Holocaust-Era Assets

Civilian Agency Records

State Department and Foreign Affairs Records

Records of the Foreign Service Posts of the Department of State (RG 84)

Spain

Spain, led by Francisco Franco, began the war as an avowed non-belligerent, and only in October 1943, did it formally declare neutrality.  Franco and his government openly sympathized with Hitler and Mussolini ideologically and out of gratitude for their support against the Republican forces during the Spanish Civil War.  But even if Spain wanted to assist the Axis it was exhausted from the Spanish Civil War.  Also, because of the sea blockade, Spain was reliant on the Allies for food, fuel, and raw materials.  Spain did, however, helped the Axis by servicing their planes, allowing their agents to operate in Madrid, sent a military unit, the "Blue Division," to fight with Germany against the Russians, and early in the war allowed German U-boats to resupply and refuel covertly at Cadiz and Vigo, but withdrew this permission in the face of fierce Allied protests.

Germany, who had always had relatively close economic and financial ties with Spain, increased its economic penetration in Spain once the Nazis came to power in 1933.  In order to wage total war, the Nazis needed to import products like foodstuffs, iron ore, ferro-alloys, etc., and to assure a continuing supply, the Germans in Spain had to obtain an economic interest in the production and marketing of those products.  There were two German banks in Spain, the Banco Aleman Transatlantico-the Spanish branch of the Deutsche Uberseeische bank, which was one of the most important banks in Spain-and the Banco Germanico de la America del Sur, S.A., formed by the Deutsche-Sudamerikanische Bank A.G. of Berlin. They were at least ten German insurance companies operating in Spain.  In almost all sections of Spanish chemical and pharmaceutical industries there was some involvement by I.G. Farben.  It controlled a number of Spanish firms directly through Unicolor S.A.  I.G. Farben had a controlling interest in the Sociedad Electro- Quimica de Flix. The German firm of Lipperheide and Guzman S.A. had widespread holdings of mines, smelters, and transportation facilities.  The company owned an interest in or were closely allied with ten mineral and chemical companies in Spain.  The Germans were also deeply entrenched in the machinery and electrical equipment business in Spain.  The official German trading company in Spain, Soc. Financiera Industrial Ltda (SOFINDUS), which was controlled by Rowark GmbH, had strong interests in Spanish agriculture.

Germany's war effort depended significantly upon its imports of raw materials and goods from the neutral nations.  Spain a major supplier to Germany of food and other goods.  Spain also provided Germany with invaluable supplies of wolfram ore which Germany refined into tungsten and used in the steel-hardening process.  As the second largest producer of this critical commodity (after Portugal), Spain sold Germany over 1,100 metric tons annually between 1941 and 1943, providing more than 30 percent of Germany's industrial requirements.

Despite the sympathies of the Spanish Government with the Axis and its constant provocations, such as the seizure of Tangier in North Africa, and harboring spies and saboteurs, the United States and Great Britain followed a careful policy in the expectation that Spain would not become an avowed belligerent.  And indeed for much of the war Spain remained pro-Axis, but non- belligerent.

It should be noted that despite its often pro-Axis actions and activities, Spain also assisted refugees fleeing Nazi persecution.  It allowed 20,000 to 30,000 refugees to cross the French border from the fall of France until the summer of 1942, and another 7,500 refugees entered Spain by the end of 1944.  Spain also gave protection to 4,000 Jews of Spanish descent living in occupied Europe.

By 1943 Spain began to gradually adopt a neutral policy, largely in response to Allied economic warfare, the growing strength of Allied armed forces especially in North Africa and the Mediterranean, the reversals experienced by Germany from 1942 onward.  After the fall of Mussolini in July 1943, Spain softened its stance against the Allies.

Nonetheless, Spain's strategic location and its supply routes to North Africa and South America gave Germany a conduit for important wartime materials, which Franco continued to supply. Private Spanish merchants were also Germany's principal source of vital commodities smuggled from Latin America and Africa, including industrial diamonds and platinum.

After much pressure, and as Germany's defeat became more certain, in May 1944, Spain agreed to reduce drastically its wolfram exports to Germany, to hand over all interned Italian ships, to close the German consulate in Tangier, and to expel all German agents on Spanish territory.  With respect to the latter, Spain continued to give Germany intelligence aid right up until the end of the war.  Also, the Allies soon learned that senior members of Franco's Cabinet cooperated with Germany in smuggling more than 800 tons through July 1944 in violation of the May agreement. Spain's exports of wolfram to Germany finally ended with the closing of the Franco-Spanish border in August 1944.  And it was not until April 1945 that Spain severed diplomatic relations with Germany.

The Safehaven program encountered resistance in the United States Embassy in Madrid as Ambassador Carlton Hayes preferred a less aggressive attitude toward Franco and his government.  Great Britain was less interested in the postwar political goals of the Safehaven program than in negotiating a trade agreement with Spain and ensuring the flow of Spanish goods to Great Britain in the postwar period.

Spain had been asked in October 1944 to state its adherence to Bretton Woods Resolution VI.  It did not do so until May 5, 1945. Also, in early May 1945, in response to an Allied request, Spain issued a decree freezing all assets with Axis interests and arranged for a  a census of census of assets. On May 11, 1945, Spain exempted from blocking the assets of countries with whom it still maintained diplomatic relations  The slow actions by the Spanish, and allowing the withdrawing funds from bank accounts and cloaking assets in anticipation of freezing, the Germans were able to evade the immediate effects of Spanish controls.

The Allies estimated German external assets in Spain at the end of the war at about $95 million. American officials conservatively estimated in 1946 that between February 1942 and May 1945, Spain acquired about 123 tons of gold worth nearly $140 million: 11 tons directly from Germany and German-occupied territories, 74 tons from the German account at the Swiss National Bank, and about 38 tons directly from the Swiss National Bank, which the Allies believed included some looted gold.  United States estimates indicated that 72 percent of the gold, worth approximately $100,000 million, acquired by Spain had been looted by Germany from the nations it occupied.

Protracted postwar Allied negotiations with Spain over the restitution of monetary gold and the application of external German assets for reparations began in Madrid in September 1946, at which time the Allies suspected that Spain held about $30 million in gold looted by the Nazis and another $30-39 million in other German assets.  In October 1946, Spain agreed to turn over to the Allies an estimated $25 million in official and semi-official German assets.

In January 1948 Spain insisted on separating the negotiations over assets and gold, declaring that it would restitute any looted gold but would not sign an agreement that did not include a reciprocal claim for Spain's lost Civil War gold.

Spain and the Allies agreed in May 1948,  by which time the United States was seeking access to Spanish bases, to a complex formula for liquidating private German assets (then estimated at $20- 23 million) in which Spain would get about 24 percent and the Inter-Allied Reparations Agency about 76 percent of the proceeds.   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.

The two sides signed a separate agreement in May 1948 that Spain would return $114,329 out of about $30 million in looted Dutch gold that the Allies had identified at the Spanish Foreign Exchange Institute and be allowed to keep the remainder.  This portion was the only gold that Spain had purchased directly from Banco Aleman Transatlantico, a German bank, and the Allies claimed that under the terms of Bretton Woods Resolution VI only the original purchaser of the gold from Germany was liable for its return.  The Allies publicly acknowledge that Spain had not been aware at the time it acquired the gold that it had been looted.  In addition to the $114,329 of looted gold, Spain turned over to the Allies $1.3 million in gold bars and coins it had seized from German State properties at the end of the war.

The Allies could have insisted on more returns by Spain, backing up their demands with sanctions. But the Allies feared exacerbating tensions within Spain, that could bring about another civil war or allow Communists to gain a foothold in Spain.  By 1948 the United States had concluded that attempts to pressure and isolate Spain were counterproductive and were detrimental to the Spanish economy.  As a result, with the signing of the May 1948 agreements, the United States released over $64 million in assets frozen since the war.  And by 1950 the Allies joined with the United States to normalize relations with Spain, and the future assets negotiations (continuing to 1957) were subordinated to efforts to integrate Spain into the Western economic and military framework and provide Spain with substantial military and economic assistance. (Note 90)

Records of the U.S. Embassy, Madrid Spain

     General Records 1936, 1939-1945, 1950-1952 (Entry 3161)

          Boxes 1-134

     Classified General Files (Security-Segregated Records) 1940-1952 (Entry 3162)

          Boxes 1-187
          1940
          Box# File #    File Title or Subject
          1    710    Political Relations
               711    Morocco and the War
               800    Political Reports
               851    Financial Conditions
               851.51 Exchange 
          1941
          Box# File #    File Title or Subject
          2    631    Trade Relations  location: 350/67/26/02
          3    711.2     Foreign Funds Control
               800    Political Reports 
          4    820.02 Axis Activities
               850    Economic Matters
               851    Financial Conditions
               851.51 Exchange
               851.6     Banks, Banking
               854    Patents and Copyrights
               863    Mines, Mining
               871    Censorship 
          1942
          Box# File #    File Title or Subject
          5-7  631    Trade Relations
          7    710    Political Relations-Argentina-Germany
               710    Political Relations-Argentina-Italy
               710    Political Relations-Egypt-Germany
               710    Political Relations-France-Germany
               710    Political Relations-France-Spain
               710    Political Relations-Germany-Italy
               710    Political Relations-Germany-Spain
               710    Political Relations-Great Britain-Spain
               710    Political Relations-Portugal-Spain
               710    Political Relations-Spain-United States loc: 350/67/26/03
          8    800    Spain 
          9    800    Political Reports
               711.1     Neutrality Bloc
               711.1     Spain
               711.2     Germany
          10   820    Military Activities
          10A  820.02 Axis Activities
          11   851.51 Spain
               851.51 Spain-Switzerland
               851.51 Tangier
               851.51 United States
               863    Mines, Mining
          1943
          Box# File #    File Title or Subject
          15-17     631            Trade Relations
          19   710    Political Relations-Germany-Spain
               710    Political Relations-Germany-Spain-Trans-shipment
               710    Political Relations-Great Britain-Portugal
               710    Political Relations-Great Britain-Spain
               710    Political Relations-Great Britain-Italy
               710    Political Relations-Italy-Spain
               710    Political Relations-Spain-Switzerland
               710    Political Relations-Spain-United States
               710    Political Relations-Chile-Germany
               710.1     Argentina
               710.1     Spain
               710.2     Neutrality, Neutrals
               710.3     American Property in Enemy Territory loc: 350/67/26/05
          20-21     800            Political Reports 
          22   800.1     Petain
               800.1     Hitler 
          23-25     820.02         Axis Activities 
          27   850.06 Insurance
               850.31 Property Census
               851    Financial Conditions
               851    Tangier [shipment of gold from Tangier by State Bank of
                         Morocco]
               851.5     Germany
               851.51 Spain
               851.51 Tangier
               851.51 United States
               851.6     Banco Exterior
               851.6     Bank of Morocco
               851.6     Chase National Bank
               851.6     National City Bank
               863    Spain
               863.4     Diamonds
               863.4     Germany-Diamonds
          28   871    Intercepts 
          1944
          31-34     631            Trade Relations
          36   710    Political Relations-France-Spain
               710    Political Relations-Great Britain-Portugal
               710    Political Relations-Great Britain-Spain
               710    Political Relations-Portugal-Spain
               710    Political Relations-Spain-United States  loc: 350/67/26/07
          37   710    Political Relations-Spain-United States
               711    European War [includes various subjects, including war guilt
                         and refugees] 
          37-38     711.2               Neutral Commerce
          38   800    Political Reports-Argentina
               800    Political Reports-Spain
               800    Spain-Portugal
               800    War Refugee Board 
          39-41     800            Political Reports 
          42   800.1     Franco 
          42-46     820.02         Axis Activities 
          48   850    Economic Matters   location: 350/67/27/02
          49   850.31 Property Census
               851    Financial Conditions
               851.5     Gold Policy-Spain
               851.5     Gold
               851.5     Credit Suisse (Gold)
               851.5     Germany-Spain
               851.5     Italy-Spain
               851.5     Morocco
               851.5     Switzerland
               851.5     France
               851.51 Spain
               851.51 Spain-United States
               851.51 United States
               851.51 Switzerland
               851.51 Spanish Foreign Exchange
               851.51 Commercial National Bank
               851.51 Foreign Funds Control
               851.51 Spain (Refugees Funds)
               851.51 Swiss Bank Corporation
               851.51 Tangier 
          50   851.6     Banks, Banking
               863.4     Diamonds  
          51   871    Censorship  
          52   879.6     Lufthansa   location: 350/67/27/03
          1945
          Box# File #    File Title or Subject
          60-61     631            Trade Relations  
          65   710    Political Relations-Spain-Argentina
               710    Political Relations-Spain Great Britain
               710    Political Relations-Spain-Germany
               710    Political Relations-Spain-Guatemala
               710    Political Relations-Spain-Hungary
               710    Political Relations-Spain-Japan
               710    Political Relations-Spain-Mexico
               710    Political Relations-Spain-Peru
               710    Political Relations-Spain-Portugal
               710    Political Relations-Spain-Russia
               710    Political Relations-Spain-Uruguay
               710    Political Relations-Spain-United States
               710    Political Relations-Spain-Yugoslavia
               710    Political Relations-Spain-Ecuador
               711    War Guilt (Croatian Plane)
               711    War Guilt-Laval
               711.1     General
               711.1     Portugal
               711.1     Ireland
               711.1     Spain  
          66   710    Political Relations-Spain-Guatemala
               710    Political Relations-Spain-Germany
               710    Political Relations-Spain-Italy
               710    Political Relations-Spain-Japan
               710    Political Relations-Spain-United
               711    War Guilt Cases
               711    War Guilt Cases, Laval et al
               711.2     Neutral Commerce 
          67   711.9     General
               711.9     Germany
               711.9     Italy
               711.9     Japan  
          67-68     800            Political Reports  
          71-73     820.02         Axis Activities  
          74   850    Economic Matters   location: 350/67/27/06
          75   850.6     Banks, Banking
               851    Frozen Funds
               851    Portugal
               851    Spain
               851    Financial Conditions
               851    Spain-Italy
               851    Argentina
               851    Foreign Funds Control
               851    Spain-Germany
               851    Spain-Italy
               851    Frozen Funds-France
               851.5     Great Britain
               851.5     Belgium
               851.5     Spain
               851.5     Germany
               851.5     United States  
          76   863.4     Clandestine Sale of Diamonds in Spain 
 
     Secret General Records 1944-1945 (Entry 3163)

          Boxes 1-2

     Top Secret General Records 1944-1945, 1947-1955 (Entry 3164)

          Boxes 3-5

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