Gold transactions during the Second World War
The monetary policy background of the gold transactions of the Swiss National Bank in the Second World War
During the War, the Swiss National Bank (SNB) primarily endeavoured to strengthen confidence in the currency, to keep prices under control and to ensure Switzerland's solvency in respect of vital supplies. The first part of the study shows that the SNB's decision to adhere to the principle of the gold standard can be explained by the desire to avoid a repetition of the negative monetary experiences during the First World War. Moreover, the SNB aimed to pursue a strategy oriented to the economic structure of the country which had permitted it to survive the monetary turbulences of the 1930s relatively unscathed. The second part deals with the most important periods with respect to monetary policy during the War. It shows that the SNB tried to achieve its aims by pragmatic means. In general, it adhered to the principle of the gold standard, only deviating from it when it considered its goals threatened. At certain times, foreign policy considerations also played a part that should not be underestimated.
In view of the goal of maintaining confidence in the currency, of price stability and of safeguarding vital supplies, adhering to the convertibility of gold in principle even during the War was an adequate strategy. Purchases of gold – of increasingly dubious origin – from the Deutsche Reichsbank associated with this strategy, however, represented the other side of the coin. The question thus arises whether the SNB could not have pursued a strategy which would have taken account of the political, legal and moral issues while not posing a threat to its monetary goals.
The study draws the conclusion that in the first half of the War a substantial reduction of gold purchases from Germany could have jeopardised one or the other of the goals pursued by the SNB. From 1943 onwards, however, the SNB was provided with the monetary leeway which would have made it possible to limit its operations with the Reichsbank without incurring significant monetary risks. The question why it did not revise its policy sooner despite the warnings of the Allies goes beyond the scope of this investigation. The authors suspect that the decisive factor was to be seen in the false assessment of the political, legal and moral aspects of the gold transactions with the Deutsche Reichsbank.