Official
account of what many believe was British central bank's most shameful episode
revealed more than 70 years after event
The Guardian, Ben Quinn, Wednesday 31 July 2013
 |
| Montagu Norman, who was governor of the Bank of England at the time of the sale. Photograph: Hulton Getty |
Bank of
England records detailing its involvement in the transfer and sale of gold
stolen by Nazis after the invasion of Czechoslovakia were revealed online on
Tuesday.
The gold
had been deposited during the 1930s with the Bank of International Settlements
(BIS), the so-called Central Banker's bank, as the Czechoslovak government
faced a growing threat from Germany.
The
document goes on to detail how a request was made in March 1939 to transfer
gold, then worth £5.6m, from a Czech National Bank account at the BIS to an
account operated by Germany's Reichsbank. Some £4m of the gold went to banks in
the Netherlands and Belgium, while the rest was sold in London.
The
document tells how the chancellor, Sir John Simon, had asked the governor of
the bank, Montagu Norman, if it was holding any of the Czech gold in May 1939,
two months after the Nazi invasion of Czechoslovakia.
It says:
"The Governor in his reply (30th May) 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. Hence,
they could not say whether the gold was held for the National Bank of
Czechoslovakia." A further transaction was made that June – despite
concerns from Simon being raised. On that occasion, there were sales of gold to
the value of £440,000 and a £420,000 shipment to New York.
According
to the documents: "This represented gold which had been shipped to London
by the Reichsbank. This time, before acting, 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."
The BoE's
account, of what some regard as one of the Threadneedle Street's darkest
episodes, was written in 1950 and published online on Tuesday following the
first stage of the digitalisation of the bank's archive. It admits that the
incident involving the Czech gold "still rankled" at the outbreak of
the second world war "and for some time afterwards".
"Outside
the Bank and the government the Bank's position has probably never been thoroughly
appreciated and their action at the time was widely misunderstood," it
adds.
"On
the BIS enquiring, however, what was causing delay and saying that
inconvenience would be caused because of payments the next day, the Bank of
England acted on the instructions without referring to the Law Officers, who,
however subsequently upheld their action."
Professor
Neville Wylie, a historian at the University of Nottingham who has examined the
period as part of research into Nazi Germany's looted gold and the role of
Britain and Switzerland, said on Tuesday that the Bank of England's official
history of the period was news to him and shed new light on a number of issues.
Wylie said
that the attitude shown by the BoE in the history was consistent with what emerged
from his own research into the British position towards Germany's wartime
financial activities, which he described as "wanting".
He added:
"The bank was wedded to a view of international finance and central bank
co-operation. It was too concerned about maintaining London's status as an
international financial centre – and clung to the need to maintain sterling's
convertibility long after it was wise to continue with this policy."
Sources at
the Bank of England on Tuesday drew attention to a section in the official
history, containing comments by the chancellor to the House of Commons in June
1939, when he stated that Law Officers had advised him that the British
government was precluded by protocols from preventing the BoE from obeying
instructions given to it by the BIS to transfer the gold.
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