Search Blog Posts

Sunday, February 2, 2014

Nazi Gold: The Merkers Mine Treasure, How the US Army Stiffed the Soviets

“ Patton told Bernstein that he was very glad Eisenhower was taking responsibility for the gold. Bernstein told him that he wanted to move the Merkers treasure to Frankfurt as quickly as possible and that under the Big Three arrangements at Yalta, the Merkers part of Germany would be taken over by the Russians after the war and that they certainly needed to get the treasure out of the area before the Russians got there.

I’m intrigued what the Russian feelings might have been(are). Noted there are 711 bags of American $20 gold coins (plus dozens of bags of numismatic gold) recovered. FDR confiscated this gold unlawfully by decree from Americans and redeemed it @$35 for US dollars with foreigners only, These coins likely originated from those illegal transactions.

Spring 1999, vol. 31, no. 1

By Greg Bradsher
Late on the evening of March 22, 1945, elements of Lt. Gen. George Patton's Third Army crossed the Rhine, and soon thereafter his whole army crossed the river and drove into the heart of Germany. Advancing northeast from Frankfurt, elements of the Third Army cut into the future Soviet Zone and advanced on Gotha. Just before noon on April 4, the village of Merkers fell to the Third Battalion of the 358th Infantry Regiment, Ninetieth Infantry Division, Third Army. During that day and the next the Ninetieth Infantry Division, with its command post at Keiselbach, consolidated its holdings in the Merkers area.(1)

During April 4 and 5, displaced persons in the vicinity interrogated by the Counter Intelligence Corps (CIC) personnel of the Ninetieth Infantry Division mentioned a recent movement of German Reichsbank gold from Berlin to the Wintershal AG's Kaiseroda potassium mine at Merkers. In all of these instances they quoted rumors, but none stated their own knowledge that gold was present in the mine. But just before noon on April 5, a member of Military Intelligence Team 404-G, attached to the 358th Infantry Regiment, who was in Bad Salzungen, about six miles from Merkers, interviewed French displaced persons who had worked in the mine at Merkers. They told him they had heard that gold had been stored in the mine. The information was passed on to the G-2 (intelligence section) of the Ninetieth Infantry Division, and orders were issued prohibiting all civilians from circulating in the area of the mine.(2)
Early the next morning, two military policemen guarding the road entering Keiselbach from Merkers saw two women approaching and promptly challenged and stopped them. Upon questioning, the women stated that they were French displaced persons. One of the women was pregnant and said she was being accompanied by the other to see a midwife in Keiselbach. After being questioned at the XII Corps Provost Marshal Office, they were driven back into Merkers. Upon entering Merkers, their driver saw the Kaiseroda mine and asked the women what sort of a mine it was. They said it was the mine in which the German gold reserve and valuable artworks had been deposited several weeks before and added that local civilians and displaced persons had been used for labor in unloading and storing the treasure in the mine.(3)

By noon on April 6 the women's story had reached Lt. Col. William A. Russell the Ninetieth Infantry Division's G-5 (civilian affairs) officer. He proceeded to the mine, where interviews with displaced persons in the area confirmed the women's story. They told him that works of art were also stored in the mine and that Dr. Paul Ortwin Rave, curator of the German State Museum in Berlin as well an assistant director of the National Galleries in Berlin, was present to care for the paintings. Russell then confronted mine officials with this information, and they stated they knew that gold and valuable art were stored in the mine and that other mines in the area were likewise used for storing valuables. Russell also questioned Werner Veick, the head cashier of the Reichsbank's Foreign Notes Department who was also at the mine, and Rave. The latter informed Russell that he was in Merkers to care for paintings stored in the mine. Veick indicated that the gold in the mine constituted the entire reserve of the Reichsbank in Berlin.(4)

With this evidence, Russell requested that the 712th Tank Battalion be ordered to proceed to Merkers to guard the entrances to the mine. Elements of the Ninetieth Division Military Police were also deployed about the entrances, and arrangements were made for generation of power and electricity at the mine so that the shafts could be entered for examination the next morning. Later that afternoon, after it was learned that there were at least five possible entrances to the mine at Merkers and that one tank battalion would not be sufficient to guard them all, Russell requested reinforcements. That evening Maj. Gen. Herbert L. Earnest, the Ninetieth Infantry Division's commanding general, called the 357th Infantry Regiment then at Leimbach and ordered that its First Battalion proceed to Merkers to relieve the Ninetieth Division Military Police and reinforce the 712th Tank Battalion.(5)

Russell also that afternoon told a XII Corps G-5 officer what was going on at the mine site, and word was passed on to the Corps Commander Maj. Gen. 
Manton S.Eddy. He immediately called Patton and informed him of the capture of the German gold reserves at Merkers. Patton, who had been burned on so many rumors, told him not to mention the capture of the gold until they definitely confirmed it.(6)

As the evening ended, with the anticipation of what they might find the next day, there must have been excitement. All involved knew that they had perhaps stumbled upon something important, something that political and military leaders expected to find somewhere in Germany--its gold reserves. The Allies, through their intelligence and diplomatic sources, knew that the Nazis had looted hundreds of millions of dollars worth of gold from many central banks of Europe, and despite sending much of it to neutral countries in payment for war goods, they still had a considerable quantity.(7) If, indeed, they had captured the Reich's monetary reserve, the war might be ended sooner, as the Germans would be less able to procure essential war-making materials.

Throughout most of the war, the bulk of the German gold reserves was held at the Reichsbank in Berlin. In 1943, however, some gold bars were shipped to numerous branches of the Reichsbank. During late 1944 and early 1945, as American bombing of Berlin increased and the Allies pushed toward the city from the east and west, more of the gold reserve was dispersed to branch banks in central and southern Germany. Also, early in 1945, a large quantity of Reichsmarks were dispatched from Berlin to branch banks.(8)

The dispersal of Reichsbank assets went into full swing in February 1945. On February 3, 937 B-17 bombers of the Eighth Air Force dropped nearly twenty-three hundred tons of bombs on Berlin, causing the near demolition of the Reichsbank, including its presses for printing currency. Following the bombing, Walter Funk, president of the Reichsbank and Reich minister of economics, decided to send most of the gold reserves, worth some $238 million, and a large quantity of the monetary reserves to a mine at Merkers, about two hundred miles southwest of Berlin, for safekeeping. Space in that mine, like all of the other salt and potassium mines in Germany, had been requisitioned by the government because firms found it necessary to store materials and continue armament production underground because of the bombings.(9)

On February 11 most of the gold reserves, including gold brought back from the branch banks to Berlin for shipment to Merkers, currency reserves totaling a billion Reichsmarks bundled in one thousand bags, and a considerable quantity of foreign currency, were transported by rail to Merkers. Once the train reached Merkers, the treasure was unloaded and placed in a special vault area in the mine designated Room No. 8.(10)

In addition to the shipment to Merkers, it was decided to send a substantial quantity of currency and staff to the Reichsbank branch in Erfurt in early February. The currency and upwards of ten employees were sent packing to Erfurt. Among them were Veick and Otto Reimer, chief cashier in the Reichsmarks Department. Once there they began circulating money to other branch banks as well as sending some of it back to Berlin when the need arose. Currency was also taken out of the Merkers mine and redistributed to branch banks and to the Reichsbank in Berlin as needed.(11)

The Schutzstaffeln's (SS) Office for Economy and Administration, which operated the concentration camps, also wanted their loot held by the Reichsbank to be sent to Merkers for safekeeping. From August 26, 1942, until January 27, 1945, the SS made seventy-six deliveries to the Reichsbank of property seized from concentration camp victims. This stolen property was received for a holding account in the name of "Melmer," named for SS Capt. Bruno Melmer, who made most of the deliveries. Gold jewelry was sold abroad; gold of some fineness was sold either to the Prussian Mint or to Degussa, a large German industrial firm that engaged in the refinement of precious metals. Securities, foreign currency, and similar items were purchased by the Reichsbank. Much of the miscellaneous jewelry was sold through the Berlin Municipal Pawn Shop. Once the transactions took place, the proceeds were credited to the account of "Max Heiliger," codeword for Heinrich Himmler and his SS. By early 1945, much of the loot had been processed, but a significant amount still remained with the Reichsbank.(12)

The confiscated property on hand in March 1945 consisted of all kinds of gold and silver items ranging from dental work to cigarette cases, diamonds, gold and silver coins, foreign currencies, and gold and silver bars. The gold and silver bars were placed in 18 bags, and the remainder of the loot was placed in 189 suitcases, trunks, and boxes and, along with other items, were sent by rail to Merkers on March 18. The shipment was under the control of Albert Thoms, head of the Reichsbank's Precious Metals Department. Once the SS loot arrived, it was stored in Room No. 8 along with the gold and currency.(13)

To protect the nation's art treasures, the Reichminister for Education decided in March to ship them to mines for safekeeping. The first shipment took place on March 16, 1945, when forty-five cases of art from the Kaiser-Freiderichs Museum were shipped from Berlin to Ransbach, about nine miles from Merkers, for storage in a nearby mine. Rave, who had been sent with the shipment, found that the mine was unsuitable for a deposit, and therefore it was decided that subsequent shipments would go to Merkers. Between March 20 and March 31 the Germans transported one-fourth of the major holdings of fourteen of the principal Prussian state museums to Merkers. Rave was ordered to stay at Merkers and watch over the collection.(14) Finish reading extended report>>