1940: Switzerland

Counter-Espionage.

The impact of war in Europe has been felt heavily in Switzerland, although during 1940 this 'traditional neutral' escaped the ravages of direct participation in hostilities. As one of the few localities where freedom of communication has been maintained, and where the interests of all belligerents are closely intermingled, Switzerland was a natural center of intrigue for spies. During the year, Swiss authorities uncovered numerous espionage activities, some of which had serious international aspects. One of the most sensational cases was that of Colonel Arthur Fonjallaz, his son, and a woman of German origin who had become a United States citizen by marriage. Fonjallaz, who had attained the highest peacetime rank in the Swiss Army before his retirement, was formerly a leader of Switzerland's disbanded Nazi movement. His arrest, on Jan. 27, was first to be announced in a series of measures to clean up a large German spy ring. Among a number of other agents, Swiss police arrested the following: (on Jan 31) Edouard de Morsier, member of an old and prominent Geneva family; (on Feb. 29) Wilhelm Tobler, head of the Swiss National Front and the country's leading Nazi; and (on April 20) Lt. Col. Hans Trueb, an Army officer working in the Swiss War Ministry. In April and May the Army general staff warned the Swiss people of prevalent attempts by foreign spies to get plans and other information of Swiss frontier fortifications.

National Defense.

Amid the tension of 'Fifth Column' precautions, Switzerland guarded its neutrality actively throughout 1940. In accordance with an announced policy aimed at stationing on its borders as many troops as any one belligerent posted there, Switzerland on April 2 ordered 41 new army units to active service, in order to balance the 200,000 Nazi troops reported in the Baden and Kuertemberg areas north of the German-Swiss frontier. Following the Nazi invasion of Scandinavia, the Swiss Government and High Command on April 18 published mobilization plans for the guidance of the Swiss people in case their country should also be attacked. Simultaneously, the Swiss Army was increased to almost 500,000 men by the addition of 60,000 militiamen, for service in the Winkleried Line (between Basle and Lake Constance) and other frontier fortifications. With the invasion of Holland and Belgium on May 10, the Swiss Government ordered a general mobilization 'in view of the profound changes which have occurred on the western front,' and announced a precautionary 'state of war.' On May 16, as the League of Nations started to shut its offices in Geneva, Swiss and German military authorities closed their common frontier on both sides of the Rhine River. Swiss tension was soon relieved, however, as Germany and the Allies on May 19 withdrew many of their tanks, armored cars, and troops from the Swiss border for service in Belgium. On June 29, demobilization of about half the Swiss Army was begun, but the other 250,000 men were kept under rigid training routine for the remainder of the year. Frequent violations of Swiss neutrality by German and French planes up to the middle of June, and by British planes en route to Italy after Rome's entry into the war, made Switzerland the object of numerous diplomatic protests from both groups of belligerents. Finally, on Nov. 6, the Swiss High Command ordered strict blackout precautions for all Swiss cities.

Vicious anti-Swiss press and radio attacks in Germany and Italy followed military movements and air violations as a cause of concern in Switzerland during 1940. Most of the verbal barrage resulted from Switzerland's unwillingness to muffle its own newspaper editors, who were frequently accused by Axis spokesmen of giving war news a 'pro-British' twist. 'We will place the name of Switzerland . . . side by side with that of our detested enemy,' the Italian press warned on Nov. 8.

Internal Political Developments.

In the face of repeated Axis threats Swiss democracy held its head high. After the death on Jan. 23 of Guiseppe Motta, five times President of the Republic and Foreign Minister at the time of his death, President Pilet-Golaz became head of the Department of Foreign Affairs on March 1. On June 25, after the capitulation of France, he caused some anxiety in the cantons by announcing a new program of centralization and 'economic adaptation' to the Axis-dominated 'new order' in Europe. Since 'events happen quickly these days,' he said, the government would 'no longer be able to explain and justify its decisions,' and speeches would have to be curbed. Switzerland was completely surrounded by Axis powers, and in the succeeding months was forced to yield to German and Italian terms on all trade matters involving the transit of essential supplies over Axis territory. The people's faith in democratic processes, however, remained unshakeable. When in September the President granted an interview to three leaders of the Nazi-affiliated National Movement, widespread popular criticism and indignant protests from the workers' papers brought forth a public explanation from M. Pilet-Golaz. On Nov. 19, the Federal Council dissolved the National Movement, consisting chiefly of two organizations — the Swiss Union of Friends of Authoritarian Democracy, and the Swiss National Socialist Workers Party. Eight days later, the Swiss Communist Party and all its branches were similarly suppressed. On Dec. 4 Federal police raided the offices of the Swiss National Movement and Communist organizations throughout the country, and seized large quantities of propaganda. With a promise that Switzerland's 650-year-old independence would be preserved at all costs, Ernest Wetter was elected President of the Republic on Dec. 10 to succeed M. Pilet-Golaz for the year 1941.

Economic Situation.

The Swiss economy stood up well until June 1940, when Italy's entry into the war impaired the transshipment of Switzerland's vital import requirements through Italian territory, and rail service with France was stopped after the French collapse. Deprived of essential imports, Switzerland's manufacturing industry — normally the country's chief source of revenue — declined sharply. By the end of July prices of motor fuels and chemical products rose 74 per cent, coal and firewood 63 per cent, metals 55 per cent, and the textile-leather-rubber group 46 per cent. Prices on vegetable foods rose 51 per cent, but the domestic livestock industry kept animal foodstuffs down to a 13 per cent price increase. Italy's invasion of Greece on Oct. 28 further complicated Switzerland's supply problem by withdrawing from service the entire Swiss merchant marine, which consisted of 17 Greek ships chartered by the Swiss Government after the outbreak of the European War. See also WORLD ECONOMICS.