SWITZERLAND, always something of a riddle in European developments, is today more so than ever. She is a landlocked country, deficient in natural resources. For over six centuries she has been a republic surrounded by monarchies. She became a liberal democracy in 1848, at a time when the general European environment was neither liberal nor democratic. From 1870 -- when Italy and Germany achieved national unity -- until the World War, she was surrounded by four powerful neighbors, each with a population of from ten to twenty times her own. Her people, having long partaken of three rival cultures, have never enjoyed either confessional or linguistic unity.
Yet this small state has survived all the tumultuous wars which have laid Europe waste during more than six centuries. In spite of being landlocked she has exported her textiles, her watches, her machinery, her chemical products and, above all, her emigrants to the four corners of the earth. The United States alone has nearly as many Swiss-born as, for instance, French-born. Though a poor country, without raw materials and colonies, she nevertheless was the birthplace of the Industrial Revolution on the European Continent. The per capita value of her foreign trade exceeds not only that of Great Britain and the United States, but of Holland and Belgium, small states like herself. Her general standards of economic and social well-being are a source of astonishment to all foreigners and a cause of envy to her neighbors. And this small people, internally divided by tongue, creed and divergent international sympathies, today remains firmly united in a common devotion to its national independence.
The changes which have come over Europe since the World War have increased Switzerland's difficulties, both economic and political, but they have reënforced rather than shaken the determination of her citizens to subordinate everything to the defense of her national unity. To understand the country's peculiar international position today we must first of all examine the point of view from which the Swiss regard those changes in Europe's equilibrium. Her geographical position, her small area, her economic structure and the racial composition of her people combine to make her extraordinarily sensitive to what goes on beyond her own frontiers.
Though the peace treaties of 1919 did not modify the Swiss boundaries, they changed the country's politico-geographical environment. The restitution of Alsace to France prolonged the Franco-Swiss frontier to the Rhine at the expense of Germany, and the Italo-Swiss border was slightly extended at the expense of Austria. More important from the Swiss point of view, however, was the substitution of a small and weak state for the former Austro-Hungarian Empire. The postwar Austria was only about twice as large as Switzerland and only about one and a half times as populous. Since republican Austria's weakness was a cause of international uncertainty, Switzerland was merely consulting her own interests when she participated in the League's efforts to bolster up Austria economically.
Austria's recent disappearance from the map is viewed with more concern in Switzerland than almost anywhere else. Her neighbors are reduced from four to three (not counting the diminutive principality of Lichtenstein, which is joined to the Swiss Federation by a customs and monetary union). Even more significant, the balance of influence and power among those neighbors has been completely upset. Before the war, Germany occupied the most important place in Switzerland's foreign trade, both as a supplier and as a customer; and except for the years just after the war, Germany has maintained this place. With the resources of Austria added to her own, Germany's commercial supremacy in the Swiss market will become even greater. Strategically, the end of Austria has rendered Switzerland far more vulnerable, particularly vis-à-vis the Rome-Berlin axis. More than two-thirds of the total length of her frontier now touches Germany or Italy.
Even more important than these territorial changes, from the Swiss point of view, have been the alterations in the constitutional structure of the neighboring states. Before the war, Europe was a continent of monarchies. There were only three republics, of which Switzerland was by far the oldest and best established. After the Armistice, the sudden adoption of republican constitutions in all the new states, and particularly in Germany and Austria, seemed to create a more congenial political environment. But soon the rise of dictatorships, first in Italy and then in Germany and in Austria, threw Switzerland back into a greater isolation, constitutionally speaking, than she had been in before the war. And even on her other frontier there have been events, e.g. certain adventurous policies pursued by the French Front Populaire, which helped make the consciousness of this isolation especially acute.
Fluctuations in the foreign policy of other states, particularly as affects their relations with the League of Nations, have also had repercussions on the Swiss position. When Switzerland was invited to accede to the Covenant in 1919, both her government and her people felt considerably embarrassed. They naturally welcomed with enthusiasm the League's fundamental idea, the substitution of law for war in international relations, the more so as they hoped the League would afford some peaceful means for correcting what they held to be the errors in the treaties themselves. On the other hand, it was with reluctance, indeed repugnance, that they regarded the prospect of entering into any undertakings which might conflict with their traditional policy of neutrality. This feeling was strengthened by the fact that not all the Powers were, for one reason or another, expected to join the League.
Their hesitations, and to some extent their scruples, were overcome by a clause inserted in Article 435 of the Treaty of Versailles and by a declaration of the League Council on February 13, 1920. The clause was to the effect that the guarantees of Swiss neutrality contained in the treaties of 1815 were held to constitute "international obligations for the maintenance of peace," which engagements, under the terms of Article 21 of the Covenant, were declared to be compatible with its other provisions. By its declaration of February 13, 1920, the Council of the League expressly recognized "that the perpetual neutrality of Switzerland and the guarantee of the inviolability of her territory as incorporated in the Law of Nations, particularly in the Treaties and the Acts of 1815, are justified by the interests of general peace and as such are compatible with the Covenant." In consequence, Switzerland, while recognizing and proclaiming "the duties of solidarity which membership in the League of Nations imposes upon her, including therein the duty of coöperating in such economic and financial measures as may be demanded by the League of Nations against a Covenant-breaking state," and while being "prepared to make every sacrifice to defend her own country under every circumstance," was relieved of the obligation "to take part in any military action or to allow the passage of foreign troops or the preparation of military operations within her territory." It was under these conditions that the Swiss people by a nation-wide referendum authorized the Federal Council to accede to the Covenant on May 16, 1920.
In its early days the League was often criticized, in Switzerland as elsewhere, as an alliance of victors in which certain neutrals were tolerated but from which the defeated Powers were excluded. This view soon proved erroneous. Though strong feelings on the part of several countries made impossible Germany's prompt admission to the League, she was associated with the International Labour Office from the very start. Furthermore, Austria and Bulgaria were admitted in 1920 and Hungary in 1922. The attitude towards Germany also rapidly changed. Indeed, when she was finally welcomed to Geneva in 1926 the step was held to be quite as much a triumph for the League as for her.
Notwithstanding the legal guarantees which Switzerland had secured in 1920, she continued to feel some uneasiness about her own position as a neutral state, belonging to a League whose membership was not universal and whose fundamental law provided for collective sanctions against aggressors. After the admission of Austria and Germany this uneasiness subsided somewhat. But her misgivings were again aroused by the withdrawal of Japan and Germany from the League in 1933, the admission of the Soviets (with whom Switzerland has never resumed diplomatic relations) in 1934, the failure of the Disarmament Conference, the experiment with sanctions against Italy, and finally Italy's withdrawal in 1937. These developments have forced the Swiss Government to reconsider its position in the League.
Threatened with a new popular referendum intended to rescind the decision taken in 1920, the Federal Council on April 29, 1938, asked to be released even from the limited obligations assumed in joining the League and requested a renewed recognition of Switzerland's traditional neutrality. This was done by a resolution of the League Council on May 14. But the Swiss Government does not wish to abandon the League. In the first place, the Swiss people are more attached than ever to the fundamental principles of international law and order which led them to join the League in 1920 and which, though sadly disregarded since, remain in their eyes the principal justification of its existence and the only hope for the future. In the second place, they realize that to leave the League, now that it is violently attacked by Germany and by Italy but still supported by the more liberal and pacific states of Europe, would be interpreted less as an assertion of neutrality than as an act of subservience to the Rome-Berlin axis. And against such a policy of subservience the Swiss people would revolt almost unanimously.
The economic, financial and monetary instability characteristic of the last twenty years has proved just as unsettling to Switzerland's material position as the above-recalled events have been to her political situation.
In the field of commercial policy, these years have seen a general rise in tariffs and other restrictive measures. In finance, they have been years of increasing public expenditure, of rising taxation, of enhanced national and international indebtedness, and of general public and private bankruptcy. In the field of monetary policy, they present a record of inflacion and devaluation such as the world has not experienced for over a century.
It requires little imagination to picture the terribly destructive effects which developments like these were bound to have on a country in Switzerland's position. In 1913 more than three-quarters of her exports -- particularly vital for a nation deficient in domestic food stuffs and raw materials -- were shipped to the following countries, enumerated in the order of their importance for Switzerland: Germany, Great Britain, France, United States, Italy and Austria-Hungary. All these states devalued their currencies before Switzerland, which managed to hold out until the autumn of 1936. Furthermore, those which were already protectionist raised their tariff walls still higher, while Great Britain, whose free trade market had always been particularly hospitable to Swiss exports, became mildly protectionist after the war and vigorously so in 1931. Let me cite merely one instance of how this affected Swiss trade. Influenced by the general depression, Britain's conversion to protectionism and the devaluation of the pound, Swiss exports to Great Britain fell from 230 million Swiss francs to 87 million in the space of one year (1931 to 1932).
Swiss exports, which before the war were rising gradually but steadily, reached abnormal heights during the war due to scarcity prices and currency depreciation. After the war they became stabilized at a lower though still relatively high level, and remained there until 1929. Since then they have shrunk to far less than their prewar importance. Although the 1937 figures, in francs, are somewhat more favorable than those for 1936, they are about what they were at the turn of the century, when the population of Switzerland was 17 percent less than it is today and the gold content of the franc was 30 percent greater.
Imports, which before the war always exceeded exports by from 20 to 30 percent in value, rose less than exports during the war and have fallen slightly less in the period since then. Even today, though Switzerland's imports are only two-thirds of what they were in 1913, they still amount to over 1,200 million francs, or approximately 280 million dollars. This means that the Swiss purchase from abroad every year about $72 worth of goods per capita.
How have the Swiss people reacted to all these happenings?
In the first place, the loss of foreign markets, the depreciation of foreign investments (especially when expressed in the national currency), and the decline in the tourist traffic, have all affected the national income adversely. Unemployment, though moderate when compared with that prevailing in most other industrial countries, steadily increased from 1929 until 1936 when the number of registered jobless nearly reached one hundred thousand. Since then, public works and increased exports have caused it to decline somewhat. The rise in Swiss exports is due to the absorption of foreign competitors with armament orders and to the weakened position of certain sectors of French manufacturing.
A second notable consequence of postwar economic developments has been the stimulation of the class consciousness of those small artisans and shopkeepers who are referred to in Marxian parlance as the petty bourgeoisie. In Switzerland as elsewhere, this class has long suffered from the effects of the Industrial Revolution and the growth of large-scale retail distributing agencies, such as consumers' coöperatives and department stores. Postwar protectionism was naturally most welcome to the smaller craftsmen, as it tended to expand the internal market. On the other hand, the rise in the cost of living consequent upon the higher tariffs promoted the growth of the larger retailing organizations, which of course were as popular with the consuming public as they were unpopular with the small business men.
This situation gave rise to some rather peculiar political developments. The small retailers have clamored -- and with some success -- for legislation restricting the size, number and activities of department stores. In this they were supported by some minor pro-Fascist and anti-Semitic organizations that had sprung up in large cities such as Zürich, Basle, Berne and Geneva. Actually these organizations are very limited in membership, and the few young people who have joined them are constantly quarreling over the choice of a leader. Swiss democracy seems to assert itself in that the will to lead is much more general than the will to be led!
In opposition to these small and sometimes unruly groups -- whose constant schisms and secessions naturally attract much press comment -- there sprang up around a certain Mr. Duttweiler a movement of consumers hostile to the protective policies of the government. During the war Mr. Duttweiler had been partially responsible for securing Switzerland's food supply. After the war he became a planter in Brazil, but returned to his native land in 1925 and set up several grocery firms, notably a semi-coöperative institution called the Mi-Gros. His plan, which he has carried out with great success in the face of much middle-class opposition, is to sell groceries from motor trucks, whose itinerary is announced in a time-table published in a paper created for the purpose. By eliminating the middleman and sharing his profits with the consumers Mr. Duttweiler soon became the consumers' idol. This induced him to go into politics, to found a federal party, and to be elected to Parliament at the head of a group of seven representatives. As a parliamentary legislator, however, he has been, if not less spectacular, at least much less effective than as a wholesale-retail grocer.
A third consequence of the diminution of the national income and of the general dislocation of trade has been the tremendous increase in expenditures by the federal, cantonal and municipal governments. Doles and public works, subsidies to various professional groups and to the peasants, and greatly enhanced military expenditure, have led to unbalanced budgets and -- despite increased taxation -- to a steadily mounting public debt. The total debt of the federal government was only 161 million francs in 1913, if we leave out of account the debt of the state railways. By 1918 it had increased to over 1,600 million, and today it is nearing the 3,000 million mark. If we include the state railway debt, we reach a total federal debt of more than 6,000 million francs. If we add thereto another 3,000 million francs representing in round figures the debt of the cantons and municipalities, we discover that the per capita public indebtedness of Switzerland is over 2,000 francs, an increase of at least 300 percent since 1913.
A fourth consequence of these developments has been a tremendous extension of government enterprise, government intervention and government regulation, which for want of a better word might be called state socialism. Consideration of this important fact serves to lead us from economics and finance into the field of politics.
By supporting the unemployed, by fixing prices, by protecting various economic groups all the way from petty craftsmen to banking establishments, the state has undoubtedly weakened the spirit of initiative and self-reliance which alone can make the country prosperous. Furthermore, this ever-increasing state intervention in economic life has tended to augment the number of political parties and modify their character.
There are three traditional parties in Switzerland, one conservative, one liberal and one radical. To these, shortly before the war, was added a Socialist Party. Since the war there have risen a so-called Farmers' and Burghers' Party, a so-called Young Peasant Party, an Independent Consumers' Party (the Duttweiler group), and a small Communist group. The traditional parties, created over a century ago, had been formed in order to defend rival political philosophies. The newcomers, on the other hand, were essentially economic pressure groups. The latter of course soon reacted on the former, so that parliamentary debates have come to turn upon questions concerning the distribution of the national income rather than upon political matters in the stricter sense of the term. The federal government cannot maintain its majority against the Socialist opposition without the support of the peasants' representatives, with the result that the latter today exercise an influence quite disproportionate to their numbers.
In the National Council (the popularly elected branch of the Parliament) the extreme Left is composed of the Communists, now represented by two deputies, and the Socialists. Up to the elections of 1928 the Socialists increased their numbers; but since then they have merely held their ground. It is noticeable that in very recent times they have become distinctly more coöperative and less radical; for instance, they discourage rather than provoke labor disputes, and they support, instead of combating, bills for military expenditure. This changed attitude is clearly due to the altered international situation.
In 1920, the Socialists opposed Switzerland's entry into the League of Nations, denouncing it as a conservative institution for the defense of capitalism. But now that the Soviets have joined the League and the German and Italian dictatorships have left it, the Socialists have come to be its best friends. Many conservatives, on the other hand, repelled more by the Soviets than by their Fascist foes, have become lukewarm, if not hostile, to the League. Certain recent developments, however, especially the behavior of Nazi Germany in Austria, have created a greater spirit of unity among all the Swiss political parties than has been seen for generations. The parties of the Right were, for national reasons, alarmed by the actions of the German Government; while their opponents of the Left judged the Nazi coup even more severely, as being a threat to their social ideals of democratic liberty.
This state of affairs explains the extraordinary proceedings in the Federal Parliament on March 21, 1938. At the opening of the ordinary session, the following declaration on behalf of the federal government was solemnly read in German, French and Italian Before both houses:
On March 13, the federal state of Austria, with which Switzerland maintained cordial relations of good neighborhood, ceased to exist as an independent state. This historical event, which took place before our eyes, is of immense importance. The wish to unite the peoples of Germany and Austria was not a new aspiration; it had already given rise to armed conflicts in the last century; that wish has now been realized.
The Federal Council understands the emotions which have been provoked among the Swiss people. It seizes the opportunity offered by the meeting of the Federal Assembly in ordinary session to enlighten public opinion and to dissipate unjustified apprehensions.
The changes which the political map of Europe has undergone in the last few days cannot lead to a weakening of the political position of Switzerland. On the contrary the independence and the neutrality of the Confederation appear today more than ever indispensable to the maintenance of the equilibrium of Europe.
We have received formal assurances of undisputable value to this effect from all sides. None of our three neighbors can wish or hope for the disappearance of Switzerland. None threatens our democratic institutions, which are essential to the life [qui constituent des raisons de vivre essentielles] of the Confederation and of its twenty-two cantons. It is Switzerland's secular mission in Europe to guard the passage over the Alps in the interests of all. It is the unanimous and unshakable will of the Swiss people to accomplish this mission and to assure the respect of its independence at the price of its blood.
Switzerland holds aloof from foreign quarrels. Any attack on the integrity of our soil would be an abominable crime against the law of nations.
There is no doubt about the lesson taught by these events: our efforts for the recognition of our integral neutrality must be pursued to a successful end. There must remain no possible equivocation in this respect. It is necessary furthermore for us to endeavor to maintain to the same degree correct and friendly relations with each of our neighbors.
The struggle which is going on abroad between opposed political systems is no concern of our state. Every people is free to choose its own internal régime. The Swiss people are united in the determination to defend at any cost, to the last breath and against anyone, the incomparable country which is theirs by God's will.
Let us in these troubled times become ever more convinced of our providential mission; let us show that a democracy like ours is a régime of disciplined liberty and that nothing can weaken the force of the federal bond.
Anyone familiar with the essentially undramatic character of Swiss political life and with our aversion for rhetorical utterances will appreciate the exceptional significance of this declaration. In order to make the occasion still more impressive, every member of the Parliament (except the two Communists and a single pro-Fascist) agreed on the following statement, which was also read in both houses in the three official languages by deputies representing both the majority and the Socialists:
All the political groups of the two houses approve the declaration of the Federal Council. They solemnly affirm that the whole Swiss people -- without regard to tongue, confession or party -- are prepared to defend the inviolability of their territory against any aggressor to the last drop of their blood. This defense will be all the more effective as it will be inspired by the respect of popular rights and based on the coöperation of the whole people.
The Swiss people are prepared to consent to the sacrifices necessary for their national defense, but the military armament of the country would be useless if it did not rest on the spiritual and moral forces of the whole people: the union of all Confederates must be placed above all political and economic struggles and our internal discussions must be carried on in a spirit of dignity, in the respect of contrary opinions and in fidelity to our democratic institutions.
The federal Constitution makes it incumbent upon the Federal Council to guard over the external security of Switzerland and the maintenance of her independence and neutrality. The Swiss people support the Federal Council in this essential task, which must be carried out in the spirit of Swiss democracy and in full accord with Parliament.
Trusting to Providence, which has always protected our country, the Swiss people are prepared to face with determination and courage any tribulations which the malice of the future may hold in store.
The first of the orators called upon to read this statement in the National Council was Herr Grimm, the Socialist who had headed the revolutionary strike in November 1918. His intervention twenty years later in favor of the security of Switzerland and the union of all its citizens indicates how greatly European events have affected Swiss politics.
The menace contained in the German and Italian dictatorships has similarly brought together the three linguistic elements. The German Swiss are naturally most disquieted by the aggressive and intolerant National Socialism of their neighbors to the north. The Italian Swiss are equally alarmed by the no less aggressive and intolerant Fascism of their cousins to the south. In the French-speaking cantons the bourgeois majority has looked with increasing disfavor on the policies of the Front Populaire in France. In the past, foreign influences often weakened the unity of the Swiss people; today, on the contrary, they tend to consolidate it. Thus a normally centrifugal force has, under circumstances entirely without precedent in Europe, come to be distinctly centripetal in its action on the national temper of the Swiss people.