How Swiss oiled Hitler's killing machine

A new book claims 'neutral' Switzerland helped Germany fight on after 1943, reports David Brierley

In May 1943, Hitler's war machine was showing signs of weakening. In North Africa, German and Italian troops were in retreat. In the East, Germany was suffering appalling casualties. At home, nightly RAF bombing raids were exacting a heavy toll.

The German economy was wilting under the demand for "total war". Production of arms had quadrupled since 1939 and this was set to rise still further as the Wehrmacht struggled to replace the losses of equipment on the Eastern Front.

Civilian morale, already wilting, was driven even lower by chronic shortages of consumer goods.

Against this background of deepening gloom, an unlikely saviour came to Germany's rescue, according to Professor Jean Ziegler of Geneva and the Sorbonne universities.

Supposedly neutral, Switzerland was happy to take German gold in return for hard currency and weapons, enabling the Nazis to continue their war effort. The effect of this, asserts Professor Ziegler, was that his country extended the Second World War.

"I consider it proven that the Swiss contributed significantly to the prolonging of the Second World War," he writes. The war, he maintains, should have ended after the German defeats at Stalingrad and in North Africa.

His argument takes the "Nazi gold" controversy, which has rocked Switzerland these past few months, much further. Hitler, claims Professor Ziegler, in a new book just published, Die Schweiz, das Gold und die Toten (Switzerland, the Gold and the Dead) was dependent on the trade in gold for his ability to continue fighting the war.

Professor Ziegler was a leading thorn in the Swiss authorities' side over the earlier gold row. While that affair still rumbles on and causes paroxysms of embarrassment - only last week it was reported that Union Bank of Switzerland was considering dropping the Switzerland from its title, something inconceivable until the Nazi gold furore swept the world - these fresh accusations will start another round of Swiss self-criticism.

"The Swiss financed Hitler's war of aggression," writes Professor Ziegler. "Without them, the war would have ended earlier and hundreds of thousands of lives would have been saved."

At least hundreds of thousands. For, if Professor Ziegler's assertion is correct, that the war should have ended in 1943, some of its worst episodes in terms of the loss of civilian and military life would have been avoided. No resistance against the push from the Red Army in the East, no dogged defence in Italy, no V1 and V2 raids, no carpet bombing of German cities - above all, no smoke pouring out of the chimneys at Auschwitz-Birkenau, Treblinka and the other extermination camps, as the Final Solution reached its height.

It was to Treblinka, in May 1943, that the last remaining Jewish survivors from the Warsaw ghetto were sent. And, says Professor Ziegler, it was in the same month that Karl Clodius, a German official involved in economic negotiations with the Swiss, noted his country's dependence on Switzerland. In a memorandum, Clodius quoted Walther Funk, head of the Reichsbank and industry minister of the Third Reich, as saying he "could not drop Swiss foreign currency dealings, particularly not the conversion of gold into hard currency, for longer than two months".

The trade, writes Professor Ziegler, was not confined to exchanging gold for currency and raw materials. In December 1943, as fighting raged in Italy and Ukraine, a German freight train was derailed at Thun in Switzerland. Among those who witnessed the crash was a child - the future Professor Jean Ziegler. He remembers seeing its cargo of anti-aircraft weapons, tank turrets and heavy guns, and how German officials arrived and gave orders to local soldiers and gendarmes to clear up the wreckage.

The incident shocked the local Swiss. Here was proof that Germany was illegally using their Alpine passes to wage war, with the knowledge and approval of their own government. Professor Ziegler is convinced that Swiss bankers and industrialists were ready appeasers.

He writes: "The banking hierarchy - whether in the National Bank or in commercial banks - were, in their overwhelmingly majority, willing accomplices and eager helpers."

Their eagerness, he says, is explained by commercial greed rather than by anti-Semitism or support for Nazi ideology.

Dr Neville Wylie of Cambridge University, an expert on the Swiss war economy, commented: "Many financiers claimed at the time, 'We're saving Switzerland'. Yet after the autumn of 1943, Switzerland was no longer in grave danger. The Swiss treatment of the Reich was too generous."

Switzerland gave Nazi Germany access to hard currency and world markets. Stolen and plundered gold worth SFr1.7bn was laundered by the Swiss National Bank, enabling the Germans to acquire crucial raw materials: manganese from Spain, chrome from Turkey, tungsten from Portugal and iron from Sweden.

Of these, tungsten was the most important. Used in steel alloys in the aerospace industry, tungsten was designated as "Kriegswichtig" (vital to the war effort) by the German armaments ministry and no effort was spared to obtain the metal.

Chrome was used to make stainless steel and was vital for the production of ball-bearings, in which Germany suffered important and potentially crippling shortages. Manganese mixed with steel was used to make gun barrels.

A standard work about the German war economy written by Will Boeke, a German historian, poses the question: "What would have happened if all the imports of strategic materials had suddenly stopped?"

Fortunately for Germany, reveals Professor Ziegler, the Swiss ensured that there was little chance of that happening. For instance, he says, a United States government report in 1944 reckoned that 90 per cent of Germany's hard currency came from Switzerland.

Most of the gold laundered by the Swiss National Bank was stolen from the central banks of occupied Europe. Some was looted by the SS in Eastern and Central Europe and some undoubtedly came from victims of the concentration camps; Treblinka produced eight to ten kilos of gold a week.

Berne accepted gold from Germany as late as April 1945. At that time, Emil Puhl, deputy head of the German Reichsbank, was astonished to be wined, dined and given "far-reaching" promises in Berne.

Puhl later claimed to the Nuremberg war crimes tribunal that he told the President of the Swiss National Bank, Ernst Weber, that the gold was looted. This leads Professor Ziegler to describe the National Bank officials as Schreibtischtater ("desk criminals"), a class that was "very numerous in Switzerland".

Aside from laundering stolen gold, the Swiss National Bank also financed the arms trade with Germany. It lent money to Berlin to cover the difference between imports of Swiss arms and German exports. This largely interest- free credit reached Sfr1.1bn by the end of the war.

Swiss financial aid to the Reich totalled Sfr3bn. That is a considerable sum - the gold reserves of Belgium looted by the Nazis and partly laundered by the Swiss amounted to Sfr1bn.

While not denying the facts on which Professor Ziegler's thesis is based, other Swiss academics are putting a different gloss on the interpretation of those facts.

Professor Hans Ulrich Jost of Lausanne University claims that other countries would have taken Switzerland's place and Germany might have found alternative ways of replacing the strategic materials.

Philippe Marguerat, professor of economic history at Neufchatel University, argues that his country's bankers were perhaps, to quote Professor Ziegler, "consenting accomplices", but they certainly were not "eager helpers".