![]() ![]() So much so, that all through the war, the Reichsbank continued paying interest on the monies lent by the BIS. The BIS’s reach and connections were vital for Germany. Indeed, the BIS was so useful for the Nazis that Emil Puhl, the vice-president of the Reichsbank and BIS director, referred to the BIS as the Reichsbank’s only ‘‘foreign branch’’. It carried out foreign exchange deals for the Reichsbank it accepted looted Nazi gold it recognised the puppet regimes installed in occupied countries, which, together with the Third Reich, soon controlled the majority of the bank’s shares. In fact the BIS was so entwined with the Nazi economy that it helped keep the Third Reich in business. It reads: ‘‘The general attitude of the Bank of England directors of the BIS during the war was governed by their anxiety to keep the BIS to play its part in the solution of post-war problems’’.Īnd here the secret history of the BIS and its strong relationship with the Bank of England becomes ever more murky.ĭuring the war the BIS proclaimed that it was neutral, a view supported by the Bank of England. In fact there was a powerful counter-argument that the Nazi invasion of Czechoslovakia had rendered any such obligations null and void as the country no longer existed.Ī key sentence in the Bank of England documents is found on page 1,295. The Bank of England’s historian argued that to refuse the transfer order would have been a breach of Britain’s treaty obligations with regard to the BIS. The Czechoslovaks believed that the BIS’s legal immunities would protect them. ![]() Its assets can never be seized, even in times of war. The BIS is a unique hybrid: a commercial bank protected by international treaty. ![]() Schacht even referred to the BIS as ‘‘my’’ bank. The BIS was founded in 1930, in effect by Montagu Norman and his close friend Hjalmar Schacht, the former president of the Reichsbank, known as the father of the Nazi economic miracle. A world, in other words, not entirely different to today. They are a window into a world of fearful deference to authority, the primacy of procedure over morality, a world where, for the bankers, the most important thing is to keep the channels of international finance open, no matter what the human cost. The documents released by the Bank of England are revealing, both for what they show and what they omit. Sir John Simon, the Chancellor of the Exchequer, had instructed banks to block all Czechoslovak assets. The second transfer order, for the gold held in the National Bank of Czechoslovakia’s own name, did not go through. Thanks to Norman and the BIS, Nazi Germany had just looted 23.1 tonnes of gold without a shot being fired. Winston Churchill demanded to know how the government could ask its citizens to enlist in the military when it was ‘‘so butter-fingered that pounds 6 million worth of gold can be transferred to the Nazi government’’. George Strauss, a Labour MP, spoke for many when he thundered in Parliament: ‘‘The Bank for International Settlements is the bank which sanctions the most notorious outrage of this generation - the rape of Czechoslovakia.’’ His decision caused uproar, both in the press and in Parliament. The Czechoslovak bank officials believed that as the orders had obviously been carried out under duress neither would be allowed to go through.īut they had not reckoned on the bureaucrats running the BIS and the determination of Montagu Norman to see that procedures were followed, even as his country prepared for war with Nazi Germany. Yet it proved crucial - and allowed Norman to ensure that the first order was carried out. To outsiders, the distinction between the accounts seems obscure. The second order instructed the Bank of England to transfer almost 27 metric tonnes of gold held in the National Bank of Czechoslovakia’s own name to the BIS’s gold account at the Bank of England.
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