Gold and Money in Extremis... One Man's Story

The fascinating story of Marion Szablicki, as reported in Marc Faber’sGloom, Boom and Doom Report

My economics education was started as a child by my grandfather, Marion Szablicki, who was a living testimonial to the value of gold. Notably, toward the end of his life at 99 years of age in 2010, he felt there was simply too much debt, and that a long downward spiral was underway with difficult times ahead. He had lived through times of “extremis” and his account of fiat money, war, gold and survival should serve as a reminder to all people that those who choose to ignore history’s lessons do so at their own risk.

On September 17, 1939, Russia invaded Poland, and over the next year over 1.7 million Poles were deported to labor camps or sent into exile into Kazakhstan and Siberia. Their only crimes at the time were being Polish citizens. None of the land or homes taken by the Russians was ever returned to these Poles after the war, despite their release from the Gulag in 1941 to fight with distinction under the British army. Per the 1943 Tehran Declaration, post WWII, Eastern Poland remained a part of Russia. Winston Churchill said of Poland in 1946, “We who went to war on her behalf…watch with sorrow the strange outcome of our endeavors.”

Fiat currencies are particularly vulnerable during war and often become rapidly worthless as countries fail. Such was the case for my grandparents, who in 1939 resided in eastern Poland. This is their story as told to me by my grandfather, Marion Szablicki:

Early morning on September 18th, 1939, I learned the rumors of the Russian invasion of eastern Poland were true. Just three weeks prior, we had been attacked by Germany. Russia now attacked Poland from the east. In a matter of weeks, Poland was overrun. I had re-enlisted in the army after the Germans invaded, but upon hearing this news, those of us from the east were told to go home. I had a wife and a three-year-old daughter to protect. I left to go back to our village immediately, covering the 40- kilometer journey on foot in a day.

We lived near the Russian border and I knew the soldiers would arrive soon. I was a working-class man; however, my wife’s family were better off, and we had a very modest amount of gold and jewelry kept by her family. I hid it carefully in a hole in the ground. I knew our currency (the Zloty) would not last and I knew that gold would be the only money I would have to try and save us.

Poland’s great inflation (1923) happened when I was a boy and was concurrent with the Weimar hyperinflation in Germany. My father, brothers and I bartered for food, goods, services, and gold. Gold was preferred then to cash. My father was well versed in history, and often cited the great inflation in pre-revolutionary France. It was he who taught me that gold was the only money that knows no sovereign borders.

Russian soldiers arrived at our village two days later. Having been born in far eastern Siberia, and a boxer in Russia years earlier, I was fluent in Russian. I remembered the Russian revolution; anyone who was not a common peasant or was in any way educated was in danger. I spoke with many soldiers seeking clues about our fate.

Two weeks later, my wife’s father, a recently retired Polish officer and landowner, was arrested and taken away by the NKVD. We never saw him again. He was likely executed at the Katyn massacre, where thousands of other Polish officers were later found to have been killed.

I immediately sent my wife’s mother away. We would never see her again either.

Winter came in earnest with a scarcity of goods and whisperings of mass deportations. In February of 1940, policemen and landowners, and many educated people, were arrested and deported along with their relatives. Late one night I received a knock on my door. In walked four armed Russian soldiers. One of them was a man I had spoken with several times over the previous months. I greeted them all politely in Russian.

I was ordered to get my coat and accompany them. I was taken to a station and asked many questions. It was a stroke of luck for me that the Russian soldier to whom I had spoken in the past was here among them. After conferring with the others, he said: “Because you were born in Siberia, speak Russian, and you’re an uneducated worker — much like us — we will not detain you further. You may go for now.” He then gently grabbed my elbow and said very quietly, “Go back to your family, Marion. Get prepared for deportation to Siberia.” I ran home.

At dawn, I retrieved the gold and jewelry. I found my largest boots and heaviest jacket. I lined the bottom of my boots carefully with small coins and put leather over the insoles. I slit the heels, carefully hollowed out what I could and stuffed larger gold coins inside the cavities. Finally, I opened up various parts of my jacket and distributed more gold chain and coins in it — with great care so they did not rattle and were hard to detect.

Several days later, we were awakened by a knock at 4 a.m. and told we were being deported to Siberia. We were given 15 minutes to gather any personal belongings needed for immediate use. Our land, homes, and possessions were now property of the Russian state. My wife, my three-year-old daughter, and I were put into a truck with a group of others and taken to a railroad station.

We would never see our parents, our siblings, nor set foot on Polish soil, again. I was greatly relieved that they did not check my jacket or my shoes. My small cache of gold was going with me.

When the train arrived many hours later, we were put into cattle cars. The trip to Siberia took almost three weeks. It was hellish: we were cramped in overcrowded cars with no toilet, and only a hole cut in the floor, with scarcely any food or water. We were given dark bread and water every few days. Many died, and they were simply thrown off the train, be they men, women or children. I recall the last time I wept during those years: a baby had been born in our boxcar during the journey; it had died and was cast off the train by the soldiers like rubbish.

We arrived in Kazakhstan, near the Siberian border, at a rundown village. This was to be our new home. The Poles could not leave under the penalty of death. It was freezing cold — 20 degrees below zero. The locals were told they must shelter us, but they were also very poor; the NKVD allocated three or four families to a house. The Russian people were as good as they could be to us under the circumstances.

I needed to use my gold immediately, as things were dire: I bartered with a man to acquire better living quarters; and then I exchanged, with another better off man, some gold chain links and coins for a fair sum of rubles. I used these to get bread and food for the remainder of that first brutal winter. I bought tools and worked cutting wood, fixing stairs, or any other odd jobs for a few rubles or just food. I sometimes went days without food, so that my daughter and wife could eat. We managed to survive winter and summer, despite my coming down with malaria and my wife nearly dying of typhus. We were able to get medicine and food from those who had it — as long as we had some gold. Polish currency (Zloty) was not accepted, Rubles were, but gold was now preferred over anything.

Finally, one day in 1941, the exiled Poles were summoned by the local NKVD. We were being released. Suddenly, we were free to go, but no reason was given. (Germany had attacked Russia on June 22, 1941 and the Poles by agreement were to be released from the gulag to form an army in Persia.)

I asked a Russian official I knew. He said, “Marion, get to the train station and get on a train as fast as possible before they change their minds.” We left within hours. Many were too weak to go anywhere and simply remained. At the station, we learned the Polish Army was being reformed, but the man in charge was telling everyone that the trains were already full.

I very quietly made my way to the man in charge and offered him three gold coins, among my last, one for each of us for passage on the next train. He agreed. When the train arrived, he quietly motioned us around to the far side, spoke with another official and they put us on the train citing “special orders”. We were finally on our way out of that terrible place and were now among thousands of exiled Poles all racing south as fast as possible to get into General Anders’ Polish Army.

We then crossed the Caspian Sea in a ship and arrived in Persia (Iran). We were lucky to be on that train, and hence on an early ship; as some later boats were turned back, the quota deemed filled, those aboard were turned back to Russia. We arrived in Persia emaciated. Local people took our family into their home during the first weeks and they nursed us back to health. They were among the kindest people I have ever met.

I joined the Polish Second Corps under General Anders. There was now a glimmer of hope for us. My wife and daughter were evacuated.

I thought they were on their way to South Africa, but instead they were sent to India. I didn’t see them again for six years. For a long while, neither of us knew the whereabouts of the other, or if we were dead or alive. I fought in Africa and Italy, and most notably at Monte Cassino. I have never witnessed so much blood and determination. We led the decisive final charge on the German-held Abbey. I was very proud to be a Pole on that day.

The war drew to a close and I found out my wife and daughter were alive and still in India, but that they would be moved somewhere near London. I would be going there, too, after I finished my service. When we were finally reunited in London two years later, it was a miracle. Thankfully, Mr. Churchill did not force repatriation upon the Poles. All of my brothers had died in the war in the Resistance. Without the knowledge of history and money imparted to me by my father, we would not have made it. I owe my life to a handful of gold coins and chains. Several days before we were to leave for Australia to emigrate, I received a call:

“Marion, we have an open slot for America — do you want it?”

I told him, “Yes.”

He said, “Then get here as soon as possible.” I ran the entire way.

Victoria Szablicki passed away on June 5, 2011. Marion passed away just 11 days later, on June 16, 2011, at 100 years of age and less than two years after receiving his last medal, the Siberian Cross, from the Polish government. They had been married for over 76 years.

Richard Rabkin
for The Daily Reckoning