Switzerland: we know it for its watches, skiing, and incredible chocolate, but even more so for the Swiss banking industry, unique in all the world for its secrecy and neutrality. Neutrality and secrecy do have a dark side, for, during World War 2, Germany used the Swiss banks to further their war effort and since the war ended, we’ve uncovered the reality of just how greedy the biggest Swiss banking institutions actually were. Nazi gold is gold possessed by Nazi Germany.
Did the Swiss help the Germans?
While the Swiss never had the expansionist ambitions of the other great nations of Europe, like France, the UK, and Germany, they did have a very keen sense for economic power, which is why they steadily developed a banking secrecy act that protected the anonymity of people using their banks.
In their geopolitical situation, this made a lot of sense since the Swiss also practiced a policy of armed neutrality to protect themselves and their banks. This means avoiding military alliances and never entering the conflicts of other nations.
It is a testament to their persistence that Switzerland holds the oldest neutrality policy in the world, with the last war they participated in being the one that saw the defeat of Napoleon. So, when World War 2 saw the Swiss surrounded by Axis and Allied countries, they took very serious steps to avoid being pulled in, at one time mobilizing almost a million soldiers to defend themselves from being invaded.
The Swiss prevented both American, British, and German planes from flying through their airspace or traversing their country and anybody not following these rules found themselves in Swiss internment camps.
At the time, the Swiss were praised for their neutral position in the war, but they also received a lot of bad press about their neutral stances in banking and business. They were willing to continue accepting gold and to do business with all countries, including Nazi Germany.
How much gold was taken from the Jews?
Now, after the reparations for World War 1, Germany was struggling to pay its debts; that is, until, Adolf Hitler rose to power in 1933 and promptly canceled the repayments. Hitler’s plan was to start organized looting, both of the private individuals and the countries that he invaded, a task that he handed over to a special force designed for that purpose.
Supposedly, the group was to collect art and valuables in order to preserve them, intending to return whatever was taken to the owners after the war was over. And yet the immense value of the stolen goods proved way too tempting, and so the plunder was funneled off to help the war effort.
It’s estimated that over $550 million worth of gold was plundered from the banking reserves of countries like Belgium, the Netherlands, and Austria, all in an effort to fund the war. This number is hard to finalize because, besides gold reserves, there was also looting of silver, collectibles, and fine art.
Now, just having valuable art is of no use if you can’t actually buy anything with it, so In order to actually use this gold, Hitler had to get creative. He began sending shipments to the neutral powers that still did business with Nazi Germany, the largest of which was Switzerland.
In 1940, Hitler became even more aggressive, changing his strategy from looting banks to legalizing the outright appropriation of the property of the Jewish people, especially their gold. Now, keep in mind that none of these actions were hidden: the world was pretty aware of the harsh treatment of the Jews. And yet, despite the blatant way Nazi Germany acted, Switzerland, in an effort to remain neutral, continued buying the looted Nazi Gold.
The Swiss stubbornly resisted any claim they were acting favorably towards the Nazis, but the reality was very different. Swiss companies like Nestle ignored the atrocities and continued operating as if everything was business-as-usual.
Of course, there was plenty of actual Nazi sympathy going on in Switzerland at the time. The two Swiss companies that would eventually form the pharmaceutical titan Novartis completely replaced their Jewish board members with an Aryan German board when Hitler rose to power in 1933.
The official border policy of Switzerland during this time was to actively turn away any Jews from the border that were fleeing the Nazi regime.
In 1938, the Swiss Chief of Police even requested that all Jewish German passports be marked with a “J”, so they could easily deny entry to the Jewish people, all the while hoarding their stolen gold. Now to be fair, most Swiss citizens at the time had no idea of these connections to the Nazis, but the businessman, bankers, and politicians could claim no ignorance.
Luckily for them, the world was too busy battling with Hitler’s forces to take any action against Switzerland, but after the war ended in 1945, the global attention turned towards those renowned private vaults in the Swiss Alps. Allied forces, acting on behalf of the hundreds of thousands of Jewish victims, demanded the Swiss banks turn over the gold they had been storing away.
Where is the German gold now?
The banks resisted at first, of course, but an international agreement forced them to hand over $60 million to the victims and their families a year after the war was won. In 1962, a law was made that forced banks to identify the dormant accounts they had and to reclaim that money. That law, however, only saw a further $15 million recovered and paid back.
In 1996, the World Jewish Council formed a special committee to uncover the true scope of the actions of Swiss Banks and after 2 years of investigation, the findings were staggering.
The Nazis had smuggled at least 100 tons of gold through Switzerland, but only 4 tons had ever been recovered and paid back.
The WJC sued the banks and won a lawsuit that saw several Swiss banks and companies contribute to a settlement of over $1.25 billion to disperse to the victims of the Holocaust around the world, who numbered at just under half a million at the time. Several banks like Credit Suisse and UBS, as well as Nestle, and other smaller companies participated in that settlement.
UBS also made a donation of $40 million to the International Red Cross as a token compensation for the unclaimed accounts. Of course, there are many who still aren’t happy with the way the Swiss banks handled the after-war repayments.
The banks; they claim, haven’t reclaimed the accounts and deposit boxes belonging to the families who were entirely wiped out. Unfortunately, there is no acceptable figure of how much unrecovered Nazi gold still lingers in the vaults today, stolen from families that no longer exist.
Neutrality, as Switzerland learned, has its price, and yet at the end of the day, it seems to have been a small one.
To this day, Swiss banks safeguard over 25% of the world’s cross-border assets and currently hold $6.5 trillion in assets.