Senate Banking, Housing and Urban Affairs Committee

Hearing on the Swiss Banks and the 1946 Washington Accords

I. -- The men and women of Switzerland are a deeply civilized, peace loving, democratic people. During World War II and the years before, the overwhelming majority of them despised the Nazis. The Nazi Party of Switzerland never gained more than a ridiculous 1.5% of the vote. The ordinary Swiss people were deeply hostile to the mass murderers in Berlin. They hated Adolf Hitler and refused any dealings whatsoever with him and his croonies.

Unfortunately, this was not the case for some of the members of the ruling class, namely the directors of the Swiss National Bank, Board members of commercial banks and some members of the Swiss government.

II. -- In 1996, the shadows of the past began haunting the living. On December 13, 1996, the Swiss Parliament passed a law creating an International Commission of Independent Experts (among them Sybil Milton, Harold James and Saül Friedlaender). The law suspended bank secrecy for the period 1933 through 1945 and forbade the banks, insurance companies, etc. to destroy any document relating to this period. The Government promised to abide by the findings of the Commission and then to act according to them. As a Member of the Swiss Federal Parliament, I voted for this law. I still think that the strategy defined in December, 1996 was an act of courage and reason.

III. -- The International Commission of Independent Experts published its report on the question of laundering by Swiss banks of stolen Nazi gold on May 25, 1998. The Swiss Federal Government, by a decision of the same day, accepted the report and, in doing so, recognized the facts it reveals. I quote excerpts from the conclusions of the report (I have translated from the French version):

1. "During the Second World War, Switzerland was the principal exchange center for the gold coming from the territories dominated by the Third Reich. From the total sum of the gold sent by the Reichsbank abroad, 79 percent went to Switzerland. Of this 87 percent went to the Swiss National Bank (SNB) and 13 percent to the Swiss commercial banks. The gold sent by the Reichsbank to the Swiss National Bank totaled between 1.6 and 1.7 billion Swiss francs. The Swiss National Bank kept for its own account 1.2 billion Swiss francs. The rest was put into deposit accounts belonging to all the central banks and the BRI in Berne. A considerable part of the gold acquired by the SNB was resold to third countries, namely: Portugal, 452 million francs; Spain, 185 million; and, Romania 102 million francs. . . .



2. From the beginning of the War, the stolen gold constituted for the Third Reich an important source of foreign exchange. The expression "stolen gold" ("Raubgold" in German) defined the gold confiscated or stolen and the gold which the National Socialist Regime robbed from the victims of the policy of extermination. It includes also the reserves of the central banks of the countries under Nazi domination. After the War, the Tripartite Commission for the Restitution of Gold would not judge necessary to introduce the distinction between the different origins of stolen gold. . . .



3. During the first two years of the War, the Reichsbank effected the majority of the transactions of the gold in Switzerland through the commercial banks. In October 1941, the Swiss National Bank asked the Reich to become the only receiver. After this date, the commercial banks received gold only periodically from the Reichsbank. . . .



4. Already in 1941, members of the Directorate of the Swiss National Bank knew that Germany disposed of stolen gold. This situation was discussed during Board meetings. In 1942, the Board of the Swiss National Bank contemplated even the necessity to refund an important part of the yellow metal delivered by the Third Reich. . . .

IV. -- A very special gold dealing went on between the SS and the commercial banks. On his trial in Warsaw in March, 1947, Rudolf Ferdinand Höss, former Commander of the Auschwitz extermination camp, said:

"Gold teeth were wrenched from the corpses and their valuables and jewelry removed. The gold was melted down into bars and sent to the Reichsbank in Berlin. Articles of daily use were carted off to the Reich by the carload and distributed among the population there. The valuables were dispatched to Switzerland to be exchanged for foreign currency via a special department of the Reichsbank."⁽¹⁾

V. -- Why did the directorate of the Swiss National Bank and the private banks act as they did, knowingly laundering the stolen gold sent to them by the dictator from Berlin? The possible explanations are numerous. Was it the hope that the laundering of Hitler's stolen gold would dissuade the dictator from invading Switzerland? Was it greed? Political blindness? Or an immoral application of the principal of neutrality? Different historians have different answers.

During the conference of Yalta in the beginning of February, 1945, Churchill, Roosevelt and Stalin adopted the principle of confiscation of all the German assets deposited outside Germany. The confiscated assets were to serve as reparations. The distribution of these assets between the Western Allies and the Soviet Union was decided at the Potsdam Conference in 1945. The German assets existing in the three zones of Western occupation and the ones in the neutral countries of Western Europe should go to the Americans, the English and the French. The assets existing in the Soviet occupation zone and in Central Europe and East Europe, were attributed to the Soviet Union.

The Swiss gold-laundering machine remained in operation until April 6, 1945, three weeks before Hitler's suicide. Swiss supplies of arms, credits, and industrial goods were also maintained until Germany's final collapse.

VI. -- The reparation negotiations between Switzerland and the Western allies started in March, 1946.

The psychological climate in Washington was icy when the Swiss delegation, headed by Minister Walter Stucki and accompanied by William Rappard, a Genevese professor in international law, arrived there on March 11, 1946. The victorious allies strongly suspected that the Swiss were hoarding, either in their vaults at home or in frozen accounts in the United States, large amounts of foreign exchange which the Germans could at any time use to finance a third world war. The fourth Reich remained an allied nightmare, especially since Martin Bormann and other leading Nazis had disappeared. At that stage even Hitler's death was still a source of some speculation.

The main aims of the Washington talks were reparation payments and the confiscation of German assets. They dragged on for sixty-eight arduous days.

Although the Swiss had committed themselves to freezing German assets under the Currie Agreement, they were utterly opposed to handing them over. Their theory was: Switzerland had been neutral in the war and, like any neutral, had simply carried on business with all and sundry.

Finally, the Swiss delegation agreed to hand over 250 million Swiss francs as a global compensation.

VII. -- In the view of the historical facts put to light by the International Commission of Independent Experts and accepted by all parties, including the Swiss federal government, it appears that the Swiss negotiators of March through May, 1946 in Washington, D.C. did not say the truth. Switzerland received much more German assets, especially stolen gold, than it admitted.

My conclusion and that of others of my colleagues in Parliament is that the Swiss National Bank and the private banks should restitute without delay and in the quickest possible manner, the reparation sums which are still due.

I believe renegotiating the Washington Accord would be too complicated a procedure and take too long.

The surviving victims of the Shoa and their descendants, and all the other victims of the Nazi crimes, cannot wait. Rather, the Swiss National Bank and the commercial banks should restitute to the Tripartite Commission all the stolen Nazi gold that was not accounted for in the Washington Accord. The remaining technical problems ­ how to calculate the exchange rate between the dollar and the Swiss franc since 1946, the evolution of the gold price, the problem of the interest rates to be applied ­ can easily be solved.

VIII. -- To entertain the best of relations with the United States is a basic axiom of Switzerland's foreign policy. We should find a rapid solution to the question of Swiss reparation. This is in the evident interest of both our countries. The United States of America and Switzerland are two important financial powers. I hear rumors of an American boycott against Swiss banks, insurance companies and industrial companies. This has to be avoided.

IX. -- Today 5.5 billion people are living on Earth. 3.8 billion in one of the 122 so-called developing countries. Hundreds of millions of children, women and men live in hunger, misery and sickness. In 1998, according to the World Bank, Switzerland is the richest country on Earth (per capita income). Banking secrecy is playing a central role. Switzerland is a beautiful country without any raw materials. Its raw material is money, mostly foreign money from wherever it comes (flight capital from the developing countries; tax evasion money; corruption money, etc.).

The present act of reparation imposed by the misdeeds committed during World War II could be the first step for the necessary reform of certain fundamental aspects of the Swiss financial system.

Jean Ziegler

Member of the Swiss Federal Parliament,
Elected from Geneva
Member of the Foreign Relations Committee

Note:

1. Document cited by Jean Ziegler in The Swiss, The Gold And The Dead, Harcourt-Brace, New York, NY, 1998.

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