Guardian News and Media/London
The extent of the Bank of England’s (BoE) involvement in the transfer and sale of gold stolen by Nazis after the invasion of Czechoslovakia has been revealed in documents just released.
The gold had been deposited during the 1930s with the Bank of International Settlements (BIS), the so-called Central Banker’s bank, as the Czechoslovak government faced a growing threat from Germany.
The documents go on to detail how a request was made in March 1939 to transfer gold, then worth £5.6mn, from a Czech National Bank account at the BIS to an account operated by Germany’s Reichsbank.
Some £4mn of the gold went to banks in the Netherlands and Belgium, while the rest was sold in London.
The documents tell how the chancellor, Sir John Simon, had asked the governor of the bank, Montagu Norman, if it was holding any of the Czech gold in May 1939.
It says: “The governor in his reply (May 30) did not answer the question, but pointed out that the Bank held gold from time to time for the BIS and had no knowledge whether it was their own property or that of their customers. Hence, they could not say whether the gold was held for the National Bank of Czechoslovakia.”
A further transaction was made that June despite concerns from Simon being raised.
According to the documents: “This represented gold which had been shipped to London by the Reichsbank. This time, before acting, the Bank of England referred the matter to the Chancellor, who said that he would like the opinion of the Law Officers of the Crown.”
The BoE account, which was written in 1950 and published online on Tuesday following the first stage of the digitalisation of the bank’s archive, admits that the incident involving the Czech gold “still rankled” at the outbreak of World War II “and for some time afterwards”.
“Outside the Bank and the government, the Bank’s position has probably never been thoroughly appreciated and their action at the time was widely misunderstood,” it adds. “On the BIS enquiring, however, what was causing delay and saying that inconvenience would be caused because of payments the next day, the Bank of England acted on the instructions without referring to the Law Officers, who, however subsequently upheld their action.”
Professor Neville Wylie, a historian at the University of Nottingham who has examined the period as part of research into Nazi Germany’s looted gold and the role of Britain and Switzerland, said that the Bank of England’s official history of the period was news to him and shed new light on a number of issues.