How Switzerland Fares

Timaru Herald, Volume CL, Issue 22064, 10 September 1941, Page 4

How Switzerland Fares

A WAR which has affected the lives of people in all European countries has touched Switzerland, one of the few remaining neutral States, with a lighter hand than most others. Indeed, the existence of the Swiss, because of this seeming immunity from the consequences of the war, has been almost forgotten. But for the fact that Geneva is still the centre of the Red Cross organisation Switzerland would still remain forgotten by the world outside. Nevertheless, while the warring nations may not be greatly aware that Switzerland exists, the Swiss themselves are learning that the war means something to them. This landlocked country is rapidly losing the economic independence it still enjoyed, in spite of the war, before the collapse of France. Outwardly, it is reported, there is hardly any change in the “war economy” that was organised in Switzerland at the beginning of the war. Then, large stocks of foodstuffs and raw materials prevented serious difficulties, but now these stocks are disappearing and industrial self-sufficiency is not possible in a mountainous country without coal, iron or metal resources. In order to be selfsufficient in cereals alone Switzerland would need to double the present area under cultivation and that would take flve years. Lack of feeding-stuffs has resulted already in a reduction of the cattle and pig population, and the fat content of margarine has had to be reduced from 84 per cent, to 75 per cent. In general, Swiss industry is caught between two fears. On the one hand, the elaborate organisation of the “war economy” is thought to be a menace to private industry; on the other hand, without it, German economic penetration would find no obstacle. So far, the interdependence of Swiss and German capital and industry has prevented direct German economic penetration. There are a number of Swiss holding and manufacturing concerns which have large capital interests in German and other European concerns. Because of the country”s strong capital position, Swiss reinsurance companies have played an important part in Europe's insurance industry. The war, however, has ended the valuable tourist industry. Tourist arrivals from foreign countries fell from 1,000,536 in 1939 to 130,379 in 1940. Swiss income from capital investments in foreign countries is also decreasing, and a good many companies operating in German occupied countries are paying no dividends. Before the collapse of France, Germany’s share in Switzerland’s foreign trade actually fell. Since July, 1940, British and French commodities have practically disappeared from the Swiss market, and American goods have become very scarce. Swiss exports to overseas countries, however, are still substantial. There is no competition to German goods in Switzerland; only Italy and Sweden are still offering goods in quantities comparable with pre-war imports. If Germany decided to end Swiss industrial activity or to put pressure on the country, the suspension of sales of coal and iron and steel manufactures would be sufficient. Germany and Italy easily succeeded in securing autononfy for their transit traffic through Switzerland. The principle of the Central Clearing through Berlin has been accepted for Switzerland’s foreign trade with Belgium, Holland and Norway. At the end of May, 1941, the index of wholesale prices had increased by 62.9 per cent, from the level of August, 1939, and the index of the cost of living had risen by 23 per cent. The wages of roughly three-quarters of the workers have been increased since the beginning of the war—by some 6 per cent, on the average. This compares unfavourably with the general increase in prices and the wartime increase in income tax of 16.5 per cent. The real wages of the workers have thus fallen considerably.