A Battle for Neutrality: The Swiss Made Mistakes, but Allegations That We Profited from World War II Are Unfair

By Jolles, Paul R. | Newsweek, August 25, 1997 | Go to article overview

A Battle for Neutrality: The Swiss Made Mistakes, but Allegations That We Profited from World War II Are Unfair


Jolles, Paul R., Newsweek


The Swiss made mistakes, but allegations that we profited from World War II are unfair

RECENT NEWS ABOUT SWITZERLAND AND THE NAZI gold have brought a lot of long-forgotten history back into the public eye. Some of the allegations about Swiss banks may turn out to be true; clearly the banks were not diligent enough in tracking down wartime depositors, among them victims of the Nazis. But other allegations, that Switzerland helped the Nazis and turned the war to our own profit, strike me as completely unfair.

As someone who lived through the wartime period of Swiss-American relations, I can attest that the times were much more complicated than people now realize. I'm one of the few surviving members of the Swiss team that negotiated the "Washington Agreement," the 1946 treaty between the Swiss and the Allies that dealt with war reparations and Nazi loot. I know that what you read in the papers these days is not the full story.

The Swiss legation in Washington was a fascinating place for a young diplomat like me, starting out on my career in 1942, just after America entered the war. In the hopelessly overcrowded U.S. capital, I was assigned an isolated room in the deserted Italian Embassy on 16th Street. While the United States was at war with Mussolini, Italy's embassy was placed under Swiss protectionalong with those of Germany, France and Bulgaria. We were responsible, as a neutral nation, for representing the interests of those countries in the United States-and U.S. interests in those enemy countries. We were also responsible for passing messages between the United States and its enemies, including one ordinary cable, sent via Western Union, that turned out to contain the formal Japanese surrender. We had to decode and transmit that message in a great rush; the hurried messenger was arrested by the police for making a U-turn on Pennsylvania Avenue.

When the war ended, I was the youngest member of the Swiss team negotiating with the Allies over Nazi assets. The two sides had a common understanding at the outset: Germany should be deprived of the financial means to start a third world war. But Switzerland argued that, as a neutral country, we were not at war with "enemies" and therefore did not recognize the notion of "enemy loot," which the Allies wanted us to hand over. We did transfer some of it. And in gratitude for having been spared in the war, our side offered 250 million Swiss francs, then about $65 million, toward what became the Marshall Plan for rebuilding Europe. The Americans felt that wasn't enough, and negotiations broke down.

They resumed again after two weeks, but only recently have American and British historians revealed why. Retaliation against the Germans ceased to be the Americans' main motive; keeping the communists at bay in Europe began to take priority. Switzerland had to be a bulwark of that strategy--indeed, we had already assisted U.S. intelligence during the war. (When I got back to Switzerland, I moved into a house in Bern that had been used by Allen Dulles as the European headquarters of the OSS, the precursor of the CIA. "Switzerland is the most incorruptible neutral nation in existence," Dulles cabled Washington in 1944. …

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