Today we are going to explore a set of unusual historical events that continues to have repercussions. These events resurface from time to time on the front pages of news agencies and news providers when they run out of current debacles and must get a hold of and oldie but a goodie: Nazi stolen treasure.

A QUICK BACKGROUND

Throughout WWII and the preceding years, Hitler made the determination that "enemies of the state" shall "one way or another" fund the Nazi war machine and the "new-and-improved" Nazi culture which was to be free from "degenerate art". This in practice meant quite simply that any and all economic valuables (including artistic) of any and all people that would fall under the Nazi regime would be extracted to its maximum. And yes, this included slave forced labour and body parts.

HISTORY BEGINS

Many Germans who understood what the Nazi rise to power actually meant, decided to take precautions and made use of Swiss banks to hide their assets from Nazi expropriations even under the real threat of severe punishment if discovered. Among these people there were anti-Nazi industrialists, political opposers and other wealthy families, many of them Jews. This is quite unsurprisingly. However, what is commonly forgotten is that these people created voluntary and valid agreements with Swiss banks that run against valid German laws. These contracts were indeed valid since Switzerland had no contractual obligations with Germany to disallow such deposits. Yet, from the Nazi's morality point of view it was "bad" alas from depositor's point of view this was "good".

At the same time, many German people were simply blackmailed to go to Switzerland and deposit their assets into high-level Nazi official's accounts. Swiss banks obliged. Again, these deposits (contracts) were valid since Switzerland had no legal authority to intervene in cases of blackmail beyond its borders. Yet, from the current morality's point of view, this was "bad" however according to the Nazi's morality this was "good".

A CLOSE RELATIONSHIP

Swiss banks had a very close relationship with Germany many years before WWII. This was so because in the 1920's German people felt threatened by the rise of Bolshevism in Germany and tended to deposit their assets in Switzerland for protection. This was, of course, "good" from their point of view and "bad" from communist's point of view but, we must again remember, it produced strictly valid contractual relationships between Swiss banks and the depositors.

At the same time, Swiss banks tended to provide larger loans to Germany than to other countries. Again, these loans were perfectly valid since they were made with the legal German authority, i.e. the Nazis. We must remember that Nazis' rise to power (however bloody may have been) was not illegal at all (Hitler was elected). Everything that Nazis did at the country level was legal according to German laws. According to historic revisionists such acts constituted immoral acts since Swiss loans enabled Nazis to build their war machine thus enabling WWII. Yet, according to Nazis these loans were vital to the wellbeing of the German nation. Yet according to facts, Swiss banks dealt strictly with valid contracts.

THE NEED FOR HARD CURRENCY

Hitler needed hard currency because his war machine needed raw materials and supplies that could only be acquired in countries outside his sphere of influence. These countries would not accept Reichmarks but would accept other hard currency such as British pounds or gold / silver.

This triggered a series of events destined to provide Hitler with the maximum amount of such currencies. We will briefly review such events in so far they concern Switzerland.

THE ART PIECE

Nazis also had a master plan for world art at the highest government level (i.e. legal). Hitler himself planned The Museum of European Art which was supposed to be built in Linz. To fill this museum, Hitler planned to grab non-degenerate art from all his military conquests. Again, this was all legal under German law.

Also, Nazis were fully aware of the hard currency that art works commanded in the open market. When they arrived to Paris one of the first things they did was to plunder the most important art repositories in that city and hence in the world. Some of the art was sent to Berlin but the "degenerate" art was sent to Switzerland to be sold for hard currency.

In Switzerland many art dealers cooperated with this scheme through contractual obligations. However, we need to point out that the art pieces that said dealers received they did so from legal German officials acting in their capacity as representatives of the German government. As a matter of fact art pieces were transported into Switzerland in official German diplomatic pouches. The seizure, transportation and selling of said art was strictly legal under German law. In other words, Swiss art dealers had valid contracts to sell this art. They knew or could have known what the Germans did, but they had no contractual obligations whatsoever with the previous owners of said art. Furthermore, Swiss law stating that trading in stolen art pieces was punishable, did not apply in this case because technically speaking the art was not stolen but simply seized through legal (German) means.

Again, historical revisionists, religious leaders and simply people often misunderstand these acts and believe that Swiss dealers should have somehow turn down the deal. But strangely enough, they never provide a legal reason. Sure, they have plenty of moral and ethical reasons but never a legal one. However the point is that if there were no legal reasons then Swiss dealers where not obligated to act against their own best interest. Their acting in this manner may have been "bad" for these critics, but it was "vital" for the German government.

THE GOLD PIECE

At that time most countries were on the pseudo-gold-standard and this meant that they had to store a sizeable amount of physical gold. The simplest way to acquire gold was to plunder the gold reserves of Central Banks invaded by the Nazis. Nazis did exactly that. Again, this plunder was entirely legal under German law.

The second method the Nazis used to obtain gold was by extracting wealth from Jewish, Communist, Religious and other communities in conquered territories, particularly the East. Some of the gold was received as payment for slave services rendered and some was literally taken from personal properties and even body parts. Nazis took a holistic approach to the economic exploitation of "untermensch" (or sub-humans). Again, we must remind the reader that however horrific these events may have been, they were strictly legal under German law (including racial laws).

All this gold was sent to the Reichsbank (the German Central Bank) to be smelted and converted into official German gold ingots.

The problem with this gold was that most countries were unwilling to be seen dealing with Germany, hence the Germans used Swiss banks as intermediaries. The countries that bought German gold were among others Vichy France, Turkey, Sweden, Spain, Portugal and Argentina. However, we again need to point out that all these transactions and contracts were strictly legal. Swiss banks were dealing with Germany's legal authorities who had the German legal right to do so.

THE GERMAN VIEW OF SWITZERLAND

To understand the Swiss position we need to study the country. Swiss territory was originally German territory. A large proportion of their people are German descendants who speak German and have German traditions. Switzerland had a sizeable trade volume with Germany and it shared a border with Germany. Hitler had already annexed the "Sudetenland" from Austria where German population lived with the excuse of "liberating" German people. Hitler had as many if no more excuses to do the same with Switzerland. Furthermore, Switzerland stands alone with no allies. It is a land-locked country with no natural resources whatsoever (if you discount mountains and lakes). They produce nothing. They farm nothing. Their army is tiny and they can only wage guerrilla war for so long. If Germany decided to attack the end was inevitable. As a matter of fact German High Command had a detailed and up-to-date plan for the full-scale invasion of Switzerland; it was called Operation Christmas Tree. The German invasion was a real and constant threat.

Eventually, Hitler decided that invading Switzerland would simply be too costly; besides he had already extracted from Switzerland most of what he wanted. Nevertheless, overt German threats to Switzerland continued up to the end of WWII.

One such threat happened in 1943 after the allied invasion of Europe. Hitler was afraid of Switzerland allowing the passage of allied troops through their territory. New plans for the invasion were drawn but then something unusual took place. Hitler's financial advisors convinced him to the contrary in part because they themselves had personal assets in Switzerland in violation of German law which would come to light should an invasion happened.

Note: please see the Glossary if you are unfamiliar with certain words.