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Europe: Morality And Neutrality Collided In World War II, Says U.S.

Washington, 8 May 1997 (RFE/RL) - During World War II, "neutrality collided with morality," allowing bankers and businessmen to conduct trade with Nazi Germany and enabling the Germans to prolong the war, a new U.S. report says.

The report on the role of neutral countries, especially Switzerland, in the handling of gold and other assets looted from occupied Europe during the war was made public Tuesday at the U.S. State Department.

The 259-page examination criticized the European neutral nations -- including Portugal, Spain and Sweden -- and Turkey, for doing business with Berlin. However, the study was especially critical of Switzerland.

"Too often, being neutral provided a pretext for avoiding moral considerations," U.S. Commerce Department Undersecretary Stuart Eizenstat said in introducing the report at a State Department press conference.

He said many neutral countries continued to trade with the Nazis out of fear they too would be overrun. Nevertheless, Eizenstat said Switzerland and others "ignored repeated Allied entreaties to end their dealings with Nazi Germany."

"Whatever their motivation, the fact that they pursued vigorous trade with the Third Reich had the clear effect of supporting and prolonging Nazi Germany's capacity to wage war," he said. "Most inexplicable," he added, was the persistence of a "business as usual attitude by Switzerland."

The study culminated seven months of work by 11 U.S. government agencies under the direction of State Department Historian William Slany. The document did not spare the U.S. government from criticism either, particularly when it came to helping Holocaust survivors and other Nazi victims reclaim assets stolen from families and individuals.

"There was a demonstrable lack of senior-level support for a tough U.S. negotiating position with the neutrals," Eizenstat said. "Neither the U.S. nor the allies pressed the neutral countries hard enough to fulfill their moral obligations to help Holocaust survivors by redistributing heirless assets for their benefit."

The purpose of the study, Eizenstat said, was to describe U.S. and allied efforts to recover and restore gold and other assets stolen from governments and civilians in Nazi-occupied countries, and to describe the steps taken by the U.S. and its allies to use these assets to aid the victims of Nazi persecution and help the reconstruction of post-war Europe.

"We have done just what the president had asked, and we've done it in unvarnished terms," said Eizenstat. "This historical report represents a search for facts, a quest for understanding, and an effort to set the record straight."

According to the report, Germany transferred $3.9 million worth of looted gold, in today's dollars, to the Swiss National Bank between January 1939 and June 30, 1945. The report said that overall, Nazi Germany stole gold that would be worth $5.6 million today.

Quoting from the report's conclusions, Eizenstat called that "one of the greatest thefts by a government in history."

He also told reporters that the investigation could prove conclusively that the German state bank "smelted dental fillings and jewelry, that the SS had robbed from Jews and Jewish and non-Jewish concentration camp inmates," and incorporated it into its gold reserves which were traded abroad.

Eizenstat said the report paints a "harsh and unflattering" picture of neutral and allied countries alike. He said all the neutrals "profited from their economic cooperation with Nazi Germany." Switzerland received the most attention, he said, because of its crucial financial role.

Eizenstat added that the United States did not want to single out Switzerland as a villain because today it "is a robust democracy, a very generous contributor to humanitarian efforts, and a valued partner of the United States," and he praised the Swiss Government for cooperating with investigators.

"But," said Eizenstat, "the purpose and scope of this study regarding Nazi gold means that Switzerland figures prominently."

Eizenstat said he drew five personal conclusions from the report.

First, he said, the plundering of occupied Europe "was systematic, intentional, and essential to the financing of the German war machine." He said the Nazis used neutral countries to facilitate their transactions.

Secondly, Eizenstat said the report makes clear that neutral countries -- Argentina, Portugal, Spain, Sweden, Switzerland, and until the last three months of the war, Turkey -- "were slow to recognize and to acknowledge that this was not just another European war." Nazi Germany was, said Eizenstat, "a mortal threat to Western civilization."

And third, he said Switzerland had the most complex role.

"It had the deepest and most crucial economic relationship with Nazi Germany, involving banking, trade, industrial production, and the use of their railways," he said. But, at the same time, many of Switzerland's actions benefitted the Allies.

He said the Swiss bought substantial amounts of gold and hard currency from the Allies. The country protected Allied prisoners of war, and Switzerland also provided a crucial base for Allied intelligence services.

Fourth, Eizenstat said American leadership in the post-war negotiations to retrieve Nazi gold and other assets "was clearly well-intentioned but, unfortunately, limited."

"There was a demonstrable lack of senior-level administration support for a tough and consistent U.S. negotiating position with the neutrals," he said. "Moreover, there was an even greater lack of attention to ensuring the implementation of agreements already negotiated, like the 1946 Washington agreement."

Finally, Eizenstat said the report concludes that gold stolen from individuals was sent to Switzerland and other neutral countries, and that some of this gold was placed in a so-called gold pool after the war for redistribution to the governments whose state bank gold was looted.

Eizenstat said there is no evidence that Switzerland or any other neutral country knowingly accepted gold taken from camp victims. However, he said the study does provide clear evidence that some of the gold that entered Switzerland included gold from individuals in occupied countries and from concentration camp victims.

Eizenstat said the publication of the report offers an opportunity "to complete the unfinished business of World War II, to do justice while its survivors are still alive."

He said the United States supports a proposal to place a substantial portion of the $70 million still in the post-war "gold pool" in an international fund for Holocaust victims and other victims of Nazi atrocities.

(See RFE/RL three-part series Switzerland And Nazi Germany)