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Nazi gold – The history of Gold

nazi gold

An ingot of goldis part of a collection of gold stolen by the nazis

At their peak in 1949, the United States held half of all gold ever mined in history, almost 22000 tons.  Almost two decades earlier, as the world was struggling to drag itself out of the great depression, a new crisis was looming, a crisis that threatened the whole of civilisation.  Adolf Hitler came into power in a Germany that was still reeling from defeat in the First World War with its gold reserves empty and its currency valueless.  Having promised to return his country to glory, Hitler began to rebuild the Germanic Empire and for this he needed gold.  It is important to understand that in 1939 Germany’s gold reserves were not very large, worth around 200 million dollars and already allocated, mainly for constructing German war machines.  Furthermore, the country could no longer buy products manufactured abroad nor basic raw materials because of the low value of the Reichsmark.  The only remaining alternative was gold.

And so, little by little whilst moving through Europe, the German Army plundered the gold reserves of the nations they invaded.  In 1938 they took 30 million dollars worth of gold from Czechoslovakia and a further 85 million dollars from Poland.  In reality it all started with the Anschluss ( union of Austria and Germany  forced by Hitler in 1938) where the Austrians’ gold was taken then in 1939 they stole the Czech reserves before occupying Czechoslovakia.  At the beginning of the war, each time they took control of a country they plundered the gold.

Most of Hitler’s spoils were stored in the Reichsbank’s vaults in Berlin.  But the tide began to turn for this Reich which should have lasted a thousand years.  The intensive bombing carried out day and night by allied forces systematically destroyed Hitler’s war machine by hitting it right at its heart, that is to say by destroying industrial infrastructures themselves built from stolen gold.

On the 3rd of February 1945 more than 900 allied bombers unleashed nearly 23000 tons of explosives on Berlin.  The city was reduced to ashes and ruins and the Reichsbank was practically destroyed.  In February 1945, what was left of the Reichsbank’s gold reserves was probably loaded onto trucks by prisoners, probably French, and taken to Merkers in Southern Germany.

In the Spring of 1945, General Patton’s third army advanced on Germany like a juggernaut.  On the 4th of April it entered the town of Merkers.  Rumours were circulating about a secret shipment that had recently arrived from Berlin that had been concealed in a nearby potassium mine.  Out of sheer curiosity, several GI’s decided to go and investigate.  On leaving the elevator, eight hundred metres below, they came face to face with a huge steel door.  They sent a message to Patton, what should we do? Patton’s response: “Break down the door.”  As someone was just about ready to blow open the door, some genius realised that half a stick of dynamite would be enough to blow up the wall just next to it without having to worry about the vault.

In the room lay more than 7000 neatly stacked bags.  What the Americans found inside was so incredible that three of the most powerful men in the world had to see it with their own eyes.  George Patton, his superior Bradley as well as Eisenhower, Supreme Commander of the allied forces in Europe.  It was an extraordinary sight.  More than 8000 gold bars in the form of ingots, 2000 bags of gold coins: Reichsmarks, English sovereigns, Napoleons, American 20 dollar gold coins and hundreds of bags of gold from other countries.  Heading towards the back of the mine, Patton discovered a more sinister haul.

General Dwight D.Merkers sm

Eisenhower and Bradley examine suitcases of silverware, gold rings and teeth

The back of the room was full of goods stolen from victims of the concentration camps.  There was a pile of suitcases full of silverware, gold wedding rings and gold teeth.  Each bag, box or trunk had been carefully inventoried and stamped with a label marked Melmer.  Melmer was the German SS officer who went back and forth from the concentration camps to collect all he could such as gold teeth and gold wedding rings in order to take them to Berlin.  During the war he carried out 77 deliveries containing the fruits of his plunder.

Assets taken by Melmer amounted to more than one million US dollars.  Today this sum would exceed one billion, but this discovery was only the tip of the iceberg.  At the end of the war, the Germans had plundered around 580 million dollars worth of gold from the occupied countries.  Out of that, we estimate that 450 million dollars worth of gold was sent to Switzerland and other countries during the war.

In 1946, this gold was entrusted to an international commission in charge of calculating damages for the victims of the Holocaust.  The surplus was returned to an allied commission and redistributed to the nations from which it was stolen.  Europe was devastated and recovered painfully from the Second World War.  The United States became the richest country in history.  To reconstruct their economies, nations torn apart by war were forced to buy dollars.  Their method of payment remained gold.  As a result the United States gold reserves soared.

The largest quantity of this gold reserve is stored five levels below Manhattan in the Federal Reserve’s vaults.  At the time,  probably one quarter or one third of all gold extracted from mines could be found underneath the basements of Manhattan.  (read our article : the Federal Gold Reserve in New York)

With such a large quantity of gold, the dollar became the strongest currency in the world.  Countries settled their debts in dollars and governments could exchange their dollars for gold.  Following the example of the Besant and the Ducat, the dollar is the coldest hardest form of cash.

Maurice Hall

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"For a mountaineer, the important things are the effort, the posture and the muscles. The rope that holds him serves no purpose when everything works but it gives him a sense of security. In the same way, all gold does is ensure confidence; it's a safe haven."