The legend and the documented history

The Paris affair of 1932

On the afternoon of 26 or 27 October 1932, depending on the account, the French police entered the Paris premises used by representatives of the Basler Handelsbank and caught its officers in the act of assisting wealthy French clients to evade taxes. Guex, working from the French and Swiss files, dates the searches to 27 October and reports that further raids followed against the Banque d’Escompte Suisse and a Geneva private bank. The documents seized allowed the authorities to compile a list of persons involved that ran to more than a thousand names, among them three senators, a dozen generals, two bishops, former ministers and leading industrial families such as the Peugeots and the Cotys, the owners of Le Figaro.¹ Peter Hug gives 26 October 1932 as the date and speaks of records concerning some 2,000 clients with deposits of about two billion French francs.²

The difference in the figures is itself instructive. In the French Chamber of Deputies the deputy Fabien Albertin claimed that the French deposits at the Basler Handelsbank amounted to two billion French francs, then about 400 million Swiss francs. Vogler remarks drily that where Albertin obtained the basis for his figures remains a mystery, contrasting them with the far lower amounts established by the Independent Commission of Experts from the bank’s records: French client deposits of 119 million francs in 1926, 106 million in 1935 and 117 million in 1944.³ Guex, for his part, notes that the frequently cited figure of one billion French francs, some 200 million Swiss francs, was probably too low by at least half. Whatever the exact amount, the affair exposed to public view what everyone in the trade knew: that a significant part of the deposits in Swiss banks belonged to foreigners who wished to hide them from their own tax authorities.

The French reaction was severe. The assets of Swiss banks in France were frozen, including some 80 million French francs belonging to the Basler Handelsbank, and managers of the bank were held in custody for about two months. The French government asked for judicial assistance, for access to the banks’ books and for information on account holders. The Swiss authorities rejected the request for judicial cooperation categorically and argued that granting access would damage the substantial business that Swiss banks derived from foreign deposits. The Swiss business press spoke of a campaign against Swiss finance as a whole, while the Neue Zürcher Zeitung described the French measures as a veritable hate campaign.⁴ For the Swiss government, the lesson of the affair was that foreign states were prepared to pursue their taxpayers’ money into Swiss banks, by legal means where possible and by other means where necessary.

Vogler warns against overestimating the direct legislative effect of the affair. In his reading the deeper crisis of the Basler Handelsbank stemmed from its German credits, whereas the reputational damage in France, though real, was only one factor among several.⁵ Hug, by contrast, counts the Paris scandal as the first of five causes that produced the criminal sanction of 1934. The others were the increasing readiness of German and French tax and currency authorities to pursue capital flight on Swiss territory, the instability of the banking system with its sudden withdrawals, the introduction of strict disclosure requirements in the tax and currency laws of neighbouring states such as France, Germany, Austria and Czechoslovakia, and domestic precedents in parliament and the courts that created pressure for a statutory rule.⁶ The two historians differ in emphasis. They agree on the essential point that the motives were fiscal, monetary and commercial.

The birth of the legend

For three decades after 1934 nobody claimed that Article 47 had been enacted to protect the victims of Nazi persecution. The story appeared, according to Hug, in November 1966, in an unsigned article in the bulletin of the Schweizerische Kreditanstalt that he attributes to the bank’s economist Hans J. Mast. The article asserted that it had been precisely the intensive espionage for Jewish money that induced Switzerland in 1934 to tighten the banking secrecy previously based on customary law. An unsigned article of April 1967 went further and attributed the creation of numbered accounts to the same motive, without any documentary basis.⁷ Vogler, himself a former bank historian, also names a publication of the Kreditanstalt of 1966 as an early carrier of the story.⁸

Hug places the invention in its context. The early 1960s had seen the Eichmann trial and a new public awareness of the Holocaust, and banking secrecy was coming under growing international criticism. A narrative that linked Article 47 to the protection of the persecuted gave the banks a moral argument of great persuasive force. The legend was soon embroidered. Hug discusses the claim, repeated in popular books, that a Gestapo agent named Georg Thomae had been sent to Switzerland in January 1934 to track down Jewish assets. His verdict is unambiguous: the claim is simply invented and false, no archival evidence supports it, since the draft banking law with its secrecy clause preceded the alleged activities by more than a year.⁹

The story travelled across the political spectrum. Hug records that in a parliamentary debate of 1970 the Social Democrat Jean Ziegler, later one of the most vocal critics of the Swiss banks, himself stated that banking secrecy had been instituted to protect German citizens of the Jewish faith against Hitler’s persecution. According to Hug, the Federal Council’s dispatch on the revision of the Banking Act in 1970 also referred for the first time to totalitarian regimes pursuing the deposits of persecuted persons.¹⁰ By the 1980s the legend had reached the international press. Vogler cites an article in the Hamburg weekly Die Zeit of 1984 that explained the introduction of banking secrecy by humane compassion and called Article 47, wrongly, the famous article that introduced anonymous numbered accounts.¹¹ Guex found the same narrative in a statement of the banker Philippe de Weck in 1992 and in The Economist in February 1996.¹²

What the archives show

The documented history contradicts the legend on every point that can be tested. Guex formulates the result in two propositions. Banking secrecy existed before 1934 as a matter of tradition and civil law, which the legislation of that year merely reinforced. And in the state of research there is no evidence that the Swiss authorities adopted the measure for humanitarian reasons.¹³ The chronology alone is decisive. The bankers’ demands for criminal protection date from 1931 and January 1932, before Hitler came to power. The first draft with a secrecy article dates from February 1933, a few weeks after 30 January. The Paris affair that crystallised the threat was a French tax matter.

Hug adds a piece of evidence that turns the legend on its head. On 9 January 1934, three weeks before it published its dispatch on the banking law, the Federal Council signed an additional protocol to the double taxation agreement with Germany. Germany had made the protocol conditional on Switzerland’s acceptance of a far-reaching application of the German rules on capital and tax flight, including the Reich flight tax that fell with particular harshness on emigrants and refugees. The Federal Council accepted, although the discriminatory effect of the German rules was known.¹⁴ A government that had wished to protect German Jews against their persecutors would hardly have made such a concession at the very moment it was drafting Article 47.

The Independent Commission of Experts Switzerland – Second World War, chaired by Jean-François Bergier, focused on the war years, but its research on the banks confirms the picture. Its volume on the relations of the big banks with Germany records that Swiss bankers in some cases helped Jews to transfer their assets to Switzerland, but also documents antisemitism among bank leaders and the invocation of neutrality and banking secrecy as the central arguments with which the banks resisted Allied demands during and after the war.¹⁵ Banking secrecy thus served, in the decisive years, as a defence against the claims of the Allies and later against those of the heirs of victims, whose dormant accounts are the subject of chapter F.VI. The irony that a rule later presented as a shield for the persecuted was used to frustrate their heirs has not been lost on historians.

Why, then, did the legend prove so durable? Vogler offers an answer that combines two elements. After 1945 the bankers used the story as a marketing instrument, which a generation of bankers who had not witnessed the debates of 1934 but had lived through the war found it plausible. He adds a broader methodological point: the attractiveness of the Swiss financial centre is usually reduced, monocausally, to banking secrecy, whereas political stability, a strong currency, a reliable banking system and free convertibility mattered at least as much.¹⁶ Guex draws a harder conclusion. For him the maintenance and reinforcement of banking secrecy was, throughout the twentieth century, a major objective of the Swiss authorities that exerted a substantial influence on domestic and foreign policy and on the country’s relations with other states.¹⁷ Both readings can be reconciled. Secrecy was never the only reason why capital came to Zurich, but it was the one that the Swiss state defended most consistently.

Notes

1. Guex, “Origins of the Swiss Banking Secrecy Law” (2000), p. 248 (list of “over a thousand names”) and the surrounding account of the affair. ↩
2. Peter Hug, “Steuerflucht und die Legende vom antinazistischen Ursprung des Bankgeheimnisses”, in Jakob Tanner and Sigrid Weigel (eds.), Gedächtnis, Geld und Gesetz (Zurich: vdf), manuscript version published by the Social Democratic Party of Switzerland, https://www.sp-ps.ch/wp-content/uploads/2022/06/bankgeheimnis.pdf, p. 17. ↩
3. Vogler, Das Schweizer Bankgeheimnis (2005), on the Paris affair, Albertin’s figures and the figures of the Independent Commission of Experts (“Woher die Grundlagen für seine Ausführungen stammen, bleibt ein Geheimnis”). ↩
4. Guex, “Origins of the Swiss Banking Secrecy Law” (2000), on the French measures, the Swiss refusal of judicial assistance and the reactions of the Swiss press. ↩
5. Vogler, Das Schweizer Bankgeheimnis (2005), p. 22, on the German credits (“Deutschlandkredite”) as the main source of the Basler Handelsbank’s difficulties. ↩
6. Hug, “Steuerflucht und die Legende” (2002), p. 17, listing the five motives for the criminal sanction of 1934. ↩
7. Hug, “Steuerflucht und die Legende” (2002), pp. 1–2, quoting the Kreditanstalt bulletin of November 1966: “Bemerkenswerterweise war es … die intensiv betriebene Spionage nach jüdischem Geld, welche die Schweiz 1934 veranlasste …”. ↩
8. Vogler, Das Schweizer Bankgeheimnis (2005), p. 7. ↩
9. Hug, “Steuerflucht und die Legende” (2002), p. 11 (“Diese Behauptung ist freilich schlicht erfunden und falsch”). ↩
10. Hug, “Steuerflucht und die Legende” (2002), pp. 12–16, on Ziegler’s statement of 1970 and on the dispatch of 1970. ↩
11. Vogler, Das Schweizer Bankgeheimnis (2005), p. 6, quoting Die Zeit (1984): “Kernstück ist der berühmte Artikel 47 über die Einführung anonymer Chiffrekonten”. ↩
12. Guex, “Origins of the Swiss Banking Secrecy Law” (2000), p. 239 (“Since the late 1960s, the most widely disseminated story asserts that the Swiss Banking Secrecy Law was introduced in 1934 … to protect the victims—mainly Jewish—of Nazi persecution”) and pp. 239–240 on de Weck and The Economist. ↩
13. Guex, “Origins of the Swiss Banking Secrecy Law” (2000), p. 239 (“the Swiss Banking Secrecy Law was not introduced in 1934 but was merely reinforced at that time”) and p. 240 (“banking secrecy was a matter of civil, not criminal, law”). ↩
14. Hug, “Steuerflucht und die Legende” (2002), p. 16, on the additional protocol of 9 January 1934 and the German condition (“weitgehende Anwendbarkeit der deutschen Vorschriften über die Kapital- und Steuerflucht”). ↩
15. ICE/UEK, summary of volume 13 (Perrenoud et al.), https://www.uek.ch/de/schlussbericht/Publikationen/Zusammenfassungenpdf/13d.pdf (“In einigen Fällen haben die Schweizer Bankiers Juden geholfen, ihr Vermögen in die Schweiz zu überführen”, and on neutrality and banking secrecy as arguments against Allied pressure). ↩
16. Vogler, Das Schweizer Bankgeheimnis (2005), pp. 6–7 (“nach 1945 von den Bankiers … als Marketinginstrument” and “die Attraktivität des Finanzplatzes Schweiz wird meist monokausal auf das Bankgeheimnis … reduziert”). ↩
17. Guex, “Origins of the Swiss Banking Secrecy Law” (2000), p. 237. ↩

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.