Testimony, House Committee on Banking and Financial Services
Subcommittee on Capital Markets, Securities and GSEs June 25,
l997
Gerhard L. Weinberg
First, let me make clear that I am not speaking for anyone but
myself, and
second, that what I have to say pertains to the time of World
War II and
the immediate postwar period, not to the present.
The Report referred to as the Eizenstat report seems to me to
be in
general very sound. Its finding that Swiss financial and trade
assistance
to Germany prolonged the war has been challenged but is undoubtedly
correct. The Germans were not buying cuckoo clocks so that every
German
soldier could be provided with one to wake him up when the time
came to
invade another neutral country. The Swiss francs acquired by
the Germans
through borrowing or sales of looted gold and other items were
utilized by
them for intelligence operations in Switzerland against the Allies
and
against Switzerland itself and, certainly primarily, for the purchase
of
those goods and services which the German leadership at the time
believed
would be of greatest assistance to them in fighting the war.
In their
calculations and allocations they undoubtedly made some mistakes,
but
basically it was the war needs of the German economy which dominated.
Electric power for German factories, raw materials for the German
war
effort, rolling stock for the German railway system, and all manner
of
other materials which those running the German war economy believed
might
assist them in the war had first call on the balances in Swiss
financial
institutions which the Germans acquired as a result of their looting
of
much of Europe.
There are three aspects of the report which in my opinion require
either
some addition or further emphasis. First, the report does not
mention the
very large credit, 850 million SF, which was extended to Nazi
Germany in
l940-42. I mention this because the Germans were not borrowing
from
Switzerland because they enjoyed paying interest but because they
had to
borrow to pay for purchases from Switzerland. When thereafter
they
suddenly came up with massive quantities of gold and other
valuables, it was obvious thaat these had been looted. And this
was
clear long before the Allies pointed it out formally. Those running
the
Swiss government and banks at the time were not kindergarten dropouts
but
smart people; they knew what they were doing. If you own an automobile
dealership and your neighbor appears one day asking to borrow
a hundred
dollars so that his electricity will not be turned off, the next
week
there is a bank robbery in your town and the description of the
robber
fits your neighbor precisely, and the following week he comes
into your
showroom and puts down $30,000 in cash for a car, you will know
where the
money came from.
The legal position of the Swiss government at the time and in
the
immediate postwar years was always that looting is legal; the
looter
acquires legal title to the loot, and can convey legal title to
you or
anyone else. That position was held not only towards Nazi Germany
but
also
toward Communist Poland. As the report points out -- but without
the
emphasis I believe it deserves -- in l949 the Swiss government
signed a
secret agreement with the Communist government of Poland under
which the
Swiss government with the agreement of the regime in Warsaw looted
the
accounts in Swiss financial institutions of those Polish citizens
who had
been murdered and who either had no heirs or whose heirs had been
stonewalled. The proceeds of this looting operation were then
paid over
to Swiss citizens who had claims on Poland arising out of the
nationalization and/or confiscation of their property in Communist
Poland.
Note that suddenly the accounts which either could not be located
or did
not exist -- depending on which week the Swiss negotiators were
speaking
to the Allies or the organizations looking after Holocaust survivors
--
_COULD be located the moment the accounts were to be identified
and
emptied so that payments could be made to Swiss citizens. I am
not
suggesting that the individual recipients knew that there was
blood on
this money; however, everyone concerned in the government and
banks knew,
since by definition, the accounts emptied were those of the murdered.
This brings me to the second point. As the report indicated,
in April
l945 the Swiss government signed a secret agreement with the German
government
which violated the agreement they had reached with the Allies
in the
preceding month. With Allied troops about to meet in the middle
of
Germany, this obviously had nothing to do with fear of a German
invasion.
As should, perhaps, have been made more explicit, this agreement
and the
many prior arrangements of various sorts with the Nazi government
of
Germany detailed in the report, had no more to do with pro-Nazi
sentiments
than the l949 agreement with Poland (or a similar agreement with
the
Communist regime in Hungary) involved pro-Communist sentiments,
nor should
such deals be attributed to anti-Semitism or anti-Catholicism.
I am not
suggesting that there were no pro-Nazis, anti-Nazis, anti-Semites,
philo-Semites, anti-Catholics, or pro-Catholics in the Switzerland
of the
time. My point is that all such considerations were insignificant
as
compared with priority number 1: making as much money as possible
for
Swiss citizens, and to do so regardless of legalities, morality,
decency,
or anything else. There is an irony in the fact that the characteristic
so often falsely attributed to Jews -- greed for money above all
else --
was in fact the constant policy of those involved in these wartime
and
postwar procedures.
The third issue to which I want to draw your attention is of an
entirely
different kind. In dealing with the reluctance of the Western
Allies to
push the Swiss government too hard, the report repeatedly mentions
in
passing that the Allies were concerned about the fate of the British
and
American preisoners of war held by the Germans. Switzerland was
representing Allied interest to the Germans, and the Red Cross
was
involved in arranging inspections, food parcels, and correspondence
links
for these prisoners. It is my opinion that this issue was vastly
more
important in restraining the Allies from pressuring the Swiss
government
than the report might lead one to believe. There was always concern
that
the Swiss government, and the Red Cross, might renounce their
role if we
pushed them too hard, a step that might well endanger the fate
of these
POW's.
It is important to note that this concern increased rather than
decreased
after the tide of battle turned in favor of the Allies, and it
did so into
the last days of the war. It was obvious that the number of Allied
prisoners held by the Germans was likely to increase as the war
continued:
there would be POW's taken at the front in Italy and the West,
and there
would be members of aircrews who had to bail out during operations
over
the shrinking portion of Europe controlled by the Germans. No
one could
predict the numbers; everyone could predict that the total number
would go
up.
It was known that the Germans slaughtered Red Army POW's by the
hundreds
of thousands; it was known that there had been terrible incidents
--
perhaps the most notorious one involving Americans being the one
during
the Battle of the Bulge; but it was also known that on the whole,
the vast
majority of British and American POW's were surviving. Would
the Germans
allow this to continue? Would they issue orders, as we were beginning
to
understand that the Japanese had, to kill them all before they
could be
liberated? We know now that this did not happen, but it should
be easy to
understand that Allied officials at the time did not know and
had every
reason to be concerned.
In February l945, during the fighting in Manila in the Philippines,
Japanese soldiers not only raped and slaughtered tens of thousands
of
Filipinos but also broke into the Spanish dipomatic mission there
and
raped and slaughtered about 200 people inside. What has this
to do with
our subject? The answer is that Spain had been representing Japanese
interests to the Allies and in response to this outrage formally
renounced
that role. Renouncing such a role had few if any precedents;
it must
have reminded the American and British governments at the time
-- as they
received the formal notification in the last months of the war
in Europe
-- that something like this could indeed happen. It seems to
me that as
we look back on events from today's perspective and with today's
knowledge, we must be very careful to make allowances for the
concerns of
those who faced agonizing choices at the time.
I would like to conclude with a brief reference to the immediate
postwar
years. A major concern of the allies was the reconstruction and
recovery
of Europe; we were in fact putting substantial amounts of American
money
into the Soviet dominated portion of the continent through UNNRA.
The
Cold War does not enter the picture substantially for several
years. It
was the relief and reconstruction concern that made it difficult
for the
allies to pressure Switzerland, especially because the British
government
of the time was unwilling to participate in such a policy. Their
main
concern was the recoveryof an economy terribly drained by the
war; their
second worry was that compensation to Holocaust victims and their
heirs
might enable more of them to get into the British mandate of Palestine.
But no economic pressure on Switzerland would work unless all
the major
trading nations were willing to participate. In effect the British
had a
veto and exercised it. The profiteers could rest easy on whatever
they
had pocketed while others had sacrificed to protect their safety
and
Switzerland's independence.
References:
For Swiss credits to Germany and related support of the German
war effort,
see the piece by Daniel Bourgeois in "Operation Barbarossa
and
Switzerland," in Bernd Wegner (ed.), __From Peace to War:
Germany, Soviet
Russia and the World, 1939-1941__ (Providence: Berghahn Books,
1997), pp.
593-610, which also has a useful bibliography.
For German espionage against Switzerland, including the payments
to Swiss
citizens involved, see Hans Rudolf Fuhrer, __Spionage gegen die
Schweitz:
Die geheimen deutschen Nachrichtendienste gegen die Scweitz im
Zweiten
Weltkrieg, 1939-1945__ (Frauenfeld: Allgemeine Schweizerische
Militaerzeitschrift, 1982), esp. pp. 19ff.
On the Spanish angle to the Japanese massacres in Manila in 1945, see Gerhard Krebs, "Japanese-Spanish Relations, 1936-1945," __Transactions of the Asiatic Society of Japan__, fourth series, vol. 3 (1988), p. 49.