Negotiations With Other Neutrals

Negotiations With Sweden
Even as negotiations with the Swiss began over the return of looted gold and German assets, Allied officials were preparing for parallel negotiations with the other neutrals on these matters. Nowhere did these negotiations proceed as swiftly and successfully as with Sweden, although there were nevertheless many problems. By April 1945, as the war was ending in Europe, Swedish officials had assured British and American diplomats that in response to Allied wartime statements on gold and assets, Sweden would freeze German assets and restore looted property. By early 1946 the Swedish Parliament had adopted legislation necessary to control German property in Sweden and was working cooperatively with Allied representatives to quantify German assets and wartime gold shipments. The Swedish Government consistently rejected, however, the Allied assertion of Allied Control Council Law No. 5, vesting control in the Council over German external assets.

This difference on the application of international law prolonged negotiations between Allied and Swedish representatives. But in July 1946, they concluded an agreement that immediately provided $12.5 million to the Intergovernmental Committee on Refugees to rehabilitate and resettle the non-repatriable victims of Nazism, agreed to provide $18 million as reparations to the IARA, and assigned the remaining $36 million in liquidated German assets for the assistance of the British and U.S. occupation forces in Germany. Although agreement was also reached on the restitution by Sweden of some $15 million in gold tentatively identified as having been looted by Germany, this gold was not all actually delivered to the Federal Reserve in New York for deposit in the TGC Gold Pool until 1955--fully nine years later--after the Allies and Swedish authorities finally resolved remaining differences.

Negotiations With Portugal
Safehaven negotiations with the Portuguese proved protracted and difficult. In 1946, the Allies estimated both private and German state assets in Portugal at 500 million escudos (about $20 million). In addition, based on preliminary investigations, they believed the Portuguese may have acquired between 93 and 122 fine metric tons of looted gold (about $105.1 to $137.9 million). Investigations in 1947, however, indicated that the Bank of Portugal had received between 38.45 and 46.76 tons ($43 to $53 million). Talks began in earnest in September 1946. The Allies initially sought 44.864 fine metric tons (about $51 million), but Portugal offered only 3.9 tons (about $4.4 million) for which it expected full compensation from liquidated German assets. The two sides reached a tentative accord in February 1947, in which Lisbon agreed to give up 100 million escudos (roughly $4 million) in liquidated German assets in exchange for as much as 180 million escudos (about $7.2 million) for their claims against Germany. But the accord was not implemented because of an impasse over looted gold.

As gold negotiations dragged on into the 1950s and the value of these assets depreciated, the State Department grew frustrated and convinced a reluctant Treasury Department to agree to Portugal's terms. State also feared that the impasse might jeopardize what it considered to be the more important strategic goal of gaining U.S. access to an Azores air base and integrating Portugal into postwar Europe.

Negotiations With Spain
Allied negotiations with Spain regarding German assets and looted gold were protracted and yielded only a token amount. The Allies suspected that Spain held about $30 million in gold looted by the Nazis and another $30-$39 million in other German assets. The Allies reached an agreement with Spain on looted gold through an exchange of notes in May 1948. In 1949, Spain turned over to the Tripartite Gold Commission $114,329 in looted gold.

An accord on the disposition of German assets in Spain was not reached until April 1948, by which time the United States was seeking access to Spanish bases. Some of the proceeds from the liquidation of German assets (about $36 million) were distributed to IAPA nations, but none was slated for non-repatriable victims. In November 1949, the Allies registered a protest over Spain's implementation of the accord, and a year later Spain threatened to suspend it. The debate continued without resolution until 1958. As a result, there was no payment for German assets.

Negotiations with Turkey
Although Turkey abandoned its neutrality and joined the Allies shortly before the end of the war, Allied representatives sought from 1946 until 1952 to gain control of German assets estimated at up to $44 million and looted Belgian gold worth $5 million or more located in Turkey. Desultory negotiations stretched over several years. By the spring of 1951, the Allies had agreed to relinquish their claims to German assets in Turkey in return for settlement of the gold issue. A May 1952 Allied note to the Turkish Foreign Ministry agreed to settle the gold issue for $1 million, relinquished the Allied claim to the German assets, and allowed Turkey to keep the proceeds from the liquidation of German assets. However, Turkey never turned over any monetary gold to the Tripartite Gold Commission.

Negotiations with Argentina
In the case of Argentina, no negotiations regarding the identification and disposition of German external assets were undertaken in the months immediately following the end of the war--or at any time. The United States set about to establish more friendly relations following the criticisms contained in the State Department "Blue Book" on Argentina in early 1946. Argentina had resisted wartime Allied entreaties to freeze German assets and by the end of 1947, American officials concluded that German assets were not identifiable by the Argentine Government and no looted gold had reached Buenos Aires.

Source: The United States State Department
This document is in the public domain.

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