Between the Alps and a Hard Place (4 page)

What policies—political, economic, military—would suit a democratic, pluralistic country surrounded by enemies disposing of thirty times its manpower and resources? It would have been strange indeed if the answer had not aroused hot dispute. The Swiss people never doubted that Nazi Germany was the enemy. But how could their government resist the pressure of those emboldened to seek profit from what appeared to be Germany's inevitable victory? The Swiss also had some Communists who at first backed Hitler and then, after the Nazis invaded the Soviet Union, made trouble. They too had greedy businessmen and weak politicians. Officially and unofficially, the Swiss had to learn to speak softly to and about Germany, since Switzerland's stick was small. Yet how can a people keep its spirits up while biting its tongue? How can a nation reaffirm principles of individual and economic freedom when circumstances demand that it empower economic planners and even institute compulsory labor to raise food?

In 1940 Germany's military victories dazzled much of the world into moral defeat. Since power is something around which human beings instinctively bend, the peoples of continental Europe vied to adjust to the New World Order. Throughout the world (not least in Washington, D.C.) Charles de Gaulle's call to honor and resistance was widely deemed foolish. The Soviet Union and the progressive Western leaders who followed it opposed resisting Nazi Germany in thought, word, or deed. In America Franklin Roosevelt described Hitler's New Europe with minced words, in part because some of his major constituents, such as Joseph Kennedy, were sympathetic to it, while other Roosevelt supporters took their bearings from Hitler's ally, Stalin. From behind the English Channel Winston Churchill roared defiance like the lion he was. Yet this throwback to a nobler age barely managed to dominate an Establishment rotten with pro-Nazis.

In Switzerland, surrounded and multiethnic, whose every aspect ran counter to every precept of Hitler's New Europe, whose press daily insulted Hitler in his own language, where the full panoply of Nazi subversion was at work, the task of maintaining coherence, of steering the ship of state between the twin shoals of capitulation and recklessness, was inherently difficult. During the Cold War, the world developed the word “Finlandization” to describe the lot of a small, free people cut off from the community of free peoples and forced to come to terms with a neighboring totalitarian superpower. Wartime Switzerland, however, managed to retain a greater degree of independence than did Finland.

The outcome of the struggle for the Swiss home front was in doubt only during the summer of 1940. While diplomats and industrialists were conciliating the Germans, the Swiss
army's commander in chief, Henri Guisan, was rallying the troops and forcing the politicians' choices. One of Guisan's instruments, the organization Army and Hearth, spread determination through society's capillaries. Though Swiss President Marcel Pilet Golaz was inclined to conciliate, he responded to public opinion, which was following the army, and agreed to banish the enemy's partisans from the political process. The Swiss reaffirmed their own and the enemy's identity by arresting and executing substantial numbers of Swiss citizens who spied for Germany. Fortunately, as Germany's victory became more doubtful after 1942, fighting Nazi subversion became easier.

As a lifeboat in the midst of shipwrecks, Switzerland was a magnet for all kinds of refugees. When its minister of justice and police declared in 1942 that “the lifeboat is full,” Switzerland, a country of 4 million, already had about 80,000 refugees. By the end of the war that number had risen to some 300,000. Of these approximately 20,000 were Jews, the number of Jewish refugees amounting to one-half of 1 percent of Switzerland's population. Proportionately, this was five times as many Jewish refugees as the United States admitted.

The one peculiar aspect of Switzerland's behavior toward refugees—namely, the contrast between what the central government prescribed and what actually happened—is due to Switzerland's unique decentralized structure. In essence, the federal government set restrictive rules on the inflow of refugees, cantonal governments applied them differently, local governments bent them, and private organizations and individuals (presumably including Senator Barbara Boxer's relatives) often ignored them, especially when facing the human consequences of deporting such vulnerable human beings. That
is why the lifeboat continued to fill, especially after the man nominally in charge of it declared it full.

The prototypical case occurred in Zurich in 1942. A young Belgian Jewish couple who had escaped into Switzerland spent the night in the city's Jewish cemetery. With the greatest courtesy, local policemen took them to the police station and contacted the federal authorities, who, the police believed, would provide for the couple. When the federals instead deported the young couple, individuals and local authorities in Zurich began to hide refugees. Ordinary citizens in border areas did the same; they were shocked at the pitiful sight of refugees turned back by border guards. Unsurprisingly, as the fortunes of war shifted against the Axis, more refugees got in. The balance of power did not determine behavior, but it counted for a lot.

Were the Swiss then just weathervanes, blowing with the prevailing winds? The classics of international affairs teach that even great nations, like great sailing ships, must live by the balance of the wind's power. The great texts of statesmanship, including Thucydides'
Peloponnesian War
and Machiavelli's
Discourses
, treat the decision whether, or how, to intervene in conflicts as one of the weightiest and most complex that statesmen ever have to make. They ask: Which side is likeliest to hurt us if we do not join it? How well can we defend ourselves against the displeasure of everyone who has a stake in the conflict? George Washington and Alexander Hamilton, who were alert to such considerations, would have chuckled at Rabbi Israel Singer's charge that by remaining neutral in World War II Switzerland had chosen an equidistant position in a fight between good and evil.

Recall that America's first major decision in international affairs was whether to join revolutionary France, which had helped America win independence in its war against England. American public opinion was pro-French and anti-British. Washington and Hamilton, however, pointed out that none of this made up for the fact that American ships and troops could affect neither the character of the French Revolution nor the war's outcome. By joining the war, America would not help France but only harm itself.
²³
Though the notion of equidistance never occurred to them, Washington and Hamilton sought to trade with both sides. England and France respected America's neutrality only to the tiny extent that American forces could enforce it. Since it turned out that England could hurt America more than France could, America was forced to tilt toward England. America nevertheless persisted in trying to force England to respect its neutrality. The consequence was the War of 1812.

Equidistance, then, was no more part of the Swiss notion of neutrality in World War II than it had been of early American neutrality. True, early Americans valued neutrality chiefly because of a temporary weakness, while the Swiss long ago recognized that they would always be weaker than their neighbors. Yet among true statesmen, neutrality and war are always means to ends, never ends in themselves. After World War I Switzerland had largely abandoned neutrality when it joined the League of Nations, which promised universal security. But when Hitler's occupation of the Rhineland and his
Anschluss
of Austria proved the league a cruel joke, Switzerland retreated into neutrality once again, even as its public opinion was becoming more anti-German than ever. In the months leading up to the outbreak of war, the Swiss army—blatantly violating
neutrality—was secretly planning joint operations with the French army. France was Switzerland's hope. When that collapsed, Swiss neutrality became a plea to Germany. That plea was backed by an army that understood its own weakness, by an economy that was worth more alive than dead, and by a political system that managed to limit the influence of its enemies. Meanwhile, surrounded Switzerland hoped Germany would lose the war.

Historically, neutrals are pressured by both sets of belligerents. In World War II Switzerland was in the center of two concentric blockades. The outer blockade, run by the Allies, restricted world commerce to and from Switzerland on the reasonable ground that the Germans could pressure the Swiss to share their commerce. The inner blockade, run by the Germans, restricted Swiss exports to the Allies on the reasonable ground that Swiss products could help the Allies. To increase the pressure, Germany also restricted Swiss imports of fuel and food. The result of these blockades was that the Swiss had to obtain agreements from both the Axis and the Allies for every pound of cargo that entered or left the country. This meant that the Axis and Allies had to bargain with one another through Swiss intermediaries. They both knew the pressures that the other was putting on the Swiss. The total transparency of the compromises that resulted renders ludicrous today's claims that their secrets are just now being discovered. Nevertheless, because the daily business of economic warfare consisted of squeezing the enemy largely by squeezing the neutrals, the Germans retaliated for Swiss concessions to the Allies, and the Allies for Swiss concessions to the Germans.

Both sides realized that, especially in the case of Switzerland, it was best not to squeeze too hard. Both sides relied on Switzerland to look after their prisoners of war. Both used it as
a mailbox to communicate with one another, and as a base for espionage on one another. Tacitly, the Allies allowed the Germans some access to world goods through Switzerland. The Allies openly purchased through Switzerland the one industrial product that Germany produced better than anyone else—namely, glass eyes.

When a fortress is surrounded, it can usually be taken by economic strangulation. The German demands on Switzerland were mainly economic. Since Switzerland depended on foreign trade for over half its food, nearly all its fuel, the whole wherewithal of its industrial economy, and depended entirely on German permission to import anything at all, the Germans could obtain many (but not all) of the benefits of occupation without its inconveniences. Whenever the Swiss would balk too hard at some demand, the Germans would cut off coal shipments or block delivery of wheat the Swiss had purchased in Argentina. On the other hand, the Swiss franc's status as the world's only remaining freely convertible major currency—a currency that all belligerents needed for their relations with the world's neutrals—gave Switzerland considerable economic leverage over the Axis. The economic relationship between the two countries changed as the course of the war changed.

Under such conditions, the question is not whether to give in to the besieger's demands, but how much. The strategy of the besieged must be to maintain as much control as possible over the slippery process of concession. The tactics include maintaining as much as possible the pretense that the economic relationship is businesslike and not a reflection of the balance of power. Success is measured by the incentives given to the
enemy to postpone military operations, the time gained during which the balance of power might shift, and how well damage to the economy is limited. Rarely can a besieged fortress increase the importance of its military deterrent. Switzerland managed this difficult feat through its economic relationship with its besieger. By the end of the war Switzerland was stronger than in 1940, having diverted to its own military some of the resources that Germany had allowed through the blockade.

The combination of Switzerland's military and economic deterrents in fact managed to stave off attack until Germany itself was overwhelmed. For this the Swiss paid an economic price, perhaps high, perhaps low. But indisputably the price, and the character of the economic relationship, varied during the course of the war along with the changing balance of power. The stranglehold on fuel and food remained constant until 1945. However, as German victory became questionable and then unlikely, as Germany's capacity to spare troops to overcome Switzerland's military deterrent decreased, Germany's power to compel deliveries on the basis of new credits disappeared. The power of the Swiss franc, which during the first stages of the war had limited damage to the economy, by the end was serving to repair some of that damage.

In war, all international economic relationships depend on the balance of power. Neither Nazi Germany nor the Soviet Union needed money to obtain many goods and services from their own peoples or from occupied countries. Force sufficed. To get unskilled labor from those they controlled, the Nazis set up slave labor camps. None of the inmates profited. Getting more complex goods and services from occupied countries involved somewhat subtler forms of enslavement, such as price-and
wage-controls. Very few French or Dutch got more than a pittance for backing such schemes.

To get what they wanted from Sweden, which they almost surrounded, and from Switzerland, which they surrounded completely, the Nazis relied on a combination of economic constraint—namely, rationing food and fuel at high prices—and of incentives backed by threats of violence. Nevertheless, some Swedes involved in selling iron ore, and some Swiss involved in selling machine tools and weapons to Germany—on credit supplied under duress by their countries' banks—made money. By contrast, to get what they wanted from Spain and Portugal, which they could threaten only a little, the Nazis had to pay top prices often in competition with Allied counterpurchases. Hence Spanish and Portuguese involved in the sale of tungsten made enormous amounts of money.

Whereas Sweden or Switzerland might feel obliged to deliver goods to Germany on bad credit, Spain, Portugal, and Turkey would not deliver tungsten and chrome to Germany for Reichsmarks, whose value they doubted. Nor would they sell for gold because, beginning in 1942, these countries began to doubt that Germany could harm them and, fearing the Allies, heeded their warnings against accepting German gold. In 1942–1943 the Allies objected less if the neutrals accepted Swiss francs. That is why Germany used the gold it had before the war and the gold it stole during the war to buy about 1.3 billion Swiss francs. Germany used these francs to buy Spanish, Portuguese, and other goods, either directly or with escudos or pesetas bought on the free Swiss currency market. Then the central banks of Spain, Portugal, Sweden, and so forth, quickly converted both francs and local currencies into gold on Switzerland's free gold market. Thus these countries
wound up owning large amounts of gold from Germany without violating the Allies' warning too blatantly. In other words, much of the gold that Germany had or stole passed through Swiss hands but ended up in the accounts of other neutrals that supplied large amounts of tangible goods. All of this was entirely transparent.