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U.S. Department of State

Department Seal Stuart Eizenstat, Under Secretary of State for Economic, Business, and Agricultural Affairs

On-the-record briefing upon the release of the report, U.S. and Allied Wartime and Postwar Relations and Negotiations With Argentina, Portugal, Spain, Sweden, and Turkey on Looted Gold and German External Assets and U.S. Concerns About the Fate of the Wartime Ustasha Treasury, Washington, DC, June 2, 1998

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UNDER SECRETARY EIZENSTAT: This report, like our preliminary study completed in May of 1997, reflects a solemn commitment by the United States and by the Clinton Administration to confront the largely hidden history of Holocaust-year assets after five decades of neglect.

This is a historical review. It is not intended to be nor is it an accusation or indictment of any country. We are revealing facts, and we hope that these facts will lead other countries to examine their pasts, to draw their own conclusions and to act accordingly, as indeed each of the countries mentioned in this report are already doing. Switzerland is leading the role in this respect with their own study, the Bergier Study, which has gone beyond even our facts.

We have been candid about the American role, as well. We remained neutral for 27 months after the outbreak of war in Europe, moved only by Pearl Harbor to intervene, although we provided critical land lease assistance to Great Britain in what was then its lonely fight.

I would like to acknowledge the tireless work and dedication of the State Department's historian, Dr. William Slany, and his staff; my senior advisor, Bennett Freeman; Eli Rosenbaum and Dr. Barry White of the Justice Department; and all the other agencies involved in preparing this report, and I would also like to acknowledge the pioneering work of the World Jewish Congress and the American Jewish Committee and other NGOs.

Our most significant finding in our May 1997 study regarding the financing of the war was the overall movement of looted gold from occupied countries and individual victims flowing to and through Switzerland -- primarily the Swiss National Bank -- from Germany, and used by Germany to pay for its wartime imports. The Swiss National Bank must have known that some portion of the gold it was receiving from the Reichsbank was looted from occupied countries, due to the public knowledge about the low level of the Reichsbank's gold reserves and repeated warnings from the Allies. The gold received from the Swiss National Bank from the Reichsbank included some which was stolen from Holocaust victims and smelted into disguised gold bars; although there is no evidence that the Swiss National Bank knew of this latter fact.

These findings were confirmed by the bold and probing gold report just released by Switzerland's Bergier Commission on May 25, 1998, that even exceeded our own estimates of the amount of general and looted gold transferred by Germany to the Swiss National Bank. The Bergier Commission also specifically indicated that there was no longer any doubt that the governing board of the Swiss National Bank was informed at an early point in time that the gold they were handling was looted gold taken from other countries. Indeed, the Bergier Report goes even further and indicates -- and I quote -- "that attentive citizens could read in the Swiss press exactly where the gold which the Reichsbank was circulating came from." This is the kind of hard-hitting and objective analysis we have come to expect from Professor Bergier.

Our first report focused on how Nazi Germany financed its war effort. Switzerland figured prominently because our focus was on looted gold and the key role that that gold played in the German war effort. Today's report focuses on the equally important issue of the uses to which that looted gold was put -- the ability of the Nazis to use Swiss francs they obtained in exchange for the gold they looted to purchase critical war materials from the other neutral countries necessary to sustain the war effort: Argentina, Portugal, Spain, Sweden, and Turkey.

By illuminating the trade as well as the financing side of the equation, our two reports together provide a seamless web, a comprehensive and integrated view of the important part the wartime neutrals cumulatively played in the structure of the German war economy. We have focused on the factors which shaped their neutrality and their trading links with both the Axis and the Allies as well as on their handling of looted assets, essentially gold.

There are five sets of new findings in this report since our first. The first deal with the enormous contribution of European neutrals in supplying critical materials to the German war effort. This report makes clear that whatever their motivations and however acceptable by the standards of the time this trade was for neutrals -- and, indeed, legally, much of it was -- the cumulative trade of the World War II European neutral countries, in particular Spain, Portugal, Sweden and Turkey, helped to the sustain the Nazi war effort by supplying key materials essential to their conduct in the war in many cases well past the point where, from the Allied perspective at the time, there appeared to be a genuine threat of German attack.

The first chart on my right is a chart of the contributions that Germany made -- that were made to the German war effort by each of the neutrals. It provides estimates of Germany's annual requirements of three wartime commodities, considered by Allies to be critical to the German war effort. Those are chromate, iron ore and wolfram. These were absolutely critical to the manufacture of the German war industry. Pre-war stockpiles were used up in the first years of the war, and supplies from Spain, Portugal, Sweden and Turkey were, therefore, indispensable.

The first column at the top describes the importance of chromate, which was used in hardening steel to make armor. It demonstrates that in 1943, Turkey supplied almost 100 percent of German war needs in chromate, and as late as 1944, between 50 percent and 65 percent. Albert Speer, who was the armaments minister for Hitler wrote in his memoirs that he told Hitler in November 1943 -- and these are his words to Hitler -- "should supplies from Turkey be cut off, the stockpile of chromium is sufficient for only five to six months. The manufacture of planes, tanks, motor vehicles, tank shells, U-boats, almost the entire gamut of artillery would have to cease from one to three months after this deadline, since by then the reserves and distribution channels would be used up."

A second element which was important was wolfram, from which tungsten is derived, used in hardening steel to make machine tools, filaments and armor. This chart demonstrates that Spain and Portugal together supplied 100 percent of the German war requirements for this critical material in 1942, '43, and about 50 percent in 1944, the last full year of the war. Here again, the critical importance was demonstrated by someone on the scene at the time. Prime Minister Salazar, the prime minister of Portugal, acknowledged in early 1944 that denying wolfram to Germany -- and these are his words -- "would reduce her power of endurance and the war would accordingly be shortened."

Third, Sweden provided Germany's wartime industry in some years with up to 100 percent of its requirement in iron ore, particularly high-grade iron ore used to make steel. It also supplied important elements in ball bearings. This iron ore produced hardened steel that was used in German weapons, arms and vehicles. The supply of ball bearings, much of which was manufactured in Germany, but some of which was imported from Sweden, was seen by Allied leaders as so critical that a campaign of terribly dangerous air raids was launched against Germany in the summer of 1943 over cities like Shrineford, many planes and crews were lost in a valiant effort to cripple Germany's production. All the Allies could do about Swedish supplies of ball bearings to Germany was to pursue, well into 1944, their demands that the exports be decreased or be ended.

Implicitly or explicitly, the neutrals resisted repeated Allied economic diplomacy, and expressed fear of German reprisal if their economic relations were curtailed. This invocation of what is called force majeur or superior force by the neutrals indeed could not easily be countered by the Allies in the early years of the war, when neutral vulnerability was all too apparent. But the invincibility of the German war machine was belied during 1943 with a series of major defeats that foreshadowed the eventual Allied victory. The neutral nations recognized the turn of the tide and the receding danger of German attack or reprisal and, at Allied demand, began to curtail trade and other measures that supported the German war effort.

By late 1943, the Allies were much less willing to accept the neutrals' claim of the force major argument as a reason to justify their continued economic interaction with the Nazi regime.

The second chart provides a time line for each of the neutrals or non-belligerents; their major exports and other contributions to Germany; their contributions to the Allies, because indeed, they traded as well with the Allies. But it makes an effort -- and here we've done a great deal of work with our military historians and others -- at that point in time, the Allies believed that the German threat had begun to recede such that trade might have been curtailed or eliminated. Then we've tried to take an objective measurement of when there were actual actions taken by the neutrals, demonstrating that their fear must have evaporated. For example, when Portugal allowed the United Kingdom, in October 1943, to use the Azores as a base. And then compare that to when exports of these critical materials actually ceased.

It shows that in 1943, as the course of the war clearly begins to flow against Germany, Allied leaders felt that the German military threat began to recede -- for some, by late '43; for others, sometime in '44; lastly, they say, for Switzerland and Sweden, who were most under threat. Most importantly, the charge shows that despite the lessening or ending of any real force major from Germany and, indeed, the making of considerable concessions to the Allies -- like the Portuguese granting Azores bases, Spain withdrawing its Blue Division from Russia and the rescue and aid to Jewish refugees -- the neutrals continued for many months into mid- or late 1944 in most cases -- Switzerland, indeed, until the closing days of the war in 1945 -- to continue to trade or ship critical materials to the Germany war industry.

A second set of findings deals with the whole issue of neutrality. It sheds new light, I think for the first time, on the complexities of neutrality in the midst of this horrific war -- the different forms that neutrality took in different countries for different reasons. These dispel any sense that there was a monolithic concept of neutrality during World War II. The wartime neutrals often faced similar pressures and counter-pressures, but reacted to them in varied ways, reflecting their specific wartime circumstances, the attitudes of their leaders and the more enduring features of their economies and geography. There was, in short, no such thing as uniform or absolute neutrality during World War II.

The ideological leaning of Franco's regime in Spain, for example, was clear and it was unmistakable. Indeed, he dispatched a Blue Division to fight with the Wehrmacht that the Russian front, clearly underscoring the pro-Axis tilt and what, even by legal standards of the time, would not have been considered a neutral act. So, too, leading members of the Argentine military regimes were also openly sympathetic to the Axis, and allowed Argentina to be used as a base for espionage and smuggling.

Sweden's permission for German troops to regularly transit its territories -- indeed, we estimate that there were 250,000 separate trips by German troops, rotating to and from the war front through Sweden -- and providing, via the Swedish Navy, protection for German shipping in the Baltics were also hardly neutral acts. Yet on the other hand, neither was Portugal's granting access to the British to bases in the Azores, even though this was obviously a welcome and important contribution to the Allied war effort. Turkey was the only neutral to accept arms for its military from both the Allies and the Axis.

Different factors shaped the neutrality of Argentina, Portugal, Spain, Sweden, Switzerland and Turkey, ranging from long-standing, centuries-old policies of avoiding entanglements in European wars in the case of Switzerland and Sweden, to the fear -- and legitimate fear -- during the early parts of the war of invasion and the desire to reap economic benefits.

These interests in turn produced decisions and actions which were both consistent and inconsistent with their claims of neutrality, depending on what time one looked at them. At times they were helpful to Nazi Germany; at other times, to the Allies. These decisions and actions were often based on their own strictly legal interpretations of what was permissible under existing international law, as distinct from moral considerations of what was right or wrong. Now, we recognize that neutrality was at the time an accepted legal standard, and that standards of morality have evolved since the war that may not have existed then. As a result of the war itself, recognition of the dimensions of the Holocaust, the Nuremberg trials which followed and the UN declaration of human rights, standards of morality have certainly risen.

All of these seemingly inconsistent decisions and actions co-existed within countries and contributed to this complex phenomenon of neutrality during World War II -- a war different from all previous and, indeed, subsequent battles because of the unprecedented scope of the assault on human values.

There are a number of questions that need to be addressed today by all nations involved in World War II, including the wartime neutrals -- questions which can help these countries, and all of us, come to terms with World War II. For example, at what point during the war did it become evident that the Nazi aggression was not just another in an endless series of European conflicts, but was qualitatively different in its brutal treatment of civilians and its threats to basic human values? At what point did the threat of invasion by the Nazis recede sufficiently so that with little risk, trade with Germany and critical commodities might have been sharply curtailed or even stopped? If neutrality was defended during the war as a way of self-defense, why was there so little cooperation after the war with the Allies in returning looted Nazi assets, which had come into the possession of the wartime neutrals or in liquidating German assets for the benefit of stateless refugees and the reconstruction of war-torn Europe?

These are difficult questions to which there are no easy or glib actions, with or without the benefit of hindsight. There appears to have been a clear preponderance of sympathy for the Allied cause in several of these neutral countries, and significant elements of sympathy in others. Consistent with this mixed pattern of action was the refuge offered by the neutral countries to more than 250,000 Jews fleeing the Holocaust. Acts of humanity and even heroism rose above the harshness and insensitivity of wartime refugee policies and reflected well on the governments and peoples.

An estimated 100,000 refugees, mostly Jews, fled through or into the Iberian Peninsula, for example Spain allowed 20,000 to 30,000 refugees to cross the French border from the fall of France until December of 1942, and then another 7,500 by the end of 1944. The Portuguese Government allowed Jewish organizations to relocate from Occupied Europe to Lisbon during the war. During 1941 and '42 the Portuguese Government allowed 5,000 refugees to pass through Portugal to the US. The Swedish Government, while it was at the same time supplying critical materials to Germany, was also supplying refuge for 7,000 Danish Jews in the famous Danish boat lift, who fled for the safety of Swedish shores.

To show the complexity of neutrality, perhaps one precise example could be used, and that is Sweden's Wallenberg family. On the one hand, Sweden's protection, spearheaded by the truly heroic actions of Raul Wallenberg, was extended to 20,000 to 30,000 Jews who would have otherwise faced extermination in the last phase of the Holocaust. And yet at the very same time, another branch of the Wallenberg family, through their bank and other businesses, served as cloaking agents for German-owned businesses and helped support the German war effort.

Turkey, which had protected Jews since their expulsion from Spain in 1492 had more than 100,000 Jewish refugees pass through its borders during the war. Argentina, despite its sympathies with the Axis, received between 25,000 and 45,000 Jewish refugees between 1933 and 1945 -- more than any other country in the Western Hemisphere. Switzerland admitted over 50,000 Jewish refugees from 1933 until the end of the war, of whom 30,000 remained and survived during the war in Switzerland. In this respect, the United States had one of the worst records in accepting refugees and with less justification. Only 21,000 refugees fleeing from Europe were accepted in the United States during the war.

A third major and new finding involved Nazi gold itself -- new materials which have come to our attention since our first report. Let me summarize these as follows. First, we've arrived at new figures of looted gold. Our first report estimated that Switzerland received as much as $414 million -- or about $3.5 billion in today's total -- of looted and non-looted gold from Nazi Germany, of which we estimated $185 million to $289 million in those dollars were looted. These figures were increased by the recently-released Swiss Bergier Report, which estimated that some $440 million in total gold went to Switzerland -- about $4 billion -- of which $316 million, or $2.7 billion to $2.8 billion, was looted. These figures taken together -- ours and the Swiss figures -- now give us a higher and more definitive range of the total of looted and non-looted gold that flowed through Switzerland.

A second new finding with respect to gold is that presented in the separate annex prepared by the US Justice Department's Office of Special Investigations. Their work here is really quite pioneering and quite remarkable. New sources recently came to light that provided additional information about the infamous Melmer account at the Reichsbank, named after Bruno Melmer, the SS officer who was responsible for taking materials, possessions from concentration camp victims and others at killing centers and depositing them in an SS account in the Reichsbank. These new sources provide the most detailed data currently available for the valuable amounts of gold in the SS Melmer account, and yield an estimate of the total value of this gold markedly higher than previous estimates -- indeed, two times the estimates in our initial report and in the Bergier Report.

These new, more definitive figures are based in part on our assessment of the records of the Degussa Company in Germany, who were the smelters for the Reichsbank, and that were examined by the Justice Department team, and newly discovered, remarkably discovered Reichsbank microfilm found in Vienna in private hands. Although that microfilm did not have direct information on Melmer, it contained a critically important post-war study, done by Albert Thoms, the first post-war head of the Vendusbank, which provides fresh findings and analysis.

Thoms' own study immediately after the war of the Melmer shipments lists in gruesome detail 29 columns of the types of loots from victims, under headings such as "Gold Bars," "Gold and Silver Coins," "Purses," "Knives, Forks, Jewels," "Gold and Diamond Rings," "Watches," "Dental Gold," "Broken Gold," et cetera. The Justice Department's historians make the conservative estimates, based on these new records for the gold and the looted shipment at $4.65 million, or $40.5 million in today's values. It's important to recognize that this may only be the tip of the iceberg.

It does not include, for example, the estimated $3.9 million in gold bouillon and coins forwarded to the Reichsbank as a result of Operation Reinhard alone -- the Nazi program to exploit Jewish property and labor and murder millions of Jews in killing centers in Eastern Poland. Nor does it include gold taken from victims before they were sent to concentration camps or forced sales to the Berlin Municipal Pawn Shop.

A third new finding on the gold side is that nearly $1 million in values in those days in victim gold from the Melmer account made its way to the Dresdner Bank and the Deutsch Bank, both private German commercial banks, and were sold on the Turkish free market as part of a scheme to provide the Reichsbank with foreign currency and to help Axis diplomats and agents finance their operations in Turkey.

A fourth new finding is that more than $300 million, or $2.6 billion in today's values, in Nazi gold reached Portugal, Spain, Sweden and Turkey during the war. Three-quarters of this amount was transferred from Germany through the Swiss National Bank, the principal gold trading center on the continent. This third chart lists the estimates of the gold, looted and unlooted, which we believe each of those countries got -- mostly, but not exclusively, through the Swiss National Bank.

It's important to recognize that this flow of gold from Germany to these neutrals persisted throughout the war, despite Allied warnings in January of 1943 and February of 1944, against accepting transfers of assets from Nazi Germany that had been looted from occupied countries. The European neutral countries continued to accept looted gold from the Reichsbank after 192, when it became absolutely clear the Reichsbank had long since exhausted its own pre-war gold reserve and was, therefore, using the reserves of looted central banks of the countries overrun by Nazi forces. For example, the Allies estimated that Germany financed its imports from Spain and Portugal with as much as $204 million in looted gold, and that is demonstrated on this chart.

The next set of findings which are new involve the post-war negotiations. We touched on this in our first report, but have gotten into much more detail here. These involve negotiations by the US, Britain and France with the wartime neutrals focused on in this report. These negotiations were protracted, contentious and they failed to meet their original goals; that is, the restitution of looted gold and the liquidation of German external assets to fund the reconstruction of post-war and Occupied Europe; to provide relief for non-repatriachal refugees, stateless refugees; and to satisfy the claims of those countries whose gold was stolen by the Nazis via the vehicle of the Tripartite Gold Commission.

This third report, therefore, this third chart is a summary which gives a very good picture of how much German external assets on this side accumulated of the various neutrals during the war was actually returned in liquidated form, and how little gold was returned to the Allies. Not including Switzerland, of the more than $300 million worth of gold traded to the neutrals, of which we estimate $240 million was looted, only $18.5 million was returned to the Tripartite Gold Commission as a result of the protracted negotiations with the neutrals -- so only $18.5 million of $240 million looted gold.

Most of that amount -- almost $15 million -- came from Sweden, the most cooperative of the neutrals after the war. The turnover of even this amount was largely delayed until 1955. Portugal's $4.5 million of a much larger amount did not reach the TGC -- the Tripartite Gold Commission -- until 1959. Separately, of the some $470 million to $490 million in German external assets in Argentina, Portugal, Spain, Sweden and Turkey, the long post-war negotiations resulted in turning over for the recovery of Europe about $100 million of the some $470 million to $490 million. Two-thirds of this amount came from Sweden.

Why did the Allied negotiators fail to recover much of the gold and the German external assets in the negotiations that stretched out, in some cases, to 1958? The answer is complex. It includes the intransigent bargaining of the neutrals in yielding up what they had received during the war. It resulted from sharp conflicts among agencies in Washington, particularly Treasury and State -- the Treasury taking a much stronger line on threats to the neutrals unless they coughed up these amounts; State taking a much more acquiescent position. Conflicts between the US and our other Allies, the US generally taking a firmer and our other Allies a more acquiescent position. Perhaps, above all, the great pre-occupation of policy-makers after the war with the threat of communist subversion and aggression aimed at these very countries and Western Europe in general, and the effort to incorporate these neutrals into the Western family during the Cold War.

It also resulted, due to a very unfortunate Allied interpretation after the war, of the wartime Bretton Woods resolution. That was a resolution which, in essence, said, you're dealing in looted assets; and we won't recognize your transfers. Unfortunately, in the post-war period, the Allies interpreted this to mean that only countries directly purchasing looted gold from the Reichsbank were responsible for its return, even if they knew it was looted. This was an interpretation which would have made the wartime Secretary of the Treasury, Henry Morganthal, shocked. And it allowed, shortly after the war, the US to accept looted gold as collateral for US private bank loans to Spain.

The fifth set of findings involves something not discovered at all in the past; and that is the strange story of Ustasha gold. As we were going through the millions of pages of documents, we came across the issue of Ustasha gold. This therefore raises, in this chapter, questions about the aspects of the Vatican's record during and after the war to which answers may only exist in Vatican and Croatian and Serbian archives.

The Ustashi regime was Nazi Germany's wartime puppet state in what was then called Croatia. This puppet state systematically and mercilessly robbed, murdered or deported its Serbian, Sinti-Romani, Gypsy and Jewish populations. Gold and other valuables of all these victims became a part of the Ustashi treasury, and may have amounted to as much as $80 million. Portions of this treasury appear to have been transferred to Switzerland in the last year of the war. Very little of it was accounted for in the post-war arrangements made by Yugoslavia with the Allies and Switzerland.

With the defeat of Hitler in May 1945, and his satellites, including the puppet Croatian regime, the leaders of the Ustashi regime fled to Italy, where they found sanctuary at the pontifical college of San Girolamo in Rome, which was run by Father Dragonivic. This college was most likely funded, at least in part, by the remnants of the Ustasha treasury, the stolen assets, and may have operated, at least with the tacit acquiescence of some Vatican officials. It helped fugitive Croatian war criminals, including the Ustashi leader himself, Ante Pavelic, escape to South America in the early post-war years. This pontifical college also cooperated with the "rat line," as it was called, used by the US Army Counter-Intelligence Corps after the war to assist the escape from Europe of anti-Communists, including the infamous Nazi war criminal, Klaus Barbie, to South America. Nothing better demonstrates how Allied and US policy dramatically changed after the war from a focus on war-related issues to the Cold War against the Soviet Union.

The record of this terrible legacy of the Ustasha assembled for our study is incomplete, and a full accounting should be made to achieve a complete understanding of the issues raised. The opening of relevant archives in Croatia, Serbia and the Vatican and cooperative international research will be essential in this effort, and we're very pleased that the Croatian Government has recently announced the establishment of an historical commission to look at this issue.

These conclusions that we've made are based largely on our admittedly limited perspective from almost exclusive reliance on US documents, as well as captured Nazi documents in possession of the US. These have been located, declassified, evaluated and in this report, for the first time, we have also used intercepts by the US during the war, and these have been incorporated into our findings. These intercepts have also been declassified.

We hope that each country with a stake in these issues will intensify its efforts to examine its own record and confront its own history on its own terms and in its own way. It's essential that these studies move forward quickly so that a more comprehensive historical record of the looting and ultimate disposition of Holocaust-era assets can finally be completed as we enter a new millennium.

I want to salute those countries already undertaking such efforts -- not only the UK and the US, but Switzerland with its Bergier Commission and some 16 countries in total: Argentina, Portugal, Spain, Sweden, Turkey, Croatia, Belgium, Brazil, Canada, France, the Netherlands, Norway and, just in the last few weeks, Estonia, Latvia and Lithuania have all established historical commissions to address these issues. We welcome that and applaud it.

It is our hope that our two studies, combined with those that will come from these countries, the London Gold Conference of last December and the conference we will be sponsoring with the US Holocaust Memorial Commission this fall, which will deal with the completion of gold, but also look at a whole variety of other issues including art and insurance, and the emerging presidential commission, which Congress is working on with the leadership of Senator D'Amato and Congressman Leach, at President Clinton's request to examine Holocaust-era assets in the US -- that the combination of these will provide, by the end of this century, the complete historical record of these complex and painful issues.

We share a commitment not only to come to terms with the past, including that in the United States, but to galvanize the urgent quest for justice for Holocaust victims and survivors.

Thank you, and I'll take your questions now.

QUESTION: You've just mentioned 16 countries that you would like to salute for their efforts. You have left out Germany in this list, and I just wanted to ask you if I can conclude from that that you think Germany should really do more.

UNDER SECRETARY EIZENSTAT: No, I've only listed those who have recently set up historical commissions. Germany has long since come to terms with its past. It has provided $60 billion in funds for Holocaust survivors. I think, in a great tribute to Chancellor Kohl, it has made a decision with respect to the World Jewish Congress and the Material Claims Conference just within the last few weeks to set up $110 million fund, which we hope will be operational by the end of this year, to pay, for the first time, pensions to those Holocaust survivors who were trapped behind the Iron Curtain during the post-World War II era, during the Cold War and have never been compensated directly by Germany.

This is a further recognition of the fact that Germany has long since come to terms and is continuing to try to do justice in every way possible. They obviously haven't set a historical commission up; we haven't called for them to do it. It is essentially these other countries that have done it.

QUESTION: You were saying that you had hoped this would be taken as a historical record. But nonetheless, the average American might look at this as a criticism of the countries for taking the gold and keeping the Nazi war machine running and for not cooperating with the Allies after the war -- these countries as well as the Vatican. Why should they not take this as criticism of those countries?

UNDER SECRETARY EIZENSTAT: Well, first of all, we have tried to be very critical of our own record. I hope that comes across with respect both to many actions or inactions that we didn't take.

Second, it is inevitable that countries may interpret this in this way, but it is not intended to be a criticism. It is intended to be and was a non-political, historical review. We have let the chips fall where they may. If those facts come out in ways which seem harsh, it is only because those are the facts that we have determined. Our hope is not to try to impose our will on other countries, but indeed to give the best evidence we have from our archives and to hope that through their own historical commissions, they will come to their own terms.

One of the most important ways this can be done, for example, is shown by the Bergier Commission. The Swiss people are much more likely to take the factual findings from the Bergier Commission than they may from us. If other countries, therefore, will follow, as they are doing, our lead in trying to examine the past, we think it will be much less in the way of criticism and much more in the way of a historical review.

I really view this as a sort of cleansing process for all of us -- the Axis, the neutrals, the Allies -- about the worst events and hidden events, particularly with respect to the confiscation of assets, that occurred in this century -- a century we're about to leave. I think it's important before we do, and as we prepare for the next, that we be a little more just, we perhaps be a little more sensitive and that we have a clear understanding.

Another example of how what may seem like but what is not intended to be criticism can be turned into a positive is what's happening in a number of areas. First of all, Sweden, for example, has established, at the Prime Minister's insistence just a few weeks ago, a thorough-going Holocaust education program for Sweden in terms of their role during the war. We have set up a new Nazi persecutee fund, after the London Gold Conference; and there are now almost a dozen countries, including those that don't have any claim to the remaining $60 million in gold still held by the Tripartite Gold Commission who are making a contribution. The US is going to make a $25 million contribution; the UK, $1.5 million. Spain just informed me this week that they'll be making a $1.6 million contribution to the World Safardic Organization.

So a number of countries -- Austria, Argentina and others -- have made pledges to this fund. This is the way to convert a painful past into a more hopeful future.

QUESTION: You have concluded in the report that in Argentina there was not Nazi gold. I wanted to know, first, if this is a conclusive conclusion. Second, why, then, Argentina is included in the report?

UNDER SECRETARY EIZENSTAT: That's a good question. First of all, we did make no finding that actual looted Nazi gold made its way to Argentina. We will await the findings of the Argentine commission, using their own information, their own archives for a final conclusive judgment. But there's nothing in our record indicating that.

Therefore, why was Argentina included, because it was not a major contributor to sustaining the war as the other European neutrals were. The reason was that it stood out so sharply from other countries in the Western Hemisphere. It was the only one that ideologically and publicly sympathized with the Axis. It was a base for espionage throughout the Western Hemisphere by Germany. There was a good deal of smuggling of important items -- gems and others -- through Argentina. And their military leaders were openly sympathetic to the Axis.

QUESTION: (Inaudible) -- much debate about who should take part in the so-called "global solution," besides the commercial banks. What is your opinion, based in the reports that have been issued so far, should the Swiss Government and the Swiss National Bank take part in that global solution?

UNDER SECRETARY EIZENSTAT: The pivotal role of the Swiss National Bank is clear from the Bergier Report, which demonstrates very clearly not only the amount of looted gold they knew, but that, as they put it, there is no longer any doubt that they knew early on that they were dealing in looted gold. Our report in May and our current report reconfirms their pivotal role in the financing of the war effort.

The Swiss National Bank has made a $75 million contribution to the $200 million humanitarian fund, which the three private, large Swiss banks have contributed to, as well as other Swiss corporations. We think that further discussions regarding the Swiss National Bank should be made through diplomatic channels.

We hope that the facts in the Bergier Report and in ours will have their own affect on all of those involved, and that ultimately this is a decision that the Swiss and the Swiss institutions have to come to themselves.

QUESTION: Senator D'Amato has called for a re-opening of the 1946 report, but not for the first time. What is the likelihood that the US Government will look into the issue of re-opening this report in the next couple of years?

UNDER SECRETARY EIZENSTAT: We think it's more important to focus on the current cooperative process and to resolve issues through cooperation and consultation, and not through confrontation, threats of sanctions and other means.

The real issue is whether we have all done everything in our power to answer the troubling questions that remain from the Holocaust-era, and to provide, where appropriate, remedies to those who have suffered. Switzerland has played a path-breaking role in providing compensation to Holocaust survivors, and we think that we should continue with the cooperative efforts that we have with the Swiss Government and pursue that channel as long as possible.

QUESTION: Just a point of clarification -- have you asked the Vatican to open up their archives on this, and perhaps --

UNDER SECRETARY EIZENSTAT: We have.

QUESTION: And perhaps more broadly, you say each country must come to terms in their own way, but I imagine that you are asking them to look into this, specifically.

UNDER SECRETARY EIZENSTAT: Well, first of all, what are we saying to the other neutrals? We do not mean to be, and we are not being condescending; we've been self-critical. We're basically saying the following. First, we hope, as you are doing, that your historical commissions will be established, will be probing and will complete their work in a timely fashion. The Bergier Commission is not yet through. It will, for example, be publishing a report later this year on its refugee policy --the Swiss refugee policy.

Second, we are hopeful that the facts which come out will be widely distributed and used to educate the public, as Sweden is doing, with respect to what their role was during World War II. And third, we do hope that countries -- neutrals and others -- will consider a contribution; not because it is legally demanded, not because the United States is in any way demanding it, but as a moral gesture to the Nazi persecutee fund. And again, we already have around nine countries who are doing so -- the Dutch, the Austrians, the Greeks, Italy, Spain has indicated, again, that it will contribute to the World Safardic Organization, the United States, the UK. We hope that other countries will follow suit.

QUESTION: Can you summarize for us what are the self-criticisms that this report makes of the United States? And also, could you speculate or tell us what evidence there might be as to where is the Ustashi money?

UNDER SECRETARY EIZENSTAT: First of all, we make clear in our forward that we ourselves were neutrals for the first 27 months of the war. So when one examines neutrality, one has to look at that.

We were for sure not supplying aid to the Germans; we were, quite the contrary, providing critically important lend-lease assistance to Britain. But we were neutral during a time of critical importance in Europe and in Great Britain.

Second, we clearly had short-comings in terms of our pursuit of the recovery of looted gold and of German external assets. Now, I think it's important not to self-flagellate the United States. We were, after all, the ones trying to get it back. It was the intransigence of the neutrals that played a significant role, but no question that our own focus drifted from trying to get this back and trying to put pressure on neutrals to our understandable pre-occupation with the new Cold War which was emerging. This is likewise a recognition that we might have done more.

Third, we're setting up -- the President has called for the establishment and Congress is now working on legislation which Senator D'Amato and Congressman Leach are co-sponsoring a presidential commission. The presidential commission would have members appointed by the President, the Senate and the House. It is charged specifically with looking at what role the US may have had in handling Holocaust-era assets -- not only looted gold, but also assets from Holocaust victims who would have deposited not only in Swiss banks, but in American banks assets and then never recovered them.

Under US law, under the law of most states in the union, unlike European law, where those looted assets remain in the bank, so we can trace them, as we are through the Volker process. In the US, those looted assets -- excuse me, those Holocaust-era assets, after 10 years, generally returned to the states, and therefore are not easily discoverable. We want to see what happened to those.

So in all of those ways, we're trying to be self-analytic.

QUESTION: Sort of a follow-up on their questions -- can you characterize your opinion, or the Administration's opinion of the Vatican's cooperation, overall cooperation with this worldwide effort? Secondarily, are you satisfied with the candor about its own role in World War II in possibly aiding the Nazis? Also, did you uncover any evidence that the Pope, the wartime Pope knew of these activities?

UNDER SECRETARY EIZENSTAT: We have no evidence that the wartime Pope knew of these activities. This college was a pontifical college. It was outside the walls of the Vatican. Our assumption is that because of the inter-relationships, there may have been some knowledge by some Vatican officials. We have no evidence that the Pope was.

Second, Pope John Paul II is one of the great moral figures of our century. The statement that was made in March by his commission and by he, again, in terms of seeking repentance and using the term, "never again," was the beginning of coming to terms by the Vatican with the whole World War II and pre-World War II era, and indeed, the historical relationship between the Catholic Church and the Jewish people in Europe. It is welcome and, I think, very positive; although there were some who indicated it might have gone further.

Third, with respect to cooperation, we have met a couple of times with the Vatican. They have been very open in the meetings. I've met with those who control their archives. They have indicated that they have difficulties in terms of the capacity to look into these archives. We do hope that they will follow the lead of the other countries involved and will begin the examination of these archives. This would certainly be in the tradition that the Pope has set on so many other moral issues, and we hope that it will occur.

QUESTION: (Inaudible) -- at a certain time, an explanation why some of these countries had to operate like they did? Sweden, for example.

UNDER SECRETARY EIZENSTAT: Yes, absolutely. We went into great detail -- and I think it's very important -- and this is also gets to this issue of being accusatory. We try not to be judgmental here. We go into great detail, looking at the circumstances under which neutrality occurred -- the threats that these countries were under, the dangers of invasion. We make that very clear and very evident, both in my forward and the summary and in the bulk of the report.

At the same time -- and this is why I've emphasized that chart -- we do make it clear that there was a point during the war when that danger receded. Yet in many instances, trade continued well past the point at which -- at least by those Allied estimates at the time -- the danger was greatest. We tried, again, to have concrete measures of that -- not only what our military leaders thought at the time, which is mentioned in some footnotes to this particular chart, but also objective measures. For example, the Portuguese would hardly have granted base rights to the UK if they had thought the Germans were going to invade the next day; yet their trade in wolfram continued for many months thereafter.

So we've tried to be as balanced as we could and as non-judgmental as we could. We also recognize that for, in particular, Switzerland and Sweden, they had centuries-old traditions of neutrality, which continue to this day.

QUESTION: The role played by the Swiss National Bank was a central role during the war. Just to make clear, what are you asking for exactly? Because the Swiss National Bank, the Swiss Government already turned down any involvement in further discussion inside the global settlement, and they turned down any possibility to re-open the Washington agreement. So what's the official position of the American Government?

UNDER SECRETARY EIZENSTAT: I think it's important to understand that what we have tried to do in this report, and what the Bergier Commission has done in its striking report, is to indicate the pivotal role that the Swiss National Bank played and their knowledge at the time that they were dealing in looted assets, recognizing all the pressures that were on Switzerland at the time. And as we said, Switzerland, along with Sweden, was perhaps the last country to feel that there was a receding of the threat from Germany because of its location.

In terms of what the Swiss National Bank should do, it has already contributed $75 million to a fund. We hope that they will take to heart the facts in our report and the Bergier Report and come to their own conclusions and judgments about what is most appropriate under the circumstances of these very riveting and very clearly set forth facts.

QUESTION: In the figures you mention in your report, it says that Switzerland only paid back $28 million of the $58 million of German external assets, regarding the terms of accord with the Allies. This means that Switzerland, if I understand, is the only country who hasn't fulfilled its agreement in 1946. What does it mean? Should Switzerland fulfill today this agreement of 1946?

UNDER SECRETARY EIZENSTAT: Well, I think that it's important to recognize -- and this chart demonstrates the degree to which all of the neutrals returned only small percentages of what they had. Again, if you take -- excluding Switzerland -- the total of the looted gold was $240 million; only about $18.5 million was returned. The total of German external assets was close to $500 million; and only $100 million was returned.

So Switzerland was not unique in returning only small percentages. And ultimately, the Allies, for the reasons I've just indicated -- the divisions within our own Administration, the divisions between the US, the UK and France and, in particular, the emphasis on the Cold War -were willing to accept these very small percentages in part because, again, of the very, very long, protracted and transient position of the neutrals. This is one thing that it's very important to recognize.

Here, I'll let judgment speak for itself, as with all these other facts. That is to say, if one is concerned about the pressure that the Germans had, then why after the war wasn't there a more full accounting and willingness by the neutrals to return? There was also the argument made, well, wouldn't the Allies have been better off, under these circumstances, than having Germany invade these countries? Well, it has to be remembered, first of all, had Germany invaded these countries, the US would have fought in those countries. The mines and other minerals from which the Germans were using would have been partially or totally destroyed. And the notion that the Germans, already spread thin, could have invaded each of these countries and controlled 100 percent of their resources is unlikely.

QUESTION: (Inaudible) -- found, beyond aiding the German war machine of any neutral economic implicitly in what would be considered war crimes, such as factories that supported slave labor or anything like that?

UNDER SECRETARY EIZENSTAT: There were clearly a number of German firms that were operating in various of the neutral countries. Some of these German firms were also using slave labor. But we have no information at our ready disposal to indicate the flow of dollars or of moneys from those firms into the institutions of the neutral countries. But clearly, there were a number of such companies -- (inaudible) -- and Siemens and others -- who were operating in Switzerland and in other countries. We mentioned the Dresden Bank and the Deutsch Bank operating in Turkey. They weren't using slave labor, but they were using Melmer gold, which they must have known was coming from victims. So this is an area which we have not explored in great detail.

QUESTION: You mentioned the Bergier Commission Report and everything Switzerland is doing, but especially after yesterday -- so much anticipation in the US press about your report -- there is a little bit of confusion in the public opinion in Switzerland. Can you summarize for us how did the role of Switzerland change with this new report?

UNDER SECRETARY EIZENSTAT: I don't think that the role of Switzerland changed in the new report. What the new report does is give an integrated view of how all the neutrals fit together. They each had an important role to play, without which any one of them would have been a critically missing ingredient in a German war effort.

The Swiss role was the financing of the war by taking gold -- mostly looted -- and converting it into hard currency Swiss francs. The role of the Spanish and Portuguese was to provide -- using that hard currency or gold -- critically wolfram. The role of Sweden was to provide ball bearings and iron ore. The role of Turkey, chromate. Each of these provided, again, a seamless and integrated web of relationships that the Germans weaved -- albeit, under great pressure from Germany -- to support their war effort. It needs to be looked at not as each as an isolated entity, but an integrated portion of sustaining the war effort.

QUESTION: But isn't what you just described a normal appearance in all wars?

UNDER SECRETARY EIZENSTAT: What we've said is that -- and we've made it very clear in this report, perhaps clearer than in our initial report -- that neutrality was an accepted, legal position. With neutrality came the right to trade with both sides. What we have said is that even given that, the consequences of that did have effects.

We've also said that moral judgments changed after the war, and that what was considered moral today would be considered very differently, perhaps, under the occasion of World War II. And last we've said that World War II -- and it became evident -- that World War II was not just another war. It involved the decimation of individual civilians on a scale never before seen. It became evident, certainly, by the middle and latter parts of the war that it was qualitatively different than other wars.

QUESTION: In your study, I find that there was a British study from 1943 that dealt with German banks' activities in Turkey. Has this study ever been published? Could you clarify that for me, please?

UNDER SECRETARY EIZENSTAT: I can't tell you if that one was, but it may have been similar to the one that we've just given, which is the activities of the Dresden and Deutch Bank in Turkey.

QUESTION: Just a follow-up on his question. Is it the case that all of these neutral countries financially, after the war, were much better off than before the war and there was a lot of profiteering going on at that time?

UNDER SECRETARY EIZENSTAT: Well, the neutrals largely escaped the devastation that those countries that were occupied. In most instances, their gold reserves did increase and there were profits from sales by these countries to Allies and to the Axis.

I think one thing that I have not mentioned is, one could say, well, they did trade with the Allies. And we make it very clear that they traded with the Allies, and we provide that trade. But there was a critical difference. First of all, the Allies were not using looted gold. Second, and equally important, much of the Allied trade with these neutrals resulted from pre-emptive buying not because the Allies needed these materials which they generally could get -- the wolfram and other materials -- from other sources, from other countries; but rather as a pre-emptive way of keeping as much as possible out of German hands.

There was a very aggressive, pre-emptive buying system employed by the Allies, buying at highly inflated prices, because of the wartime conditions, these essential products.

QUESTION: Does your report change anything or have any impact on relatives of victims of the Holocaust, who are engaged in attempting to seek restitution of some sort, to recoup looted assets?

UNDER SECRETARY EIZENSTAT: Not necessarily. Those are efforts which are going on in private class actions.

There are, however, separate efforts, which we hope will be given an impetus by this. That is, for example, how will we dispose of the remaining $60 million in gold at the Tripartite Gold Commission? Should any of the claimant countries take that gold, or should instead, as most are doing, they forego their right to it and put it into a Nazi persecutee fund. We hope that there will be an accelerated payment out of the $200 million Swiss fund for Holocaust survivors.

So in that way, perhaps this will act as an impetus for other countries to contribute to the Nazi persecutee fund. But the class actions which are private have a life unto their own.

QUESTION: Does this report in effect say that the neutral trade prolonged the length of the war?

UNDER SECRETARY EIZENSTAT: We say very clearly in one of my conclusions that this helped sustain the German war effort. Whatever the motivations, whatever the pressures, it clearly helped sustain the German war effort.

QUESTION: Can you give an estimate of how long?

UNDER SECRETARY EIZENSTAT: No, but we mentioned two quotes -- one from Speer, the German munitions and arms minister, who said that without the chromate, within a couple of months after their some-five months' supply was exhausted, that they basically wouldn't have been able to make any artillery. We also have Salazar's statement that the war effort would have been shortened. But we can't estimate by how much.

QUESTION: Ambassador, what's next for you? Is this pretty much just wait and see until the December 1999 deadline set by the London Conference, or are you going to follow this up with bilateral diplomacy?

UNDER SECRETARY EIZENSTAT: Well, most of the countries are not waiting until September of '99. I mean, for example, Spain, whose chairman, Mr. Musica I just met with a couple of days ago, has already completed its interim work. The Bergier Commission is doing a great deal. The Dutch commission is well on its way toward making some findings.

I also hope, by the way, that in our justifiable focus on helping the survivors, that funds will also eventually be set up as the Swedes are doing for a broad Holocaust and war-related education. Unfortunately, life for all of us -- and certainly for Holocaust survivors who are already in their late 70s and early 80s -- is very temporal. It is very important that there be some continuity, and this can best be provided by educational funds from museums and educational curricula in the United States in the formerly neutral and occupied and Allied countries.

I also want to say that the French are a good example of what can be done in terms of recovery. The President of France, Mr. Chirac, in a very courageous decision has asked his French commission -- and they're well on their way to finishing their report, not by the end of '99 -- to look, for the first time, at the role of Vischey France as an institution of France, as a part of the continuity of the French Government, not an extra-French entity as had been thought before by French presidents; and pledge specifically to identify looted art works, many of which hang in the Louvre and the -- (inaudible) -- and others, and to return them to their rightful owners.

So I think this is a worldwide effort that goes beyond money. I think it's the sense of, again, trying to learn the lessons, return what can be returned and provide an educational component that will have longer lasting attributes than only compensating victims, as important as that is.

QUESTION: Some claim that you have $300 million in the New York Reserve Bank which, after the war, gathered for all the refugees aiding money. Are you planning to still distribute this money to some survivors?

UNDER SECRETARY EIZENSTAT: I'm not aware of such $300 million. But the presidential commission, which I've mentioned, will be looking thoroughly at all Holocaust-related issues, and undoubtedly this will be one of them.

QUESTION: (Inaudible) -- the trade and victim gold carried out by Dresden Bank and Deutch Bank in Turkey. Was that merely a case of profiteering, or was it done to finance other purposes?

UNDER SECRETARY EIZENSTAT: It appears that it was to finance other purposes -- espionage activities and the like -- and that it was part of a concerted plan. We can't be 100 percent certain, but that appears to be the case.

I also want to say, with respect to Turkey, that almost all of the gold with the exception of a small amount in Turkey was privately traded, and not traded through the Turkish Central Bank.

Last question.

QUESTION: Sir, speaking of a press release which Senator D'Amato sent out last night, is this new report now sort of an official effort to end Swiss-bashing?

UNDER SECRETARY EIZENSTAT: Well, I have felt from the start, as I think it's been clear from my repeated statements, that Swiss-bashing is inappropriate. It is not only counter-productive to the kind of cooperation which will help Holocaust victims receive funds, but it is not justified on the basis of the actions which Switzerland has taken -- the creation of this $200 million fund; the Bergier Historical Commission; the Volker Commission looking at dormant assets; the government's pledge to have a referendum on a solidarity fund for a variety of humanitarian causes, including the Holocaust. Much more can be done by cooperation. When people feel that they're threatened or being accused -- and I have to say this is one of the reasons I was quite disturbed about a headline in The Financial Times.

We're not accusing anyone; we are laying out a financial and historical and trade record. That record should speak for itself. And the fact that other countries are now setting up their own commissions to look at their own pasts is the most promising thing that is occurring; and the Swiss have been at the forefront of this.

Thank you very much.

[End of Document]

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