1938: Switzerland

The Federal Government was chiefly occupied during 1938 with questions of foreign policy, defense, and national unity. Because of the increasing tension in Europe, especially after the annexation of Austria in March, the Government applied to the League of Nations for a further reduction of Switzerland's commitments under the Covenant. The League Council adopted a resolution on May 14 ruling that Switzerland, which had been exempted in 1920 from all military obligations, could not be invited to participate in economic and financial sanctions. The Swiss Government immediately notified Germany and Italy that it had removed every obligation to intervene in European affairs, and both countries formally agreed to recognize and respect this unconditional neutrality.

This return to the traditional policy of complete neutrality was accompanied by increased defense appropriations, allocation of the Federal income tax for military expenditures, and proposals for extending the age limit of military service and lengthening the period of recruiting and training. The rapidity of modern invasion and air attack compelled Switzerland, wedged between three powerful neighbors, to consider reorganization of its citizen army and enlargement of its transport and aviation units. The Czechoslovakian crisis during September caused the Government to take precautionary measures along the Swiss frontiers. Although a general mobilization was avoided, additional volunteer troops were summoned, anti-aircraft defenses were prepared in the cities, and mines were placed under all bridges, tunnels, and roads near the borders.

The Federal Parliament on March 21 adopted almost unanimously an impressive declaration proclaiming that the Swiss people will defend at all cost their independence, democratic institutions, and neutrality. In order to eliminate every pretext for outside interference, the Government banned the use of foreign uniforms, flags, and party emblems, and extended the 1936 decree against Communist activity to a prohibition of any propaganda material likely to endanger the State. Over one hundred German agents were arrested and several Nazi party headquarters raided during November. The Journal des Nations, a liberal newspaper popular in international circles at Geneva, was ordered on October 7 to suspend publication for three months because of anti-Fascist editorial policy. The trend toward greater national unity was given additional emphasis on July 3, when a popular referendum approved the establishment of a new Federal penal code, replacing the separate codes of the twenty-two cantons.

The Swiss economy, after considerable recovery in 1937, was adversely affected by the general recession during the early part of 1938. Foreign trade declined, and the tourist trade was hampered by bad weather and currency restrictions on German citizens. Unemployment was sufficiently large to compel the Government to close its northern and eastern frontiers to persons without proper passports, and to grant only temporary visas to Jewish refugees from Germany. Swiss business men continued to seek for satisfactory financial and commercial arrangements with both democratic and totalitarian countries without becoming involved in their political controversies.