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

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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.)