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FTR #427 Guilding the Lily: The Japanese Looting of Asia in World War II

[1]Lis­ten:
MP3 One Seg­ment [2]
RealAu­dio [3]
NB: This RealAu­dio stream con­tains both FTRs #426 and #427 in sequence. Each is a 30 minute broad­cast.

Fore­shad­ow­ing infor­ma­tion pre­sent­ed at greater length in FTR#428 and sup­ple­ment­ing infor­ma­tion pre­sent­ed in FTRs 290, 291, 426, the pro­gram sets forth the fas­ci­nat­ing tale of “Gold­en Lily,” the name for the loot­ing of Asia by Japan dur­ing the Sec­ond World War. Over­seen by Emper­or Hiro­hi­to’s broth­er Prince Chichibu, Gold­en Lily con­cen­trat­ed incred­i­ble amounts of wealth in secret loca­tions, where it became the foun­da­tion for Japan’s post­war “eco­nom­ic mir­a­cle” — much as the Bor­mann orga­ni­za­tion effect­ed the res­ur­rec­tion of Ger­many after the war. As Amer­i­can sub­ma­rine war­fare made the trans­fer of loot to Japan increas­ing­ly dif­fi­cult, the wealth (chiefly gold bul­lion, plat­inum and gems) was stashed in the Philip­pines, where much of it was sub­se­quent­ly recov­ered by the Japan­ese. A major out­growth of Gold­en Lily was the uti­liza­tion of much of the gold secret­ed in the Philip­pines by US intel­li­gence to finance post­war covert oper­a­tions.

Pro­gram High­lights Include: The John Birch Soci­ety’s recov­ery of some of the gold stashed in the Philip­pines to finance its post­war anti-com­mu­nist activ­i­ties; the Japan­ese sink­ing of ships loaded with trea­sure for sub­se­quent recov­ery; Japan’s use of hos­pi­tal ships to trans­fer the loot to the Home Islands; US intel­li­gence agents’ trans­fer of much of the Gold­en Lil­ly wealth to Switzer­land and else­where; the use of Gold­en Lily bul­lion to estab­lish accounts for Dou­glas MacArthur and Her­bert Hoover; the role of OSS (and lat­er CIA) oper­a­tive Sev­eri­no Gar­cia San­ta Romana in recov­er­ing the Gold­en Lily trea­sure, in com­pa­ny with Gen­er­al Edward Lans­dale — a prime mover in the world of post­war covert oper­a­tions.

1. Begin­ning with an overview of the Japan­ese plun­der of Asia, the pro­gram sets forth the sto­ry of “Gold­en Lily” — the for­mal name for the pro­gram of loot­ing from the occu­pied nations of Asia. “Dur­ing World War II, Japan’s mil­i­tarism became a heady mix­ture of glo­ry and greed as the army and navy embarked upon a binge of con­quest and loot­ing, from which Tokyo could not extri­cate itself. We know a log about the con­quest, but amaz­ing­ly lit­tle about the loot­ing. In the Japan­ese holo­caust, mil­lions wee killed and bil­lions were stolen, but the loot van­ished. One of the great mys­ter­ies of World War II is what hap­pened to the bil­lions of dol­lars worth of trea­sure con­fis­cat­ed by the Japan­ese Army from a dozen con­quered coun­tries. The answer involves the impe­r­i­al fam­i­ly, so it is an essen­tial part of this biog­ra­phy.”

(The Yam­a­to Dynasty; Ster­ling Sea­grave and Peg­gy Sea­grave; Copy­right 1999 by Peg­gy and Ster­ling Sea­grave; Broad­way Books [a divi­sion of Ran­dom House] [HC]; ISBN 0–7679-0496–6; p. 18.) [1]

2. The pro­gram was over­seen by Emper­or’s broth­er, Prince Chichibu and much of the plun­der was secret­ed away in the Philip­pines. “Rec­og­niz­ing after the Bat­tle of Mid­way in June 1942 that the war was going bad­ly, a num­ber of impe­r­i­al princes devot­ed the rest of the war to hid­ing the loot inge­nious­ly to give Japan a hedge against dis­as­ter. This sys­tem­at­ic cam­paign of loot­ing and hid­ing trea­sure, code­named Gold­en Lily, was under the direct super­vi­sion of Hiro­hi­to’s broth­er Prince Chichibu. Until now, he was assumed to have spent the war on med­ical leave from the army, recu­per­at­ing from tuber­cu­lo­sis at a coun­try estate beneath Mount Fuji, nursed by his wife. In fact, he trav­eled all over occu­pied Chi­na and South­east Asia super­vis­ing the col­lec­tion of plun­der, using hos­pi­tal ships to car­ry much of it to mani­la for onward ship­ment to Japan. From ear­ly 1943 til mid-1945, he was in the Philip­pines over­see­ing the hid­ing of this loot in bunkers, in vaults beneath old Span­ish church­es and in vast under­ground tun­nel com­plex­es. Gold­en Lily stripped Asia of cur­ren­cy, gold, plat­inum, sil­ver, gems, jew­el­ry, art trea­sures and reli­gious arti­facts, includ­ing more than a dozen sol­id gold Bud­dhas, each weigh­ing more than a ton. Accord­ing to Japan­ese who par­tic­i­pat­ed, some $100 bil­lion worth of gold and gems was hid­den at more than two hun­dred sites in the Philip­pines when it became phys­i­cal­ly impos­si­ble to move the loot to Japan. We have cor­rob­o­rat­ed accounts from eye­wit­ness­es and par­tic­i­pants, includ­ing Japan­ese, and mem­bers of Prince Chichibu’s per­son­al ret­inue.” (Ibid.; pp. 18–19.)

3. As dis­cussed in FTRs 290, 428, the wealth loot­ed by the Japan­ese dur­ing World War II was instru­men­tal in financ­ing the res­ur­rec­tion of the Japan­ese econ­o­my after World War II. “Faced with Allied inva­sion of the Home Islands, and the total destruc­tion of Japan’s her­itage, Emper­or Hiro­hi­to was final­ly per­suad­ed to opt for a quick sur­ren­der. This was a bit­ter pill, but it allowed Japan to sur­vive the war with the bulk of its assets intact, includ­ing bil­lions of dol­lars of loot that would help put the nation back on its feet. Since the war, the gold hid­den in a num­ber of sites in the Philip­pines has been recov­ered by teams from Japan and oth­er coun­tries, and these recov­er­ies have been ver­i­fied. A Swiss court dis­closed in 1997 that one of the sol­id gold Bud­dhas is now in a bank vault beneath Zurich’s Kloten Air­port, along with a large quan­ti­ty of oth­er gold bul­lion recov­ered by for­mer Philip­pine pres­i­dent Fer­di­nand Mar­cos and held in Mar­cos fam­i­ly accounts. In 1997, a Japan­ese inves­tiga­tive team from Asahi Tele­vi­sion was tak­en to an under­ground vault in Luzon where they filmed (and took core sam­ples of) 1,800 gold bars worth $150 mil­lion — gold that was stolen from Suma­tra, Cam­bo­dia and Bur­ma. This gold had been melt­ed down in occu­pied Malaya, recast and marked in accor­dance with the account­ing pro­ce­dures of Gold­en Lily, and then sent to Mani­la on fake Japan­ese hos­pi­tal ships. Trea­sure loot­ed from Chi­na was tak­en to Japan by way of Korea and hid­den in under­ground vaults in the moun­tains near Nagano, the site of the 1998 Win­ter Olympics. Gold bul­lion aboard ships at the time of sur­ren­der in 1945 was sunk in Tokyo Bay and oth­er points along the coast, and some of it has since been recov­ered.” (Ibid.; pp. 19–20.)

4. As dis­cussed in FTRs 290, 426, 428, the suc­cess­ful recov­ery of this wealth was real­ized in con­sid­er­able mea­sure through the delib­er­ate sub­ver­sion of attempts at reform­ing Japan­ese polit­i­cal and eco­nom­ic life after World War II. “Thanks to Prince Chichibu and Gold­en Lily, when the U.S. occu­pa­tion end­ed in 1952 ‘bank­rupt’ Japan was able to begin a ‘mirac­u­lous’ recov­ery, on its way to becom­ing the world’s sec­ond-rich­est econ­o­my. War repa­ra­tions were dodged, the impe­r­i­al fam­i­ly evad­ed pun­ish­ment, and Japan’s finan­cial elite resumed con­trol as if the war had not occurred. Claims that Japan and its impe­r­i­al fam­i­ly were left vir­tu­al­ly pen­ni­less by the war would there­fore appear to be com­plete­ly false. War loot also pro­vid­ed a huge pool of black mon­ey used by post­war politi­cians to cor­rupt Japan’s bureau­cra­cy, bring­ing the coun­try full cir­cle again at the mil­len­ni­um to the verge of eco­nom­ic col­lapse.” (Ibid.; p. 20.)

5. Fur­ther detail­ing the real­iza­tion of “Gold­en Lil­ly,” the pro­gram sets forth details of the estab­lish­ment of the Philip­pines as a pri­ma­ry repos­i­to­ry for the vast sums of loot­ed wealth. “Because of the fail­ure of its eco­nom­ic strat­e­gy, Japan’s finan­cial rape of Asia became more impor­tant than its mil­i­tary con­quest. Loot and plun­der became the only way Japan could stay afloat and con­tin­ue to finance the war. . . Until the end of 1942, this trea­sure was accu­mu­lat­ed in Ran­goon, Penang, Sin­ga­pore and Jakar­ta, then shipped by sea to Mani­la for trans­ship­ment to Japan. There was no over­land route by way of Chi­na until the brief suc­cess of Oper­a­tion Ichi­go in late 1944. The mer­chant ships used were paint­ed to resem­ble hos­pi­tal ships, one of which — the Awa Maru — was sunk by an Amer­i­can sub­ma­rine any­way, in fair­ly shal­low water just off the coast of Chi­na. (By inter­na­tion­al agree­ment, hos­pi­tal ships are sup­posed to be immune to attack.) Ware­hous­es along the Mani­la Bay front became clogged with bul­lion and oil drums full of gems and coins. A 35-mile-long tun­nel half as wide again as a loaded army truck, was dug by POWs so that this loot could be trucked from the bay front to the old Span­ish mil­i­tary forts on the east­ern perime­ter of Mani­la, where there were cat­a­combs avail­able to hide it. The tun­nel is still there, although Fil­ipinos are unaware of it . . .” (Ibid.; pp. 184–186.)

6. ” . . . When the U.S. sub­ma­rine block­ade became effec­tive ear­ly in 1943, and the war turned increas­ing­ly against Japan, a huge quan­ti­ty of loot­ed trea­sure was still in the pipeline, unable to move beyond the Philip­pines. Accord­ing to Japan­ese sources, Prince Chichibu moved Gold­en Lily’s head­quar­ters from Sin­ga­pore to Luzon, the north­ern island of the Philip­pines, where he devot­ed two and a half years to inven­to­ry­ing and hid­ing the trea­sure I care­ful­ly engi­neered vaults, tun­nels, bunkers and caves at 172 ‘impe­r­i­al’ sites. (There were many oth­er sites for which the army was sep­a­rate­ly respon­si­ble.) Accord­ing to Japan­ese who par­tic­i­pat­ed, a sec­ond inven­to­ry team in Luzon was head­ed by Asaka’s son, Prince Takahi­to. The Japan­ese hoped that they would be able to arrange a cease-fire that would allow them to hold on to the Philip­pines, essen­tial­ly annex­ing it, so that they could recov­er the war loot at their leisure. If they were unable to annex the Philip­pines, they rea­soned that they could still recov­er the trea­sure grad­u­al­ly under a vari­ety of cov­ers — which is essen­tial­ly what did hap­pen after the war. Hav­ing gam­bled and lost, it was essen­tial not to for­feit the plun­der, which would be need­ed to rebuild Japan.” (Ibid.; pp. 186–187.)

7. “In the last year of the war, Japan also hid large quan­ti­ties of bul­lion at sea, delib­er­ate­ly scut­tling ships includ­ing the cruis­er Nachii, sunk with all hands in Mani­la Bay by a Japan­ese sub­ma­rine that then machine-gunned all the Japan­ese crew mem­bers who came to the sur­face. The gold aboard the Nachii was recov­ered from its hulk in the late 1970s by Pres­i­dent Mar­cos. The Japan­ese sub I‑52, a car­go ves­sel the length of a foot­ball field was attempt­ing to deliv­er two tons of gold worth $25 mil­lion to the Nazi sub base at Lori­ent, France, when it was sunk in mid-Atlantic by a U.S. Navy plane. It has now been locat­ed and a recov­ery oper­a­tion is under way. Oth­er bul­lion ship­ments were made by sub to Europe and South Amer­i­ca, and deposit­ed in over­seas branch­es of Swiss banks.” (Ibid.; p. 187.)

8. “For decades after the war, the exis­tence of this hid­den trea­sure was regard­ed by many as sheer fan­ta­sy. It served Japan’s pur­pose to have peo­ple think so, while recov­ery efforts went on secret­ly. But in the 1990s, courts in Amer­i­ca and Switzer­land con­clud­ed that bil­lions of dol­lars in gold were loot­ed by Japan and hid­den in the Philip­pines. In 1997, a team from Japan’s Asahi tele­vi­sion was led to a moun­tain cave in the Philip­pines, where they exam­ined 1,800 of these bars, worth $150 mil­lion, and drilled core sam­ples that con­firmed their province . . . Sources at Asahi Tele­vi­sion said they were dis­cour­aged from doing a full inves­ti­ga­tion because of fear of reprisals by Japan­ese extrem­ists.” (Idem.)

9. “There is grow­ing evi­dence con­firm­ing that Prince Chichibu was indeed in the Philip­pines dur­ing this peri­od, head­ing the trea­sure effort. But a full and detailed study of Gold­en Lily must be the sub­ject of anoth­er book. In Tokyo in the 1950s, after Chichibu’s pre­ma­ture death from TB, a mem­ber of the impe­r­i­al fam­i­ly con­fid­ed to a for­eign vis­i­tor that the army had amassed over $100 bil­lion in trea­sure, and much of this was hid­den in the Philip­pines, where ‘it will take a cen­tu­ry to recov­er.’ He con­firmed that Chichibu was in Luzon for two and a half years, escap­ing to Japan by sub­ma­rine ear­ly in 1945. The involve­ment of the impe­r­i­al fam­i­ly in such activ­i­ties has been acknowl­edged in Japan, although in recent years it has been wide­ly dis­cussed in pri­vate. Nazi war loot got more atten­tion because of the pow­er­ful post­war Jew­ish lob­by which was able to mount an effec­tive, coor­di­nat­ed cam­paign for which there was no Asian equiv­a­lent. Both wars had hor­rif­ic con­se­quences. Six mil­lion Jews were killed by the Nazis but as many as 30 mil­lion Asians died as a result of Japan’s aggres­sion, 23 mil­lion in Chi­na alone.” (Ibid.; pp. 187–188.)

10. Dis­cov­er­ing some of the caches of wealth in the Philip­pines, US per­son­nel sub­se­quent­ly recov­ered some of the loot for their own pur­pos­es. Among those was MacArthur’s intel­li­gence chief Gen­er­al Charles Willough­by. An arch reac­tionary whose idol was Fran­cis­co Fran­co (the fas­cist dic­ta­tor of Spain), Willough­by went on to become a key fig­ure in post­war rightwing pol­i­tics, includ­ing the John Birch Soci­ety. (For more about Willough­by, see — among oth­er pro­grams — RFAs 10, 11, 15, 37 — avail­able from Spit­fire. Willough­by is also dis­cussed in FTRs 54, 120.) The John Birch Soci­ety was among those inter­ests that effect­ed post­war recov­er­ies of some of the Gold­en Lily bul­lion, in order to finance their polit­i­cal activ­i­ties. (For more about the John Birch Soci­ety, see RFAs 11, 12, avail­able from Spit­fire.) “Dur­ing the clos­ing months of the war, Amer­i­can guer­ril­la forces oper­at­ing in the moun­tains of Luzon observed Japan­ese Army units hid­ing truck­loads of very heavy small box­es in caves. They cap­tured and inter­ro­gat­ed Japan­ese sol­diers and learned that the box­es con­tained gold bars. When the war end­ed, MacArthur’s G‑2 Gen­er­al Charles Willough­by and oth­er intel­li­gence offi­cers backed secret recov­ery oper­a­tions that net­ted huge sums, accord­ing to some of the Amer­i­can offi­cers who par­tic­i­pat­ed. The gold was slipped into the mar­ket cau­tious­ly to avoid affect­ing world gold prices. These recov­er­ies con­tin­ued inter­mit­tent­ly over the years. One such effort involved the John Birch Soci­ety, a vir­u­lent­ly anti-Com­mu­nist orga­ni­za­tion named after an Amer­i­can who was killed by Marx­ist forces dur­ing the Chi­nese civ­il war. In the mid-1970s, the soci­ety lent nearly$500,000 to an Amer­i­can trea­sure-hunter to finance a recov­ery in the Philip­pines, promis­ing to help him laun­der up to $20 bil­lion of the recov­ered gold. (The soci­ety seemed to believe that it was per­fect­ly cor­rect to break Amer­i­can laws regard­ing the ille­gal laun­der­ing of mon­ey, pro­vid­ing it was done to finance anti-com­mu­nism.) Colonel Lau­rence Bunker, a close friend of Gen­er­al Willough­by who took over from Bon­ner Fellers as MacArthur’s chief aide, per­son­al sec­re­tary and spokesman from 1946 until his retire­ment in 1952, was a char­ter mem­ber of the John Birch Soci­ety.” (Ibid.; pp. 226–227.)

11. Direct­ly antic­i­pat­ing infor­ma­tion pre­sent­ed in Ster­ling and Peg­gy Sea­grave’s Gold War­riors (see FTR#428), the pro­gram details the recov­ery of Gold­en Lily bul­lion by ele­ments of US intel­li­gence, its trans­fer abroad, and its devel­op­ment as an asset in order to finance CIA covert oper­a­tions. “We refer here to a major recov­ery of Japan­ese war loot car­ried out in Luzon between 1945 and 1948. Sev­eri­no Gar­cia San­ta Romana, a Fil­ipino-Amer­i­can OSS offi­cer and lat­er an offi­cer in the CIA, under the direct field super­vi­sion of the CIA’s Gen­er­al Edward G. Lans­dale, over­saw the recov­ery. Doc­u­ments show that this mas­sive recov­ery of war loot was known to OSS chief Gen­er­al William Dono­van, to Gen­er­al MacArthur, to Brigadier Gen­er­al Fellers and to Her­bert Hoover, and lat­er to CIA direc­tor Allen Dulles and his deputies, so it was prob­a­bly known to Pres­i­dent Tru­man. We must assume that Tru­man’s close asso­ciate Pauley was also aware of it when he went to Japan.” (Ibid.; p. 294.)

12. “The San­ta Romana recov­ery — the first of its kind — came about the fol­low­ing man­ner. In the clos­ing months of the war, Amer­i­can OSS offi­cers fight­ing along­side Fil­ipino gueril­las observed a heav­i­ly laden Japan­ese hos­pi­tal ship unload­ing bronze box­es at Subic Bay. A con­voy of army trucks car­ry­ing the car­go was tracked into the moun­tains where guer­ril­las watched Japan­ese sol­diers car­ry the remark­ably heavy box­es into a cave. When the Japan­ese sealed and dis­guised the cave entrance and left, the gueril­las — includ­ing one Amer­i­can OSS major — opened the cave and dis­cov­ered that the box­es con­tained gold bars. They then resealed the cave. After the war, San­ta Romana was assigned by Gen­er­als Dono­van and Lans­dale to emp­ty the cave secret­ly. Doc­u­ments show that no attempt was made to return this bul­lion to its right­ful own­ers, or even to set up a fund to ben­e­fit vic­tims of the war. Instead, the gold bul­lion was deposit­ed by San­ta Romana in 176 bank accounts in 42 coun­tries, and became the basis of the CIA’s ‘off the books’ oper­a­tional funds dur­ing the imme­di­ate post­war years, to cre­ate a world­wide anti-Com­mu­nist net­work. This was done by dis­trib­ut­ing gold cer­tifi­cates to influ­en­tial peo­ple, bind­ing them to the CIA. One sin­gle account in Gen­er­al Lans­dale’s name at the Gene­va branch of Union Banque Suisse, doc­u­ments show, con­tained 20,000 met­ric tons of gold. It is only one of many. Here is a clear prece­dent to the secret accounts set up by Colonel Oliv­er North dur­ing the Iran-Con­tra arms con­spir­a­cy of the 1980s which were triv­ial by com­par­i­son.” (Ibid.; pp. 294–295.)

13. Sig­nif­i­cant­ly, large amounts of gold appear to have end­ed up in accounts in the name of Gen­er­al Dou­glas MacArthur and for­mer Pres­i­dent Her­bert Hoover, both deeply involved in sub­ver­sion of the reform of Japan in the post­war peri­od and the exon­er­a­tion of Emper­or Hiro­hi­to of war guilt. “Some of the bul­lion accounts that San­ta Romana squir­relled away were set up for his own pri­vate use, with gold bars that he side-tracked dur­ing the recov­ery process. These accounts still exist in New York and else­where, and they are the object of numer­ous legal actions by peo­ple claim­ing to be San­ta Romana’s heirs. But there is a lot more gold still in the ground in the Philip­pines, yet to be recov­ered. Doc­u­ments also show that one of the big gold-bul­lion accounts set up by San­ta Romana was in the name of Gen­er­al Dou­glas MacArthur. Oth­er doc­u­ments indi­cate that gold bul­lion worth $100 mil­lion was placed in an account in the name of Her­bert Hoover. Both men were deeply involved in res­cu­ing Emper­or Hiro­hi­to, and sub­orn­ing wit­ness­es at the Tokyo war-crimes tri­bunal. What does this sug­gest?” (Ibid.; p. 295.)