Switzerland: we know it for its watches, skiing, and incredible chocolate, but even more so
for the Swiss banking industry, unique in all the world for its secrecy and neutrality.
But, as we’ll see in this video, neutrality and secrecy do have a dark side, for during
World War 2, Germany used the Swiss banks to further their war effort and since the
war ended, we’ve uncovered the reality of just how greedy the biggest Swiss banking
institutions actually were.
This video is brought to you by CuriosityStream.
Watch thousands of award-winning documentaries by signing up with the link in the description.
While the Swiss never had the expansionist ambitions of the other great nations of Europe,
like France, the UK and Germany, they did have a very keen sense for economic power,
which is why they steadily developed a banking secrecy act that protected the anonymity of
people using their banks.
In their geopolitical situation this made a lot of sense, since the Swiss also practiced
a policy of armed neutrality to protect themselves and their banks.
This means avoiding military alliances and never entering the conflicts of other nations.
It is a testament to their persistence that Switzerland holds the oldest neutrality policy
in the world, with the last war they participated in being the one that saw the defeat of Napoleon.
So, when World War 2 saw the Swiss surrounded by Axis and Allied countries, they took very
serious steps to avoid being pulled in, at one time mobilizing almost a million soldiers
to defend themselves from being invaded.
The Swiss prevented both American, British, and German planes from flying through their
airspace or traversing their country and anybody not following these rules found themselves
in Swiss internment camps.
At the time, the Swiss were praised for their neutral position in the war, but they also
received a lot of bad press about their neutral stances in banking and business.
They were willing to continue accepting gold and to do business with all countries, including
Nazi Germany.
Now, after the reparations for World War 1, Germany was struggling to pay its debts; that
is, until, Adolf Hitler rose to power in 1933 and promptly canceled the repayments.
Hitler’s plan was to start organized looting, both of the private individuals and the countries
that he invaded, a task that he handed over to a special force designed for that purpose.
Supposedly, the group was to collect art and valuables in order to preserve them, intending
to return whatever was taken to the owners after the war was over.
And yet the immense value of the stolen goods proved way too tempting, and so the plunder
was funneled off to help the war effort.
It’s estimated that over $550 million worth of gold was plundered from the banking reserves
of countries like Belgium, the Netherlands and Austria, all in an effort to fund the
war.
This number is hard to finalize because besides gold reserves, there was also looting of silver,
collectibles, and fine art.
Now, just having valuable art is of no use if you can’t actually buy anything with
it, so In order to actually use this gold, Hitler had to get creative.
He began sending shipments to the neutral powers that still did business with Nazi Germany,
the largest of which was Switzerland.
In 1940, Hitler became even more aggressive, changing his strategy from looting banks to
legalizing the outright appropriation of the property of the Jewish people, especially
their gold.
Now, keep in mind that none of these actions were hidden: the world was pretty aware of
the harsh treatment of the Jews.
And yet, despite the blatant way Nazi Germany acted, Switzerland, in an effort to remain
neutral, continued buying the looted Nazi Gold.
The Swiss stubbornly resisted any claim they were acting favourably towards the Nazis,
but the reality was very different.
Swiss companies like Nestle ignored the atrocities and continued operating as if everything was
business-as-usual.
Of course, there was plenty of actual Nazi sympathy going on in Switzerland at the time.
The two Swiss companies that would eventually form the pharmaceutical titan Novartis completely
replaced their Jewish board members with an Aryan German board when Hitler rose to power
in 1933.
The official border policy of Switzerland during this time was to actively turn away
any Jews from the border that were fleeing the Nazi regime.
In 1938, the Swiss Chief of Police even requested that all Jewish German passports be marked
with a “J”, so they could easily deny entry to the Jewish people, all the while
hoarding their stolen gold.
Now to be fair, most Swiss citizens at the time had no idea of these connections to the
Nazis, but the businessman, bankers, and politicians could claim no ignorance.
Luckily for them, the world was too busy battling with Hitler’s forces to take any action
against Switzerland, but after the war ended in 1945, the global attention turned towards
those renowned private vaults in the Swiss Alps.
Allied forces, acting on behalf of the hundreds of thousands of Jewish victims, demanded the
Swiss banks turn over the gold they had been storing away.
The banks resisted at first, of course, but an international agreement forced them to
hand over $60 million to the victims and their families a year after the war was won.
In 1962, a law was made that forced banks to identify the dormant accounts they had
and to reclaim that money.
That law, however, only saw a further $15 million recovered and paid back.
In 1996, the World Jewish Council formed a special committee to uncover the true scope
of the actions of Swiss Banks and after 2 years of investigation, the findings were
staggering.
The Nazis had smuggled at least 100 tons of gold through Switzerland, but only 4 tons
had ever been recovered and paid back.
The WJC sued the banks and won a lawsuit that saw several Swiss banks and companies contribute
to settlement of over $1.25 billion to disperse to the victims of the Holocaust around the
world, who numbered at just under half a million at the time.
Several banks like Credit Suisse and UBS, as well as Nestle, and other smaller companies
participated in that settlement.
UBS also made a donation of $40 million to the International Red Cross as a token compensation
for the unclaimed accounts.
Of course, there are many who still aren’t happy with the way the Swiss banks handled
the after-war repayments.
The banks; they claim, haven’t reclaimed the accounts and deposit boxes belonging to
the families who were entirely wiped out.
Unfortunately, there is no acceptable figure of how much unrecovered Nazi gold still lingers
in the vaults today, stolen from families that no longer exist.
Neutrality, as Switzerland learned, has its price and yet at the end of the day it seems
to have been a small one.
To this day, Swiss banks safeguard over 25% of the world’s cross-border assets and currently
hold $6.5 trillion in assets.
Now, if you’re curious about the final days of the Nazi regime or the bombing campaigns
that made that possible, you’ll probably enjoy watching these two awesome documentaries
on CuriosityStream.
If you don’t know, CuriosityStream is the largest online streaming platform for award-winning
documentaries and you can watch all of them for just $2.99 a month.
CuriosityStream is a great way to broaden your horizons and you can try it for free
right now if you sign up for a 30-day free trial by following the link in the description
and using the code ‘businesscasual’.
In any case, I’d like to thank you for watching this video.
I hope you enjoyed it and if you did, make sure to subscribe to catch my new videos every
other Friday.
We’re gonna hear each other again in two weeks and until then: stay smart.