Bank of England facilitated transfer of gold looted by Nazis

This post has been corrected. Please see note at bottom for details.

LONDON -- The Bank of England facilitated the transfer of Nazi-plundered gold from Czechoslovakia to the German central bank in the run-up to World War II, according to documents published online.

Extracted from an unpublished history of the Bank of England written in the 1950s and posted on the bank's website for the first time Tuesday, the faded, type-written pages explain its role in the Swiss-based Bank of International Settlements, which authorized international transactions at the time.

The publication is part of a Bank of England project to digitize material in its archives that was previously available only in print. 

In March 1939, days after Germany took full control of Czechoslovakia, the Bank of International Settlements agreed to transfer $8.6 million worth of gold between accounts they believed to be held by the National Bank of Czechoslovakia and the Reichsbank, despite protests from the French government.

The historical account begun by a one-time advisor to the Bank of England, John Osborne, and finished by another writer, Ronald Allport, describes the gold transfer in some detail. Most of the gold went to banks in the Netherlands and Belgium, while the rest was sold in London.

At the time, the Bank of International Settlements was chaired by the British bank’s overseas and foreign department director, Otto Niemeyer.

The then-British chancellor, John Simon, raised questions in parliament after another transaction on June 1, 1939, when there were "sales of gold" and "gold shipments to New York ... from the No. 19 account of the BIS” worth about $670,000. 

“This represented gold which had been shipped to London by the Reichsbank,” according to the published account.  

This time, the Bank of England had referred the matter to the chancellor before acting. But when pressed by the Bank of International Settlements, the British bank had agreed to the transfer without waiting for the chancellor’s decision. Law officers advised the chancellor at the time that the government did not have the authority to prevent the Bank of England from acting on instructions from the Bank of International Settlements.

The four-part, 1,755-page history covers the entire period of the war, including the bank’s more respected role in financing Britain's wartime and immediate postwar needs. But it relates that "at the outbreak of war and for some time afterwards the Czech gold incident still rankled."

The details published Tuesday raised surprise and some condemnation from British readers. A number concurred with historian Neville Wylie of Nottingham University, who was quoted in the Guardian as saying that the bank at the time was "too concerned about maintaining London's status as an international financial center -- and clung to the need to maintain sterling's convertibility long after it was wise to continue with this policy."

For the record, 7:05 p.m. July 31: The headline on a previous version of this post said the Bank of England facilitated the sale of looted Nazi gold. It actually helped in the banking transfer of gold looted by the Nazis.


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Stobart is a news assistant in the Times' London bureau.


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