Formation of the BIS:

Versailles Treaty.Source-Wikipedia

After the end of World War I, the victories conveyed in Versailles. They drafted the monetary losses that needed to be paid by Germany due to the war.

The repatriations were huge, equivalent to one-third of the world’s gold reserve. The war devastated the German economy, so the allied nations came up with an idea.

The central banks of England, Italy, Spain, Germany, the United States, and Japan came together to form the Bank for International Settlement or BIS. The countries contributed 500 million dollars to the bank to revamp the German economy. The investors will receive returns on the investment as a yearly payout. Germany will pay its repatriation to the BIS, which will yield interest to the founders.

A plan was formulated under the Young Plan to restore the German economy. BIS was headed and staffed by the member countries. A headquarters in Basel, the bank received special immunity from the Swiss government.

The BIS was probably the only location in World War II where Germans, French, Japanese, British, and Americans worked together throughout World War II.The critical clause in the formation was that the BIS would not be closed even in case of another war, which was a grave mistake.

In theory, the BIS can trade with Allied and Axis power, but in reality, the BIS business was mostly with Axis power. During the peak of World War II, German national bank Reichsbank used the BIS to launder the looted gold from other European nations into Swiss Francs.

Czech Gold Loot:

Nazi gold loot . Source-Wikipedia

As the German war machine mowed over European countries, tensions brewed up.

The Munich Agreement was signed to appease German expansionism with an offer to occupy the Sudetenland region in Czechoslovakia. Hitler threw the deal out of the window and annexed the entire Czech.

The first aim of the German forces when it occupies a country was to transfer the country’s gold reserve to the Reichsbank in Berlin. The Reichsbank was the central bank of Germany, which acted as the engine for the German war machine.

Looted gold from occupied countries, personal properties of holocaust victims, and even their gold teeth fillings from concentration camps reached the vaults of theReichsbank. The Reichsbank will melt them and seal them with a pre-World War II era year and sell it to Swiss banks and BIS for Swiss francs.

With fear of an imminent German invasion, the Czech central bank transferred 48 million dollars worth of gold reserve to the BIS. After the Czech occupation, the Nazi German government requested the BIS to transfer the gold to the Reichsbank account.

Ideally, the the BIS should have rejected the request as its extortion. Still, BIS went ahead and moved the gold to the Reichsbank account, which was a disaster.

Political situation in England:

Neville Chamberlain with Hitler-Source-Wikipedia

The political scenario in 1938 was lucid. There were Nazi sympathizers in high offices in England.

Even the royal family has its fair share of interest in Nazi ideology. Winston Churchill warned British Prime minister Neville Chamberlain on the consequences on Britain’s soft corner to Hitler.

Chamberlain brushed aside the criticism and made peace with Hitler and made a new agreement whenever Germany showed aggression. The Governor of the Bank of England Montagu Norman was also a pro- Hitler man.

When the request came for the transfer of gold to the Reichsbank, he approved it. When questioned on the gold transfer prime minister, Chamberlain coined the phrase “a faraway country of which we know little.”

Winston Churchill was outraged on the cooperation between the Bank of England and the Reichsbank. The British representatives at the BIS were also sympathetic to the Nazi government.

Belgium Gold Loot:

Belgium gold route.Source-Wikipedia

The Czech gold, which was with the Reichsbank, was sent to the central banks of England, Netherlands, and Belgium, who happily converted it to international currency to fund the German war effort. The BIS was also involved in the infamous transfer of the Belgium gold reserve. Belgium feared a German invasion and gave one-third of its gold reserve to France.

When Germany invaded France, Belgium requested France to send the gold to the USA, but France sent it to an East African town of Dakar and then to central Africa.

After repeated requests from Nazi Germany, Vichy France transferred the gold to Basel, where the BIS and other Swiss banks converted them into money.

Aftermath:

Thomas Harrington McKittrick.Source-Wikipedia

After the Czech gold fiasco, the BIS got a new director Thomas Harrington McKittrick who took the collaboration between the BIS and the Reichsbank to the next level.

The BIS converted German looted gold on a large scale into international currency and made the German war effort run its course. None of the BIS bank officials faced judicial trials for wartime crimes.

They argued that its the responsibility of the Reichsbank to provide BIS with gold procured from legitimate ways. The BIS officials knew the gold reserve of Germany and the gold loot in the occupied zone, which increased the German gold reserve.

After World War II, a tripartite commission was set up in 1946 to distribute the looted gold back to the respective countries. Out of 12 tons of gold received by the BIS and Swiss banks from the Reichsbank, 3.7 tons seems illegitimate.

For some bankers, war is a way to do the business even at the cost of human life. The BIS’s sole purpose in World War II was war profiteering when millions of people died.

When a reported asked the spokesperson for the Bank of Portugal whether the Nazi gold is from Jews, he replied, “Gold has no race.”

Source: Hitler’s Secret Bankers-Adam Lebor

Lessons from History

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Karthick Nambi

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A human with interest in history and technology

Lessons from History

Lessons from History is a platform for writers who share ideas and inspirational stories from world history. The objective is to promote history on Medium and demonstrate the value of historical writing.

Karthick Nambi

Written by

A human with interest in history and technology

Lessons from History

Lessons from History is a platform for writers who share ideas and inspirational stories from world history. The objective is to promote history on Medium and demonstrate the value of historical writing.

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