What made Lisbon, an ancient Atlantic port with a storied past, so important during World War II? Refugees, spies, tungsten, gold—and Portugal’s precarious neutral status.

As global war raged, Lisbon hummed with trade, conspiracy, and subterfuge. The last European ocean gateway open to refugees, it was flooded by a million of them, including Jews and Allied POWs. Legendary secret agents like Garbo made Lisbon their headquarters. The Nazis needed tungsten, found extensively in Portugal, for vital equipment like manufacturing tools and armor-piercing munitions; the Allies didn’t want them to get it; and Lisbon was where both sides cut deals. As for gold, it motivated Prime Minister Antonio de Oliveira Salazar to play a dangerous game throughout the war. His country’s poverty, vulnerability, and natural resources had him walking an economic tightrope between the Allies and Axis while heading Portugal’s authoritarian regime, Estado Novo—the New State—powered by a Gestapo-like secret police.

How and why did these elements meet and mesh here? Last fall, I walked Lisbon’s seven hills, with their Roman, Arab, bohemian, and upscale shopping quarters, and trawled the lively outdoor cafés and street life of Baixa, the commercial hub in the heart of Lisbon. The more I came to admire Lisbon’s cosmopolitan population, rich cultural heritage, astounding architecture, and extraordinary vistas, the more I wanted to unravel its past.

Legend says Odysseus washed up here, and founded a town named Olisippo after himself. Historians say the Phoenicians landed around 1200 B.C. and dubbed it Allis Ubbo—“Good Harbor.” Under the Romans and Muslims the port grew prosperous and famous. One bright morning I climbed through the winding alleys and marvelously tiled façades of Alfama, the Arab quarter, to Sao Jorge castle. In 1147, Christians—mostly English crusaders looking for plunder—fought bitterly to retake this fortress from the Moors. Their victory began an enduring English-Portuguese alliance, codified by the 1386 Treaty of Windsor.

After admiring the stunning views and the castle’s tame peacocks, I climbed down to Baixa. Here during World War II refugees spent anxious months (and dwindling cash) in cafés and restaurants under watchful secret police eyes. Meanwhile, their torrents of paperwork slowly wound through the Portuguese bureaucracy, Lisbon-based relief agencies—such as the American Jewish Joint Distribution Committee (JDC), which chartered ships and funded rescue missions—and the American and British embassies. The wealthiest refugees stayed in converted palaces like Hotel Aviz and got tickets for the Pan American Clipper, the luxurious seaplane flying twice weekly between Lisbon and New York. Most of the rest snaked and huddled along the city’s docks and alleys, depending on soup kitchens and shelters run by agencies like the JDC and seesawing between hope and despair as they dreamed of passage to the New World.

From Praça do Comércio, Lisbon’s triumphal riverside square, I took a 15-minute tram ride west along the Tagus River docks, many now servicing luxury cruise ships with posh restaurants and clubs, to Belém and the Jerónimos monastery, a magnificent limestone cloister. There lie the bodies of epic poet Luis de Camões, who wrote about Portugal’s 15th-century Age of Discovery, and Vasco da Gama, who lived it. Financed by Prince Henry the Navigator, Portuguese sea captains like da Gama sailed from this harbor to probe Africa and the Atlantic for trade routes to Asia, bringing back knowledge, wealth, and exotic products—and launching modern globalization.

Over the stone ramparts of Belém Tower, which once helped defend the mouth of the Tagus, I looked east toward Europe’s second-largest suspension bridge and the piers. In June 1940, when refugee waves first hit Lisbon, Portugal’s 1940 world exposition monopolized a square kilometer of this waterfront, intensifying the chaotic crowding. Lucky souls eventually boarded ships like the SS Quanza, which, in August 1940, loaded 317 refugees, mostly Jewish, in Lisbon, dropping 200 in New York, 36 in Vera Cruz, and the rest in Norfolk, Virginia.

Many Jews escaping Europe owed their lives to a Portuguese diplomat, Aristides de Sousa Mendes. From the Bordeaux consulate, France, Sousa Mendes issued visas—many free of charge, and virtually all against Prime Minister Salazar’s directives—to thousands of desperate refugees. In one sleepless three-day stretch alone, he and his two sons frantically processed 1,575 visas. When word reached Lisbon, he was ordered home, fired, and disgraced. He died destitute in 1954; Portugal didn’t officially rehabilitate his memory until 1988.

Portugal’s prime minister had been dealing with problems he felt were more essential. Above all, Salazar needed money: to rebuild Portugal’s shattered economy, keep its remaining empire intact, and ensure its independence. Somehow, without repudiating the Treaty of Windsor, he had to maintain neutrality. So he promised both Britain and Germany open trade in Portugal’s domestic and colonial resources. The Allies and Axis each threatened Portugal with sanctions or worse for dealing with their enemy, and used bidding wars and secret deals to outfox each other. But both needed what Portugal had. Thanks to Salazar shrewdly playing off the competitors, Portugal’s balance of trade went from a $90 million deficit in 1939 to a $68 million surplus in 1942. By war’s end, the Reichsbank had paid Banco do Portugal 124 tons of looted gold, laundered through the Swiss National Bank.

Secret transactions were on my mind one cloudy day on the tree- and statue-lined Avenida da Liberdade. In this quarter lurk remnants of the grand hotels, like Avenida Palace, Victoria, and Britannia. During the war, their swank bars and restaurants buzzed with Lisbon’s top-rank spies, like James Bond creator Ian Fleming and Kim Philby, later unmasked as a Soviet mole.

Then there was Garbo.

Juan Pujol García came to Lisbon from Barcelona. Anti-Nazi and anticommunist, he decided to sell his services to the British. But first he upped his potential value by becoming an agent with the German Abwehr intelligence agency after feeding it “information” he’d gleaned at a Lisbon public library. So convincing was the eventual Allied double agent—dubbed “Garbo” by the British, and central to the plan to deceive the Germans about the Allied invasion of France—that the Germans awarded him the Iron Cross after D-Day, never realizing they’d been had. Garbo’s story became the model for Graham Greene’s satiric novel Our Man In Havana, in which an English vacuum cleaner salesman in Cuba unwittingly becomes a leading spy by selling fabricated information to ever-hungrier British intelligence.

One moonlit night in Bairro Alto, the nightlife-rich bohemian quarter, I scanned Baixa, glittering with movement, and its surrounding hills. Across from me rose brightly lit Sao Jorge castle and Alfama; to my right, the Tagus River swirled darkly toward the ocean. I remembered how Our Man In Havana ends: the “spy,” exposed as a fraud, is awarded a medal and promotion to cover up his masters’ gullibility. I thought of Garbo savoring this view, a glass of port in hand; of how truth is stranger than fiction; and raised my own glass with a grin.

Gene Santoro is the reviews editor for World War II and American History magazines, and covers pop culture for the New York Daily News. His latest books are Highway 61 Revisited and Myself When I Am Real: The Life and Music of Charles Mingus. His current project deals with U.S. State Department cultural tours.

When You Go

Continental, US Air, and TAP fly direct to Lisbon from the U.S.

Where to Eat
Lisbon is a very cosmopolitan city, with citizens from Portugal’s former colonies in India, China, Brazil, Oceania, and Africa,
which enriches its cuisine. Lunchtime soup and a sandwich at Catedral do Pao (Rua Don Pedro V, 57) is a high point: dazzling with marble colonnades and tiles, the bakery makes Lisbon’s best bread and pastries. Café des Sandes, a ubiquitous chain, offers reasonable sandwiches, soups, and salads at locations around town. Rossio in Baixa is a café hub. Try the dainties at Café Suica (Praca Don Pedro IV, 100) while enjoying first-rate street musicians. Café A Brasiliera (Rue Garret, 120) is a prime stop for a nightcap of fine port with a lively soundtrack from Afropop street bands. Family-style dinners are the stock-in-trade at Bonjardim (Travessa de Santo Antao 12; 01121-342-7424). Cocheira Alentejana (Travessa do Poco da Cidade, 19), serves up the Alentejo region’s cuisine—arguably Portugal’s best. For Brazilian-Portuguese flair, try Praco do Chile (Avenida Almirante Reis 117), one of the many cervejerias (beer bars), for seafood and snacks. At Delhi Darbar (Rua do Norte, 100), the excellent curry goes down well with Taj Mahal beer. Locanda Italiana (Rua de Paio Mendes 2-A-10) serves pizzas, pastas, and seafood in a heated outdoor café.

What Else to See

An hour’s train ride from Lisbon, mountainous Sintra is a favorite for day-trippers, with eye-popping vistas to the Atlantic and the Tagus, myriad palaces ancient and modern, and gorgeous artisanal crafts.