U.S. admits to melting gold of Nazi victims

NEW YORK — Personal gold seized by the Nazis was melted into gold bars after the war by the Federal Reserve Bank of New York and then shipped as gold bullion to the central banks of four European countries, the bank has revealed.

The Federal Reserve Bank said its action occurred in February 1952 at the direction of the Tripartite Gold Commission.

The bank's admission, which came in response to inquiries from the World Jewish Congress, is the first concrete evidence that the Tripartite commission also dealt in so-called non-monetary gold.

"It means the Tripartite commission's claim that it was returning only gold looted by the Nazis from the central banks of Europe was simply untrue," said Elan Steinberg, executive director of the World Jewish Congress.

In effect, documents now show, the Tripartite commission was passing off gold fragments stolen by the Nazis from individuals and businesses, melting them into bars and pretending they were gold bars stolen from Europe's central banks. In this way, they were finishing what the Nazis were in the process of doing — camouflaging non-monetary gold as gold bullion.

With that information to buttress its position, Jewish groups at this week's Nazi gold conference in London asked that 5.6 tons of undistributed Nazi gold be turned over to the victims of Nazi persecution, their heirs and families.

"That is our demand," Steinberg said. "We have the moral right to make such an assertion and the evidentiary right to do so." Steinberg said the Czech Republic is believed to be reluctant to accede to the request, the only one of 10 European nations with a stake to the gold to take that position. The request for the gold was first made in September 1996 by Edgar Bronfman, president of the World Jewish Restitution Organization, which represents nine international Jewish groups.

A study earlier this year by the World Jewish Congress concluded that 30 percent of all gold looted by the Nazis during the war — which today would be valued at $8.5 billion — was non-monetary.

Until now, the Tripartite commission had insisted it did not knowingly distribute to central banks any non-monetary gold bars. It said it may have unwittingly distributed bars smelted by the Nazis and spiked with non-monetary gold, including the gold teeth and fillings of Jews.

But James Hennessy, the attorney for the Federal Reserve Bank of New York, said in a letter to the WJC that he obtained special permission of the Tripartite commission to release details of the February 1952 transaction. He included a copy of the commission's records, which detail the quantity and nature of the non-monetary gold that was smelted into gold bars.

The non-monetary gold was in the form of chunks, coins, pipes, buttons, sticks, sheets and commercial bars that would be valued today at $500,000.

Noting that the shipment included "various burnt and fused together coins and clinkers," as well as "mutilated" coins, Steinberg said it is apparent the Nazis were smelting this gold into bars when their work was stopped.

The gold shipment was sent from Frankfurt by the U.S. high commissioner for Germany and arrived in New York in 17 boxes.

It was smelted into 43 bars that were subsequently shipped by the Tripartite commission to the central banks of France, Holland, Poland and Czechoslovakia, according to the Federal Reserve Bank.

Steinberg said he believed the Tripartite commission's intent in releasing the documents was to show their limited involvement in non-monetary gold transactions. But he said this document has served to "prove the more general proposition about private gold" mixing with the monetary gold pool.

"For a long time we have been asking if they knowingly accepted non-monetary gold and knowingly turned it over to central banks after first melting it into bars," he said.

"Now we know the answer is yes. There were no gold rings or teeth listed in the document, but it is pretty hard to represent that gold buttons and pipes came from some central bank's gold reserves."

The Federal Reserve Bank said there was another shipment on Oct. 24, 1952 of 21 small gold bars and 5,324 gold coins.

They were melted into gold bars at the Tripartite commission's request and shipped to central banks.