Contraband as a structural economy of the border

Why smuggling was structural

Smuggling on the southern border of the Confederacy was a permanent consequence of the legal and fiscal order described in the preceding sections. Wherever two jurisdictions a few kilometres apart imposed different duties, maintained different monopolies or prohibited the export of goods in short supply, a price difference arose that could be earned by carrying the goods across the line without declaring them. From the sixteenth century merchants on the territory of present-day Switzerland smuggled grain, textiles, salt and tobacco on a large scale in order to avoid fiscal tolls and road charges.¹ The border between the bailiwicks and the Duchy of Milan ran through a densely populated country of hills, lakes and valleys, cut across ancient paths and divided parishes, properties and families. It could not be closed. The people on both sides spoke the same dialects, attended the same markets and married across the line. Many of them owned land on both sides.

Three sources of price differences dominated. The first were the Milanese state monopolies on salt and, from the seventeenth century, on tobacco, which kept prices in the Duchy far above those in the neighbouring territories. The second were export bans and licences for grain and other foodstuffs, which one side or the other imposed in years of dearth and which created a gap between the price in the market that was closed and the price in the market that was open. The third were ordinary duties on manufactured goods, which the Milanese government raised in the eighteenth century in order to protect its own industries and to increase revenue.² Each of these differences created a trade that followed the price: salt and tobacco went south into the Duchy, grain went north or south according to the harvest, and textiles and colonial goods went wherever the duty was lowest.

Treaty salt and the Milanese monopoly

The treaty quotas of salt described in the fourth section were the classic case. The capitulations allowed the bailiwicks to buy salt from the Milanese monopoly at a treaty price for their own consumption, and they prohibited its resale in the Duchy. The treaty price was lower than the monopoly price paid by Milanese subjects, while the quantities were calculated generously. The result was predictable: part of the treaty salt returned to Lombardy through the hands of smugglers and was sold below the monopoly price but above the treaty price.³ The Milanese salt farmers, who had leased the monopoly and bore the loss, complained to the governor, who complained to the Confederate authorities, who promised to punish the smugglers and did so only occasionally. The bailiwicks had little interest in enforcing a Milanese monopoly. The landfogti, whose terms were short and whose income depended in part on fines, had no reason to antagonize the communities they governed.

Tobacco followed the same pattern after Milan introduced a monopoly on its sale. Tobacco grown or imported in the bailiwicks was sold across the border below the monopoly price. In the eighteenth century the Austrian government of Milan tried to suppress the trade by tightening the control of the border, by concentrating the collection of indirect taxes in the Ferma generale and by stationing guards at the crossing points. The treaty of Varese of 1752, which fixed the border in detail, was also an instrument of this policy.⁴

Notes

1. HLS, art. "Schmuggel" (Marco Polli-Schönborn, version of 21.11.2012), https://hls-dhs-dss.ch/de/articles/026198/2012-11-21/: "Ab dem 16. Jahrhundert betrieben Händler im Gebiet der heutigen Schweiz Schmuggel im grossen Umfang (z.B. Getreide, Textilien, Salz, Tabak), um die Fiskalzölle und Strassengebühren zu umgehen". ↩
2. Treccani, Dizionario di Storia, art. "Ferma generale" (as above); Ceschi (ed.), Storia della Svizzera italiana dal Cinquecento al Settecento (as above). ↩
3. HLS, art. "Schmuggel" (as above), on smuggling as the exploitation of a price gap created "durch zollpolitische Massnahmen" and on salt among the goods smuggled "im grossen Umfang" from the sixteenth century. ↩
4. HLS, art. "Varèse" (as above), on the negotiations of 1752 as a means of combating contraband. The tobacco monopoly and the Ferma generale. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of August 2025.