NZZ Swiss Review of Wold Affairs

Gold from Italy in 1944

Gian Trepp

By sending 23 tons of gold to Switzerland in 1944, Mussolini was paying back loans made before the war by a consortium of Swiss banks and the Bank for International Settlements. While it might conceivably have been looted gold, that is not likely.

On 20 September 1943, ten days after the Germans occupied Rome in response to the fall of Mussolini, SS-Colonel Herbert Kappler, together with his right-hand man SS-Major Karl Hass, had his parachute shock troops surround the headquarters of the Banca d'Italia in the Palazzo Koch on the Via Nazionale. The Germans loaded 120 tons - some sources put it at 100 tons - of the Italian gold reserves onto trucks and transported it to Milan, where the ingots were stored in the regional branch of the national bank under German supervision. To this day it remains unclear just who gave Kappler the order to steal the gold. According to one hypothesis, the operation was carried out on the instructions of Reichsbank President Walther Funk in Berlin and his representative in Rome, Reichsbank Director Maximilian Bernhuber. Another version holds a certain Dollmann responsible; he was SS-Reichsführer Heinrich Himmler's personal envoy in Italy. The Banca d'Italia offered no resistance to the German raid on its gold reserves. On the contrary; Governor Vincenzo Azzolini agreed to it. After the cease-fire and the division of Italy, Azzolini had taken sides not with the Badoglio government in the south, controlled by the Allies, but with the fascist puppet state in northern Italy under Salo. The Bank for International Settlements (BIS), in Basel, had had investments totaling about 75 million Swiss francs in Italy since the early 1930s. At that time, this amount corresponded to about 16 tons of gold, which was held by the Banca d'Italia and secured by a gold clause. After the Anglo-American invasion of Sicily in the summer of 1943, the BIS had sent word from Basel that it would like to get back its investments from the Banca d'Italia in the form of those 16 tons of gold - an attempt that proved unsuccessful. After communications between Basel and Rome were broken, the Italian secretary general of the BIS, Raffaele Pilotti, set out in late November 1943 for Rome, where he arrived a week later after a perilous journey. Pilotti was warmly received in the Palazzo Koch. Governor Azzolini promised to send the gold as quickly as possible to Switzerland and gave Pilotti a 60-page list of the numbers and the precision weight of the gold ingots, which he had signed over to the BIS and placed in the vaults of the Banca d'Italia until they could be shipped. At the same time, though, Azzolini made it clear that the gold would not be transported from Italy to Switzerland unless the Reichsbank gave the green light.
Once the issues of the BIS had been settled, Governor Azzolini showed the man from Basel an urgent message from the Swiss National Bank to the Banca d'Italia. The SNB was asking for the immediate repayment of a 53-million-franc loan with which a Swiss banking consortium had financed Italian state industry before the war. Like the BIS investments, this, too, was secured by a gold clause. Azzolini asked Pilotti to go see Swiss National Bank President Ernst Weber in Zurich to inform him that the Banca d'Italia was willing to send 7 tons of gold to Switzerland for the SNB in addition to the 16 tons for the BIS. Satisfied, the BIS secretary general returned to Basel.
On 23 December 1943, Pilotti did indeed meet with Ernst Weber, president of the SNB, to tell him about the complicated situation in Italy. He also gave Weber some good advice about how the gold might be obtained, and from then on, the BIS and the SNB coordinated their efforts to recover investments and loans they had in Italy. With the help of the German BIS General Director Paul Hechler (National Socialist Party member number 7,686,661), Pilotti got in touch with Reichsbank President Walther Funk in Berlin and asked for his support in Italy. Funk agreed to the repayment to the BIS and the SNB with the Italian gold. In January 1944, Funk sent his deputy, Emil Puhl, to see Azzolini in Moltrasio on Lake Como; the fascist government had moved the Banca d'Italia there to keep it safe from the Allies, who were closing in on Rome. In Moltrasio, Azzolini and Puhl decided on the particulars of transporting the gold to Chiasso, in Switzerland just over the Italian border.
There was one person who did not agree with transferring this gold to Switzerland, though: Pellegrini, finance minister of the fascist government in Brescia. He succeeded in persuading the German guards around the Milan offices of the Banca d'Italia to disregard the instructions sent by Azzolini and Puhl. The shipment to Switzerland planned for February 1944 never took place. Instead, the gold reserves were transported under still unexplained circumstances from Milan to Fortezza, a fort the Austrians had carved out of the rock in the 1830s near Bressanone (Brixen), South Tyrol.
Pilotti did not let this setback discourage him. In February 1944 he returned to Moltrasio to see Azzolini, who promised to do everything in his power to have the more than 23 tons of gold shipped to Chiasso. Pilotti then continued south to Brescia to see fascist Finance Minister Pellegrini. As things developed, Azzolini was able to prevail over Pellegrini, and four freight cars from Fortezza arrived on 20 April loaded with 23.3 tons of gold.
From a purely legal point of view, no one could object to the claims that the BIS and the consortium of Swiss banks had on the Banca d'Italia, backed as they were by a gold clause in the contract. But it is quite another question whether it was politically wise for them, shortly before the complete collapse of the fascist dictatorship, to secure these Italian investments and loans that had helped Mussolini before the war. This gold was kept out of the hands of the Allies and thus, in a certain sense, withheld from Italy as it reconstructed after the war. By using Azzolini's lists, somebody could presumably determine whether the gold from Fortezza had been looted - if those lists themselves were available.
In 1941, Italy had, together with Germany, looted the Yugoslavian gold reserves, so it cannot be completely ruled out that such gold was also used to pay the BIS and the SNB. It does appear unlikely though, since by April 1944 it was only a matter of time until Mussolini's puppet government collapsed, and by shipping looted gold to Switzerland, Governor Azzolini would have needlessly exposed himself to the risks of later being exposed as a gold thief.
To this very day it remains unknown how much gold was in Fortezza at the end of the war and where it is now. So unsurprisingly, innumerable stories and rumors have grown up around the legendary treasure at Fortezza (Franzensfeste) in South Tyrol. Luigi Einaudi, the governor of the Banca d'Italia after the war, was of the opinion that American troops had confiscated the gold, then given part of it to the Yugoslavs in compensation for the gold reserves stolen in 1941 and returned the rest to the Banca d'Italia. But the Banca d'Italia has never been able to present clear documentary proof of this official version. At the moment, the Roman military investigating magistrate Antonio Intelisano is trying to shine some light into the gloom surrounding this mysterious gold story.