History indicates Bank of England helped Nazis sell seized Czech gold

July 31, 2013 at 9:49 AM
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LONDON, July 31 (UPI) -- The Bank of England helped Nazis sell gold looted after they invaded then-Czechoslovakia in 1939, a history of the bank's World War II activities indicated.

The history, published on the bank's website Tuesday, indicated the Bank of England sold gold on behalf of the Reichsbank, which Germany's Central Bank seized from its counterpart in what is now the Czech Republic, after the British government froze Czech assets held in Britain after the Nazi invasion, the Financial Times reported Tuesday.

In March 1939, gold valued at about $8.4 million ($1.1 billion at today's prices), was transferred from the National Bank of Czechoslovakia's account at the Bank for International Settlements to an account managed on behalf of the Reichsbank.

The history, which was never published after it was written by bank officials and completed in 1950, also indicated the British Central Bank sold gold after March 1939 on behalf of the Nazis because of pressure from the Bank for International Settlements without waiting for the British government's approval, the Times said.

"There was a further gold transaction on the 1st June [1939] when there were sales of gold [$666,472] and gold shipments to New York [$636,149] from the No. 19 account of the BIS. This represented gold which had been shipped to London by the Reichsbank," the history said.

Before acting on the June transaction, 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. On the BIS inquiring [about] what was causing delay and saying that [an] inconvenience would be caused because of payments the next day, the Bank of England acted on the instructions referring to the law officers, who, however, subsequently upheld their action."

The history also indicated that Montagu Norman, Bank of England governor, was less than forthright in his communications with John Simon, the chancellor at the time, when asked whether the bank still held the Czech gold, the Times said.

When Simon asked Norman about whether the Bank of England still held the gold, "The governor in his reply ... 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," the history said. "Hence, they could not say whether the gold was held for the National Bank of Czechoslovakia."

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