The Legend of the U-166

For many years, U-166 remained a mystery, a sort of modern "Flying Dutchman" in the Gulf of Mexico. Although the boat was believed to have been sunk in relatively shallow water, not far offshore, it seemed that no one could find the wreck -- it simply wasn't where it was supposed to be. In time, a legend grew up around U-166, which was told and retold wherever fisherman and divers gathered to swap tales. And as with all such tales, the story gradually got better and more elaborate in the retelling. Occasionally gold bullion, spies and other stock features of mysterious legends find their way into the story. One treasure hunting magazine even published a story claiming that U-166 had been carrying 200 tons of mercury, but (significantly) credited no source for that claim, or offered any explanation of why such quantities of mercury would have been aboard.

A fine example of the legend surrounding U-166 was published in the late 1970s by Tom Townsend in his book, Texas Treasure Coast (Eakin Press, 1979). After relating rumors of U-boats being resupplied in Mexico, Townsend breathlessly continues,

Going hand-in-hand with this story is probably the most fascinating of all legends of the U-166. A colonel of the SS traveled to Mexico during early 1942 to attempt to negotiate the sale of a huge treasure of gold bullion values into the tens of millions. The story of the accumulation of this treasure is long and complicated but is one of the best documented tales of hidden wealth I have ever come across. In short, it goes as follows:

During the thirties a group of financiers purchased huge quantities of gold in Mexico and South America with the intention of reselling it to the U.S. Government after the U.S. had gone off the gold standard. It was anticipated that the price of gold would go up by about a third at that time but after the treasure was smuggled into the United States and hidden in West Texas the U.S. Government made it illegal to possess gold after a certain date and the group became stuck with a very large "pig in a poke." The U.S. refused to negotiate with the group and the treasure remained hidden. World War II came along and the group approached Germany with plans to sell the gold there and the German government was highly interested. Although it has come to be generally believed that the Germans refused to buy because of the treasure's hidden location inside the United States, it is odd that so many searches for it were made after the war without result. Twenty tons of bullion is rather hard to hide from modern electronic equipment. It does not seem impossible that the treasure was removed back to Mexico and sold to the Germans. If so it most likely it would have been removed from the country by submarine. . . .

Although Townsend never makes the direct claim that U-166 was mixed up in this bizarre and implausible scheme, his account is typical of the legends that have swirled around the U-boat -- a mixture of  a little fact and a lot of fancy that have enthralled credulous listeners for nearly sixty years