Language: ns
NARA; RG 84, Foreign Service Posts of the Department of State, U.S. Legation in Switzerland, Confidential Files, American Consulate Basel, 1938-1949, Entry 3228, 350/68/32/01, Box 6, 1943: 801.2 - 891
Information Independent Commission of Experts Switzerland-Second World War (ICE) (UEK)
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851.6: Banks

Strictly confidential letter from Sholes to Harrison, American Minister Bern, 12.4.1943. re: interest of President of SNB in keeping National Bank affairs divided from those of the private banks, since the latter were tainted by close contact with the Axis.
"Reports reaching here from Zürich seem to indicate that Mr. Ernst WEBER, President of the National Bank of Switzerland, is much concerned over Mr. Albert Nussbaumer's [a General Manager of SBC] ambitious and presentday (sic) activities, particularly concerning the latter's efforts to have himself sent to Washington by the Bern Government, on business of a more or less undisclosed nature. The subject has, it seems, taken on such importance as to have resulted in important meetings at Zürich and Bern recently between government officials and private bankers, in which both President Weber and Bundesrat Wetter figured conspicuously. The former during these conversation was, I am told, quick to emphasize the great importance of keeping National Bank affairs and private bank affairs widely separated these days. He advanced two important reasons, namely, the existing important business relations between Swiss private banks and the Axis Powers which have been the source of some embarrassment in Zürich and, secondly, the very considerable secret accounts in these private banks with the nationals of various countries. He feared these relationships might easily involve his institution and lead to trouble.
"In these circumstances, President Weber has urged upon Bundesrat Wetter the importance of restricting Mr. Nussbaumer's activities in the United States to private banking. Bundesrat Wetter, it appears, has now fully concurred.
"As a result, Mr. Pfenninger's American mission will be restricted to National Bank affairs - he is a National Bank man - while that of Mr. Nussbaumer , should he proceed to the United States limited to those of his own bank, namely, the Swiss Bank Corporation, during his stay in Washington.
"As previously pointed out in these letters, Mr. Nussbaumer is a very able and ambitious man, who has spent most of his time in recent years in Italy and London. At the national Bank in Zürich and in Government circles in Bern, they look upon him with cold eyes generally."

Confidential letter from Sholes to Reagan, Financial attaché, American Legation Bern, 30.4.1943. re: names of leading directors and executives of 5 German banks. This information was supplied in response to a telegrammed request from the Department of State in Washington. The five banks were the Commerzbank, the Deutsche Bank, the Bank der Deutschen Arbeit, the Bank der Deutschen Luftfahrt, Berlin, and the Dresdner Bank. Regarding the Bank der Deutschen Arbeit, no names are given [but are in fact supplied in later letter, of 2.6.1943], but the following remark is offered: This bank was taken over in 1933 when the Nazis obtained power. It was formerly known as the Bank der Arbeiter, Angestellten und Beamten, organized by the Social Democratic Government. Its directors and executives may, therefore, also be considered hand-picked Nazis from top to bottom."
Re: the Bank der Deutschen Luftfahrt, Berlin, likewise no names are given, but the remark is offered: "This bank was organized on or about 1940 - 41 by the Regime. There is a branch at Paris. the directors and executives of this bank were hand-picked by the Regime at the time and, therefore, must be listed as pro-Nazi from top to bottom. This bank is known to be active in France, where it has credits and participations in French industry."

Confidential note of 29.4.1942, No: 35,900, Source: Adams. re: sale of Italian Lire by the Argentine Consul at Geneva to Swiss banks, perhaps to Julius Bär and Company, Zürich (the leading trader in Lire in the country), in the amount of Lire 5,000,000 during April. SFR 300,000 was transferred by the Consul to the national Bank of Argentina at Buenos Aires. The informant "suspects the funds now being transferred to Buenos Aires are for German accounts." By this time, the market in Switzerland for Reichsmarks was no longer active, though the market for Lire remained lively. [Confidential note of May 13, 1943, source B, From: 22,600 says that the banks involved in the financial transactions discussed above were the SBC and the Credit Suisse at Geneva. Continues: "The total turnover in Italian lire of late has slackened very considerably, amounting to not more than 100,000 to 200,000 daily, according to informant."

Confidential report from: 31,800, source: B, 4.5.1943. re: visits of German bank directors to Zürich. "According to an absolutely reliable bank official, Herr Puhl of the Reichsbank, Herr Goertz of the Dresdner Bank and Herr Abs [who was previously described by Sholes's sources "as the most outstanding and trustworthy figure from our point of view in the German financial world today" - see letter of 20.5.1943 from Sholes to Reagan] were in Zürich last week. He had occasion to meet them and discuss postwar financial reconstruction." They generally viewed the Keynes Plan favorably, and were waiting to see the White Plan. "Dr. Puhl is quoted as feeling that the English proposals [Keynes] may seem to anticipate being able to effect rather more than is possible under the conditions which may be expected."

Cross reference of letter (to File 800-I Confidential) from Sholes to American Legation Bern of 11.5.1943 re: "General Piccio [of Italy] placing his fortune in security in Switzerland and 'flight of capital' from Axis countries."

Voluntary confidential report of Sholes to the American Legation, Bern, of 28.5.1943. re: Secret accounts in Swiss Banks.
Sholes quotes at length Maurice Golay, president of SBC. Sholes asserts that it is known that secret accounts are held at at least two banks in Basel, namely Credit Suisse and the Kantonal Bank. Golay suggests in concluding his letter to Sholes that a "competent personality be sent from Washington to Switzerland, after the concurrence of the Bern political Department has been obtained, to see the Swiss situation for himself and to enter into contact with Swiss banking, commercial and industrial circles." (wording is Sholes's).

Strictly Confidential Report from: 76,660, source: Frede (A1), 14.7.1943. re: closing of Turkish Embassy at Berlin's account with the SBC Zurich branch. "The Turkish Embassy at Berlin, which for years has maintained a good sized account with the Swiss Bank Corporation's branch at Zurich, early this month closed its account. This action has caused no little speculation in Swiss political and financial circles, as the Bank's relations with the Turkish Mission have always been of the best; moreover, the account, which had been opened in the names of the Turkish Ambassador and some eight officers of his Mission, has, so far as known, not been transferred to another bank in Switzerland." [In Classified General records 1940-52 (Entry 3208) (American Legation Bern Confidential File 1940-49) RG 84, 350/68/20/01, this same note is followed by a Secret Report from: 1553, Source Willy B2, 5.11.1943, which reports that Société de Banques Suisses, which previously had received monthly instructions from Ankara "to pay salaries, etcetera, to all Turkish Foreign Service officers and employees in Germany and in all the occupied countries" had received on November 4 instructions "to pay the salaries of this personnel, three months in advance; and to distribute to all Turkish Foreign Service officers in Switzerland huge sums in bank notes. It is understood that these large amounts in cash are being forwarded this morning to the Turkish officers concerned, by registered post. The amounts are not divulged....
"There follows the supposition that Turkey is preparing to declare war and is assuring three months' salary in the pockets of its representatives and is furnishing Turkish officials in Switzerland with large sums for relief and transportation to numbers of Turks who may proceed by this country."]

Confidential report from: 61,300, Source: B2, 19.7.1943, re: Bank für Anlagewerte Zürich (allegedly a subsidiary of SBC) offering huge parcels of gold (mostly Napoleons) on the Swiss market. "It is believed in well-informed quarters that the Zürich institution is acting for Herr Feld Marshall Goering and his nazi friends, who have succeeded in accumulating large sums in gold in Budapest, Bucharest and even in Rome, which they wish to dispose of against Swiss francs. It is understood that the Zurich bank is only accepting large orders.
"Black market prices involving huge profits for the Germans and big commissions for the bank seem to mark the transactions to date."

Confidential report from: 33,092, Source: Frede, 22.7.1943, re: visit of Reichsbank directors Wedel and Wolf to Switzerland. "They are trying to raise a loan of SFR 8,000,000 to meet engagements coming due shortly in this country.
"The Germans are offering American bonds 'purchased' by them in Holland as collateral. it appears the Germans have obtained large parcels of American securities during the occupation. The Dutch banks had first issued certificates of their own against these American bonds, etc., but it appears the German authorities have since found the original (American [handwritten]) certificates in Holland. At least, this is what Swiss bankers believe. "The Germans have thus far failed to approach the Swiss Bank Corporation in the premises."
[From Confidential report from: 86,340, Source: A, 8.9.1943: "German bankers referred to left Switzerland with empty hands insofar as Swiss banks here are concerned. They were refused a loan of SFR 1,800,000 by the SBC, Basel."]

Confidential report from: 28,409, Source: B2, 21.7.1943. Refers to No. 61,300, listed as #8 above. Re: Bank für Anlagewerte, Zürich.
"The Bank für Anlagewerte, Zurich, is not connected in any way with the Swiss Bank Corporation, Basel, according to one of the general managers of this leading Swiss bank. The dominating influence in this Zurich institution is the Fran[c]k Coffee and Chicory group, (PL [Proclaimed List]),* [* = Refers to German owners of Kaiser's Kaffee-Geschäft.] about whose German connections there can be no doubt.
"The Bank für Anlagewerte mentioned is headed by Mr. Matthias Ehinger-Alioth of Basel, who is also president of Ehinger & Cie., a private Basel bank.
"It is known that considerable sums of gold in the form of Gulden 'Napoleons' and in bars have arrived in Constantinople recently from the Balkans, believed to represent deals closed with the Zurich banking house mentioned.
"It remains to report that the gold bars involved failed to bear German markings."

Confidential report from: 64,200, Source: B2 (Frede), 22.7.1943. Refers to No. 61,300, listed as #8 above. Re: Bank für Anlagewerte, Zürich and German gold sales. KOPIE
"The following additional information has been obtained concerning the activities of the Bank für Anlagewerte, Zürich, which now admits selling gold for German account:
"1. The gold is German-owned. (It has unfortunately not been possible for the Consulate at the present time to identify the actual owners.)
"2. The gold has been offered in Lisbon, Madrid, in the Balkans, Turkey and elsewhere.
"3. Sales have already been effected, although Mr. Claus Vogel, vice chairman of the company at first denied that any operation had been completed."
4. British Consulate Zürich may have known of this issue, as well.
"5. It may interest our authorities to know that the bank in question is controlled by the 'Inga' (International Nahrungs and Genussmittel Aktiengesellschaft, Schaffhausen. 'Inga' itself is owned by the Franck group. Mr. Johann Heinrich Franck, a German, has been living in Switzerland for years and 'has made all arrangements so that at his death no part of his fortune will go back to German.'" (sic applies to entire paragraph)
6. previously German interests owned a number of Inga shares, but were bought up by Franck at start of war against sale by Inga of their German participations.
7. Inga is "today" purely a Swiss company, so recognized by Office Suisse de Compensation.
8. Bank für Anlagewerte, in financial statement for year ended 31.12.1942, shows capital of 5,000,000 reserves of SFR 2,619,075, and assets and liabilities of SFR 33,822,301.
"9. Richard S. Guinness of London, said to be a close friend of Mr. Winston Churchill and Oliver Littleton, is a member of the Board."

Confidential report from: 81,345, Source: B3, 17.8.1943. Refers to Reports Nos. 28,123 of May 11, 1943 and 61,300 of 19.7.1943, i.e. #8 above. Re: fall in gold price in Switzerland from 52 - 53 on 1.8.1943 to 41 on 17 August. Official price is 30.5. Speculation that this was a result of an attempt by SNB to break the black market for gold by selling one million Napoleons at 30.5 to Swiss banks, at least one of which (UBS-Geneva) made them available at the official price to private account holders under certain conditions. The Napoleons had originated in France and "represented a clearing balance form a third unnamed country. No French or Swiss napoleons seem to be among this lot." Gold will thereafter have to be registered and must remain in Switzerland.
"Attention is invited to the report 28,123 of May 11, in which the activities of General Piccio of the Italian Armistice Commission in France and Signor Modiano were mentioned. The latter is known to have made considerable gold purchases here at the time, and it is not, of course, excluded that both men made purchases elsewhere in Switzerland."

Confidential report from: 61,301, Source: A1, 23.8.1943. Refers to nos. 81,345 of 17.8.1943 and 61,300 of 18.8.1943. Re: principal reason for gold sale by SNB is to decrease note circulation. "It is known, for instance, that the vaults of the Swiss banks are full of money for which there appears no safe outlets. As a result, banks like the SBC, Credit Suisse and UBS to mention a few, are buying "registered gold" from the National Bank with their idle money. This serves to spare the National Bank's printing presses at a time when it is the policy of the latter not to increase its note circulation
"On the other hand, at least one Swiss bank, the Commercial Bank of Bale, chose to decrease its capital recently owing to the absence of safe and profitable outlets for its funds. [CORRECTION contained in Report no 10,111, source B2, 27.8.1943: delete this paragraph and write "On the other hand, the fact that the Commercial Bank of Bale some years ago decreased its capital has made unnecessary such purchases."]
"An examination is now being made into reports current here that certain banks, including SBC, the largest Swiss bank and Roth and David, private bankers at Basel, are selling gold at black market prices and at the same time furnishing buyers with export permits."

Confidential report from: 31,222, source: B2, 24.8.1943, Refers to No. 81,345 of 17.8.1943. Re: sale of 40,000 gold Napoleons at 30.5 by SNB (Banque Federale, Geneva) to "Mexican Consul at Geneva", a "René de Werra".
"From the same source it was learned that the 'Roumanian Minister' at Berne is also interested in selling gold on the black market in amounts of SFR 100,000 at a time. The manager of the Credit Suisse at Berne seems to be active for the Minister in question and has already offered this gold to one or more agents here in Basel."

Confidential letter from Sholes to Reagan, Commercial Attaché, US Legation, Bern, 21 Sept 1943. Re: 3 Italian banks being investigated by Dept. of Treasury, for which lists of directors are supplied. The banks are Banca Commerciale Italiana, Milan; Credito Italiano, Genoa; and Banco di Roma, Rome.
Confidential letter from Sholes to Harrison, American Minister, US Legation, Bern, 23.9.1943. Re: presence in Switzerland of Mr. Tochef, General Manager of the National Bank of Bulgaria, Sofia, who was en route to Vichy as part of a special mission.
"When last in this country [eight months earlier], he was in the market for the purchase of 200,000,000 Rumanian Lei, equal to approximately SFR 2,000,000, which he was endeavoring to buy on the 'black market' at a cheap rate. It is known that Mr. Tochef had some negotiations at the Zürich branch of the Banque Commerciale de Bâle on the subject; the results of his negotiations, however, remain unknown here."

Confidential Report from Sholes, 20.10.1943. Re: drop in the value of the French franc from 2.3 to 1.5-1.6 as a result of manipulation of money market by trade in "Rumanian Occupation marks, in Gold, et cetera." The occupation marks are imported to Switzerland (the "'honest, neutral broker'") from Rumania, and then are sent on to Paris "where German agents are facilitating the business. Huge profits, it would seem, are being made by the initiated as a result.
Discussion of trade in gold follows. "When operations are effected in gold, the profits seem to be even greater." Napoleons are bought at the black market price in Switzerland of SFR 40, then exported to Rumania, where they fetch SFR 67, whereupon the 67 SFR yields 670 occupation marks. (Since in Paris 100 occupation marks are worth 2,000 FF, and since the rate in Switzerland for FF is 1.6, the deal yields SFR 32 in Paris.) 670 occupation marks sold at Paris at 32 makes 214.14 SFR. Therefore, for capital of SFR 40, the "manipulator gets 214.14."
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