Gold loses its glitter for the Swiss gnomes

Banks' wealth built on Holocaust loot

The glittering symbols of Switzerland's wealth are piled in the vaults of the capital's most imposing building, the neo-classical National Bank on Berne's Bundesplatz. The gold ingots which underpin the world's hardest currency have until recently been a source of national pride but now they are beginning to lose their lustre.

It turns out that some of the gold is stained with Holocaust blood. The Swiss parliament, pressed by the United States and Britain, is to set up a commission of historians to investigate what is left of the Nazi loot. And there is quite a lot, according to Gian Trepp, who has written a book on the Bank for International Settlements and its dealings with the Nazis.

He said that the German Reichsbank sold 1,700m Swiss francs (pounds 885m) of bullion to the Swiss National Bank. "It was only in Switzerland that the Germans could buy foreign currency."

Some of the gold was legal Reichsbank property but most was plundered from the occupied countries. After the war, when the Swiss struck a deal with the Allies to hand over the gold, they came up with a tiny estimate of their illegal hoard. The Allies collected SF250m; the rest remains in Berne.

"They [the Swiss] were perfectly aware that it was stolen gold," Mr Trepp said. Among material never returned was 58 tonnes of bullion from the Belgian central bank, large amounts from Italy and the Netherlands and a smaller quantity bought from the Prussian mint. The Prussian ingots contained gold from the teeth of Auschwitz inmates.

The authorities, it seems, have been ignorant for the past five decades of the source of their banks' wealth. "The establishment ... wanted to know nothing," said Oskar Scheiben, a journalist, whose paper, Zurich's Wochenzeitung, has been trying to expose the banks' dealings. Historians dismissed his disclosures and politicians declined the temptation to delve into the murky past. Those seeking the gold were denounced as agitators.

Even now, as US archives disgorge documents detailing Switzerland's wartime trade, Berne remains silent. "The Swiss government has nothing to hide," said a spokesman. "We cannot comment on these allegations."

Since the ingots do not reveal their origin, any attempt to separate German state property from Nazi loot is likely to be almost impossible. Apart from bullion, Swiss bank accounts are still believed to shelter deposits made during the war by the Nazis as well as their victims. Both should have been handed to Holocaust survivors years ago but Jewish groups argue that the gnomes of Zurich are reluctant to yield their treasure. We know the money is here but nobody knows where it is," said Iolanda Gross, a social worker. "Only today we had someone from France looking for his parents' account."

Finding the lost accounts is the task of Hans-Peter Haeni, the ombudsman appointed last year to mediate between claimants and the banks. Since last September he has collected 2,300 names and sent them to the banks in two batches but has yet to get a reply. "There are so many misunderstandings", he said. "We need more time."

The historians to be appointed by parliament will also take time on their research. They are expected to report their findings next year - 52 years after the end of the war.

Letters, page 15