What Happens When You Hand Over Your Gold To The Bank Of England For “Safekeeping”
“The Bank for International Settlements is the bank which sanctions the most notorious outrage of this generation— the rape of Czechoslovakia.”
— George Strauss, Labor MP, speaking in the House of Commons, May 1939
“the Bank for International Settlements should be liquidated before it
furnished any more sinews of war to Germany, and that the odd
relationship between the British government and the Bank of England
should be re-examined without delay.”
— “Sees British Hands Tied on Czech Gold,” New York Times, June 6, 1939
When Nazi Germany annexed the Czechoslovak border province of the Sudetenland in September 1938, it immediately absorbed a good part of the country’s banking system as well as most of Czechoslovakia’s strategic defenses. By then the country’s national bank had prudently transferred most of its gold abroad to two accounts at the Bank of England: one in the name of the BIS, and one in the name of the National Bank of Czechoslovakia itself. (Countries had deposited some of their gold reserves in a sub-account at the BIS account in London to ease gold sales and purchases.) Of the 94,772 kilograms of gold, only 6,337 kilograms remained in Prague. The security of the national gold was more than a monetary issue. The Czechoslovak reserves, like those of Republican Spain, were an expression of nationhood. Carved out of the remains of the Austro-Hungarian Empire in 1918, the Czechoslovak Republic was a new and fragile nation. A good part of the gold had been donated by the public in the country’s early years. Josef Malik, the governor of the national bank, and his fellow Czechs believed that, even as the Nazis’ dismembered their homeland, if the national gold was safe, then something of the country’s independence would endure.
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