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U.S. Department of State

Special Briefing

On-the-record briefing by Undersecretary of Commerce for International Trade Stuart Eizenstat and State Department Chief Historian William Slany on release of report on U.S. and Allied efforts to recover and restore gold and other assets stolen or hidden by Germany during World War II

MR. DINGER: Good morning. I'm very pleased to welcome you to the release of the preliminary study on Holocaust assets. Ambassador Stuart Eizenstat, coordinator of the inter-agency task force, and Dr. William Slany, the chief historian of the State Department are with us to present the report and take your questions.

I'd just like to note that although many of you have picked up copies of the report already, the full report should be on the Internet very shortly, if it's not there already. It is at the State Department website, which is www.state.gov, and it's under our "hot topics" site. Additionally, the full report should be available at the General Printing Office in approximately five days. The General Printing Office can be contacted at 202-488-9735 for details on how to obtain it.

With that, I'm very pleased to welcome Ambassador Eizenstat and Dr. Slany.

UNDER SECRETARY EIZENSTAT: Thank you all for coming. I know many of you have awaited, with interest and patience, the release of this report. Given the very important nature of the issues at stake, we felt that it was important to spend the extra time to make the report as complete and as accurate as possible.

We're issuing today a preliminary study entitled, U.S. and Allied Efforts to Recover and Restore Gold and Other Assets Stolen or Hidden by Germany during World War II. The report was prepared by the State Department's chief historian, Dr. William Slany, who is with us today. Dr. Slany is a person of great scholarship, of unimpeachable integrity, and of inordinate patience. It's the product of an extraordinary seven-month effort on the part of 11 U.S. Government agencies.

Along with a selection of some 200 documents that we have here to support our findings, it also includes a summary and an interpretive forward presenting my own conclusions. For this effort, we have declassified and transferred to the National Archives between 800,000 and one million pages - the most at any one time in the history of the National Archives -- including previously unavailable OSS, Army, State, Treasury and Justice Department records. We've also published a guide, which we have here for scholars, journalists, Congress and the others, to all of the 15 million or so pages of relevant documents. Again, we're told that this is the largest such effort ever undertaken using the records of the National Archives.

We've worked feverishly since October; but let me emphasize that our report is only preliminary. A full picture of the issues and the events covered in our report will ultimately depend on the record of other countries and further research through our own materials.

This report addresses a vital but relatively neglected dimension of the history of the Second World War and its aftermath - one that has become the focus of intense political, diplomatic and media attention over the last year. It's a study of the past, but one that has real implications for the future. The report documents one of the greatest thefts by a government in recorded history -- the confiscation by Nazi Germany of an estimated $580 million of central bank gold, which would be worth about $5.6 billion in today's values, along with indeterminate amounts of other assets from individual victims of Nazi atrocities during World War II. Around $400 million of this looted gold -- $3.9 billion in today's values -- went to Switzerland either to the Swiss National Bank's own account, or the account of other countries at the Swiss National Bank.

Why this sudden surge of interest in these events of five decades ago? There are a variety of explanations. The end of the Cold War gave us the chance to examine issues long pushed to the background. Many previously unavailable documents have been declassified. Aging Holocaust survivors have an urgent desire to ensure that long-suppressed facts come to light before it is too late for them and to see a greater degree of justice to assuage, however slightly, their sufferings. And younger generations also seek a deeper understanding of the most profound events of the 20^th century, as we prepare to enter the 21^st.

But in particular, the courageous efforts of Edgar Bronfman and Israel Singer of the World Jewish Congress, of Senator Alphonse D'Amato of New York, together with a bipartisan group in the Congress, and President Clinton's own strong support have touched the world's conscience and prompted a search for the facts.

Our mandate from President Clinton was to describe to the fullest extent possible, U.S. and Allied efforts to recover and restore gold and other assets stolen from governments and civilians in the countries Nazi Germany overran and the initially valiant but ultimately inadequate steps taken by the U.S. and its allies to use these assets for the assistance of stateless victims of Nazi atrocities and the reconstruction of post-war Europe.

We have done just what the President had asked, and we have done it in unvarnished terms. This historical report represents a search for facts, a quest for understanding and an effort to set the record straight. It seeks neither to defend, nor to offend any nation. The countries mentioned in our report are our friends and allies today, and we value their relationships. It seeks to clarify so we can move forward, not to sensationalize so as to assign blame.

The picture which emerges from these pages is often harsh and unflattering, particularly when dealing with actions and attitudes of the neutral countries. All profited from their economic cooperation with Nazi Germany. Among the neutral countries, Switzerland receives the most attention in this report because of its crucial financial role. We have no desire to single out a country, Switzerland, that is a robust democracy, a very generous contributor to humanitarian efforts and a valued partner of the United States today. But the purpose and scope of this study regarding Nazi gold means that Switzerland figures prominently.

The report also shines a bright light on our own country's shortcomings. America's leadership during and following the war was obviously admirable and commendable. Of course, the war itself would not have been won without the enormous U.S. effort in people and material. Nor could the remarkable rebuilding of Europe have occurred without American leadership. The U.S. Government took the lead in the economic warfare against the axis powers by initiating the Safe Haven Program together with our allies.

The U.S. scored significant successes in blocking German assets in leaving this country, and in tracking the flow of Nazi assets, particularly looted gold, to prevent any Nazi resurgence after the war, which was the very purpose of the Safe Haven Program. The U.S. led the reconstruction of Europe through the remarkably generous and successful Marshall Plan. The report, however, highlights United States and Allied failures in the areas of restitution and compensation during post-war negotiations to retrieve Nazi assets.

While this historical report simply lays out the facts in an objective manner, there are certain inevitable conclusions one can draw. I've outlined my own personal conclusions in the forward to the report. The report should raise questions and serve as a catalyst for further research and action to redress, however belatedly, some small measure of the injustice that still weighs on so many people today. Let me share with you the major conclusions I've reached in my own review as coordinator of this effort.

First, the massive and systematic plundering by Nazi Germany of gold and other assets from conquered nations and victims was no rogue operation. It was systematic, intentional and essential to the financing of the German war machine and they used neutral countries as banking and financial facilitators. With the Reichmark largely unusable, in order to obtain war materials, the Nazis used looted gold, shipped largely to Switzerland, to convert into Swiss francs to help meet their war needs. The German Central Bank, the Reichsbank, knowingly and willingly received gold plundered from the central banks of their neighboring countries, which the Nazis had overrun; and in addition, had a special account called the Melmer account, for the SS officer, Bruno Melmer, for the deposit of jewelry, watches and even dental fillings of civilian victims of the Holocaust.

The gold from monetary and non-monetary sources was then smelted or resmelted into gold bouillon, and its origins often disguised with false markings. This is a blow-up of one of the documents from the Precious Metals Department records, which we recently discovered just within the last few weeks from microfilm records at the Archives, from the Reichsbank. This is the Melmer account, the name Melmer. This is on one day of one year. The translation is, on behalf of the Reiff finance ministry, 854 rings, one trunk of silver objects, one trunk of dental gold, 29.996 grams. This appears frequently in Reiff Bank records.

Second, in the unique circumstances of World War II, neutrality collided with morality. Too often being neutral provided a pretext for avoiding moral considerations. Of course, neutrality was historically a well-established principal international law. Smaller countries used it to protect themselves from the incessant number of European wars. But the report makes painfully 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. Most never did.

Nazi Germany was, instead, a mortal threat to Western civilization. Their cooperation was motivated in part by fear of invasion. They were only a Panzer division away. Although this receded during the latter stages of the war, it was also motivated in part by Nazi sympathies in some countries and by a desire for profit in all. All helped support and prolong Nazi Germany's capacity to wage war at a time of grievous allied and civilian casualties.

Third, of all the neutral nations, Switzerland had the most complex role in World War II. Because of the financial role played by the Swiss National Bank and Swiss commercial banks, it had the deepest and most crucial economic relationship with Nazi Germany, involving banking, trade, industrial production and the use of their railways. It, like others, had reason to fear Nazi attack and, indeed, was surrounded on all sides by axis powers.

At the same time, many of its actions benefited the Allies. It bought substantial amounts of gold and hard currency from the Allies. It served as a protecting power for Allied POWs and property, and provided a crucial intelligence base for the OSS during the war. But without question, Switzerland and other neutral nations benefited from their trade and financial dealings with the Germans and helped prolong the war effort.

Swiss actions after the war are the least understandable. After the war, despite appeals from Allied negotiators to consider the moral imperative, the Swiss demonstrated an obdurate reluctance to cooperate with Allied efforts to retrieve and redistribute looted gold. Despite repeated Swiss protestations after the war that they had never received any looted Nazi gold, this report is incontrovertible. The Swiss National Bank and Swiss bankers knew, as the war progressed, that the Reichsbank's own coffers had been depleted and that the Swiss were handling vast sums of looted gold.

In post-war negotiations, Switzerland used legalistic positions to defend their interests, regardless of the moral issues also at stake. They first contended that they had purchased Nazi gold in good faith; and only later did they admit to having obtained looted Belgium gold. After long, difficult and contentious bargaining, agreement was reached in the form of the 1946 Washington Accord, obligating the Swiss to return $58 million to the Allies - far less than the range of $185 to $289 million in looted gold that the Treasury and State Departments estimated was in Swiss national accounts.

The Swiss were even less forthcoming in implementing the other part of the Washington Accord -- providing the Allies with 50 percent of the liquidated value of German assets in Switzerland after the war, both for the reconstruction of Europe and for the benefit of refugees. Six years later, in 1952, the Allies accepted a token payment of $28 million in liquidated value of German assets, compared to Allied estimates of $250 to $500 million.

This chart shows that Germany looted $579 million of gold during the war. That would be, again, about $5.6 billion. Around $400 million of it went to Switzerland, and of that, between $185 and $289 million was for their own account in looted gold. The rest was for the account of other banks at the Swiss National Bank, such as Portugal and Spain.

This is the amount and the range of German external assets at the end of the war. In Switzerland, the Treasury estimated $500 million; State, $250 to $500 million; the Swiss delegation itself, $250 million; press accounts, $750 million. The amount ultimately paid in total in 1952 was $28 million. Even this amount was effectively paid for by the German-Swiss settlement of war debt between the two nations, reached at the same time as the 1952 Accord with the Allies. Until last year, the Swiss banks were notably uncooperative in helping identify dormant bank accounts.

It's important to emphasize the Swiss was not the exception. Negotiation with most of the other neutral countries - Spain, Portugal, Turkey, for example, with the possible exception of Sweden, were also difficult, were also contentious, were also prolonged, and also produced little.

Fourth, 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. Moreover, there was an even greater lack of attention to ensuring the implementation of agreements already negotiated, like the 1946 Washington Agreement. The reason is quite clear when one goes through the report, and that is that war-time objectives were replaced by new Cold War imperatives. For example, the Berlin Blockade in June of 1948 emphasizes this. The need to rebuild post-war Europe; the need to create NATO to contain the Soviet threat; also putting a democratic West Germany on its feet and other security concerns with all neutral countries also took precedence.

Fifth, the report concludes that some Nazi-victim gold was sent abroad to Switzerland and other neutral countries, and that some victim gold was also included in the Tripartite Gold Commission gold pool, into which looted central bank gold was placed for redistribution to the governments from whom it was stolen during the war.

Although there is no evidence that Switzerland or any other neutral country knowingly accepted victim gold, the study also provides clear evidence that at least a small portion of the gold that entered Switzerland and Italy included non-monetary gold from individual citizens in occupied countries and from concentration camp victims or others killed before they even reached the camps. Further research could determine whether more was included.

Finally, one aspect of the study deserves immediate attention and action -- the plight of those who were victims not only of war and the Holocaust, but of the sad combination of indifference on the part of neutrals and inaction on the part of the Allies. The report reveals serious inequities developed in the treatment of victims depending on where they lived after the war, whether behind the Iron Curtain or in the West.

Beyond immediate emergency resettlement assistance, most governments did not have long-term commitments to rehabilitation of individuals; and thus the greatest burden of providing ongoing relief fell on private organizations. Throughout this voluminous report it is impossible to escape the conclusion that the primary victims were those who suffered the most during the war, the victims themselves. This alone should evoke a sense of injustice. It is important, therefore, that we use this opportunity and information to act decisively to complete the unfinished business of the Second World War, to do justice while its survivors are still alive. That is why the United States favors a substantial portion of the $70 million still in the TGC gold pool be voluntarily placed in an international fund for Holocaust victims and other victims of Nazi atrocities.

It is important that a healing process begin, and that genuine reconciliation be achieved. Here there is genuine reason for optimism, especially with so many countries now willing to honestly confront their past and to draw lessons from it. Following the landmark British study of last year, and the launching of our own study by the Clinton Administration, Switzerland, Sweden, France, Spain, Norway, The Netherlands, Belgium, Brazil, and most recently -- just within the last few days -- Argentina have established or will soon establish historical commissions to examine their roles in World War II, their relationship with Nazi Germany, and their responsibility to return looted property.

In particular, we welcome and applaud the steps Switzerland has taken in establishing commissions to examine assets in dormant bank accounts, and to review the entire historical relationship between Switzerland and Nazi Germany. The Swiss Government, individual banks, Swiss industry, and private Swiss citizens - even school children in Switzerland - are also demonstrating leadership by establishing funds for victims of Nazi atrocities and other humanitarian causes.

To move this healing process forward, it is vital that all the facts be made public. The Clinton Administration has made an extraordinary effort to declassify documents that may shed light on these issues. In addition, the U.S. Government favors the immediate declassification of all Tripartite Gold Commission documents that bear on the origin of the TGC gold pool. The United States will also explore the idea of an international conference of historians and other experts this Fall to exchange information, insights and documents about the flow of Nazi assets; the relationship with the Third Reich during the war; and measures for finding surviving owners or disposing of heirless property.

The U.S. and other concerned governments would then need to assess the results of these efforts. It would be important, for example, to have complete German Reichsbank records available, so that we can all reach a more complete understanding of the origin and flow of these looted assets.

We hope that other governments will continue to build on these hopeful beginnings. We all need to pursue unresolved issues, such as the disposition of heirless assets, including any which may remain in the United States. We must all look for ways to assure that needy survivors, particularly the double victims of both the war and communism, are cared for and compensated. Much work remains, but this preliminary study is a major step forward.

Ultimately, the United States, our allies and all of the neutral nations should be judged not so much by the actions or inactions of a previous generation, but by what we do today and by our generation's willingness to face the past honestly, to help right the wrongs, and to deal with the injustices suffered by the victims of Nazi aggression. Our hope is that this study will advance that purpose. Thank you and I will take your questions.

QUESTION: Sir, in your view, neutral countries, say, like Portugal, that have not been proven to have received gold that was the personal property of the victims of the Holocaust, but nevertheless returned only a small fraction of looted gold, do they still have a moral obligation to make reparations to the victims of the Holocaust?

UNDER SECRETARY EIZENSTAT: We document in this study the fact that looted gold was in the possession of Portugal, of Spain, of Turkey, as well as of Switzerland, and indeed, Sweden, as well, after the war. As our report indicates, the negotiations, which I have to emphasize the Allies willingly participated in, clearly did not provide a full return - in some cases not even a significant return of that gold.

Turkey, for example, had, at the end of the negotiations, promised a $1 million payment. Nothing was every paid to this day. So I think each country needs to examine this record, through its own historical recommendations and make its own judgments. But I think that these facts speak very loudly, and I would again hold out Switzerland as an example of a country which has tried to rectify the past, begun to do so. This is something I think other countries might do, as well. Yes.

QUESTION: When you say --

QUESTION: The sale of the --

QUESTION: Sorry. Let me clarify just one small thing. When you say looted gold, is it also non-monetary gold?

UNDER SECRETARY EIZENSTAT: We don't have substantial evidence of victims' gold going to other countries other than Sweden and Italy. But it's very important to understand that because of the way in which Reichsbank smelted and re-smelted both central bank gold and victims' jewelry and poured it into new ingots and then disguised it, that distinguishing between, by appearance, victims' and non-victims' gold was impossible to do.

It was the clear pattern and practice of the Reichsbank, as shown by these accounts, to intermingle these and ship these abroad. Where they may have landed and the amounts is difficult to say, but it seems quite clear that victim gold was incorporated into these ingots and would have, perhaps, been in all of the neutral countries.

QUESTION: Mr. Eizenstat, you've noted that the agreement that the Swiss made with the Allies at the end for $58 million in payments on the monetary side, and on the other side, the German assets that the Allies were supposed to get 50 percent of, the Swiss have - on both sides, they really have not paid the money that they had. They have not acknowledged the German assets that they had.

First of all, do you favor re-opening the negotiations that led to that agreement? And do you favor any other steps, now that you have done all this research to try and bring a greater measure of justice?

UNDER SECRETARY EIZENSTAT: At this point, we neither exclude or include the possibility of re-opening that agreement. We think it is important that the report stand for itself at this point; that all the countries involved, including Switzerland, look at it, examine it, determine its credibility and act accordingly. So at this point, we have not made a judgment as to whether or not we should re-open that negotiation. It is important, however - again, for all of the neutral countries - to look at their role and the very small amounts that were returned relative to what they actually possessed.

I think it is also important to understand, however, as I have emphasized, that the U.S. and the Allies were part and parcel to these negotiations. They documented the amount of the gold that was available in each of these countries. They documented the amount of Nazi assets, and because of post-war considerations, simply did not want to press the countries as much as they might have.

It's also important to understand, the U.S. unblocked Swiss assets in the United States almost immediately after signing the 1946 agreement over the objection of the Treasury Department, for example. This lost a good deal of negotiating leverage. It's also important to understand, as we point out, for example, with Portugal, there were serious negotiations for access to the Azores Air Force Base that was clearly a consideration. Even with respect to Switzerland, there was a 1951 decision by the National Security Council announced by President Truman, signed off by President Truman, that even though it was recognized Switzerland would remain neutral, that it was an essential democratic deterrent to Soviet expansion. This was also a factor.

Last, it's quite clear as one reads through the pages that the Allied and U.S. negotiators realized that at least in part, if not in whole, Germany would be funding part of these agreements. That is to say that each of these neutral countries had large outstanding debts owed by the Germans for wartime shipments of everything from ball bearings to raw materials, cobalt, chrome and the like. They wanted that money back from the Germans, despite the fact that it had helped prolong the war. The Allies realized that in the end, the Germans were going to be paying for part of this by paying the neutrals who would then in turn return the compensation. There was a desire not to overburden the post-war German economy at a time when West Germany was being incorporated back into the Allied countries. Bob

QUESTION: At the outset of your remarks, you said that this report has real implications for the future. I'm wondering, specifically, if one of those implications perhaps is a message to Switzerland concerning other hidden assets at the moment, for example, that might be held by Mobutu and various names. And also, what are some of the other implications for the future that this report holds?

UNDER SECRETARY EIZENSTAT: Well, some of the implications I've already mentioned - what to do with the documents of the Tripartite Gold Commission; what to do with the remaining $70 million; how to get a formal accounting of the need for cooperation, which the Swiss are certainly doing in the Volcker Commission study; the need for other countries to come to terms with their past.

But we certainly hope that this will occasion a broader look at the whole issue of transparency in international transactions so that we don't again face anything like we've faced here. That will pertain to each particular country in different ways. But I think the last thing, Bob, that I would say is that the Swiss, again, have led the way here in terms of initiating the commissions and funds. It's important for the other neutral countries as well to look at their record and what they did and come to terms with their own past and to act on those lessons, as the Swiss have begun to do.

QUESTION: How do you recommend that the remaining assets be distributed? This compensation to Holocaust victims - what form should that take?

UNDER SECRETARY EIZENSTAT: It's important to recognize that of the $70 million left - and these figures become confusing when we talk about today's values, so let me give you a better sense of what we're actually talking about and then we can answer the question directly.

The Tripartite Gold Commission has paid out about $379 million in monetary gold; although, again, we now believe some of that was non-monetary gold - about $4 billion in today's values. That represented a payment back to the ten claimant countries from whom it was stolen of 329 metric tons. That leaves today about 5.6 million metric tons, or in today's values, just under $70 million. Roughly four million of those metric tons are in the Bank of England, worth about $46 million; and around two metric tons, worth about $22 million, are in the New York Federal Reserve Bank.

So this is what we're dealing with. This would require - unless one were to re-negotiate the entire post-war agreement, which would take the consent of every country - voluntary contributions by the countries. What we have suggested is that a substantial portion of that $70 million be put into a fund for victims. It's important to understand, I think, that about four countries have claim on 90 percent of that $70 million in gold; and that distributed amongst even those four - let alone all ten -- $70 million is a pittance for countries. But it could be of significant help to those aging survivors who this report makes clear did not receive anything close to the justice they might of.

So this will require voluntary action, and we hope that an appeal to their conscience plus the fact that this record is now clear, that some of that gold in that pool - and therefore, some of the gold distributed - did include victim gold, although we can't quantify it.

QUESTION: To follow on then, how would you then suggest distributing that $70 million?

UNDER SECRETARY EIZENSTAT: That will obviously be something - if it can be accumulated itself - that we'll have to determine the whole organization of such a fund; who the appropriate victims are. We certainly feel that the ones who have the strongest call on the conscience, and we say so, are those double victims. That is, those who were trapped behind the Iron Curtain after World War II and have essentially gotten nothing from the German Government, unlike those who emigrated to the West - Israel, United States, other countries - who have gotten over $80 billion in Deutchmarks. These people have essentially not been paid to this day by the German Government. Yes.

QUESTION: How many people do you estimate that would be? And what are the four countries that lay claim to the $70 million?

UNDER SECRETARY EIZENSTAT: First of all, in terms of those so-called double victims, one would estimate somewhere in the range of 30,000 to 50,000, probably closer to 50,000, but something in that range. Here again, I want to indicate that this whole effort is beginning to have an almost cleansing impact on countries and a positive impact; that there is room for real optimism.

Hungary is a perfect example of a country that is leading the way in Central Europe for its double victims. Beginning this very month, a foundation has been created in Hungary, with the cooperation of the Hungarian Government, the Hungarian Jewish community, and the World Jewish Restitution Organization. This could be a potential model for the way in which funds might be allocated more broadly.

That fund will be the repository for the restitution of real property that belonged to the Jewish community then - synagogues and schools and community centers and the like. But also, they will begin paying between $20 and $40 a month to over 20,000 of their survivors. We know that around half of all the survivors in Central Europe are in Hungary. That gives us a basic calculus that we're talking around, again, somewhere between 30,000 and 50,000. Yes.

QUESTION: This report shows how close the relations were between Switzerland and Germany at that time. Was it by mutual sympathy for financial interest, or just for Switzerland not to be invaded by Germany?

UNDER SECRETARY EIZENSTAT: It was a combination of factors. One of the things we've done, as shown by my preface, and I think the report makes this very clear, we try to divide our analysis of neutral country conduct, not only Switzerland but the other countries, who also significantly contributed to the war effort, into three phases.

The first phase was from the outbreak of World War II in 1939 to roughly 1943, the Battle of Stalingrad. During that period German war prowess was the greatest. Fear of invasion, certainly by Switzerland which was the closest, was quite legitimate.

The second period would be from the time of the Allied invasion of Italy, D-Day and the continuing advance of Soviet armies from the East, when the threat of German invasion receded substantially and indeed almost evaporated toward the end of the war.

Third, is the post-war conduct. It is the post-war conduct, in a sense, that, again, is the least explainable and the most difficult to understand because some of the behavior that was seen during the war continued well into the post-war period.

QUESTION: Mr. Ambassador, you said the agreements between Switzerland and the United States of '46 and '52, obviously were not satisfactory; that the payments made by the Swiss obviously did not in any way match the estimates of the obligations made on the U.S. side. On the other hand, the Swiss Government has decided to set up a foundation which would yield something like $300 million Swiss francs a year for humanitarian purposes.

In the view of the U.S. Government, or in your personal view, is this action, if it is accepted by the people in the referendum, would that be sufficient, perhaps, to close the gap in moral obligation which seems to be outstanding and left after the '46 and '52 agreements?

UNDER SECRETARY EIZENSTAT: First, I think it is important to understand what the Swiss have actually done. They have now set up, through the private sector, the three major Swiss banks, but not by any means all of the Swiss banks, the Swiss National Bank and some of the major companies, a fund which is now roughly $180 million and growing.

This is a private sector fund. It will begin operations very shortly on both the American and U.S. sides, excuse me, the American and Swiss sides, people are already being named to that. The second fund, as you indicate, will depend on an act of the Swiss Parliament and perhaps a referendum, although this is still to be determined, in which the Swiss have set aside into a reserve $4.7 billion, which will throw off several hundred million dollars for general humanitarian causes, not simply for the Holocaust, but for general problems of poverty and other humanitarian causes.

This is obviously an important step forward. I think it's important that as Switzerland and the other neutrals examine this report and its implications, they begin to look at the question of this whether this is a sufficient response. That is why we wanted this report to stand for itself, so countries had a chance to absorb it. We think it's certainly an important first step. Whether it is the only step that should be taken is something that will bear further examination. Tyler.

QUESTION: The report stresses the fact that in the late '40s, the legal challenge seemed uncertain towards the Swiss, and the appeal was made largely on moralistic grounds. In light of the ensuing years and the evidence that you've turned up, is there now a stronger basis for a legal challenge? Is that an avenue?

UNDER SECRETARY EIZENSTAT: Well, first, I certainly don't want to start commenting on class actions and the like. I think that at the end of the day it is important that there be a closure to this issue. I don't think that we are there now, and as I've indicated, I think that all countries need to look at this report and determine what they ought to be doing.

But I don't want to get, Tyler, into legal arguments. What I would say is, the legal question involved was the question -- which the Allies had some doubts about and it undoubtedly affected our negotiating positions - was the question of whether there was legal authority in the Allies to claim, as the victorious powers, control over German assets, both inside and outside of Germany. There was an Allied Control Declaration that was made shortly after the war, in which the Allies made that assertion. They felt it was obviously sustainable in international law. But that was a question that was asked.

That is quite separate from the issue of whether or not, for example, there is a legal basis to now indicate that there was victims' gold mixed into the gold that went into the TGC pool. Now it's clear that what we think a substantial portion of that should be paid is not just based on a moral argument, but on the fact that that was legally to be gold that was monetary gold to return to the central banks from whom it was taken. To the extent that there was mixed into individual gold, then that would have been an inappropriate distribution.

I wonder if, Dr. Slany, on the international legal issue, if you would like to make any comments on the question of what was in the mind of negotiators, as you looked at this. I think Dr. Slany has a very keen understanding, as the State Department historian, of all the factors that went into the Allied review of the negotiating posture. You might, Bill, give your own thoughts about that.

DR. SLANY: In each step of the negotiations, both at the heads of government meeting at Potsdam and at the Paris Reparations Conference, and then the Allied Control Authority in Germany, 1945, the question arose and was debated as to whether or not those allies who had conquered Germany could thereby assume all authority for becoming a German government.

There never was unanimity. It is true that a law was adopted by the Allied Control Authority, and that the Allies negotiating with the neutrals all adopted the view, in general, that they had the authority to claim to be the government of Germany. There always were misgivings, and there was a consciousness in past international law that it was difficult to make such a claim. It was, in a sense, a rather unprecedented one, and one which, throughout the negotiations, troubled negotiators and probably, as Secretary Eizenstat has said, vitiated the force of their negotiations.

UNDER SECRETARY EIZENSTAT: You might just talk about broadly about the U.S. and Allies, sort of thoughts, during the negotiations, too, in terms of the post-war objectives.

DR. SLANY:: It is the case that the Allies, both at the wartime conferences and in the immediate post-war period, were most concerned about the reconstruction of Europe, devastated by Germans. The principal motive was to find the wherewithal immediately to try to begin the restoration of Europe and to succor the refugees, whose presence in the occupied area was too painful for anyone not to be terribly conscious of them.

So these negotiations were always driven with the question about the urgency of trying to rebuild Europe and to support the refugees. The issue of whether or not there was a legal basis for claiming this or whether or not there was a moral obligation was, for those negotiators, always overshadowed by the more palpable issue about doing something with a devastated continent and hundreds of thousands of people who were without means. This was an issue which always was in their minds and was only partly vitiated eventually by the establishment of the Marshall Plan.

UNDER SECRETARY EIZENSTAT: I would say also, one thing we hadn't touched on that underscores Bill's point is the issue of heirless assets. There were sad letters to the 1946 Washington Accord in which, for example, the Swiss agreed to examine sympathetically the issue of taking heirless assets in Swiss banks and giving them to the survivors' families, or for other humanitarian purposes. That was really never fully implemented. In 1962, there was a very small accounting. But otherwise, those heirless assets really were never adequately accounted for. Yes.

QUESTION: After this report, do you have a better idea - and if so, could you tell us - of the amount of assets of Holocaust survivors that remains today in Swiss banks, which, after all, was the point of this whole study?

UNDER SECRETARY EIZENSTAT: Well, first of all, that was not the point of the study. That is the point of the Volcker Commission which is to examine that, and they have two certified public accounting firms which are looking at that. The Swiss have, themselves, after first indicating in the immediate post-war era that they had none, in 1962 found $2 million. They now say that there are some $38 million, although we don't know that that was all Holocaust victims.

The whole purpose of the Volcker Commission report and study, and the analysis by the accounting firms, is to determine just that. They are looking at over 100 banks. They hope by the middle of this year to have a preliminary audit done, and by the middle of next year to complete that. I think that we should await their findings, rather than try to speculate.

QUESTION: Ambassador, I would like to ask you a personal question, if I may. To what extent did you have much awareness of all of this prior to becoming involved in this very historic study? And ultimately, how has it affected you once you have been involved in it, both as a Jew and as an American?

UNDER SECRETARY EIZENSTAT: First of all, I had a government job to do. I was assigned to do a government job and I did it the way I've tried to do all the jobs I've been assigned since my days with the Carter White House, which is the best, most objective and fairest way I can. I went into that with this as well. That means cold objectivity, letting the facts with respect to the role of the neutrals and the U.S. fall where they may, as we were asked.

At the same time, and I'll let, perhaps, Dr. Slany speak for this as a professional historian who has gone through cataloguing war records and many other things. I think as an individual and a human being all of us were affected by what we saw and what we read. The enormity of the crimes committed by the Germans, and it is important when we look at this, it was Nazi Germany not the neutrals who committed the Holocaust and looted this gold, certainly came to mind. I don't think any of us will ever be quite the same for having gone through this. It really punctuated for us the brutality of the war and the importance of making sure that everything is done to provide justice to those who are still surviving, and I think that comes through, not simply in my own personal report, but in the summary and in the findings that we all made here.

I don't think anyone can go through this without some feeling of emotion. But at the same time, we never let that emotion cloud our judgment. We never tried to come to conclusions that were not warranted by the facts, and we never leaped over assumptions in order to come to certain findings. We never let ourselves be pressured into making certain decisions because it might or might not offend or support a particular position.

Bill, do you want to just talk on - you've gone through this as a historian and many other things, in terms of the uniqueness, perhaps of -

DR. SLANY: My own impression as a historian - and I'm speaking now not only for myself, but for the 25 or 30 colleagues in various agencies who worked with me so closely, and whose work this actually is, rather than mine - is that what we discovered is that the Cold War swept away in many ways and left unfinished a whole world of problems and difficulties. We, in trying to uncover these, re-examine these matters, discovered how much was left undone from 50 years ago, and how much has yet to be examined.

I have spoken often to Secretary Eizenstat that what we've done is only a roadmap through millions of pages of documents. I've spoken to my colleagues in other foreign office historical programs in a number of countries, and they're experiencing the same thing. There's a lot that has yet to be examined; there's a lot that we don't understand. It is simply a case of having looked back over five decades and discovered that much was left undone and has yet to be addressed.

QUESTION: If I may follow up, Dr. Slany, this in fact was not your personal area of expertise. Prior to getting involved in this, how were you personally affected by having gone through, having undertaken this study?

DR. SLANY: Well, as a matter of fact, it is something that the State Department's Foreign Relations Series dealt with 25 and 30 years ago. It is my regret in taking up the study that we hadn't done it very thoroughly. It was a discovery that we hadn't understood even ourselves in the 1960s and the 1970s when we published these records originally, some of them, that we hadn't thought through and hadn't understood the implications of what we were dealing with.

QUESTION: I have an additional question concerning the Washington agreement, what could be reasons for reopening of this agreement, one might conclude from your report that already then it was considered some sort of a compromise.

UNDER SECRETARY EIZENSTAT: Again, I think that our view is that we don't want to get into the issue now of whether it should or should not be open. We are not in any way excluding that, but we are not suggesting that it should either. I think that it is important that all the countries involved in the Washington Accord examine the record, look back on it with a very cold and objective light and determine whether or not now, 50 years later, all has been done that might have been done at the time. I think the facts and conclusions are rather evident and obvious, but what that leads us to, I think, is for another day.

QUESTION: Mr. Secretary, could you address the question of victims' gold? How much do you think landed in the Melmer account? Also, why don't you have all of the records of the Reichsbank now and how much of it was then disbursed either to the TGC at the end of the war or, during the war, to neutrals such as Switzerland.

UNDER SECRETARY EIZENSTAT: The quantification of the amount of victim gold that went into the TGC account is not, at this point, capable of determination. Perhaps with more records we will be able to find it, but it may be that we will never fully know the amount. Certainly, it was a considerable sum. Relative to the amount of monetary gold from central banks, it was a relatively small amount. But for those from whom it was taken, it was obviously their life's savings and work and valuables.

We have determined absolutely specifically that not only based on the pattern and practice of Reichsbank transactions and this inter-mingling of monetary and non-monetary gold, but from an analysis of Prussian mint smelting of looted Dutch guilders from SS victims, we know that some of that went abroad to Switzerland and Italy. We also know from other reports and from the fact that some SS loot from victims, including gold coins and bars, were transferred by the Allies into the gold pool. There is also a question, although we need more information on this, about gold from the Nazi concentration camp of Terezinstadt. All of these indicate that victim gold was included and, therefore, was redistributed, but we do not know the amounts.

Now, in terms of the Reichsbank records, it is only within the last few weeks that we really began to examine those, the reason being that we had some 15 million pages of our own documents. This is one of the reasons why we are suggesting the possibility of an international conference. We did find, after a great deal of examination, that we had partial records on microfilm in the Treasury Department of Reichsbank records, and we discovered that only a few weeks ago. Those will be very important. These are part of the analysis, this blow-up.

What seems to be missing is that portion of the records representing the full accounting of the Melmer SS Account. We have very, very clear indications -- and Bill correct me if I'm incorrect here -- but we have very clear indications from even the Army person who transferred these records after they were given to the United States for copying, and then transferred them back, that this person did deliver these particular records.

Initially the Reichsbank said it has not been able to identify those, but they certainly have not, at this point, made a full examination. It will be very important to get those SS account records from the Reichsbank, and I'm sure that they'll be cooperative.

QUESTION: Did you try to, or did look through the files to see if Reichsbank officials, who not only survived the war, some of them went to Switzerland, some of them may have even stayed in Germany, were ever deposed and questioned about this particular thing?

UNDER SECRETARY EIZENSTAT: They were deposed. I believe, Bill, it was Mr. Puhl, the Vice Chair of the Reichsbank, who provided very crucial information to the Army after the war. It is also important in terms of getting a sense that these are not dry figures, to just understand, the Army almost inadvertently landed on this because the Reichsbank in the closing weeks of the war transferred almost all of their reserves into a salt mine called the Merkers Mine.

As the Allies swept through Germany in the closing days of the war, they discovered in this salt mine this enormous gold pool from Reichsbank records. It is there that they found the Melmer Account. It is there that they found sacks and box loads of victim gold identified by particular concentration camps. Then in interviewing, Bill, Mr. Puhl, I think it was and others about the practice that they had, it was determined that this re-smelting operation was occurring both with respect to central bank gold from the other countries to disguise its origin, and to convert into useable, tradable form, the victims gold that this was discovered.

Bill, do you want to add anything on that?

QUESTION: Who were the four countries that you say have claims on the Tripartite Gold --

UNDER SECRETARY EIZENSTAT: There are ten countries that have claims.

QUESTION: You said ninety percent --

UNDER SECRETARY EIZENSTAT: -- but the countries that have, I think, the biggest claims are France, Austria, the Netherlands and Italy.

QUESTION: How much of the $70 million- you said this twice, that a substantial portion of the $70 million should be put into an account for survivors or victims. Can you be a little bit more specific?

UNDER SECRETARY EIZENSTAT: No, we used that term because we want to be able to discuss with our allies and the claimant countries the amounts that ought to be done. This has to be done voluntarily if we are going to do it in any reasonable period of time to help the survivors. We have stated our view. We're not trying to pin other countries, at this point, to our negotiating position, but that is our view. We hope "substantial" means genuinely a substantial amount of that. Again, I think there is both a legal and a moral basis. This reports helps establish the legal basis for that.

MR. DINGER: Can we have the final question, please?

QUESTION: In examining - how much of this victim's gold may have gone to Switzerland through some kind of an official way or even fenced on --

UNDER SECRETARY EIZENSTAT: Again, because we can't quantify the amount of victim gold, we can't determine. What we do know is that some amount went.

QUESTION: In Switzerland's neutrality during the way, did you, I mean, was there any comparison between the amount of money and transactions Switzerland was handling for Nazi Germany, and the transactions it was handling for the Allies?

UNDER SECRETARY EIZENSTAT: The Swiss, in fact, bought very substantial amounts. By one indication of the Swiss National Bank, they actually may have purchased more gold from the Allies than they did from Germany. There was also some limited trade, although most of the trade was with Germany. Okay, one last question here.

QUESTION: Thank you. To follow on non-monetary gold, the report that states that there is no evidence that Switzerland or Italy knew about the fact that there was non-monetary gold. But what is your impression as an historian and yourself, Mr. Eizenstat? Do you think that it is possible that Switzerland knew about it? I mean, what is your impression?

UNDER SECRETARY EIZENSTAT: Well, again, there is no question that Switzerland knew, despite their initial protestations to the contrary after the war. There is no question that they knew that there was looted gold. We have certainly uncovered no evidence that they knew that it was victims' gold. We have no way of making any judgment beyond the fact that we have no evidence in that respect and that the gold was basically, by its appearance, indistinguishable.

Again, unfortunately, the U.S. definition of non-monetary versus monetary gold for TGC purposes was based on appearance and not origin. So all we can say is we have no evidence that would indicate that they knew it was victims' gold, but there is clear evidence they knew that it was looted gold.

Thank you very much.

(The briefing concluded at 12:15 P.M.)

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