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The Treasure Island of WWII

Edward Michaud 1999 - Part 1


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Corregidor with Inset Showing Manila Bay










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USS Trout arrives at Pearl Harbor February 1942








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South Mine Dock 1988








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Recoveries from South Mine Dock 1988

Every war that has ever been waged by mankind has always spurred on the stories and legends of lost or stolen fortunes. In fact, there isn’t a country or territory on the face of this earth that doesn’t have at least one legend concerning treasure as a result of military conflict. World War Two was certainly no exception. (1)

At the entrance to Manila Bay in the Philippine Islands and bordering the South China Sea lies a tiny island only nine square kilometers in size; a rocky outcropping that was to play a significant role in the war with Japan between the years 1942 – 1945.

Corregidor Island, often remembered with mixed feelings by most World War Two veterans who were there during those years, is to most historians and followers of the Pacific war the Gibraltar of the Far East. The destiny of this lonely outpost was to drastically change the one-time paradise into a bomb-cratered apocalypse.

On December 8th, 1941, the Japanese Imperial Army and Navy brought World War Two to the Philippine Islands, only a few hours after the now famous attack on the United States Naval base at Pearl Harbor in the Hawaiian Islands. At this time the American general Douglas MacArthur was in command of some 170,000 combined American and Philippine troops scattered in various locations throughout the Philippine islands. Over the next three weeks these forces were to lose ground to overwhelming Japanese forces on a daily basis.

On December 23rd Manila, the Philippine Capitol, was declared an open city by General MacArthur in order to prevent further civilian casualties and unwarranted property destruction. Subsequently, the general instructed his men to destroy all of the ammunition, equipment, and supplies which could not be removed to the Bataan Peninsula or the fortified islands in Manila Bay. All military personnel and dependents, along with a great many Philippine civilians, evacuated the city for Bataan. A number of military personnel, along with their equipment, were also transported to Corregidor; commonly referred to in those times as "The Rock". One of General MacArthur’s aides, Col. Willoughby of the US Army Intelligence Bureau G-2, was to arrange for the transportation of the Philippine National Treasury and the contents of the Philippine Central Bank to the relative safety of Corregidor Island. A Colonel Vance of the US Army Finance Office was to assist Willoughby and his Treasury staff in liaison duties between offices. This vast horde of securities, consisting of Gold & Silver specie and bullion, along with bearer bonds, Treasury certificates, precious stones, as well as privately held gold items and mementos, did indeed make it to the island, but with a great many exertions and hardships on the part of many individuals. (2)

Willoughby and his combined American / Philippine Treasury staff had been collecting and accepting securities for safe keeping from around the Province since the opening of hostilities. Keeping track of the Government property and personal valuables was indeed a monumental task. The Government securities alone consisted of over 51 tons of gold bullion, 32 tons of silver bullion, 140 tons of silver pesos & centavos, and millions of paper Treasury notes, bonds and corporate stocks. The civilian property, otherwise known as ‘private holdings’, consisted of approximately two tons of gold bullion in various sized ingots, along with an unknown amount of precious stones and foreign currency. When orders were received to evacuate the city the many paper inventories and records were still incomplete, with many private citizens not even being given receipts for their valuables. (3)

At one point just prior to the city’s evacuation, the old part of Manila within the old Fort Santiago area had been severely bombed during a Japanese air raid. The storage rooms of the rather large holdings of silver pesos was hit, scattering completely the crated and bagged coins throughout the room. Clerks were inundated and actually buried with silver coins for a short time. However, it didn’t take long for the Treasury workers to re-pack the coins for shipment.

The Treasury staff appropriated whatever vessels they could lay their hands on for the transportation of the securities to Corregidor, which consisted mostly of out-dated US Navy harbor tugs and small civilian boats. The ‘Don Esteban’ was one such vessel, along with the Presidential yacht ‘Cassiano’, which received a rather substantial shipment of silver ingots and pesos. The government gold bars loaded onto these vessels alone was worth a cool $ 41 million dollars US, (at $ 32.00 US per oz.). Overseeing the last of the night time loading of the large metal boxes of gold bullion was Admiral Hart of the US Navy. He had been there to see the MacArthur family off to Corregidor and had hung around long enough to ensure the speedy departure of the valuable shipment. (4)

In general, ingots, coins, and other precious metals were stuffed into foot-lockers, metal cabinets, and any other container which could take the weight; then thrown down unceremoniously onto the decks of the small fleet. The loading process took four days to complete and was done only at night due to the incessant bombing raids received in the city during the daylight hours. With the loading completed, the little flotilla sailed down the Manila Bay headed for Corregidor Island on the night of December 27th, 1941.

Upon arrival at the island’s North Dock the small vessels had a difficult time manoeuvring for pier space among the larger refugee and supply ships. As a result, each boat would pull up, throw its cargo containers onto the dock, and then vacate the space for the next boat in line to repeat the procedure. In this manner it took two nights and one day to deliver the valuables from the North Dock to the two designated "vault" areas on Corregidor Island. (5)

North Dock was piled a good ten feet high with ammunition boxes, gas cans, food & medical supplies – and the Philippine National Treasury securities. The US Army personnel were cooperative in assisting to move the many containers of wealth but they naturally considered gold & silver less important than weapons and ammunition. At that time Corregidor was not under direct assault, but the defenders knew that it was only a matter of time and getting caught with a pier full of open containers of fuel, food and treasure would not have been a welcome situation. Many a Marine and Army private viewed the precious crates with incredulity and would have traded it all to be back home out of harms way.

In a relatively short time, however, the 140 tons of silver pesos, packed inside canvas bags with two bags to a crate, were transported safely from the dock to the US Navy Quartermaster sections of the large underground complex known as Malinta Tunnel. The private holdings of gold, consisting of two tons in various sized ingots and packed loosely in a motley mix of containers, was sent on for storage inside what was known as the "Stockade", located at the Middleside section of the island. The ‘Stockade’ was formerly the island’s brig consisting of two small rooms of concrete construction, all of which was above ground. The building was located just below one of Corregidor’s largest batteries of twelve-inch mortars and was subsequently referred to as the "vault" due to its contents from this day forward. The remaining 51 tons of government gold bullion, consisting of 2,542 ingots of 42lbs each, (20 kilos), along with the balance of the paper currency & securities, were stowed in several of the interior laterals of the Navy Tunnel on the South side of the Malinta tunnel complex. (6)

While the battle raged on for the Bataan Peninsula across the Bay, Col. Willoughby and his staff tried their best to complete the volume of securities inventories inside the Malinta Tunnels and at the "vault" down at the Stockade on middleside. Occasional bombing raids on the island by the Japanese didn’t make the job any easier and by February, 1942 Corregidor was undergoing a constant bombing during the daylight hours.

Although the gold, silver and stocks were packaged and bundled after the inventories, the paper currencies and notes had their serial numbers recorded and then the bills them selves were destroyed with the intention of re-issuing them at a later date in the United States. Three different metal cans were used as incinerators for the burning of the bills just outside the western entrance of the Malinta Tunnel system at bottomside. These notes were sometimes burned a trunk-full at a time. (7)

Well over 15 million silver peso and centavo coins were catalogued, tagged, and bagged within the Navy Tunnels. This complex assemblage of passageways also housed the island’s reserve food supply within an area known as the Quartermaster’s storage section. Thousands of cans of pre-cooked ham were stored in one of the laterals of the later. The island defenders considered these food stocks even more valuable than the securities and as a result, a series of heavy iron and wooden doors were installed at each entrance to the interior lateral passageways; not for the security of the valuables, but to ensure the longevity of the canned ham! (8)

Back at Pearl Harbor the confused military staff were trying to clean up their mess after the Japanese air attacks of December 7th, as well as schedule what relief they could for the besieged troops on Bataan and Corregidor. By this time the Imperial Japanese Navy possessed complete control over the South China Sea and sending surface ships to re-supply Corregidor was out of the question. There was only one alternative – to attempt a supply run by submarine. Since the United States submarine fleet had their hands full trying to stem the tide of Japanese conquest in the South Pacific, only four subs were available to do the job. (9)

On February 1st and 2nd, 1942, the US subs "Swordfish", "Seadragon", and "Seawolf" surfaced inside Corregidor’s San Jose Bay on the south side of the island. These vessels were re-directed to Corregidor during their regular war-time patrols for the express purpose of evacuating certain key individuals. Since these submarines didn’t actually tie-up to the dock the opportunity to remove at least a portion of the heavier securities was not available.

When the ‘Tambor’ class American submarine USS Trout arrived in the area on the night of February 3rd she was met just outside San Jose Bay by the US Navy tug USS Pigeon and escorted through the mine field to the island’s South Mine Dock. After tying up to the small dock, the submarine off-loaded 3,517 three-inch high altitude anti-aircraft shells and over 500 cases of food and medical supplies. The Trout was the first vessel sent express from the US Naval Base at Pearl Harbor for the specific purpose of supplying the island and her skipper, Cdr. Fenno, had been ordered to proceed on his regular war-time patrol after the night time transfer of the supplies. (10)

After the unloading was completed Fenno requested some type of ballast from the Corregidor dock party so his sub would be able to dive quickly upon leaving the area. During a brief conference with the officer in charge at the dock it was decided that Fenno and one of his other officers were to hold a quick meeting with Admiral Rockwell and General MacArthur about this matter. Apparently, the command staff on the island had an idea about that required ballast. It was mutually agreed that this would be the perfect opportunity to ship out at least part of the Philippine National Securities from the island. Col. Willoughby and his Treasury staff were awakened and arrived down at the South Mine Dock shortly thereafter. (11)

At this time a curious historical note is in order. When Cdr. Frank W. Fenno met MacArthur and Rockwell at the ‘Queen’s" section of the Navy Tunnel the topic of conversation eventually changed to the earlier attack on Pearl Harbor. Evidently, the Japanese had been dropping propaganda leaflets on the island bragging about how they had destroyed the United States Navy’s fleet during their raids. Fenno confirmed to General MacArthur that at least the part about the overwhelming devastation incurred on the Fleet’s major ships was true. According to Lt. Frederick Gunn, who was the Trout’s engineering officer and who was there with Fenno, when MacArthur heard this his mouth dropped open and stated: "You mean those leaflets they’ve been dropping on us are true?" Whatever the history books may say about when MacArthur realized the full extent of the Pearl Harbor attack, at least we can put a date on "when" he knew exactly "what" happened – February 3rd, 1942. (12)

Two open-ended trucks were quickly sent up to the "vault" at the Stockade on Middleside to bring down to the South Dock the two tons worth of ‘Private Gold’ ingots. A combined loading party of Treasury officials and Philippine Scouts immediately commenced the loading of the gold bars onto the Trout, with the Trout’s crew receiving the gold on their decks by literally catching the bars as they were thrown over to them from the dock. At the center of the submarine a gangplank had been set up to ease the passing of the heavy material, but since time was of the essence, the crew started catching the ingots at the forward part of the vessel as well as at the after-battery hatch. The bullion was eventually stowed in the Trout’s forward battery, after battery, and in the midship armory compartment. (13)

When the gold was completely loaded, the trucks proceeded to the Quartermaster Area of the Navy Tunnel and loaded up a small portion of the Silver pesos. When this arrived at the dock it too was added to the already valuable ballast on board the Trout. A total of two tons of gold ingots and sixteen tons of silver pesos in canvas bags were loaded onto the vessel, along with four spare torpedoes sent down from the Navy tunnels.

Daylight was coming quickly and still there were bags of currency, stocks, bonds, certificates, and Government dispatches to be placed aboard. Since there was no more time to load these items, Fenno made arrangements with Col. Willoughby to rendezvous at a designated point inside the San Jose Bay the following night in order to complete the transfer. Capt. Fenno was in a hurry to avoid being caught at the pier by Japanese planes during the daylight hours. He wanted to proceed out into the bay and "dunk" for the day to wait out the daylight, then surface after sundown to complete his task. The first portion of the transfer being completed, Trout proceeded silently from the dock and submerged.

The following night Willoughby and the staff loaded up a small boat at the South Dock with the treasury securities they intended on loading onto the Trout. Their motor launch proceeded out into the Bay and after waiting a number of hours eventually rendezvoused with the submarine. The President of the Philippines Manuel Quezon was on the launch that night as well. According to Lt. Gunn of the Trout’s crew, an additional nine large bags were brought aboard. After this, President Quezon attempted to crawl aboard the vessel for some unknown reason. However, Capt. Fenno made it clear that no person from the "Rock" was allowed on board and so the President was assisted back into the launch. Upon completion of the transfer, the Trout engaged her surface diesels and proceeded out of the Bay, eventually dipping down into a submerged run. (14)

The USS Trout, now a submersible "National Bank", proceeded on her regular war-time patrol around the outer Philippine Islands. Since the skipper had no orders other than to proceed on a regular patrol, he did not head directly back to Pearl Harbor. Instead, Fenno brought his vessel towards Mindanao and eventually sank two Japanese vessels before heading home to Pearl. It has been stated from reliable sources that while on the patrol during a lull in activity the crew actually pulled out a few of the bags of silver pesos and played poker, using the coins as betting chips! However, virtually all of the coins were replaced in their respective containers prior to arriving back at base. Over the next year or so Capt. Fenno would attempt to claim salvage on this cargo according to the accepted maritime practice of the times. But the Navy suspiciously changed these regulations only one month after the Trout’s successful securities evacuation, which made his claim null and void. The Naval Command at Pearl Harbor ruled that the operations were an official Government to Government Transfer and required no such Salvage award to participants. As one officer from the Trout would state years later: "I wouldn’t call two Philippine Scouts throwing gold bricks to me in the middle of the night a Government to Government transfer!" (15)

Upon arrival at Pearl Harbor, the Trout pulled up alongside the heavy cruiser USS Detroit and off-loaded her precious cargo, which was eventually transported safely to the US Mint storage facilities in San Francisco. At the end of the war this securities shipment, or at least its monetary equivalent, was subsequently transferred back to the Philippine Government. The balance of the securities on Corregidor Island were not so fortunate, however.

There were still well over 125 tons of silver and at least 51 tons of Government gold bullion to dispose of on the "Rock" before it fell into the hands of the Japanese. In a last-ditch attempt to hide this vast horde, the entire silver consignment was dumped into the deeper waters of San Jose Bay at the end of April and during the first days of May, 1942. The US Navy tug Pigeon and Mine-Sweeper Harrison, each towing a barge full of silver pesos & centavos, made several trips out of Corregidor’s South Mine Dock in order to complete the dumping. In this way approximately 115 tons of silver were disposed of. During the loading process onto the barges at South Dock two cases of silver were dumped down the stack of a small ‘Dap-Dap’ boat tied up to the pier. According to surviving veterans, this particular two cases of silver were recovered later on by the Japanese. The remainder is still unaccounted for, perhaps just thrown off the docks or dumped in the shallow water of the nearby beach of Barrio San Jose. (16)

The Japanese were well aware of this clandestine dumping very soon after the island’s surrender on May 6th, 1942. Within a month they were forcing US Navy Diver prisoners of war to dive for the coins at bayonet-point. But the divers did not want these coins to fall into the hands of the Emperor’s troops that easily, and instead of sending to the surface whole bags or cases of silver, they purposely broke open the cases on the bottom, ripped the bags, and sent up only partial containers. The sabotage attempts proved somewhat successful and the Japanese command only recovered about two million pesos, only a fraction of what was on the bottom.


Post War Recovery Operations1945 - 1988 

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