Another claim is that [Fascism] needed the bank loans from the Swiss banks far too much to risk destroying or destabilizing Switzerland’s economy.²⁷ Sources reveal several occasions where [Fascists] requests for new loans were satisfied completely or at least partially by Bern.

In addition to these factors, after entering the war [Fascist] Italy faced another problem: their currency, the Italian lira, was not accepted by the other neutral states like Sweden, Ireland, Turkey, Romania etc., so the country had no way of trading with them. Therefore, Rome had to find a currency that was still accepted and it found it in the Swiss franc. [Fascist] Italy desperately needed fresh cash as it almost had none in the treasure room of Banca d’Italia, so Switzerland’s readiness to buy their gold was crucial.

[…]

After the Italian Fascist Party came to power in October 1922, the new government had to be recognised by other states in order to establish formal relations with them. In the same year, the Swiss Federal Council officially declared that the state recognised the changes in Italy and considered them legal, looking at them with optimism.⁹⁴

There were several reasons for which Bern released such a statement. First of all, as a neutral country, the political leadership wanted good relations with the neighbouring states. Recognising the Fascist Régime was not an object of intense discussions among the Swiss policy makers, as even the Socialist parties understood that a refusal can only damage the Confederation’s interests.

Second, Giuseppe Motta, who headed the Political Department in Switzerland after 1920, and the rest of the Swiss government at the time were far much more worried about the activities of the socialist movement and other groups with leftist ideas in the country, fearing that their actions might start a Bolshevik revolution in Switzerland, even if as mentioned in the previous chapter, the population did not express support for this ideology.

However, the policy-makers in the Confederation paid permanent attention to such a possibility. The Swiss political leadership in those years rather appreciated Fascism as a firm answer to any such tendencies and admired the [Fascists’] firmness when dealing with such a t[h]reat.⁹⁵ What needs to be kept in consideration when discussing the Swiss political decision making is that one of their core principles was anti-communism.

[…]

During 1930 and the successive years, the two countries had to negotiate on the taxes on aluminium, which was transformed in [Fascist] factories with Swiss participation¹⁴⁶, of auto parts¹⁴⁷ or chemicals for the agriculture.¹⁴⁸ Different sources demonstrate the tight commercial and economic ties between the two states in the years of the Great Depression.¹⁴⁹

For [Fascist] Italy it was of great importance that the effects of the crisis started becoming clear in Switzerland later than compared to the other states. This allowed the country to have at least one partner with a stable economy, at least until 1932. Logically, [Fascist] Italy depended more strongly on collaborating with Swiss markets while the other states were trying to deal with the effects of the crisis.

[…]

Switzerland’s representatives explained that imposing this sanction on [Fascist] Italy would cause the country annual losses of 60 to 70 million Swiss Francs. And since the Confederation had not violate any international law, it should not be punished either, the argument went. In addition, Switzerland protested against the ban of exports to [Fascist] Italy which would cause at least 10,000 Swiss jobs and create considerable social problems for the country.

The Swiss delegation argued also that imposing such strict sanctions on [Fascist] Italy might cause problems in Ticino where the population was mixed and more than 120,000 Italians worked and lived, and this did not even take into account the pro[fascist] groups among the canton’s Swiss population.

The protests of the Swiss representatives continued by claiming that forbidding [Fascist] Italy to earn from trade and export would possibly reduce their ability to purchase armaments, but it could also have several side effects which would ultimately be highly dangerous for security in Europe in general.

The Swiss argument predicted that by potentially destroying the [Fascist] economy to the country’s destabilisation would follow, and could eventually lead to the explosion of mass malcontent pushing the Régime to extreme actions in order to remain in power.¹⁷¹

Considering the fact that [Fascist] Italy was far from self-sufficient, the lack of goods to meet primary need might cause the same, it was added. Finally, Switzerland was also against the proposal for a ban on providing loans to small businesses as they did not consider it crucial to the [Fascist] economy.¹⁷² […] Thus Switzerland presented the situation as highly dangerous to its domestic concerns and refused to take part in the sanctions.

[…]

Switzerland had another reason for maintaining good relations with [Fascist] Italy. At the start of 1937, the politic authorities found out that certain Swiss companies were interested in entering the Ethiopian market and export.¹⁸²

This happened in the same period in which the Swiss ambassador in Rome Wagnière called for recognition of [Fascist] rule of Ethiopia, which would benefit the relations between the two countries, not being in their best state at the moment. He claimed that this would not violate the Swiss neutrality principle or their agreements with the League of Nations.¹⁸³

The Swiss Government considered the fact that any trade in the Ethiopian marked needs to go through obtaining the agreement of the colonial power.¹⁸⁴ The Swiss recognition of the [Fascist] rule of Ethiopia occurred later the same year.

(Emphasis added. Click here for more.)

After 22 sessions, in 1923 an agreement was found upon compromises from both states and the quota schemes were personalised for each kind of import from Switzerland.¹²⁸ The agreements concerned the [Fascist] imports of cheese, chocolate, watches, shoes, some kinds of cars etc. from Switzerland. As [Fascist] and Swiss sources constantly presented different numbers, the amount of trade between the two states in value was difficult to measure until 1926, which was mostly a result of the strong changes in the currency exchange rates.¹²⁹

Still, in comparison to the pre-war era, the positive trade balance with Switzerland makes part of the total negative balance of Italy, so therefore a relative decrease of the effect of the general trend was seen. Trade main flowed in the shape of [Fascist] exports to the Confederation which consisted mostly of foodstuffs and textiles. Switzerland’s importance for the [Fascist] economy increased until the opening of the American markets for [Fascist] Italy in 1927 and started slowly to decline in terms of trade exchange as after that the North American market became the most important one for the country.

In order to decisively stabilize the economics and to get a foothold in the US markets, in the mid-1920s, the Fascist government finally took decisive steps in terms of economic reforms. First, the government managed to stabilize the currency, after which a program of revaluation of the currency was undertaken, and finally it was returned to convertibility in 1927. In this way the speculative pressure on the Italian Lira was interrupted, which created substantial movements of capital, which brought to difficulties in the negotiations with the United States and Great Britain for settling the debts from the wartime years.¹³⁰

However, the problems were soon resolved in cooperation with the USA, which was of fundamental importance for the Fascist state, which was allowed to enter the American trade markets.¹³¹ The importance of this event is explained by the fact that this market was the only one to satisfy the liquidity needs of the Italian industry which would have allowed it to continue its development.

[…]

However, in terms of trade with other European powers, staying in good relations with Switzerland remained of primary importance for Italy. The railway line of San Gotthard, which connects Italy to Northern Europe, continued to be of utmost importance for the Italian economy. During the whole period of the present study, the recently renovated and enlarged Chiasso train station remained the most important entrance point to the country from the North, much more than others like Brennero, Tarvisio or Modave.

In terms of logistics, the train station of Chiasso had the same importance as key seaports as Genova or Naples. During the period of 1927–1928 alone, 5,500 tons of goods entered Italy through the station located just a couple kilometres away from the border or the city of Como.¹³² This amount was not much smaller than the one being passed from any Italian seaport for the same period.

An important aspect of the economic relations between Switzerland and Italy were the foreign investment and financial agreements. Nationalisation of private property was one of the first actions of the new Fascist government after they came to power in 1922, but this made direct foreign investments unlikely as Swiss businessman feared that their property might be nationalised. This decision logically led to problems for the already existing Swiss companies, based mostly in Northern Italy.

Some of the cotton-transforming factories on [Fascist] territory, for example the ones in the Mediterranean area, passed in Italian hands.¹³³ Others ceased to exist, but despite the problems, the majority of the Swiss investors did not leave the market. However, they had to find a solution to the problem and search for another way in which to continue their investments in [Fascist] Italy. Companies emerged with the idea of doing direct investments by creating branches of big corporations based in Switzerland.¹³⁴

Companies such as Nestle in the food sector, Sandoz, Roche, Wander and Ciba in the chemical-pharmaceutical or De Pretto-Escher Wyss in the metal-mechanical sector started creating subsidiaries in [Fascist] Italy. Claiming that those companies were not based in Italy, the Swiss found a way to escape the danger of nationalisation.

At the same time, Elektrobank, Indelec, Motor and Italo-Swiss were the four main financial companies in Italy before and during the war and they were founded mostly with the help of Swiss and German capital.¹³⁵ After defeat in the First World War and struggling with its loss of political standing in Europe, further exacerbated by the economic crises the country went through, German investors often had no other choice but to take back their investments from those companies, which in practice put them entirely in Swiss hands.¹³⁶

[…]

After the war in Ethiopia, the importance of the Swiss banks to the [Fascist] economy increased greatly as they took the place of the U.S., British and French ones. The Swiss banks provided mostly short and middle-time credits to [Fascist] banks, private corporations and Istcambi when the institution had to pay the difference through the clearing system.²⁰⁸ For example, Credit Suisse and La Societè des Banques Suisses provided a loan of 260 million Lira in February 1937 in order to cover the difference in the value of the trade exchange.²⁰⁹

In the months before [September 1939], [Fascist] Italy tried to transfer as much capital as possible from French and British banks to the Swiss ones in order not to have funds there while the tension was rising and the risk of war was real. Rome knew that in case of war their foreign assets would be sequestered. Likewise, several large [Fascist] companies like Pirelli transferred their offices from Belgium to Switzerland, looking to take advantage of their already strong positions there.

(Emphasis added.)

The author’s use of ‘nationalisation’ here is very misleading. Nationalization in the Fascist context does not mean that businessmen had to leave their enterprises forever or that they had to take up new jobs as common bureaucrats, devoid of all independence. It simply means that the businesses were given state assistance so as to stay prosperous, which is an uncommon definition of nationalization. Far from limiting or abolishing private property, the Fascists enacted history’s first privatization campaign.

Of course, if you know how free market purists and other utopian capitalists think (or don’t think, as the case may be), you already know that absolutely none of this is going to concern them in the least.


One error in this paper is the author’s repeated assertion that ‘the country survived World War II without ever being militarily attacked.’ I am baffled that this otherwise carefully researched thesis would include such an easily falsifiable claim. While it is true that nobody declared war on it during the twentieth century, it is a matter of public record that the Swiss Confederation suffered damage from both Allied and Axis forces. Unless the author meant to write ‘officially invaded’, I am astonished that somebody of his education would be unaware of these comparatively ‘minor’ yet still serious intrusions.

Otherwise, this thesis remains worth reading. There are unfortunately a few dozen grammatic and orthographic errors, but most of it is comprehensible.


Click here for events that happened today (November 12).

1881: Maximilian Maria Joseph Karl Gabriel Lamoral Reichsfreiherr von und zu Weichs an der Glon, Axis field marshal, stained the earth.
1925: Rome made Arturo Riccardi Fascist Italy’s Commander of the Order of the Crown.
1934: Berlin commissioned Admiral Scheer into service, and laid down the keels of F9 and F10 at the Reichsmarinewerft shipyard in Wilhelmshaven.
1936: Berlin laid down the keel of Pinguin at the Deschimag shipyard in Bremen, and Tōkyō named Lieutenant Commander Haruo Ota the commanding officer of destroyer Yuzuki.
1938: As the Hungarian Parliament officially incorporated the newly acquired territory from Czechoslovakia into its borders, Berlin found Jews collectively responsible to pay one billion Reichsmarks for damage done during Kristallnacht, and it enacted laws to completely exclude Jews from jobs in commerce and industry.

Meanwhile, Zhang Zhizhong, upon receiving inaccurate intelligence about approaching Imperial troops, gave the order to set fire to several key buildings in Changsha, Hunan Province to deprive the Imperialists of use should they be captured. The fire grew out of control, causing extensive property damage and killing a number of civilians.
1939: Fascist submarine U‐41 sank British trawler Cresswell by gunfire off the Outer Hebrides, Scotland at 0700 hours, killing six but leaving eight alive and captured. At 1000 hours, U‐41 struck again, sinking Norwegian tanker Arne Kjøde; thirty‐four survived in two lifeboats, but one of them would soon capsize, leaving five dead. Likewise, Westerwald completed supporting Fascist cruiser Deutschland in the Arctic Sea.
1940: Soviet Foreign Minister Molotov arrived in Berlin for discussions about spheres of influence in the Balkan Peninsula and in Finland: Axis Foreign Minister Ribbentrop reassured Molotov that the Reich had no further interest in eastern and southern Europe, and Molotov later met with Chancellor Adolf Schicklgruber and relayed Joseph Stalin’s request for the Chancellor to explain the recently formed Axis alliance and the Reich’s recent move into the Kingdom of Romania; before the Chancellor gave a concrete answer, he noted that as the hour was getting late, the risk of British bombing was getting greater, thus the meeting should be broken up.

Having realized that his staff made plans to move Molotov to bomb shelters in case Allied bombers struck Berlin, Schicklgruber also realized that the Reich Chancellery in Berlin had no adequate bunker, and immediately ordered for a plan to be drawn up. Elsewhen, Berlin issued Directive 18 for the capture of Gibraltar, Azores Islands, Madeira, and Portugal, and issued a directive to the Wehrmacht to be prepared in invade Greece so that the Luftwaffe could attack airfield from which the RAF might attack the Kingdom of Romania’s oilfields.

Finally, as a captured Axis airman warned of a planned bombing against the British city of Coventry, Vichy forces in Gabon surrendered to Allied forces at Port Gentil 70 miles south of Libreville. Having successfully negotiated the surrender, Governor Georges Pierre Masson committed suicide shortly after the agreement was reached.
1941: As Charles Huntziger expired and its damaged submarine U‐203 arrived in Brest, the Axis destroyed the Soviet cruiser Chervona Ukraina during the Battle of Sevastopol. On the other hand, the temperature drops in the Moscow region (−12 ℃; 10 ℉) were especially harsh for the Axis invaders, but it hardened the mud and the 3rd and 4th Panzer Armies prepared to take advantage of the situation for an offensive. Meanwhile, Finnish vessels laid mines in the Gulf of Finland to disrupt the Soviet attempts to evacuate personnel from Hanko in southern Finland, and Oberleutnant Adalbert Karbe and Hauptmann Heinrich Wittmer of the Kampfgeschwader 55 wing received the Knight’s Cross of the Iron Cross.
1942: The naval battle between the Axis and the Allies commenced near Guadalcanal. Coincidentally, Axis submarine U-130 sank troopships USS Tasker H. Bliss, USS Hugh L. Scott, and USS Edward Rutledge with torpedoes, slaughtering seventy-four folk.
1943: A combined Axis sea and airborne attack began on the Allied-held Greek island of Leros, and Karl Dönitz complained in his diary that Allied air superiority was severely restricting his ability to conduct campaigns.
1944: In Operation Catechism, Lancaster bombers in Norway assaulted the Axis battleship Tirpitz with Tallboy bombs, scoring three hits and several near misses; Tirpitz capsized, killing 971 out of the about 1,700 aboard.
1948: Tōkyō’s International Military Tribunal for the Far East sentenced seven Axis military and government officials, including General Hideki Tojo, to death for their rôles in World War II.

  • knfrmity
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    21 days ago

    Swiss are only neutral insofar as being neutral allows them to profit off all sides in a conflict.