What Happens When You Hand Over Your Gold To The Bank Of England For "Safekeeping"

Tyler Durden's picture

“The Bank for International Settlements is the bank which sanctions the most notorious outrage of this generation— the rape of Czechoslovakia.”

      — George Strauss, Labor MP, speaking in the House of Commons, May 1939

“the Bank for International Settlements should be liquidated before it
furnished any more sinews of war to Germany, and that the odd
relationship between the British government and the Bank of England
should be re-examined without delay.”

      — “Sees British Hands Tied on Czech Gold,” New York Times, June 6, 1939

When Nazi Germany annexed the Czechoslovak border province of the Sudetenland in September 1938, it immediately absorbed a good part of the country’s banking system as well as most of Czechoslovakia’s strategic defenses. By then the country’s national bank had prudently transferred most of its gold abroad to two accounts at the Bank of England: one in the name of the BIS, and one in the name of the National Bank of Czechoslovakia itself. (Countries had deposited some of their gold reserves in a sub-account at the BIS account in London to ease gold sales and purchases.) Of the 94,772 kilograms of gold, only 6,337 kilograms remained in Prague. The security of the national gold was more than a monetary issue. The Czechoslovak reserves, like those of Republican Spain, were an expression of nationhood. Carved out of the remains of the Austro-Hungarian Empire in 1918, the Czechoslovak Republic was a new and fragile nation. A good part of the gold had been donated by the public in the country’s early years. Josef Malik, the governor of the national bank, and his fellow Czechs believed that, even as the Nazis’ dismembered their homeland, if the national gold was safe, then something of the country’s independence would endure.

They were wrong. The Czechoslovaks’ faith in the probity of the BIS and the Bank of England was tragically misplaced. The gold was sacrificed, with barely a second thought, to the needs of transnational finance and the Third Reich.

The Nazis’ first demand came in February 1939 when Berlin ordered Prague to transfer just over 14.5 metric tons of gold, supposedly to back the German currency now circulating in the Sudetenland. This was certainly an innovative idea— first invade a neighboring country, annex part of it, and then demand that the newly truncated state supply the gold to pay for the loss of its territory.

The following month the question became academic. On March 15 the Wehrmacht marched into Prague. The German protectorate of Bohemia and Moravia was declared, and Czechoslovakia no longer existed. But the gold reserves did. Three days later a Reichsbank official was dispatched to the National Bank of Czechoslovakia and  ordered the directors, under the threat of death, to issue two orders. Thanks to diligent detective work by Piet Clements, the BIS archivist, we have a clear picture of what happened next. The first order instructed the BIS to transfer the 23.1 metric tons of Czechoslovak gold held at the BIS account at the Bank of England to the Reichsbank BIS account, also held at the Bank of England. The second order instructed the Bank of England to transfer almost 27 metric tons of gold held in the National Bank of Czechoslovakia’s own account to the BIS’s gold account at the Bank of England.

Malik and his fellow directors hoped that it would be obvious that the instructions had been issued under duress and so would not be implemented. The Nazis had just invaded Czechoslovakia and would obviously target the national gold reserves. But Malik had not reckoned on Montagu Norman. The governor of the Bank of England had no interest in whether Czechoslovakia was free or a Nazi colony. “Political” considerations must not affect the BIS’s transactions. The transfer order, he said, must go through.

Meanwhile, in Basel, Johan Beyen, the Dutch president of the BIS, wavered. Beyen discussed the matter with the BIS’s legal adviser, Felix Weiser. But like Norman, Weiser took the most formalistic approach possible. As long as the paperwork was in order, the monies must go through. Weiser argued, somewhat bizarrely, that there could be no legal grounds to claim that the transfer order had been issued under duress, as such a plea could be brought before a Swiss court only by the persons who had acted under duress. Clearly, the directors of the National Bank of Czechoslovakia were unlikely to travel to Switzerland to present their case. Therefore any decision not to authorize the transfer would be one of BIS policy, rather than administration. The board of the BIS made policy. Thus Beyen would have to consult the board to stop the payment. (This was poor advice for another reason— under the terms of the BIS statutes the Swiss authorities anyway had no jurisdiction over gold transfers between states.)

Beyen was unwilling to take a decision without authorization. But who could he ask? The chairman of the BIS board, Sir Otto Niemeyer, of the Bank of England, was traveling to Egypt and so was incommunicado. At 6 p.m. on March 20, Roger Auboin, the bank’s general manager, told Beyen that the governor of the Bank of France had discussed the matter with London. The Bank of England and the Bank of France would not be taking any action to stop the transfer, because they felt that there were no grounds for action. The BIS transfer order went through.

With London, Paris, and Basel’s compliance, Nazi Germany had just looted 23.1 metric tons of gold without a shot being fired. More than two-thirds of that gold was traded with the Dutch and Belgian national banks and was eventually transported from Amsterdam and Brussels to the Reichsbank’s vaults in Berlin. Czechoslovakia’s diligent planning to safeguard its national gold reserves, together with its misplaced faith in the integrity of the new international financial system, had come to nothing. The second transfer order for the 27 metric tons held in the National Bank of Czechoslovakia’s own account at the Bank of England did not go through. Sir John Simon, the chancellor of the Exchequer, had instructed banks to block all Czechoslovak assets. But Czechoslovak gold held in a BIS account at the Bank of England, it seemed, was not defined as a national asset and was beyond the reach of UK laws.

Norman and Beyen’s decision caused despair and incomprehension in Prague and uproar in London. The loss of the Czechoslovak gold was all “Norman’s fault,” exclaimed the Daily Herald. Paul Einzig, of the Financial News, ran a stream of stories exposing the complicity of both the treasury and the Bank of England in the affair. Einzig demanded to know why the treasury had not stopped the transfer, as it was in clear violation of the law known as the Czechoslovakia Act. Brendan Bracken, a journalist and ally of Winston Churchill, declared in the House of Commons that “the Bank of England after what has happened may no longer be looked on as the safest place in the world and the phrase ‘Safe as the Bank of England’ may no longer apply.” Churchill himself demanded to know how the government could urge people to enlist in the military when it was “so butter-fingered that six million pounds of gold can be transferred to the Nazi government.”

The real villain of the affair was Norman. Beyen, who later served as Dutch foreign minister and as executive director of the International Monetary Fund, was an ineffectual bureaucrat, paralyzed by the idea that he might have to take responsibility for a decision. Norman could have stopped the transfer immediately. He was the governor of the Bank of England, which held the two BIS accounts involved. At the very least he could have asked for the transfer to be referred to the BIS board for a decision, which would also have been a face-saving measure. He chose not to do so. It was clear that war was coming, one that Britain would have to fight. The Nazi invasion of Czechoslovakia had destroyed the last hopes of peace. That country’s gold reserves, held in London, were now a British national security issue.

Yet Norman’s priority was not the best interests of his homeland, but rather the independence of his beloved BIS. Even as the shells were loaded into the German tanks, Norman still believed that for the bankers it could be business as usual. Nothing could interfere with the bankers’ sacred neutrality and gentlemanly trust in one other, not even the coming conflagration with a regime whose evil was now plain to see. The Bank of France had refused to stop the transfer but had also asked Norman to block it. Norman was adamant. There could be no political interference in the operations of the BIS, even, it seemed, when they were ordered at gunpoint.

Norman did not express any regret at all over the Czech gold transfer. In fact, he was positively indignant at the very idea that the British government might have some say in the bank’s actions. He wrote, “I can’t imagine any step more improper than to bring government into the current banking affairs of the BIS. I guess it would mean ruin. I imagine the Germans would never have paid any interest to the BIS, and at the board we would have then likely have found the Germans, Italians, and Japs standing together!” Norman then lied to Sir John Simon, the chancellor of the Exchequer, albeit with a very telling falsehood. Simon asked Norman if he could not have warned the government that, thanks to the BIS, Germany was about to acquire “large additional financial strength.” Norman told Simon that while the Bank of England held gold for the BIS, it did not know if the gold was actually owned by the BIS or was held by the BIS for other central banks. This was untrue, as Norman later admitted. Norman then made a significant, even shocking, admission. He told Simon that “he was very doubtful that he would have thought it his duty, as Director of the BIS, to make a statement about its transactions to the British government.”

Norman even wrote to Beyen to clarify the matter and to assure the BIS president where his ultimate loyalties lay in Basel. Norman did not want to publicly correct the minutiae of what was being reported in the press and Hansard, the British parliamentary journal— that the Bank of England did not know whose gold was held in the BIS accounts— as that would expose him. “The difficulty is that if I point out to the Treasury that this is incorrect, I lay myself open to being asked details of BIS transactions, which I do not consider the Treasury are entitled to know.”  This was little short of treason. As Norman’s compatriots were enlisting in the military, preparing to risk their lives for the freedoms and luxury that he enjoyed, as his country prepared for the war against the Nazis that all knew was coming, Norman blithely announced that his primary loyalty was not to Britain, but to a hyper-privileged, international bank that was not even a decade old.

The mistake of Malik, the director of the National Bank of Czechoslovakia, was to believe that either Norman, Beyen, or indeed any of the BIS management could conceive of any moral or political dimension to their decisions. The world’s most powerful international bankers were not only unwilling to obstruct the Nazi seizure of Czechoslovak— or Austrian— assets. They simply could not conceive of any reason why they should do so. As long as the formalities were observed, the necessary papers were stamped and the gold was re-assigned. Norman’s precious independence for both the Bank of England and the BIS had been bought at a high price— in mountains of gold ingots to pay for steel to build bombs that would soon rain down on London.

* * * * *

... the affair had highlighted the deeply unsettling connections between the Bank of England, the British government, and the BIS. There was a good deal of cross-party feeling in Britain, reported the New York Times, that “the Bank for International Settlements should be liquidated before it furnished any more sinews of war to Germany, and that the odd relationship between the British government and the Bank of England should be re-examined without delay.”  The New York Times then was able to assume that its readers would understand a classical allusion. The word “sinews” was a reference to an epithet of Cicero, the Roman philosopher, who had said, “The sinews of war are infinite money.” Cicero’s observation was as prescient then as during the late 1930s. But those who wanted the BIS to be liquidated were too late. Thanks to the BIS the “sinews of war” and the flow of near-infinite money were about to be immeasurably strengthened.

Source: TOWER OF BASEL: The Shadowy History of the Secret Bank that Runs the World by Adam LeBor. 

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Mister Delicious's picture
Mister Delicious (not verified) May 1, 2015 2:54 PM

Eh, who gives a shit.

SickDollar's picture

well check than this info about Gold:

Central banks consider joining the LBMA. (So much for transparency.)

Central banks have expressed interest in joining the London Bullion Market Association, which pretty much runs the London gold market, according to a report by the LBMA's chief executive officer in the May edition of its newsletter, The Alchemist.


CME Group suspends two gold traders for 60 days for spoofing

CME Group Inc. on Thursday barred two traders from its markets for allegedly colluding to enter orders repeatedly with no intention of trading, a strategy that has been fingered as a key contributor to the 2010 Wall Street flash crash.

keremetski's picture

Why list of dead bankers stopped growing?
Run out of nail guns and they all relocated to ground level?

CH1's picture

The Lesson: Rulers will fuck you over every time.

This really should be no surprise, and yet... 99% continually  obey the exact same people they call "liar," "thief," etc.

Manthong's picture

..the good news is that the fourth Reich is alive and well..

Go ask a Greek.

TeamDepends's picture

We had a bunch of gold until that fateful day on the lake....

Manthong's picture

I have read that one of the weird things about finance is that the Nazi’s kept  payments up to the B.O.E. while the Messerschmitts and Junkers were over London dispensing love..

Gee, I wonder why that might have been.

TeamDepends's picture

The Nazis agreed to an ARM*?
*Adjustable Rate Death Pledge

Manthong's picture

And  OK … I am a really reasonable guy, and I do not claim to know everything, but…..

What was the name of the King/Queen's abdicator, whatever...  family before a traditional English name appeared to be requisite?


TeamDepends's picture

We will go with Habsburg.

Manthong's picture

ya..  we are getting close to the truth.

TeamDepends's picture

No wait, that guy is drunk. It's Saxe-Coburg-Gothe!

Manthong's picture

ya.. ya.. ya

Oy veysmir.. truth is emerging.

Richard Chesler's picture

It makes perfect sense now,

The "holocaust"(TM), was nothing more than a family feud.


Oh regional Indian's picture

It was actually the Hollow Cost. The great swindle. Or so says Earnst Zundel. And I believe him.

That said, some Native american flute and drums for the trippers ;-) sequence 12


WillyGroper's picture

Hey ORI,

You made a comment re: apples being toxic @ time of year. This is new to me. Could you explain in chat or give me a link please?


VinceFostersGhost's picture




Eh, who gives a shit.


I do bitch.


Bad news, I'm coming to dinner.

GMadScientist's picture

"Eh, who gives a shit."

Anyone with a brain!

Primary lesson: Au is the second most important metal for 'nationhood'.

0b1knob's picture

The Brits financed and encouraged the rise of Hitler and the Nazis?

Why that's as crazy as the idea that the US organized ISIS.



Oh wait....

Manthong's picture

The wife and family thinks that I am absolutely off the reservation, but that is OK as long as they do not deprive me of the Jagermiester and the Mogen David.


dogbreath's picture

its generally a waste of time to concern yourself with what women think unless they are unicorns

TeamDepends's picture

But not nearly as crazy as the right-wing notion that the Barry regime is allowing ISIS butchers to cross the southern border unhindered on flying carpets.

Manthong's picture

These notions on the relatively inconsequential blog might be fun but

right now State is sponsoring genocide in some southern gulf region.

MonetaryApostate's picture

I don't think that's what it's about, not at all.....

It's either this....  (Possible rioting from our southern workers?)


Or they are preparing for a southern invasion (Which seems plausible)


Anyway, I just stumbled upon this site, which blew my mind completely away...


J S Bach's picture

The Germans are probably the only nation that didn't (and doesn't) even need gold to back their currency.  The Labor Certificates that Hitler set up as collateral for the mark worked wonders for their economy and almost single-handedly lifted them out of the Great Depression within a few years.  (No... it wasn't armaments spending that accomplished this.)  Whether people like to admit it or not, the German work-ethic and ingenuity is unsurpassed both then and now.  It's not a coincidence that they dominate the "euro system" today.

(Humbly submitted by the greatest German composer.)

Manthong's picture

Yo, Jo...

They always had the support of NY and London bankers..

that is the dirty secret that needs to be revealed..

J S Bach's picture

The National Socialists may have been initially "backed" by non-German bankers to jump-start their push to power, but one must remember that the international banksters historically have always backed all sides of any conflicting nations.  This strategy had always assured them profits in the end once war broke out.  One of Hitler's goals was to do away with these private nation-wrecking usurers once he came to power - and he almost accomplished that imperative feat.

In my mind, THAT'S the dirty little secret.

GMadScientist's picture

Oh, I see, he just needed to destroy Poland, France, and half the future Iron Curtain to get to em. Right.

Your rationalizing sycophantism is more than a little stomach-turning.

Manthong's picture

you might want reconsider your notions of sociopaths and psychopaths..

especially in the new normal.


J S Bach's picture

Sorry, Sherlock... but, it's a proven fact that Herr Hitler did not want war with the west.  The territorial dispute with Poland was the impetus that gave the international criminals their cue to goad their puppets - England & France - into declaring war on Germany - not the other way around.  Once war starts, all bets and accusations are off - and invasions ensue.  That's how wars are won or lost.  As to the war in the east... if you think that Bolshevik Communism (60 million Christian innocents murdered) was a better alternative to National Socialism, then we will agree to disagree.

Try letting go of what your high-school teachers taught you about history - especially that period.  Historical truth has to be gleaned independently by an open, honest and reasoning mind.  The powers that won the second world war will never admit - nor allow it to be taught - that it was the successful German monetary system that had to be crushed.  Otherwise, its triumph would have inevitably bled out across the world, thus ending their reign as supreme usurers.

Sandmann's picture

Hitler was Anglophile which is why he saved the British Army at Dunkirk from Guderian's Panzers.

Manthong's picture

Well, THAT’S’s an interesting notion.

Maybe it was his real struggle…


Oh boy,  this is getting a heavy…..

gee, I wish somebody woud do a Hitler video of the fall of his banker relationships.


Mr. Magoo's picture
What Happens When You Hand Over Your Gold To The Bank Of England For "Safekeeping"

It mysteriously turns into tungsten

logicalman's picture

All wars are bankers' wars.

Google it, if you don't already know.


Manthong's picture

Geez.. that’s almost as incredulous as stating that Leon Trotsky was given millions by NY, London and German bankers to overthrow the Tzar, get them out of the war and conduct the Red Terror that killed millions of people, looted the hell out of a growing Russia, threw them all into collectivist hell and paid dozens of millions back to the bankers.

..and that Trotsky was the architect.. and that Lenin was just a newswriter that became the front man.

I learned that in high school..




RaceToTheBottom's picture

And the US corollary:

All Presidents are Bankster approved.

In the case of Dynasties like the Bush, Kennedy and possibly Clinton, all Dynasties are War Banksters approved.

NihilistZero's picture

All wars are bankers' wars.  Google it, if you don't already know.

If only Mel Gibson had said 'You know the bankers are responsible for all the wars in the world" not only would he have been more accurate, but he wouldn't have gotten into the same trouble.  i sincerely wish he had made Freedom to Fascism instead of Aaron Russo.  The film and the message would have gotten the play it deserved.  With all the money he's made and the fact that he's blacklisted from A list Hollywood anyway he should make such a film now.  Dude is swimming in Passion of the Christ money.  If he really has a problem with those specific Banking interests that start wars 9and happen to be of the tribe) I can't think of a better way for him to voice his displeasure.

Skateboarder's picture

I'm surprised he didn't express all of that information as a list. ;-)

p.s. was replying to your post re. Snyderian Christianism.

logicalman's picture


I always enjoy reading a comment that is full of information and carefully thought out!


2¢Wurth's picture

...the good news is that the Fourth Reich is alive and well...


Go ask a Greek...


Or a Ukrainian.

Manthong's picture

Oy.. the EU/US Nazis tried a final solution there but they ran into a little problem.. AGAIN.

Theosebes Goodfellow's picture

~"The Lesson: Rulers will fuck you over every time."~

Yes, but more importantly, (and something that each of us can do something about), is...


RichardParker's picture

The Lesson:

If you don't hold it, you don't own it.



Grimaldus's picture

Shee-it, holding it wont help if Hillary Clinton wants it bad enough. Look what she did to Gaddafi and what happened to Libya's 144 tons of gold? Yeah and wow how about that man the Nazi rape of Czech gold was nothing compared to Hillary's rape of Libya's gold.




"Where are Libya's 144 tons of gold ?"


"Leaving aside that comedy of exporting democracy to Libya on the bayonets of the anonymous "rebels" and in NATO bombs and rockets one would like to learn what has happened to such an "undemocratic" thing as Libya's gold reserve assessed at 144 tons , i. e. the 25th biggest gold reserve in the world ?! One of the main 'sins' of Qaddafi , beside inviting the Chinese oil companies to Libya and refusing to participate in the NATO Africa Command, was his idea to issue gold dinar as an international currency that would have defeated the US dollar by the simple fact that since 1971 no gold has supported the US currency while the Libyan dinar was to be in gold."



Oh man oh man there is a metric-butt-ton of stuff out there on Hillary's war crime destruction of Libya and Syria.




"NATO Loots Libyan Gold As Tripoli Falls"



"The war was launched, with the gleeful support of the western corporate media, on the hoax that Gaddafi’s government was slaughtering “protesters” en masse. In reality, these “protesters” had commandeered military tanks and fighter jets. For weeks, the establishment press re-branded what was a civil war as a brutal series of crimes against humanity by Gaddafi’s regime, just long enough for the United Nations to pass a “no fly zone” resolution that instantly turned into a massive NATO bombardment overnight.

Global central banks will now get to carve up Africa’s most oil-rich nation while simultaneously divvying up around 144 tons of gold bullion – which might go some way to repaying Hugo Chavez after his announcement that Venezuela is to nationalize its precious metals industry. Unless of course Chavez becomes the next head on the chopping block for another “humanitarian intervention”.

The attack on Libya, spearheaded by Obama without Congressional approval, against the advice of his own constitutional lawyers, and on a promise that the conflict would last “days not weeks,” was a brazen illustration of how the so-called “war on terror” was a cruel hoax.

From the very beginning, and in violation of their own resolution, NATO powers armed, funded and trained Al-Qaeda militants who had killed U.S. troops, setting them up to command the rebels in the march towards Tripoli. As the Wall Street Journal reported in a piece entitled, Ex-Mujahedeen Help Lead Libyan Rebels, Al-Qaeda terrorists who worked directly for Bin Laden were tasked with recruiting, training and acting as front line field commanders for the rebel army."


Nazi's got nothing compared to "Bloody Hands" Hillary Clinton and Barack "Rivers of Blood" Obombya.

Both must be arrested, prosecuted and executed for treason and crimes against humanity.



g'kar's picture

"Look what she did to Gaddafi and what happened to Libya's 144 tons of gold?"


Lesson 1: Never trust a UFSATM (United Fascistic States of America) politician

Lesson 2: Don't let the UFSATM (United Fascistic States of America) into your country

Lesson 3: Don't park all your metal in one place

Lesson 4: If you don't have any lakes to have boating accidents, use the sea

Lesson 5: Otter's quote: "You fucked up, you trusted us"

shouldvekilledthem's picture

* if you don't hold it or can't defend it, you don't own it.

PhoQ's picture

It stops being news after the first dozen or so.

MonetaryApostate's picture

I'd opt to go with....

There is nothing new under the sun....

& like um, Nothing changes....

(Granted new tech has been boiling over since what mid 1900s?)