Refugee policy, flight capital and the assets of the persecuted

Why refugee policy belongs in a history of finance

A chapter on gold and banks might seem an odd place for a discussion of refugee policy. The connection is nevertheless close. The same years in which the Reichsbank sold looted gold in Bern and Zurich saw thousands of Jewish refugees turned back at the Swiss border, while Jewish families across Europe tried to save part of their property by placing it with Swiss banks, lawyers and insurers. The Independent Commission of Experts treated refugee policy as one of its central themes and published its report on it before the final synthesis. The public debate of the 1990s also linked the two questions from the start. Assets were welcome in Switzerland, it was said, while their owners were not. Whatever the justice of that formula, the financial centre cannot understand its own reputation without understanding the refugee policy of the Confederation.

The “J” stamp of 1938

The story begins before the war. On 20 April 1933, the Federal Council decided that Jews fleeing Germany would not be recognised as political refugees, so that persecution on racial grounds did not by itself give a right to asylum.¹ After the annexation of Austria in March 1938, the number of Jewish refugees arriving in Switzerland rose sharply. The Federal Council introduced a visa requirement for holders of Austrian passports on 1 April 1938. When the Evian conference of July 1938 failed to produce an international solution, Switzerland sought a way to distinguish German Jews, whom it did not wish to admit, from other German travellers, whom it wished to continue to receive without a visa. The German authorities refused to mark the passports of emigrants who could not return, because they did not want to hinder their policy of plunder and expulsion. In September 1938, negotiations between the two governments produced a compromise under which only the passports of Jews would be marked. The head of the federal police division, Heinrich Rothmund, raised legal and ethical concerns, but the Federal Council accepted the arrangement on 4 October 1938 for economic and foreign policy reasons.²

The Commission emphasised that Switzerland was involved in the marking of German Jewish passports with the “J” stamp, that its authorities had proposed the discriminatory marking as an alternative to a general visa requirement for all Germans, and that the Federal Council had approved it unanimously.³ The “J” stamp became the most potent symbol of the Swiss refugee policy in public memory, not least because it showed Swiss officials actively negotiating the discrimination of Jews.

The closure of the border in August 1942

The second turning point came in the summer of 1942. As the round-ups of Jews in France intensified and more and more Jews tried to enter Switzerland, the Confederation closed its border. On 13 August 1942 the police division ordered that refugees who were fleeing “only on racial grounds” were not to be considered political refugees and were to be turned back.⁴ The order provoked protests from churches, relief organisations and parts of the press. At the end of August 1942, the head of the Federal Department of Justice and Police, Eduard von Steiger, defended the restrictive course with the image of a crowded lifeboat, a phrase that entered the language as “Das Boot ist voll”.⁵ The practice was relaxed in stages. Only on 12 July 1944 did a new directive provide that all civilians whose lives were in danger were to be admitted.⁶

Individual officials resisted the restrictive policy at personal cost. The best known is Paul Grüninger, police commander of the canton of St. Gallen, who in 1938 and 1939 allowed several hundred Jewish refugees to enter the country illegally by backdating their papers. He was dismissed, convicted and fined. His rehabilitation by the courts of St. Gallen came only in 1995, more than twenty years after his death.⁷ His case, like the “J” stamp, returned to public attention in the same years in which the questions about gold and dormant accounts were raised.

The numbers

The Commission’s refugee report gave figures that framed the debate. During the Second World War, Switzerland sheltered close to 300,000 people for shorter or longer periods.⁸ This total included 51,129 civilian refugees, of whom 19,495 were Jewish and 1,609 had been persecuted on account of Jewish descent, 103,869 military internees, 59,785 children admitted for temporary recuperation, 66,549 people who took brief refuge from combat near the border and 9,909 emigrants who had arrived before the war. At the same time the Commission recorded more than 24,000 cases in which refugees had been turned back at the border.⁹ It concluded that a policy oriented towards humanity would have saved many thousands of refugees from murder by the National Socialists and their accomplices. It also identified antisemitism as an important reason why the persecution of the Jews was either not perceived or not acted upon.¹⁰

The figure of 24,000 rejections became the subject of a long dispute. Critics argued that it contained double counting, because the same person might be turned back more than once, and that the records of individual border districts pointed to lower totals. The Lausanne economist Christian Lambelet proposed a figure of about 8,000, while an analysis of the Geneva records prepared for the cantonal archives found that only 1,259 of 14,200 detained refugees had been turned back in the Geneva district between August 1942 and December 1945.¹¹ Later research has not settled the question. A dissertation on the Franco-Swiss border found some 16,000 refused entry applications from Jewish refugees, more than the 14,500 visa refusals previously counted by the Commission, while other historians maintain that the total number of rejections at the border was higher than 24,000 once the northern border districts are included.¹² What is not in dispute is that the destruction of wartime records makes an exact count impossible and that the policy of August 1942 sent people back to their deaths.

The costs of refugee aid fell to a large extent on private organisations. Between 1933 and 1954, relief organisations spent CHF 102 million on refugees, CHF 69 million of which came from the Jewish welfare association. The Confederation spent more than CHF 136 million on refugee policy between 1942 and 1954.¹³ The Swiss Jewish community thus carried a burden out of all proportion to its size.

Flight capital and the assets of the persecuted

From the early 1930s, Jewish families and political opponents of the Nazi regime in Germany, and later in Austria, Czechoslovakia and other countries, tried to move part of their assets to Switzerland. Swiss banks accepted these deposits as they accepted other foreign money, and Swiss lawyers and trust companies helped to structure them. For the owners, the Swiss franc and the discretion of the Swiss banks offered protection against confiscation. The German authorities, for their part, pursued these assets with increasing severity. They made the transfer of assets abroad a criminal offence, required residents to declare their foreign holdings and, after 1938, forced Jewish owners to sign instructions to their Swiss banks to transfer their accounts to German institutions. How the Swiss banks responded to such instructions, and whether they honoured transfers that had evidently been obtained under duress, was one of the questions that the Commission examined.¹⁴

The legend that the Swiss Banking Act of 1934 was adopted to protect Jewish clients against the Gestapo has been examined in chapter F.II. What matters here is the practical side. Banking secrecy protected persecuted clients against inquiries by German authorities, but it also made it harder for these clients and their heirs to find their assets after the war. The same instruments served both purposes. The treatment of accounts whose owners had been murdered and whose heirs did not know of their existence belongs to the history of the dormant accounts, which is told in chapter F.VI. The Commission’s study of this question found that a first registration of such assets under the federal decree of 1962 produced reports by 46 banks of 739 assets worth CHF 6.2 million, and that most banks had identified victims’ assets by looking for Jewish-sounding names.¹⁵

The insurers

The Swiss insurers, whose history was the subject of Part E, were also drawn into the Nazi economy. By the end of the 1930s, foreign business generated a good 60 per cent of their premium income, and Germany was their most important foreign market. The Commission’s study found that Swiss insurers operating in Germany declared themselves “Aryan” enterprises and that some removed Jewish board members and shareholders. They generally dismissed their Jewish employees in Germany before the corresponding laws required them to do so.¹⁶ When the German state confiscated the life insurance policies of Jewish policyholders, the insurers reacted in different ways. Some resisted, others voluntarily provided the names of their clients and the values of their policies to the German authorities. After the war, Swiss courts ruled against policyholders who sought to recover the value of confiscated policies from the Swiss companies and referred them to the German restitution procedures. In the Elkan case, the Federal Supreme Court held that the confiscation of insurance policies did not violate Swiss public policy because it represented a completed legal intervention that could not be reversed.¹⁷ The insurers also used the war years to strengthen their reserves, so that they emerged from the war in a stronger position than many of their international competitors, some of which needed state support to avoid bankruptcy.

Notes

1. “Die Flüchtlingspolitik in der Nazizeit: Zitate, Zahlen und Fakten aus dem Bergier-Bericht”, SWI swissinfo.ch, 10 December 1999, https://www.swissinfo.ch/ger/schweizer-politik/die-fluechtlingspolitik-in-der-nazizeit-zitate-zahlen-und-fakten-aus-dem-bergier-bericht/1387580. According to the same summary, Switzerland recognised only 644 persons as political refugees between 1933 and 1945. ↩
2. HLS, Marco Jorio, “«J»-Stempel”, https://hls-dhs-dss.ch/de/articles/049159/. Jorio notes that Switzerland never applied the reciprocal marking of the passports of Swiss Jews that the protocol provided for. ↩
3. UEK, Die Schweiz und die Flüchtlinge zur Zeit des Nationalsozialismus, UEK publications vol. 17, 2001 (revised edition of the report of December 1999), summary, https://www.uek.ch/de/schlussbericht/Publikationen/Zusammenfassungenpdf/17d.pdf. ↩
4. HLS, “Zweiter Weltkrieg”, https://hls-dhs-dss.ch/de/articles/008927/; UEK publications vol. 17, summary, https://www.uek.ch/de/schlussbericht/Publikationen/Zusammenfassungenpdf/17d.pdf. ↩
5. Wikipedia, “Eduard von Steiger”, on his speech to the Junge Kirche in Zurich-Oerlikon on 30 August 1942 and its lifeboat image (“Wer ein schon stark besetztes kleines Rettungsboot … zu kommandieren hat …”), https://de.wikipedia.org/wiki/Eduard_von_Steiger; Wikipedia, “Alfred A. Häsler”, on Das Boot ist voll. Die Schweiz und die Flüchtlinge 1933–1945 (Zurich 1967) as the literary basis of Markus Imhoof’s film of the same name, https://de.wikipedia.org/wiki/Alfred_A._H%C3%A4sler. ↩
6. SWI swissinfo.ch, “Die Flüchtlingspolitik in der Nazizeit”, 10 December 1999, https://www.swissinfo.ch/ger/schweizer-politik/die-fluechtlingspolitik-in-der-nazizeit-zitate-zahlen-und-fakten-aus-dem-bergier-bericht/1387580. ↩
7. Wikipedia, “Paul Grüninger” (1891–1972), on his suspension in 1939, his conviction in 1940 to a small fine, the estimate of several hundred refugees saved in 1938 and 1939, the annulment of the judgment and his acquittal by the Bezirksgericht St. Gallen in 1995, 23 years after his death, and the restitution of CHF 1.3 million used in 1998 to set up the Paul Grüninger Stiftung, https://de.wikipedia.org/wiki/Paul_Gr%C3%BCninger. ↩
8. UEK publications vol. 17, summary, https://www.uek.ch/de/schlussbericht/Publikationen/Zusammenfassungenpdf/17d.pdf. ↩
9. SWI swissinfo.ch, “Die Flüchtlingspolitik in der Nazizeit”, 10 December 1999, https://www.swissinfo.ch/ger/schweizer-politik/die-fluechtlingspolitik-in-der-nazizeit-zitate-zahlen-und-fakten-aus-dem-bergier-bericht/1387580. The historical encyclopaedia gives about 21,000 Jewish refugees among some 51,000 civilians and puts the number of civilians turned back at between 10,000 and twice that figure: HLS, “Zweiter Weltkrieg”, https://hls-dhs-dss.ch/de/articles/008927/. ↩
10. UEK publications vol. 17, summary, https://www.uek.ch/de/schlussbericht/Publikationen/Zusammenfassungenpdf/17d.pdf. The quotation on a policy oriented towards humanity is reproduced in SWI swissinfo.ch, “Die Flüchtlingspolitik in der Nazizeit”, 10 December 1999. ↩
11. “Bergier-Bericht: Das wird kritisiert”, Beobachter, 19 March 2001, https://www.beobachter.ch/gesellschaft/bergier-bericht-das-wird-kritisiert. The article also reports the view of Serge Klarsfeld, who considered the Commission’s figure inflated. ↩
12. “Schweiz wies mehr Flüchtlinge ab als angenommen”, Neue Zürcher Zeitung, https://www.nzz.ch/schweiz/fluechtlingspolitik-im-zweiten-weltkrieg-schweiz-wies-mehr-fluechtlinge-ab-als-angenommen-ld.1299971. The article discusses the dissertation of Ruth Fivaz-Silbermann and the research of Guido Koller. ↩
13. UEK publications vol. 17, summary, https://www.uek.ch/de/schlussbericht/Publikationen/Zusammenfassungenpdf/17d.pdf. ↩
14. UEK publications vol. 15, Nachrichtenlose Vermögen bei Schweizer Banken, summary, https://www.uek.ch/de/schlussbericht/Publikationen/Zusammenfassungenpdf/15d.pdf: the regime forced the German population in 1933 and 1936 and the Austrian population in 1938, through capital flight laws and under threat of draconian penalties, to declare and surrender their foreign assets. After the ordinance of 26 April 1938 on the registration of Jewish assets, many clients withdrew their assets from Swiss banks and delivered them to the Reich under duress. ↩
15. Barbara Bonhage, Hanspeter Lussy and Marc Perrenoud, Nachrichtenlose Vermögen bei Schweizer Banken, UEK publications vol. 15, summary, https://www.uek.ch/de/schlussbericht/Publikationen/Zusammenfassungenpdf/15d.pdf. ↩
16. Stefan Karlen, Lucas Chocomeli, Kristin D’haemer, Stefan Laube and Daniel C. Schmid, Schweizerische Versicherungsgesellschaften im Machtbereich des «Dritten Reichs», UEK publications vol. 12, summary, https://www.uek.ch/de/schlussbericht/Publikationen/Zusammenfassungenpdf/12d.pdf. ↩
17. UEK publications vol. 19, summary, https://www.uek.ch/de/schlussbericht/Publikationen/Zusammenfassungenpdf/19d.pdf (contributions by Adolf Lüchinger and Eric L. Dreifuss). ↩

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 September 2025.