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Gold Warriors

THE COVERT HISTORY OF YAMASHITAS GOLD

How Washington secretly recovered it to set up giant cold war slush funds and manipulate
foreign governments.

By Sterling Seagrave
& Peggy Seagrave

Copyright 2001

Contents

Prologue ~ Buried Alive
Ch.1 ~ Behind the Mask
Ch.2 ~ rogue Saumrai
Ch.3 ~ The Rape of China
Ch.4 ~ Storming the Indies
Ch.5 ~ Hiding the Plunder
Ch.6 ~ The Eyewitness
Ch. 7~ Down the Rabbit Hole
Ch. 8 ~ Dirty Tricks
Ch. 9 ~ Heart of Darkness
Ch.10 ~ The Umbrella
Ch.11 ~ Pointing the Way
Ch.12 ~ Sanctifying the Gold
Ch.13 ~ The Paladins
Ch.14 ~ Loose Cannons
Ch.15 ~ Connect the Dots
Epilogue Conflict of Interest












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Gold Warriors
Prologue
BURIED ALIVE



In the closing months of World War II in the Philippines, while General Yamashita Tomoyuki
fought a delaying action in the mountains of northern Luzon, several of Japan s highest ranking
imperial princes hid thousands of tons of looted Asian gold bullion and other treasure in caves
and tunnels near Bambang, planning to recover it later. When the treasure was secure and
American tanks were less than twenty miles away, 175 Japanese chief engineers responsible
for treasure sites throughout the islands were given a farewell party. The party took place
underground in a large vault stacked from end to end with gold bars. As the evening
progressed, they drank great quantities of sake, sang patriotic songs and shouted Banzai
( long life ) over and over. At midnight, General Yamashita and the princes slipped out, and
dynamite charges were set off in the access tunnels, entombing the engineers so they would
never reveal the locations. The princes escaped to Japan by submarine, and General
Yamashita surrendered to American troops three months later. Japan had lost the war militarily,
but the princes made certain that Japan did not lose financially.
This grisly event remained unknown for half a century, and the hidden treasure
was brushed off as a fanciful legend, called Yamashita s Gold . But an eyewitness
to the entombment has provided us with his personal account. During the war, Ben
Valmores was the teenage Filipino valet of one of the senior princes, Emperor
Hirohito s first cousin, who decided at the last moment to spare Ben s life and led him
out of the cave. Ben, in his late sixties now and in failing health, took us to the site of
the fatal drinking party, and over a period of many months gave us a full account of
what he saw at 175 sites he visited with his prince, from early 1943 to mid-1945. Ben
took us (or our colleagues) to the most important of these sites, and recounted all that
he saw and experienced. We reproduce photos of the sites and some of the original
maps drawn by Japanese cartographers showing the vaults, their contents, and the
booby traps planted to discourage recovery by anyone else. We cross-checked with
other witnesses everything Ben told us. This, in turn, led us to reinvestigate Japan s
systematic looting of twelve countries that it invaded and occupied from 1895 to 1945.
In a previous book, THE YAMATO DYNASTY, we revealed for the first time that
Hirohito s brother Pri nce Chichibu headed Japan s campaign of plunder. His
organization was codenamed kin no yuri (Golden Lily). After reading THE YAMATO
DYNASTY, bestselling writer Iris Chang, author of THE RAPE OF NANKING, remarked:
The Seagraves have discovered one of the biggest secrets of the twentieth century.
What she referred to was a small but significant discovery we made by accident. In the
final stages of work on that book we were told that in October 1945, American OSS
agents learned where some of the Japanese treasure was hidden in the Philippines,
and recovered very large quantities of gold bullion, platinum, and loose diamonds. Our
sources, who included senior U.S. Government officials and high-ranking military
officers, told us that the Truman Administration decided in 1945 to set this treasure
aside with recovered Nazi loot, as a secret fund to fight communism in the Cold War.

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The fund would be used to bribe statesmen and military officers, and to buy elections for
anti-communist political parties.
We mentioned only the bare details in THE YAMATO DYNASTY because we felt
this was an important subject that merited separate study and investigation. GOLDEN
LILY is the result, a preliminary report on what we have since learned. We hope that
other researchers will pursue it further.
We have established that in October 1945, when General Yamashita
surrendered and was put in New Bilibad Prison near Manila to await trial on charges of
war crimes, his personal driver Major Kojima Kashii was tortured by an OSS agent
named Severino Garcia Santa Romana. This took place at Bilibad under the direct
supervision of Captain Edward G. Lansdale, later one of America s best known Cold
Warriors. They were torturing the major to discover exactly where the Japanese had
hidden treasure in the last twelve months of the war. They believed that Major Kojima
must have driven General Yamashita to a number of these sites. They knew that
Japanese soldiers had been hiding gold bullion in caves and tunnels, because
intelligence officers with Filipino guerrilla forces had observed them doing so, and on
two occasions they had opened the tunnels after the Japanese left, and saw what was
inside. Thousands of other Japanese POWs also were interviewed, adding more
details to what the OSS knew about Golden Lily.
Early in November 1945, Major Kojima broke under the torture and took
Lansdale and Santa Romana to more than twelve sites in northern Luzon ranging from
Bambang all the way to Aparri at the upper tip. At that point Lansdale flew to Tokyo and
Washington to report up the chain of command, while Santa Romana and others set to
opening the first of these vaults. Lansdale briefed General MacArthur and General
Willoughby in Tokyo and then to General Hoyt Vandenberg, head of Central Intelligence
Group, in Washington, and finally to Clark Clifford, special adviser to President Truman.
Truman, after discussions with his cabinet, decided to keep this a state secret. This was
made easier by the fact that the occupation of Japan was strictyl an American affair,
and the Philippines were still an American possession. So Washington completely
controlled the secret of Golden Lily and the recovery of the treasure.
Lansdale returned to Tokyo with Robert B. Anderson, a future secretary of the
Treasury who had been a financial consultant to Secretary of War Henry L. Stimson. It
had been Stimson s idea to set aside all recovered Axis war loot after the war as a
covert action fund to foster anti-communist governments throughout the world. One of
Stimson s deputies, John J. McCloy, later head of the World Bank, had worked with
Robert B. Anderson in developing this idea, which was discussed and agreed in secret
when forty-four countries met at the Bretton Woods Conference in 1944 to plan the
postwar world economy. After further discussions with General MacArthur in Tokyo,
Anderson and MacArthur flew secretly to Manila with Lansdale and were taken by Santa
Romana on a tour of the sites he had already opened. In them, Anderson and
MacArthur strolled down row after row of gold bars stacked two meters tall, representing
billions of dollars in value.
All of this has been confirmed to us by a number of sources at the highest level,
including former CIA deputy director Ray Cline, who was involved in all of this from the
Santa Romana recoveries in 1945 to Cline s retirement in 1973, at which point he

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became head of the Center for Strategic & International Studies at Georgetown
University. It was also confirmed to us by Major General Lansdale when we interviewed
him at his home in McLean, Virginia, several years before his death, although at the
time we did not appreciate the significance of what he said about the torture of Major
Kojima. It was only after working on a number of books related to this topic over some
eighteen years, including THE MARCOS DYNASTY, LORDS OF THE RIM, and THE
YAMATO DYNASTY, that missing pieces clicked into place and the full impact of what
Lansdale had said sank in..
We also located intelligence officers who directly observed the Japanese hiding
the gold in Luzon, including U.S. Navy Warrant Officer John C. Ballinger whose son
Gene gave us access to records and photographs.
We had known about Ben Valmores for fifteen years before we knew enough to
ask him the right questions. We knew that Ben had been the valet of a senior prince,
but he claimed to know the prince only by a nom de guerre, Kimsu Marakusi . It was
partly in an effort to discover which princes were involved that we were led to research
and write THE YAMATO DYNASTY. Eventually, we discovered that Ben s wartime
master was Prince Takeda Tsuneyoshi, first cousin of Emperor Hirohito and grandson
of Emperor Meiji. When we ran blind tests on Ben using period photos of the princes
from the late 1930s and early 1940s, with all names removed, he instantly identified
Prince Takeda, Hirohito s two brothers Prince Chichibu and Prince Mikasa, and the
elder Prince Asaka who had commanded the Japanese army at the Rape of Nanking.
Ben had spent time with all of them, bringing them tea and cigarettes while they carried
out inventories at each treasure site. Ben had never been outside of the Philippines,
and spent most of his life as a rice farmer, so his identification of the princes and their
correct names is persuasive. Subsequently, Japanese sources who had worked for
Golden Lily as young men, confirmed to us that these were the senior princes
controlling Golden Lily and reporting directly to Hirohito.
We appreciated all along that this book would come under attack from partisans
in Japan and America, who want to prevent this information from becoming public
knowledge. So we have done everything we can to remain neutral in presenting what
follows. The evidence speaks for itself. The characters in this book are such that
readers will either love them or hate them. We have tried to leave ethical and moral
issues for readers to decide.
The Cold War is over. Circumstances that applied fifty years ago no longer
apply. We take a position in favor of full disclosure and sunshine. Yet the secrecy
surrounding this subject is as intense now as it was half a century ago. All official
government and military documents relating to this remain deeply hidden, or their
existence is flatly denied. In America and Britain, as we recount, those who have made
too many inquiries about this subject have been arrested or terrorized by government
agents, without explanation.
When a government decides to keep things secret, lies will be told to protect the
secret. As time passes, these lies multiply, with unfortunate consequences. A state
secret of such magnitude requires such a support network of lies that history becomes
deformed. The number of people benefitting from the lies grows into a bigger and bigger
pyramid. Protecting their benefits cause the whole thing evolve into a huge boil, which

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can only be cured by lancing it. Secrecy is power. Power corrupts. Secret power
corrupts secretly.
Sadly, this strategic decision had tragic consequences for many people. Because
of Washington s actions, hundreds of thousands of victims were deprived of postwar
compensation from Japan, and their lives were ruined. One of America s other
strategic objectives in 1945 was to put Japan back on its feet quickly as a bastion
against the further spread of communism in East Asia. Some of the recovered war loot
was used for that purpose, so Tokyo and Washington had to collude to keep it secret.
Such collusion has a way of propagating, and corrupting or perverting the original
purpose. This has happened to a degree that we found astounding. We are confident
that readers will also.
We were investigating a state secret that had turned into a monster. More than
once we wished we had never begun. Like houseguests at a Transylvanian castle, we
found ourselves going down a stone staircase to the dungeon after midnight, with only a
flickering candle.
There are two ways for investigators to approach such a subject. One is to guess
what is the big picture, then to work your way backwards to see if you can find enough
evidence to explain it. We decided that this was dangerous, because our assumptions
about the big picture might be wrong. So we decided to do the reverse. We would
gather all the tiny bits and pieces that had any relevance to this subject, and only then
see what mosaic appeared. That is also how we present the material for this book, to let
readers make the same discoveries along the way, and gradually see the mosaic take
shape.
Because the treasure amassed by Golden Lily became the basis for an
unwholesome postwar collaboration between the governments of Japan and the United
States, the citizens of both countries have been deceived for half a century. We must
start by sweeping away some of the more blatant myths.
To comprehend how so much plunder could have been amassed by Japan, it
was necessary to go back to the beginning. The first five chapters of this book are an
account of Japan s systematic looting from 1895 onward, in Korea, Manchuria,
Mainland China and Southeast Asia, the collection and transport of that treasure, and
the hiding of it in Indonesia and the Philippines, when by early 1943 it was no longer
possible to ship it back to the Home Islands. Our remaining ten chapters are about
what happened to the treasure in 1945 and thereafter. Santa Romana and Lansdale
only recovered a portion of the treasure from 1945 to 1948. Major Kojima and General
Yamashita had only been in the Philippines the last twelve months of the war. So
Kojima did not know where Golden Lily had hidden treasure previously. A decade
passed before other significant recoveries occurred, as Japanese began coming back to
the Philippines, singularly or in groups, to reclaim parts of the hoard.
To begin, the looting of Asia by Japan has been brushed off officially as a few random
acts of theft and violence committed by drunken soldiers. This is nonsense. Japan was
better organized, more systematic and more thorough in its looting of Asia than the
Nazis were in Europe.
There is nothing new about looting in itself. In 1860 British and French armies on
a punitive expedition to North China got drunk, ran amok and looted the magnificent

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Summer Palace outside Peking, smashing and breaking everything they could not
carry, burning down all the palaces and pavilions. Unable to believe all the gold they
found there, they threw most of it away. The commander of this joint force was Lord
Elgin, whose father had removed most of the sculpture from the Parthenon in Athens. In
1900, another allied force of great powers marched into Peking to lift the Boxer Siege of
the Legations, then went on a rampage of drunken looting and smashing.
What Japan did between 1895 and 1945 was qualitatively different. This was not
drunken looting and smashing. The Japanese were very serious and deliberate. They
emptied the banks, private homes, pawn shops, factories, art galleries, and stripped
ordinary people of rings, bangles, the rugs on their floors, even the frames from their
windows. It was as if a giant vacuum cleaner passed across East and Southeast Asia.
Golden Lily devoted special attention to the Asian underworld: triads, sects, racketeers,
and above all narcotics distribution networks. Methodical extortion took place, with the
wholesale rape, kidnaping, and mutilation of wives and children.
We are told that Japan s wartime elite -- the imperial family, the zaibatsu, the
yakuza, and the good bureaucrats -- ended the war as impoverished victims of a
handful of bad military zealots. We are told that Japan was badly damaged and
impoverished, barely able to feed itself at war s end. In fact, Japan emerged from the
war far richer than before, and with remarkably little damage, except to the matchbox
homes of millions of ordinary Japanese who did not count in the view of their own
overlords. Obsessed by the urgent need to make Japan a bulwark against communism,
Washington excused its wartime leaders, including its imperial family and financial elite,
from any responsibility for the destruction and impoverishment of twelve countries. Only
a handful of Japan s wartime leaders were executed as scapegoats. By the mid-
1950s, all Japan s indicted war criminals were exonerated, including gangsters and
godfathers who had directed the world s largest drug trafficking system throughout the
1930s and 1940s. Japan s government was put back in the hands of the same men
who had started the war as if the United States had reinstated the Nazi party in
postwar Berlin. All this was financed with plunder and profits wrung out of Asia during
the war.
From the beginning of the U.S. occupation, General MacArthur, President
Truman, John Foster Dulles, and a handful of other Wise Men , knew all about the
loot and the continued wealth of the Japanese elite. To protect Japan from having its
secret wealth depleted by demands for war reparations, Dulles met in private with four
Japanese to work out the terms of the San Francisco Peace Treaty of 1951. One of
those four is today Japan s Minister of Finance, Miyazawa Kiichi. According to Article
14 of the treaty, It is recognized t hat Japan should pay reparations to the Allied
Powers for the damage and suffering caused by it during the war. Nevertheless it is
also recognized that the resources of Japan are not presently sufficient. To reinforce
the claim that Japan was dead broke, Article 14 of the treaty noted that the Allied
Powers waive all reparations claims of the Allied Powers and their nationals arising out
of any actions taken by Japan... in the course of the prosecution of the war . By
signing the treaty, Allied countries publicly agreed that Japan s plunder somehow had
vanished down a rabbit hole, and all Japan s victims were out of luck. To this day, the
Department of State, invoking Article 14, does everything in its power to block the

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lawsuits of American POWs who were brutalized as slave laborers by Japanese
corporations that are among the world s richest today. During U.S. Senate hearings in
June 2000, chairman Orrin Hatch of Utah challenged State Department and Justice
Department attorneys about the legitimacy of their claim that the 1951 Peace Treaty
canceled all rights of victims. You mean our federal government can just say, To hell
with you, Bataan Death Marchers, and you people who were mistreated, we re just
going to waive all your rights because we have the Almighty power to do so?
...Constitutionally, can our government take away the rights of individual citizens just
because they put it in a treaty. ... We re not asking the Japanese government to pay.
We re asking the companies that did the acts to pay, some of these companies are
multi-billion-dollar companies today. He then added, I think the Justice Department
ought to reassess it, and certainly the State Department lawyers ought to reassess
this.
In fact the 1951 Peace Treaty was gerrymandered by secret deals. In exchange
for their cooperation in keeping alive the myth of Japan s bone-crushing poverty, all the
Allies signing the treaty received portions of the gold bullion recovered by Santa
Romana. It has been confirmed to us by former CIA deputy director Cline that the gold
bullion Santa Romana and Lansdale recovered was secretly moved to national
treasuries and prime banks in more than forty-two countries, including Great Britain.
One reason for these secret kick-backs was to allow the central governments of
America s allies to make covert use of the gold without having to compensate citizens
who had been victimized and impoverished by the Japanese. A note written to British
Foreign Secretary Herbert Morrison during these secret negotiations confirms that if the
reparations question was allowed to get out of hand, it could end up including not just
Western victims but Asian victims in the hundreds of thousands. If that happened, the
amount the badly-strapped British government could expect to see from the deal would
be derisory.
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This black gold was earmarked for certain purposes. One of these was the
creation of slush-funds in countries like Italy and Greece where there was a serious
danger of the communist party gaining power. In Japan, General MacArthur and his
team set up a number of slush funds including one called the M-Fund, after
MacArthur s financial deputy General Marquat (which we study at some length in
chapter nine). According to well informed Japanese sources, the M-Fund was turned
over to the exclusive control of Japan s Liberal Democratic Party in 1960 by Vice
President Nixon, in return for their support in getting him elected president of the United
States. Whether Nixon should have done this raises very provocative questions. It is
only one of several instances when Nixon is now known to have put his own interests
ahead of those of his country.
Japan s M-Fund is now said to be worth $500-billion, and is controlled by LDP
kingmaker Nakasone Yasuhiro, who uses it to keep Japan a one-party state run by the
hard-right, and to prevent any meaningful reform. To enlarge the M-Fund, while keeping
it out of sight, former Prime Minister Tanaka Kakuei issued promissory notes called
57s" because they were issued in the 57
th
year of Hirohito s reign, 1982. The
existence of these 57s has been emphatically denied by Japan s government, but has
been confirmed by a former minister. We provide evidence with photocopies, and show

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that they were printed and produced by the Ministry itself. Japanese sources say that
when the true story of the 57s breaks in Japan in the months ahead, it will bring down
the LDP regime once and for all, and explode the secret M-Fund. It may also cause the
crash of Japan s stock market, with reverberations around the world. This explains the
intense effort to suppress all knowledge.
Today, there is enough evidence of postwar collusion between Tokyo and
Washington to merit a Congressional hearing and a General Accounting Office
investigation. Because of vested interests, and half a century of lying and cover-up, this
will not happen until more of the story becomes widely known and citizens demand that
their elected representatives and government bureaucrats strip off the dishonest mask
of national security . It has taken victims of the Nazi Holocaust nearly six decades of
concerted effort to recover their assets hidden in Swiss banks, to gain compensation for
their years as slave labor in giant German corporations including Volkswagen, and to
retake possession of artworks stolen from the walls of their homes and offices. It was
the success of Holocaust victims, along with the 50
th
anniversary of the surrender of
Japan, that recently encouraged other victims around the world to come forth with their
stories and demands for compensation. Interwoven in their testimonies of brutality,
more and more evidence is emerging about Golden Lily. Japan s victims are waking
up to class-action suits and cooperating on an international level previously
unimaginable.
More than half a century late, the last battle of the Pacific War is being waged in
courts in the United States and Japan where surviving POWs, slave laborers, comfort
women, and civilian victims of Japan have filed billion-dollar lawsuits to win
compensation mysteriously denied them after the war. In 1995, it was estimated that
there were 700,000 victims of the war who had still received no compensation. Today
their numbers are dwindling rapidly because of age and illness. Backing them is an
extraordinary coalition including international law firms with years of experience fighting
for compensation from German industries and Swiss banks, for crimes committed and
money looted during the Nazi Holocaust. One key player is New York attorney Edward
D. Fagan, famous for his recent billion-dollar settlements on behalf of Nazi Holocaust
survivors. Another is top London solicitor Martyn Day, who has led the way in suing
Japan on behalf of thousands of British and Commonwealth victims. Governments
anxious to block this tide of legal discovery Britain included are rushing to make
one-time pay-offs to the victims.
In Japan, rival factions struggling to control the M-Fund have turned repeatedly to
murder to keep it secret. Others have leaked information to journalists. In the United
States, control of clandestine funds became dominated by a far-right CIA splinter group
called The Enterprise, which has been exposed by Iran-Contra and other scandals.
Many of the retired admirals and generals who head The Enterprise have tried to
engineer further recoveries of Japanese war loot in the Philippines. We include a
number of their misadventures in this book, which demonstrate that peer review is
urgently needed.
Evidence of Golden Lily comes from U.S. legal actions. Such simple things as
the probating of the will of Santa Romana, verification of his tax records, and legal
evidence of his fortune deposited in Citibank, Chase-Manhattan, and elsewhere,

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provides hard proof that the world is awash with clandestine bank accounts growing out
of Golden Lily. We tell how Cline and other senior American government officials
became involved in trying to pry Santa Romana s hidden assets out of Citibank and
other banks.
Other lawsuits in the United States prove that Asian war loot was indeed hidden
in the Philippines. In one case, Rogelio Roxas, a Filipino locksmith, found a one-ton
solid gold Buddha and many gold bars hidden in a cave at Baguio only to have it stolen
from him by President Ferdinand Marcos. Roxas was then tortured and murdered. But
a court in Hawaii has awarded his heirs a judgment of $22-billion against the Marcos
estate. Evidence generated during this court case is overwhelming.
Another extraordinary legal battle is the case of former U.S. Deputy Attorney
General Norbert Schlei, who is fighting for his survival after being stung by the U.S.
Treasury department when he learned too much about Japan s M-Fund. Schlei is only
one of many innocent people who have been terrorized by the U.S. government when
they made inquiries about gold certificates based on Golden Lily loot. Instead of bribing
statesmen, politicians, and generals with gold bullion, the bullion remains in prime
banks and the individuals are given gold certificates of various kind. So long as the
statesmen, politician or general remains faithful, he benefits from the proceeds
generated by the leasing of the gold. But if the individual or his heirs tries to cash in the
certificate for the bullion itself, or the dollar equivalent, he is informed that the certificate
is counterfeit, as demonstrated by typographical errors and misspellings on the
document, planted there long in advance. We document a number of instances when an
individual or his heirs tried to press the matter and were threatened by government
agents with arrest warrants and subpoenas for attempting to negotiate fraudulent
financial documents . We recount astonishing cases where innocent people have
been terrorized for merely asking whether a document is legitimate or counterfeit. In
such cases, the United States legal process, and its British counterpart, have been used
to silence and intimidate people who have accidentally stumbled onto what some call
the global Black Eagle fund. The name appears to refer to the secret accord on Axis
war loot reached at Bretron Woods in 1944, sometimes called the Black Eagle treaty.
America s clandestine recovery of these huge quantities of Japanese looted
gold bullion made collusion possible on a monumental scale. For example, we
document how General MacArthur had a secret joint account at Sanwa Bank with his
old adversary Emperor Hirohito a bank account so big that by 1982 it was paying
nearly $1-billion interest per year. We show how President Marcos discovered the
existence of this account and used it to blackmail the government of Japan blackmail
that backfired when America and Japan got fed up with the Marcos greed and he was
removed from power by U.S. troops.
During the eighteen years we have been investigating this subject, we have been
deeply skeptical about the huge dollar values cited in evidence about Golden Lily.
Officially, there is said to be only about 130,000 metric tons of processed gold in the
world including bullion, coinage and jewelry. The law of gold is like the law of gravity,
something we rely upon as a universal truth. In fact, nobody really knows how much
gold there is. We do not know how much was looted by Spain from the New World,
because once it reached Europe most of it had to be passed on to the great European

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banking families, the Fuggers and Welsers, who had financed the conquest of Mexico
and Peru. We do not know the actual wealth of the Krupps, the Rothschilds, the
Oppenheimers, or the Rockefellers. Economists tell us that there is some $23-trillion in
the hands of the well-heeled , much of it sleeping in offshore private accounts where
banking secrecy and local laws keep these assets hidden from the tax-man, spouses,
business partners and clients. We know even less about the gold holdings of the great
Asian and Middle Eastern dynastic families, trading networks, and underworld
syndicates. Asians have never trusted governments or banks, preferring to keep their
wealth in small gold bars and gemstones, and in China this distrust goes back
thousands of years. We can be reasonably sure that the amount tucked under the rug
in Asia is far more than what has been amassed in Europe or North America in the two
or three centuries since Western banking (and the gold market as we know it) came into
existence.
In short, gold is one of the world s biggest secrets. We explain clearly and
simply why governments do not want you to know there is so much gold in circulation.
Just as in the diamond trade, the value of gold is thought to be determined by rarity, or
limited supply. This may have been true once, but today it is pure myth. Diamonds and
gold are only rare now because they are hoarded by a small number of wealthy
people, banks, and government treasuries that control the price by market manipulation.
Instead of dealing in gold, brokers deal in derivatives.
We document how today billions of dollars of black gold remains in the coffers of
the biggest international banks such as Citibank, Chase-Manhattan, Hongkong &
Shanghai Banking Corporation (HSBC), and Union Banque Suisse (UBS). In many
cases we provide physical evidence in the form of bank documents signed by senior
executives whose signatures we have already affirmed. In the case of Citibank, which
denied the existence of many Santa Romana accounts at its New York head office, we
provide a list obtained from the New York State tax office in Albany, which includes all
the account numbers in question plus the notation that no state or federal tax has ever
been paid on these accounts.
We provide interviews with brokers who carried out huge transactions with
Golden Lily treasure recovered by President Marcos, photocopies of letters and
contracts.
We include photos of major gold recovery operations while they were under way,
on land and sea, including Japan s recovery of the Op ten Noort, a captured Dutch
passenger liner used by Golden Lily to carry treasure to Japan safely under guise of
being a hospital ship. After returning to Japan in 1945, she was scuttled off the Maisaru
Naval Base with over 20,000 metric tons of gold aboard. The treasure was recovered in
1990. The names of the Japanese recovery ships, and the Australian recovery ship and
submersible, are all clearly visible in these photos.
We include handwritten letters and diagrams from a CIA station chief in Manila
showing how a group of senior U.S. Government officials and Pentagon generals hoped
to use recovered Golden Lily treasure to finance a right-wing vigilante force, and to
create a new military-industrial complex controlled by them.

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We were given exclusive access to an archive of some 60,000
documents, and hundreds of hours of audio and video tapes made or
collected over 25 years by American mining expert and metallurgical chemist
Robert Curtis, who physically recovered $8-billion in gold bars for President
Marcos. After nearly being murdered by Marcos, and fleeing the Philippines,
Curtis was fascinated by the historical importance of documenting the
treasure. In the course of engineering five major gold recoveries, Curtis was
able to study many of the Golden Lily treasure sites personally, giving him an
unrivaled understanding of the techniques employed by Japanese engineers.
Today Curtis has a $78-billion default judgement against the Marcos estate to
recover his share of those gold recoveries.
During the months that Curtis was working with President Marcos, he
was able to photograph 173 of the treasure maps done for Prince Chichibu by
Japanese cartographers. One set of these red series maps was left by
Prince Takeda with Ben Valmores in June 1945, in case the submarine on
which he was returning to Japan was sunk. We reproduce several of these
maps in this book.
Just down the coast from Manila in Batangas Province is a dramatic
treasure site that could one day be turned into a Golden Lily theme park. It
has been the target of several Japanese recovery efforts in recent years.
Overlooking the South China Sea, it is a big headland with so many tunnels it
resembles a Swiss cheese. Because these include gun emplacements, it
earned the nickname Guns of Navarone . (We were asked not to identify
it s location more precisely.) This complex was started by the Japanese in
the early 1920s, as part of the long-term strategy for their conquest of the
Philippines, and was filled with treasure in 1944. In a sheltered cove at the
base of the hill is the entrance to an underground pen adequate for a small
submarine or gunboat. At one side of the cove by the beach is a large mango
tree that was used as a bollard to tie up subs and patrol boats. Ben Valmores
was there several times with Prince Takeda. In 1999, he told us he saw a
gunboat at anchor in the cove in 1944, with spring-lines tied off to the tree.
Nearby, there are tunnel entrances in different parts of the headland. These
were sealed in late 1944, covered with soil and disguised with bananas,
bamboo and papaya. Each leads to a tunnel big enough for large army trucks
to drive in fully loaded. Three of the entrances have since been opened by
Japanese groups, who removed backfill and found trucks loaded with gold
bars. They were so happy with what they found in the outer reaches of the
tunnels that they went no farther. Why not be content with three or four metric
tons of gold, and leave the rest for later?
2

But let us begin at the beginning, with Korea.











12

Gold Warriors
Chapter One
BEHIND THE MASK



During the night of October 7, 1895, thirty Japanese assassins forced their
way into Koreas royal palace in Seoul.
3
Bursting into the queens private
quarters, they cut down two ladies-in-waiting and cornered Queen Min. When
the Minister of the Royal Household tried to shield her, a swordsman slashed
off both his hands.
4
The defenseless queen was then stabbed and slashed
repeatedly, and carried wailing out to the palace garden where she was
thrown onto a pile of firewood, drenched with kerosene, and torched. An
American military adviser, General William Dye, was one of several foreigners
who heard and saw the killers milling around in the palace compound with
drawn swords while the queen was being burned alive. Japan declared that
the murders were committed by Koreans dressed as Japanese in European
clothes a gloss greeted with ridicule by the diplomatic community.
5

According to the British minister in Tokyo, Sir Ernest Satow, the assassins
were in fact led by First Secretary Sugimura of the Japanese legation in
Korea.
6

The grisly murder of Queen Min was a turning point in Japans effort to gain
control of Korea, by taking advantage of a domestic quarrel within its royal
family. Her husband King Kojong was a weakling, easily manipulated by his
wife and her faction, who were allied with China and hostile toward Japan.
The Japanese wanted to be rid of the queen, so they could install a puppet
regent who would obey their orders.
7

Many Japanese leaders like Ito Hirobumi were enlightened and reasonable
men. They would have vetoed the murder had they known. But the coup was
planned in secret by Tokyos top diplomat in Korea, Miura Goro, an agent of
Japans aggressive Yamagata clique. Whether they intended to kill her in full
view of foreign observers is another matter. Japanese conspiracies often
began quietly, then went wildly out of control.
8

At first, the killing was to be done by Japanese-trained Korean soldiers,
9
so it
could be passed off as a local matter. But Miura decided to call for help from
the Japanese terrorist organization Black Ocean.
10
Many of its members
were in Korea posing as business agents of Japanese companies, including
the oldest zaibatsu, Mitsui. Black Ocean and Black Dragon functioned as
Japans secret paramilitaries on the Asian mainland, carrying out missions
that could be denied by Tokyo.
11
While Black Ocean was obsessed with
grabbing Korea, Black Dragon -- named for the Amur (Black Dragon) River
separating Manchuria from Siberia was devoted to blocking Russian
encroachment, and seizing northeast China for Japan. Black Ocean provided
Miura with the assassins he needed that night,
12
and the remainder of the
assault force were grunts from the Japanese consulate security detail.
13

Queen Mins murder marked the beginning of a half century of extreme
Japanese brutality and industrial scale plunder that ended with the atom
bombing of Nagasaki in 1945, a period when everything Japan did got out of
hand. Mins murder is a useful marker because it shows how easily the mask

13
of good intentions could slip and reveal hideous reality. For example, it is
unlikely that Japan intended all along to have its armies stage the Rape of
Nanking in 1937, butchering some 300,000 defenseless people in full view of
foreign observers, but matters again got out of hand.
14
Had the Rape
happened only once, it might have been a grotesque accident. But variations
of Nanking happened many times during Japans lightning conquest of East
and Southeast Asia. By the time they overran Singapore in 1942 the atrocities
committed against Chinese civilians there known as the Sook Ching
massacres were happening all over Southeast Asia, and not only to
Chinese.
That matters so often went out of control suggests there was more to Japans
conquest than a purely military operation. Few history books take into account
the role of the underworld, because scholars rarely study outlaws. (One
exception is the recent flurry of scholarship on the Shanghai underworld.)
With Japan, we must always consider the underworld because it permeates
the power structure, as darkly satirized by the films of Itami Juzo.
1516

There was a deep contradiction in Japan as she armed and modernized
following the Meiji Restoration in the nineteenth century. Two power
structures competed for power behind the throne. Some statesmen, like Ito,
were more Western in their outlook and sought to emulate the role of
Bismarck with Kaiser Wilhelm, or Disraeli with Queen Victoria. Others, like
General Yamagata, were throwbacks to a medieval Japan where real power
worked in the shadows, using assassins, surprise attacks, and treachery. So
while Yamagata and his clique built a modern conscript army, they also built a
great network of spies, secret police, yakuza gangsters and paramilitary
superpatriots. These were key components of the police state Yamagata
created. And when Japans armies invaded Korea and Manchuria, gangsters
and paramilitary superpatriots were the cutting edge. They played a major role
in the looting of Asia from 1895 to 1945. Many members of Japans imperial
family, and financial elite, had intimate ties to these secret societies. Whatever
would be the outcome of the war militarily, they intended to make sure that
Japan was forever enriched.
The conquest and subjugation of Korea was Japans first experiment in
plunder on an industrial scale. Until then, the Japanese people had generally
remained aloof on their secluded islands, quarreling among themselves. In
ancient times they were raided by marauders from the Korean peninsula, and
several times raided Korea in return, but these were medieval warriors. Their
mutual loathing has its parallel in the Catholics and Protestants of Northern
Ireland.
17
Most of us know so little about Korea that it is astounding how much there
was to steal. Historian Bruce Cumings says that in ancient times Koreas
influence on Japan was far greater than Japans influence on Korea.
18

19

When they first began feuding two thousand years ago, there was no Korea or
Japan as we know them today. In different parts of the Korean peninsula
there were city-states with highly developed economies that supported
magnificent religious, literary and artistic cultures. The northernmost kingdom,
Koguryo, stretched from what is now Port Arthur, all the way to Vladivostok,
and south nearly to Seoul. Down the east coast of the peninsula, facing
Japan, sprawled the rich kingdom of Silla. The third kingdom, Pakche, in the
southwestern corner, is known today as the Cholla Provinces, famous for its

14
dissidents. Of these ancient states Koguryo was the most powerful, protecting
the entire peninsula from Chinese incursions. Koguryo was famous for its
porcelain, among the most prized in the world today. Southern Pakche and
Silla were celebrated for paintings, sculpture, gold filigree, and decorated
porcelain.
20
Their wealthy elite lived in palaces with thousands of slaves.
Taking no interest in commerce or warfare, they developed astronomy,
mathematics, wood block printing,
21
and invented movable type long before
anyone else.
22
In 918 the peninsula was united by a Korguryo leader who
shortened the name to Koryo. Under his dynasty, which ruled until 1392,
2324

Korea was among the most advanced civilizations in the world.
25
The Choson
dynasty that succeeded it remained in place until 1910, when Japan annexed
Korea.
Across the strait in Japan, in ancient times, clans of immigrants from China
and Korea gradually drew together into a loose confederation ruled by Shinto
priests and priestesses.
26
Centuries passed before they submitted to any real
central authority, and a thousand years later Japanese warlords were still
feuding. This chronic conspiracy produced what one historian calls Japans
paranoid style in foreign policy.
27
If Japanese treated each other ruthlessly,
why should they treat foreigners otherwise?
Koreans despised Japanese as uncouth dwarfs. They infinitely preferred the
more cultivated Chinese, comfortably accepting a tributary role to China. In
return, China protected them from Japan.
From time to time, Japanese warlords set out to crush Korea and erase its
culture from the face of the earth.
28
In the sixteenth century after Toyotomi
Hideyoshi unified Japan, he launched an invasion of Korea with 158,000 men,
including samurai, hordes of footmen, and what passed in those days for
logistic support. After several years of occupation, Korea was rescued by
Admiral Yi Sun-shins famous Turtle Ship, the worlds first ironclad 65-feet
long, firing cannon balls filled with nails.
29
Admiral Yi cut Japans supply
routes and destroyed its ships. Hideyoshi was crestfallen, dying soon
afterward.
30

Despite his failure, Japan profited by looting Korea. Toyotomis invaders
included monks and scholars assigned to steal Koreas finest manuscripts.
Samurai kidnaped masters of ceramics and made them slaves in Japan,
where they found sources of suitable clay in Kyushu.
31
The kidanpping of Ri
Sam-pyong. See James Sterngold south Korea Wants Japan to Return Art,
from THE NEW YORK TIMES, July 11, 1991.
32
Judged by their behavior as
they ravaged the peninsula, a Korean scholar concluded that Japanese were
wild animals that only crave material goods and are totally ignorant of human
morality.
33
Centuries later, when Japan once again invaded the mainland,
its armies again included teams of monks and scholars to loot the finest art
works from the mainland.
Plundered of so much wealth, Korea did not fully recover. In the nineteenth
century it was still the least commercial country in East Asia, its army
ceremonial, a nation ripe for the picking.
34
The Choson dynasty never
regained its pluck. Its kings were indecisive and easily stymied.
35
Next door,
China was on the verge of collapse, in danger of being divided up by the
Western imperialists, and in no shape to defend Korea.
Frightened of becoming a chunk of meat in the midst of tigers,
36
. Japan
made a convulsive effort to modernize,
37
and became the first Asian nation

15
able to compete with the Western Powers on their own terms. As her navy
developed and her army grew, Japan found itself in a position for the first time
to launch a modern campaign of mechanized conquest on the mainland,
where she could acquire a colonial empire of her own.
3839
If Japan did not
take control of Korea, Manchuria, and Taiwan, they would soon become
outposts of Russia, France or England. Korea was rich in rice, wheat, mineral
resources, and manpower, all of which Japan needed.
40

41
Many game plans
were discussed.
42
The British guessed what was coming. Relying on
cunning tricks, its diplomats in Peking noted in 1879, Japan is trying to
master the Orient.
43

They were right. Japans chronic conspirators, army strongman Yamagata
and Black Ocean boss Toyama Mitsuru, were only waiting for an event that
would give them an excuse to invade, and allow them to put the blame on
Seoul. Agents of Black Ocean and Black Dragon were in position throughout
the Korean peninsula and across northeast China, running brothels,
pharmacies, pawnshops, building networks of influence by supplying local
men with money, sexual favors, alcohol, drugs, pornography, and Spanish
Fly.
Several false starts were made, as Japan provoked incidents. China gamely
countered. In 1884 Tokyo tried again, paying Korean radicals to attempt a
coup. Again, Chinese troops intervened, but not before the Korean coup
leader, Kim Ok-kium escaped to Japan with the help of Black Ocean.
44
In
1894, Kim was lured to Shanghai where Chinese agents shot him dead. His
murder was the catalyst that brought about the Sino-Japanese War of 1894-
95.
45
Yamagata urged Black Ocean to start a conflagration; then it would be
his duty to go extinguish the fire.
Starting a fire proved easy. Korean peasants were so downtrodden that many
joined a religious sect called Tonghak, which dreamed of overthrowing
Koreas incompetent rulers.
46
Black Ocean terrorists attacked Tonghaks,
provoking skirmishes that resulted in Japanese casualties. Japan sent troops
to protect its citizens in Korea. When news came that China was sending
1,500 soldiers aboard the chartered British ship S.S. Kowshing, Yamagata
dispatched a force of 8,000. A Japanese squadron intercepted the Kowshing
and fired a torpedo point blank, sinking her with all aboard. Those Chinese
who did not drown were machine-gunned in the water. The Japanese had
struck before war was declared, setting a precedent to be followed many
times in later decades.
47
Imperial China, her back to the wall, declared war
against Japan.
On September 17, 1894, in the mouth of Koreas Yalu River, the Japanese
destroyed half of Chinas navy in a single afternoon, the most significant naval
victory since Trafalgar. Japan then captured Manchurias impregnable Port
Arthur, and the fortified harbor at Weihaiwei in Shantung, sinking all Chinese
ships in the harbor. With the fall of Weihaiwai, the war was essentially over.
By the end of February 1895 Japan controlled the whole of Korea and
Manchurias Liaotung peninsula. China sued for peace.
Japans victory brought it unexpected dividends. China agreed to pay such
huge indemnities in gold bullion that Japan was able to go on the gold
standard,
48
putting Tokyo on equal terms in the international money market.
49

China also turned over control of Taiwan, Japans first colony.
50
Control of

16
Manchurias Liaotung peninsula and Port Arthur were also turned over, but
France, Germany and Russia advised Japan to return it.
In Seoul, Queen Mins faction refused to cave in to Japanese bullying. This is
what cost her life that grim night in October 1895.
51

Now that Japan had tasted military victory over China, its biggest neighbor,
she felt growing confidence of her ability to take on and defeat one of the
European powers. The obvious target was Tsarist Russia, which was
continuing to make inroads in Manchuria. On February 8, 1904, having made
no declaration of war, Japan launched two surprise attacks, one on the
Russian naval base at Vladivostok, another on two Russian warships in the
mouth of Inchon harbor.
52
The Tsar rushed his Baltic fleet half way around
the world, only to see it destroyed by Japans navy in the battle of Tsushima,
in May 1905. Russia sued for peace, giving Japan the lower half of Sakhalin
Island, transferring to Japan its lease on the Liaotung peninsula, and giving
Japan control over the southern section of its Manchurian Railway, between
Port Arthur and Changchun.
53
This gave Japan the foothold in Manchuria
she had been craving for thirty years.
In Korea, a thoroughly frightened King Kojong caved in to Japanese demands
and allowed Tokyo to build up a massive military presence in his country. In
April 1905, Tokyo formally established a protectorate over Korea, placing all
domestic affairs under the control of a Japanese governor-general. Nobody
asked Koreans what they thought. Western governments had long concluded
that the situation in Korea was hopeless, the country ungovernable, needing
an overlord to establish order, end corruption, and develop modern commerce
for the benefit of the Korean people. That January, President Theodore
Roosevelt had assured Japans envoy in Washington that the United States
would not protest if Japan provided Korea with protection, supervision, and
guidance. Britain, in keeping with the Anglo-Japanese Alliance, backed
Japans takeover, providing that Tokyo maintain an open door allowing other
nations to pursue economic opportunities in Korea. The Treaty of Portsmouth
concluding the Russo-Japanese War made it final. Koreas fate was sealed.
This was followed by an explosive increase in Japanese economic domination
of Korea. Great numbers of Japanese carpetbaggers arrived to make their
fortunes. Along with them came legions of agents for the great zaibatsu
conglomerates, pouncing on every commercial opportunity, every natural
resource.
54
Japan also took full control of law and order in the Korean
peninsula, creating new police and secret police networks.
55

No longer making any pretense of chivalry, Japan abused Korean sovereignty
at every turn, brutally crushing resistance of any kind. A Korean newspaper
editor was arrested when he published an editorial saying: Ah, how wretched
it is. Our twenty million countrymen have become the slaves of another
country!
56

There were still many Japanese who earnestly believed that they were in
Korea to help, not to plunder. Ito Hirobumi told Korean officials, Your country
does not have the power to defend itself... I am not insisting that your country
commit suicide... I expect that if you thrust forward boldly, the day will come
when you will advance to a position of equality with us and we will cooperate
with one another.
57

The appointment of the aging and increasingly irascible Ito as the first
Japanese viceroy of Korea gave the country some hope of rational

17
government. But Yamagata had seen to it that the boss of Black Dragon,
Uchida Ryohei, was assigned to Itos staff. Secretly financed from Japanese
Army funds, Uchidas thugs went on a rampage, murdering 18,000 Koreans
during Itos time as viceroy. Disgusted by the bloody meddling, Ito resigned in
1909 only to fall victim himself to Black Dragon assassins. His murder at a
railway station in Harbin was immediately seized upon by Yamagata as a
pretext to arouse public support for full annexation of Korea. On August 22,
1910, just a few weeks shy of the 15
th
anniversary of Queen Mins murder,
Korea was fully incorporated into Japanese territory.
58
Tokyo justified the
annexation because the existing system of government in [Korea] has not
proved entirely equal to the duty of preserving public order and tranquillity.
59

The takeover of Korea provided Japans new army with the beginning of its
own domain on the Asian mainland, free of interference from politicians.
One of the most rabid of Japans fighting dogs was appointed the first
governor-general of the colony, General Terauchi Masatake the man who
had overseen its annexation, and now would oversee the looting and plunder.
Terauchi, who had lost his right hand during Japans great samurai rebellion
of the 1870s, was a protg of General Yamagata. He had served Yamagata
as inspector-general of military education in the 1890s, and as army minister
during the Russo-Japanese War. He remained in that post, concentrating
most of his attention on Korea, till he became the first governor-general of
Korea in 1910. His regime was extremely brutal, and it set a pattern for
Japanese behavior in all the countries it would occupy till 1945. Terauchi
promised Koreans that I will whip you with scorpions!
60
He set up a Korean
police force and ordered it to use torture as a matter of course.
61
Terauchis
object was to destroy all anti-Japanese activities and participants.
62
He gave
this job to Japans military secret police, the kempeitai.
The kempeitai was closely linked to Black Ocean. In fact, Black Ocean
regularly reviewed the appointment lists of kempeitai officers being sent to
Korea.
63

Originally established by Yamagata in January 1881 as a way of enforcing the
conscription of recruits for Japans new national army, the kempeitai was at
first an elite corps of only 349 men. In appearance they were unmistakable,
dressed in bright green coats, black trousers with yellow stripes down the
sides, high black boots and caps banded in red.
64
As the national army grew,
the kempeitai changed into a secret police force watching both soldiers and
Japanese civilians. Their bright plumage gave way to unobtrusive field
uniforms or civilian clothes, as their activities became more covert and
clandestine, like the Gestapo. When working in plain clothes, kempeitai
officers identified themselves by wearing an imperial chrysanthemum on the
underside of their lapels.
65
They spawned a huge network of spies,
informants, and terrorists, totally pervasive inside Japan and countries it
occupied.
66
At the height of World War II there would be just under 35,000
men formally in the kempeitai, deployed throughout the Japanese Empire.
67

Their informal number was much greater because of the many thousands of
informants at all levels of society, and the close integration of the kempeitai
with Black Dragon and Black Ocean, like teeth and lips.
68
The main
kempeitai schools were in Tokyo and Seoul. Others were set up later in
Singapore and Manila. Training included espionage, explosives, fifth-column
organization, code-breaking, burglary, disguise, and torture. Foreign

18
language study was downplayed, so in the field kempeitai officers used
interpreters.
69
A British professor studying Japanese police methods in the
late 1920s noted that torture was routinely used because of the official
conviction that no Oriental can be expected to tell the truth except under
torture. The most common forms of torture are: suspending the body from a
beam by a cord tied to the middle finger, the toes just touching the floor ....A
severer form is to tie the hands behind the back and then let the body hang by
the hands from the beam, which almost disjoints the shoulder blades.
Another way is to enclose the body in a box that presses in tightly on all sides,
and then pour water on the face until the verge of suffocation is reached; also
touching the body repeatedly with red hot irons.
70

Koreans did not accept annexation with resignation, so there was much work
for the kempeitai. Protest was intense, armed, and involved thousands. In
1912, 50,000 Koreans were arrested by the Japanese, in 1918 the number
rose to 140,000.
71
During Koreas first ten years as a Japanese colony even
Japanese school teachers wore uniforms and carried swords.
72
Black-coated
policemen helped bring in the harvest, closely supervising rice production
from paddy field to storehouse, so the majority could be sent by ship to
Japan.
73

The kempeitai in Korea was notorious for dragooning women into sexual
slavery as comfort women. Since prisoners of war were the responsibility of
the kempeitai, they recruited Korean yakuza to serve as prison camp guards,
and encouraged them to be extremely vicious.
74

Once in absolute control of Korea, the Japanese army and kempeitai provided
Terauchi with all the brute force necessary for seizure of property. Usually
soldiers were not needed because the terror applied by the kempeitai and
Black Ocean paramilitaries was sufficient. Like Yamagata, Terauchi used
these underworld zealots as a strike force. patriots. In Japan, Black Ocean
financed itself by intimidation and extortion, kidnaping and murder, restrained
only by prudence in its selection of victims. On the Asian mainland there was
no need for such restraint. Although some Japanese officers exercised a
certain amount of restraint, showed some mercy, and refused to indulge in
wanton killing, Terauchi let it be known that he expected no mercy. Because it
was the style set by Terauchi, many Japanese bankers and businessmen
exhibited the same contempt for mercy. So overzealous patriotism was used
to justify the intense collaboration of bankers, businessmen, soldiers and
gangsters in looting and extortion that stripped Korea of everything from
artworks to root vegetables.
Once Korea was enslaved as Japans colony, the transfer of cultural
property was not seen by Japanese as theft. How can you steal something
that already belongs to you? And everything in Korea now belonged to Japan.
Foremost on Japans cultural wish-list was Koreas famous celadon porcelain,
regarded by many as the finest in the world, surpassing even Chinas Han
and Tang porcelain. Korean celadon stoneware was distinctive for its
translucent blue-green glaze inlaid with black and white floral designs. These
designs were incised into the clay and filled with color before glazing. A
Western expert called it the most gracious and unaffected pottery ever
made.
7576
Although Japan had kidnaped Korean artisans in the sixteenth
century, and they discovered adequate sources of clay at sites in Kyushu, the
original Korean celadon was valued above all others, particularly for

19
ceremonial purposes.
7778
Tiny Korean celadon bowls were especially prized
for use in Japanese tea ceremony. Coveted also by collectors were examples
of Koreas punchong stoneware, and Choson white porcelain.
79

It was not enough to confiscate private collections. Japanese experts who
had been studying Korean court records and ancient manuscripts determined
that the most desired celadons were those of the greatest antiquity, only to be
found in the tombs of Korean kings. To disguise the looting of these tombs,
the Terauchi administration introduced new laws for the preservation of
Koreas historic sites, and proceeded to open some two thousand tombs,
including the royal tomb of a king in Kaesong, from which they removed
celadons, Buddhist images, gilt bronze crowns, necklaces, earrings, bronze
mirrors, and other ornamental treasures. Along the Taedong River near
Pyongyang in the north, 1,400 tombs were opened and looted.
80

Scholars list more than 42,000 cultural relics, including ancient manuscripts,
that were taken to Japan for study, and never returned. Some of these were
put on display at the Ueno Museum in Tokyo, where at least they could be
admired. But most ended up in private Japanese collections where they were
never put on public view, and only rarely were seen in private. Japanese
collectors keep most of their treasures in vaults, and only take them out from
time to time for their personal viewing, so most of Koreas stolen antiquities in
effect are lost from site permanently.
The wholesale removal of art treasures from Korea was overseen by no less
than the governor-general himself, Terauchi, aided by Japanese private
collectors and antique dealers who carried off not only art works but classic
literary texts and important national archives in the name of academic
research at Japanese museums and universities.
81

One of Terauchis first acts was to completely destroy the 4,000-room
Kyungbok-goong Palace to make way for the construction of a new residence
for himself. To decorate his new home, he selected 600 art works from out of
thousands being prepared for shipment to Japan, and put them on display in
his own personal quarters.
Tens of thousands of the finest books listed as national treasures,
including all 1,800 volumes of the Ri dynasty archives, were shipped to
Japan. Some scholars state that as many as 200,000 volumes of ancient
books of lesser distinction were burned by the Japanese, as part of a
deliberate program to completely erase Koreas distinctive culture.
82
Even
before the country was fully annexed, in 1907 the Japanese forced King
Kojong to abdicate in favor of his ten-year-old son who was mentally
retarded.
83
The Japanese styled him as Crown Prince Imperial Yi Un and
sent him off to Tokyo. They claimed this was to educate the crown prince
side-by-side with Meijis grandsons -- Princes Hirohito, Chichibu and
Takamatsu. In truth, the boy was little more than a hostage, whos well-being
depended on continued cooperation by the remaining members of Koreas
royal family. For some reason, Emperor Meiji found the boy sympathetic and
lavished attention and gifts on him, showing the sort of affection he never
demonstrated toward his own grandsons. The boy was easily persuaded to
sign away his claim to the Korean throne. Eventually Prince Yi was married to
Princess Masako, once front-runner to become Hirohitos bride.
84
The couple
survived the Pacific War and lived in wealth and security until their deaths
years later.

20
All Koreans were to be stripped of their national identity and made-over into
second-class Japanese. They were divested of their land, had their names
changed to Japanese names, and were obliged to adopt Shinto in place of
their own Buddhist, Confucian or Christian beliefs. The emperor of Japan
would be their only god, and any Korean who refused to acknowledge his
divinity would be arrested. Their temples were ransacked, including stealing
the ancient bronze temple bells and Buddhist statuary. Eventually even
ordinary religious metalwork was removed and melted down for weapons as
spiritual cooperation behind the guns.
85
Koreans were to speak only
Japanese, Korean-language newspapers were shut down, political parties
disbanded, Korean writers could only publish in Japanese, and all schools
would teach only in Japanese.
86
Even in the home, Koreans were expected to
speak only Japanese to each other.
Kim So Un, a leading Japanologist in Korea, observed that throughout its
history Japan had always been a taker and never a giver.
87

Japans aim, said Korean historian Yi Kibeck, was to eradicate
consciousness of Korean national identity, roots and all, and thus to obliterate
the very existence of the Korean people from the face of the earth.
88

Before they were through, the Japanese used dynamite to blow up a
monument to King Taejo (1396-1398), and another monument to Sam-yong,
the militant Buddhist priest who led the resistance Japans invasion of Korea
in 1592.
89

Over subsequent decades, thousands of other Korean cultural artifacts were
forcibly removed from Korea by Japan, and never returned despite Japans
promises. In 1965, the South Korean government demanded the restitution of
4,479 items that it was able to identify individually. Of those, Japan grudgingly
returned only 1,432, taking another thirty years to do it.
While some of Koreas elite saved themselves and their families by
collaborating with the Japanese and profited richly most big land owners
were stripped of their traditional estates and agricultural properties, which
were snapped up by Japanese developers. One of Japans biggest
developers acquired over 300,000 acres in Korea, on which he intended to
settle Japanese immigrants.
A Japanese antique dealer named Nakada amassed a fortune over the next
forty years by specializing in the looting and export of ancient Koryo celadons.
90
He dealt with a Korean collaborator, a former high official of the Ri dynasty,
who also became a millionaire.
91

Fortunately, some rich Koreans managed to acquire whole lots of antiquities
from Japanese dealers before they could leave the country. They paid hugely
inflated prices, but in this way they preserved some of Koreas patrimony and
perhaps made amends to their countrymen. The most famous of these was
millionaire Seoul property owner Chon Hyong-pil (1906-1966) who eventually
built the Kansong Art Museum to house his collection, the first private
museum in Korea. Among his other acquisitions, Chon managed in 1937 to
buy a major collection of Koryo celadons from John Gadsby, a British attorney
living in Tokyo who saw the Pacific War coming and realized that the
Japanese government would never let him take his collection back to Britain.
92

But few Koreans were so fortunate. Tenant farmers who lost their land, and
landless urban poor, were rounded up as slave labor and shipped off to work

21
in Japanese mines and construction brigades, in Japan and later in the Kurile
Islands to the north. Sixty thousand Koreans were forced to toil in coal mines
and military factories in Sakhalin. Of these, 43,000 were still in Sakhalin at
the end of the war, when they came under Soviet control, and had
extraordinary difficulty getting home.
Altogether, it is believed that as many as six million Koreans were forced into
slave labor battalions by the Japanese prior to 1945. Almost one million of
these were sent to Japan. As Japan overran Southeast Asia, the others were
sent to the Philippines and the Dutch East Indies, to do construction work for
the Japanese army and navy, and to dig tunnels and bunkers for Golden Lily,
with tragic consequences for most of them. One group of 5,000 Korean slave
laborers who were taken to Japans Aomori Prefecture to dig a major
underground complex for the storage of war loot, were put aboard the
Japanese warship Ukishima on August 24, 1945. Japanese officials told them
they were being taken home to Korea. The Koreans were put into the ships
cargo holds, which were then sealed. When they were miles off-shore, the
Japanese crew opened the Kingston valve to flood the ship, and escaped in
lifeboats, leaving the Koreans to drown. Out of 5,000 only 62 survived.
93

Tens of thousands of young Koreans were conscripted into the Japanese
army, and sent off to serve as cannon-fodder in military campaigns far to the
south (many ending up in Burma or New Guinea).
Saddest of all were the many thousands of young Korean girls duped into
going to Japan for employment, instead ending up in brothels. It was in Korea
where the kempeitei set-up its first official brothels, in 1904. These were filled
with kidnaped women and girls, the hapless forerunners of the hundreds of
thousands of Korean women later forced to serve as Comfort Women in army
brothels all over Asia. Koreans were targeted because it was believed that if
Japanese women and girls were forced into prostitution for the army, soldiers
would mutiny.
94
Most of Japans soldiers were poor farm boys. During the
1930s, poverty and famine in Japans countryside caused farm families to sell
their daughters, who ended up in sexual slavery. Some 200,000 girls were
sold into slavery in Japan each year during that decade. This caused serious
trouble in army ranks when their brothers heard appalling stories, but were
prevented from doing anything. So the Japanese Army took pains to
characterize Korean women and girls as mere livestock. Mercy was in short
supply.
Japanese industry did move into Korea, and to some extent did modernize the
country, but at terrible cost. It was bare bones, and Korean workers were
paid one-fourth the wages of their Japanese counterparts in the same
factories.
95
Terauchi saw to it that Koreans ate millet, and their rice went to
Japan.
When people are so thoroughly terrorized and plundered, it is impossible to
come forward later with a precise list of what was stolen, or a stack of
receipts. Historian Bruce Cumings sums it up: millions of people used and
abused by the Japanese cannot get records on what they know to have
happened to them, and thousands of Koreans who worked with the Japanese
have simply erased that history as if it had never happened.
96

It did not have to be that way. In sharp contrast to the bitter experience of
Korea, the story of Taiwan under the Japanese was remarkably mellow.
Taiwan was one of the concessions wrested from the Chinese in 1895. None

22
of the Western powers could come up with any good reason why Japan
should not be allowed to keep the big island. It had always been neglected by
China. Taiwan was never an independent nation, although the attempt was
made in 1661 when a half-Chinese, half-Japanese merchant warlord called
Coxinga took it away from Dutch traders and set up his own domain as a base
to raid the mainland. Unluckily, Coxinga made his headquarters at a place the
Dutch had called Fort Zeelandia, near present-day Tainan, which was a
mosquito-infested swamp. One year later at age thirty-eight, Coxinga came
down with dreaded cerebral malaria and died in agony, bringing his rebel
kingdom to an abrupt end. His romantic legend was as popular in Japan as it
was in China, so Japanese had a positive image of the island as an unspoiled
paradise where they could do pretty much what they pleased.
Chinas Manchu regime had only a minimal administration on Taiwan, which
was despised by native Taiwanese. So there was little resistance to Japans
arrival, and what resistance there was came mostly from aborigines in the
high mountains, who were easily suppressed. Unlike Koreans, Taiwanese had
no ancient loathing of Japan, and no history of war. Most important, they had
nothing to steal -- no rich cultural patrimony built up over thousands of years,
no magnificent artistic heritage, no traditional hierarchy to destroy, and few
tombs to loot.
In their eagerness to turn what they called Formosa into a money-making
venture, the Japanese actually made life on the island a great deal better than
ever before. Taiwan did get saddled with the same ubiquitous police system
and Gestapo, but there was no core of anti-Japanese radicals or intellectuals
to fan dissent, or to lead resistance. Having been treated like dirt by the
Manchu, Taiwanese expected little better from the Japanese., and were not
disappointed.
Police were the backbone of Japans colonial administration. In addition to
policing, they supervised the collection of taxes, enforced health and
sanitation, and controlled trade in salt, camphor and opium monopolies.
Along with the army and police came Japanese carpetbaggers and
businessmen, who were looking for local Overseas Chinese partners, to set
up morphine and heroin processing laboratories, to flood Chinas mainland.
Commercially, the collaboration between Japanese and Taiwanese made
both happy.
Japan rationalized Taiwans agriculture, established a strong and efficient
government, and imposed strict public order.
97
Conscript labor was not
required of Taiwanese until the 1940s, when thousands of them were sent off
as slave laborers to the Philippines.
98

During the 1930s, Taiwan became one of Japans most important staging
bases for the Strike South in December 1941. Huge amounts of money and
manpower were invested to create a permanent military platform on the
island. The First Air Fleet made its headquarters in a big underground
complex inside Kookayama mountain, with spacious quarters for nearly 1,000
men.
99
(It was from bases on Taiwan that Japanese bombers took off to
destroy Americas air force on the ground at Clark Air Base in the Philippines.)
Many Taiwanese look back on their period as a Japanese colony as the good
old days. Those old enough to have lived first under the Japanese and then
under the KMT administration of Generalissimo Chiang Kai-shek, discovered
to their horror that the good old days ended when Chiang fled to Taiwan

23
from the mainland in 1949, bringing in his wake hundreds of thousands of
mainland Chinese.
Taiwans mellow experience of Japanese rule was unique -- the one
exception in half a century of extraordinary violence. Koreas destruction and
plunder were to be the norm, as Manchuria and China were about to discover.


1.The note to Foreign Minister Herbert Morrison was found by ABCIFER in
British FO Record 92591 p. 4. Our thanks to ABCIFER officers Keith Martin
and TK Their findings can be located on the internet at
www.abcifer.com/ww2/newpage1.htm. ABCIFER got in touch with our
publishers to share their findings after reading YAMATO DYNASTY.
2. We were given information on Navarone by people who know the site well
and have opened one of the entrances that was re-sealed in the 1990s.
3.
American diplomat Horace Allen advised the Department of State that on
his way to an audience in the morning he observed thirty evil-looking
Japanese with disordered clothes, long swords, and sword canes running
away from the palace. National Archives, Dispatch Book, U.S. Legation in
Seoul, Allen to Olney, Oct. 10, 1895.
4.
The doomed household minister was Yi Kyong-sik. Duus, The Abacus and
the Sword, p111
5.
General Dyes statement and the Japanese gloss are both from Duus, op
cit., pp111-112.
6.
For details of the murder in English see George Lensen, Korea and
Manchuria between Russia and China. p.92. Also Duus. For a detailed
Korean study of the plot, see Pak Jong-keun, Nisshin senso to Chosen,
pp255-267. For the broad background, see our earlier study of these events in
Dragon Lady, Chapter 10.
7.
Puppet regent was the Taewongun, an aging Confucian who agreed to be
Japans front man.
8
Queen Mins murder ws witnessed by American and Russian advisers. See
Cumings, KOREAS PLACE IN THE SUN, p. 121
9
These thugs were called the hullyondae,
10.
Adachi Kenzos Black Ocean ties are from Roberts, Mitsui, p268 and Duus,
p111. As Roberts makes clear, Mitsui and other top Japanese corporations
often employed agents in the field who were tied to secret societies and could
easily arrange a little mayhem.
11.
This role of the secret societies is described in Ronald Seth, Secret
Servants a history of Japanese espionage.(1957) See also Michael
Montgomery, David E. Kaplan, Robert Whiting.
12
Many Black Ocean agents were waggering professional bullies called soshi.
13.
The composition of the assassins is from Duus, p111
14.
Here I use the probably accurate high-end estimate of dead cited by
historian Bruce Cumings, Parallax Visions, P44
15
Itami had first hand experience of the underworld when he was attacked by
thugs and had his face slashed. Source JPRI paper get details.
16.
See Ian Burumas excellent Behind the Mask for a general appraisal of the
outlaws role as one of the four pillars of Japans power structure.

24

17.
Korea always had (in the words of historian Bruce Cumings) a severe
anti-Japanese allergy.

18.
Korean roots for Japans kings... Cumings, KPIS, p31 n19
19.
Of the three ancient Korean kingdoms, Pakche may have had the
strongest cultural influence on Japan. Its distinctive mural art has been found
on the walls of royal tombs in Japan. Cumings, KPIS. P33
20

21.
Cumings, KPIS. Pp36-37
22.
Movable type: Cumings KPIS p64/p65
23.
Most advanced ~ Bruce Cumings, KPITS, pp 33-39.
24.
Cumings, KPIS, p.39
25.
Cumings, KPIS, p40.
26.
From evidence found in several of Japans royal tombs, many Korean and
Western scholars conclude that these early rulers had Korean roots.
Japanese deny this, yet they seem reluctant to open other tombs. Cumings
concludes that neither the Japanese nor the Koreans were ethnically unique,
coming from the same ancient root stock. Cumings, KPIS. p31.
27.
Paranoid foreign policy is from Duus, p16.
28.
Erasing their culture ~ Bruce Cumings, KPITS, pp. 31-41.
29.
Turtle ship. Cuming. KPIS p76
30.
Hideyoshi. Cumings KPIS p77

31.
One of Koreas most famous porcelain artists of the late 16
th
century was
Ri Samp-yong who was kidnapped by Hideyoshis culture squads and taken
to Japan. Ri, working for his kidnappers, would later find the right kind of
clays in Japan, starting Japans famous porcelain industry in Kyushu, where
the famous Imari ware was fabricated.
32
Japans looting and kidnaping porcelain artisans. Cumings, KPIS p78
33.
Japan like wild animals lacking morality, Cumings KPIS, p101
34.
Koreas uncommercial state. Cummings, KPIS pp81-82
35.
Koreas weakness in 1894. Cumings. KPIS pp92-93
36.
General Yamagata warned that once the trans-Siberian railway was
completed, there would be great upheaval and Asias wealth and resources
would be like a pile of meat among tigers. Duus, P64

37.
The defeat of China by Britain during the Opium War was a profound
shock to the samurai elite who had long seen the country as a source of
culture and learning. Duus, p21

38.
The modernization of Japan with new technology is what permitted the
Meiji leaders to crush opposition within Japan, which then enabled them to
project Japanese power outward. Duus, p18

39.
Japans new conscript army had first been created to suppress internal
conspiracies and uprisings, but with those now under control the general staff
now turned their attention to a military and logistical buildup for conquest on
the Asian mainland, and possible war with China. Duus, P61


25

40.
With one sweep we can mobilize the manpower, the mineral resources,
and the grain, and use them in Hokkaido. Duus, p35
41.
Ito remarked that two-thirds of the men in the Imperial Guard lean toward
the view that Korea should be subjugated. Brown and Hirota. Diary of Kido
Takayoshi. Cited in Duus p40 n21
42.
Peter Duus, Abacus & Sword, pp.22-23.
43.
Peking quote is from Duus, p50
44
1884 coup by korean radicals. See S. Seagrave, DRAGON LADY, pp.
177-78
45
Kim Ok-kiums assassination as the catalyst of the Sino-Japanese War
1894-95. See Seagrave, DRAGON LADY, p. 178
46.
Tonghaks, see Duus P66
47
A precedent to be followed in later decades. See Roberts, MITSUI, p. 148
48.
The indemnity allowing Japan to go on the gold standard was $150-million
paid in bullion. See Roberts, MITSUI, p. 148.
49.
Putting Japan on equal terms with the international money-market. See
Tamaki, Norio. JAPANESE BANKING: A HISTORY, 1859-1959, p. xv. See
also Checkland, Nishimura, Tamaki (editors). PACIFIC BANKING, 1859-
1959:EAST MEETS WEST, Chapter One.
50.
Taiwan, Japans first colony. See Dower, EMBRACING DEFEAT, p. 21.
51.
Queen Min murder plots. Duus P101
52. War was not actually declared until February 10, 1904. See roberts, MITSUI, p. 156
Russo-Japanese
War begins. Duus P180
53
Japans gains from the Russo-Sino War. See Roberts, MITSUI, p. 162
54.
The Japanese annexation... in 1910...[was] the result of two separate but
interlinked processes... The political process entailed the gradual extewnsion
of influence and control over the Korean state...; the econonomic process
entailed the gradual penetration of the Korean market by an anonymous army
of Japanese traders, sojourners, and settlers. ... Duus p23
55.
Police state comes. Duus P186
56.
Ah, how wretched... Duus, p195
57.
Itos arrogant quote, Duus p190
58.
[Annexation, Duus p383]
59.
The text of the Treaty of Annexation is available on website
isop.ucla.edu/eas/documents/kore1910.htm.
60.
Whip you with scorpions is quoted from Lowe, ORIGINS OF THE
KOREAN WAR, p. 4.
61.
torture as a matter of course is quoted from Lowe. ORIGINS OF THE
KOREAN WAR, p. 10.
62.
The elimination of all anti-Japanese activities and activists is from
KODANSHA ENCYCLOPEDIA OF JAPAN, Volume 8, p. 12
63
Black Dragon approval of kempeitai. See Lamont-Brown, p. 74
64.
The kempeitais bright uniforms were described by Phyllis Argall who grew
up with her missionary parents in Japan and saw them in their pre-World War
II colors. See Lamont-Brown, KEMPEITAI, p. 34.
65
Kempeitai plain clothes men with a chrysantemum pin hidden under their
jacket lapels. See amont-Brown, KEMPEITAI, p. 34
66.
The kempeitai became omnipresent is quoted from Lamont-Brown,
KEMPEITAI, p. 17.

26

67
35,000 kempeitai at the height of the Pacific War. See Lamont-Brown,
KEMPEITAI, p. 34
68.
The linkage between the Black Ocean Society and the kempeitai, see
Lamont-Brown, KEMPEITAI, p. 24.
69
Kempeitai schools, curriculum. See Forty, JAPANESE ARMY HANDBOOK,
p. 236
70
Professor Bryans report on Japanese police torture methods is quoted in
Lamont-Brown, KEMPEITAI, p. 19. The study was originally published in
1928.
71
Arrests of Koreans in 1912, and 1918. See Cumings, KOREAS PLACE IN
THE SUN, p. 147
72
School teachers uniformed and carrying swords. See Cumings, KOREAS
PLACE IN THE SUN, p. 152
73
The rice police as described by Cumings, KOREAS PLACE IN THE SUN,
p. 152
74
Many POWs have only the bitterest feelings for the Korean guards. In a
phenomen that has been well-documented in the case of kapo guards at the
Nazi concentration camps, the Koreans being at the bottom of the Japanese
military pecking order often outdid the Japanese themselves in gratuitous acts
of brutality toward the prisoners in their charge.
75.
William B. Honey, The Ceramic Art of China and Other Countries of the Far
East, p.167, quoted in Cumings KPIS, p.42
76.
Oddly, one Korean innovation not adopted in Japan is the ondol floor, in
which ducts in the tile floor carry hot air from a small central charcoal hearth,
also used for cooking. Despite bitter cold winters, families slept cosily.
Cumings, KPIS, p36.
77.
All about celadon. Cumings, KPIS, p42.
78.
One master taken hostage in the Porcelain War of 1598, Yi Sam-pyong,
later discovered the first clay deposits in Japan that were suitable for making
porcelain, and established Japans first porcelain industry in the Arita region
on the island of Kyushu. His kilns produced magnificent blue-and-white
glazed Imari Ware patterned on Korean and Chinese styles.
79.
Tokyo Art Museum catalogue for an exhibition of 152 Korean treasures.
80.
KCNA, April 27, 2000, quoting the Ministry of Culture.
81.
Spoils of War, Jongsok Kim, City University, London.
82.
KCNA, April 27, 2000
83
For the story about Prince Yi of Korea (aka Sunjong) see Cumings,
KOREAS PLACE IN THE SUN, p. 145 and Bix, HIROHITO, 34-35.
84.
Korea Under Japan, Carpenter Collection, Library of Congress. The wife
provided was Princess Masako, one-time a bride-candidate to Hirohito and
cousin to Princess Chichibu, wife of Hirohitos brother. See Seagrave, THE
YAMATO DYNATY, pp. 92-94, p. 332.
85.
Spoils of War
86.
Op Cit, Carpenter Collection.
87
Kim So Un is quoted in Kim Yong-mok, Whither Japan-Korea Relations?
JPRI Critique volume 5 Number 9, October 1998.
88.
Op Cit, Carpenter Collection.
89.
Spoils of War
90.
KCNA, April 27, 2000

27

91.
20. Yang Sung-jin in the Korea Times. October 21, 1998.
92.

93
The sinking of the Ukishima. See THE KOREA TIMES Japan Allegedly
Sunk Ship Carrying 5,000 Koreans, Seoul, 15 October 1999. Online at
NAPSNet Daily Report, Friday, October 15, 1999.
94
Why Japanese non-prfoessional women were not forced to become sex
slaves. See Korean Military Comfort Women on the web at GET ADDRESS
TK this is max@twics.com
95
Korean/Japanese wage disparaties in Japanese enterprises located in
Korea. See Cumings, KOREAS PLACE IN THE SUN, pp. 168-169
96
The vanished records of the Japanese-Korean interlude. See Cumings,
KOREAS PLACE IN THE SUN, p. 139
97
Japans success story in Taiwan. See Cumings, PARALLAX VISIONS, p.
77-82
98
No conscript labor on Taiwan. See Cumings, PARALLAX, p. 84
99
Description of the First Air Fleet headquarters in Kookayama mountain. See
Kodama, I WAS DEFEATED, pp. 144-145