Switzerland during the World Wars During both World War I and World War II , Switzerland managed to keep a stance of armed neutrality , and was not involved militarily . However , precisely because of its neutral status , Switzerland was of considerable interest to all parties involved , as the scene for diplomacy , espionage , commerce , and as a safe haven for refugees . World War I . Switzerland maintained a state of armed neutrality during the First World War . However with the Central Powers of Germany and Austria - Hungary and the Entente Powers of France and Italy all sharing borders and populations with Switzerland , this was not easy to accomplish . From December 1914 until the spring of 1918 Swiss troops were deployed in the Jura along the French border over concern that the trench war might spill into Switzerland . Of lesser concern was the Italian border , but troops were also stationed in the Unterengadin region of Graubünden . While the German speaking majority generally favoured the Central Powers , the French and , later , Italian speaking population sided with the Entente Powers which would cause conflict in 1918 , but keep the country out of the war . During the war Switzerland was blockaded by the Allies and therefore suffered some difficulties . However , because Switzerland was centrally located , neutral , and generally undamaged , the war allowed the growth of the Swiss banking industry . For the same reasons , Switzerland became a haven for refugees and revolutionaries . Following the organization of the army in 1907 and expansion in 1911 , the Swiss Army consisted of about 250 , 000 men with an additional 200 , 000 in supporting roles . The size of the Swiss military was considered by both sides in the pre - War years , especially in the Schlieffen Plan . Following the declarations of war in July 1914 , on August 1 , 1914 the Swiss Army was mobilized and by August 7 the newly appointed general Ulrich Wille had about 220 , 000 men under his command . By 11 August much of the army had been deployed along the Jura border with France , with smaller units deployed along the east and southern borders . This remained unchanged until May 1915 when Italy entered the war on the Entente side , at which point troops were deployed to the Unterengadin valley , Val Müstair and along the southern border . Once it became clear that the Allies and Central Powers would respect Swiss neutrality , the number of troops deployed began to drop . After September 1914 , some soldiers were released to return to their farms and vital industries . By November 1916 , the Swiss had only 38 , 000 men in the army . This number increased during the winter of 1916 – 17 to over 100 , 000 as a result of a proposed French attack that would cross Switzerland . When this attack failed to occur the army began to shrink again . Because of widespread workers ' strikes , by the end of the war the army had shrunk to only 12 , 500 men . During the war the Swiss border was crossed about 1 , 000 times by belligerents with some of these incidents occurring around the " Dreisprachen Piz " or Three Languages Peak ( near the Stelvio Pass ; languages being Italian , Romansh and German ) . Switzerland had an outpost and a hotel ( which was destroyed as it was used by the Austrians ) on the peak . During the war , fierce battles were fought in the ice and snow of the area , with gun fire even crossing into Swiss areas at times . The three nations made an agreement not to fire over Swiss territory which jutted out between Austria ( to the north ) and Italy ( to the south ) . Instead they could fire down the pass , as Swiss territory was around the peak . Following the outbreak of the war , neutral Switzerland became a haven for many politicians , artists , pacifists , and thinkers . Berne , Zürich and Geneva became centres of debate and discussion . In Zürich two very different anti - war groups would create a lasting change on the world , the Bolsheviks and the Dada ists . The Bolsheviks were a faction of socialists that centred around Lenin . Following the outbreak of the war , Lenin was stunned when the large Social Democratic parties of Europe ( at that time predominantly Marxist in orientation ) supported their various countries ’ war efforts . Lenin ( against the war in his belief that the peasants and workers were fighting the battle of the bourgeoisie for them ) adopted the stance that what he described as an “ imperialist war ” ought to be turned into a civil war between the classes . He left Austria for neutral Switzerland in 1914 following the outbreak of the war and was active in Switzerland until 1917 . Following the 1917 February Revolution in Russia and the abdication of Tsar Nicholas II he left Switzerland via the " Sealed Train " to Petrograd from where he would shortly lead the October Revolution in Russia . While the Dada art movement was also an anti - war organization , they used art to oppose all wars . The founders of the movement had left Germany and Romania to escape the destruction of the war . At the Cabaret Voltaire in Zürich they put on performances expressing their disgust with the war and the interests that inspired it . By some accounts Dada coalesced on October 6 , 1916 at the cabaret . The artists used abstraction to fight against the social , political , and cultural ideas of that time that they believed had caused the war . Abstraction was viewed as the result of a lack of planning and logical thought processes . When World War I ended in 1918 , most of the Zürich Dadaists returned to their home countries , and some began Dada activities in other cities . In 1917 Switzerland ' s neutrality was seriously questioned when the Grimm – Hoffmann Affair erupted . Robert Grimm , a socialist politician , travelled to Russia as an activist to negotiate a separate peace between Russia and Germany , in order to end the war on the Eastern Front in the interests of socialism and pacifism . Misrepresenting himself as a diplomat and an actual representative of the Swiss government , he made progress but was forced to admit fraud and return home when the Allies found out about the proposed peace deal . Neutrality was restored by the resignation of Arthur Hoffmann , the Swiss Federal Council lor who had supported Grimm but had not consulted his colleagues on the initiative . Interwar period . One potential result of World War I was an expansion of Switzerland itself during the Interwar Period . In a referendum held in the Austrian state of Vorarlberg on 11 May 1919 over 80 % of those voting supported a proposal that the state join the Swiss Confederation . However , this was prevented by the opposition of the Austrian Government , the Allies , Swiss liberals , the Swiss - Italians and the Swiss - French . However Liechtenstein managed to exclude itself from Austria in 1918 and signed a monetary and customs union with Switzerland that effectively guaranteed its independence . In 1920 , Switzerland joined the League of Nations . In 1934 the Swiss Banking Act was passed . This allowed for anonymous numbered bank account s , in part to allow Germans ( including Jews ) to hide or protect their assets from seizure by the newly established " Third Reich " . In 1936 Wilhelm Gustloff was assassinated at Davos ; he was the head of the Nazi Party ' s " Auslands - Organisation " in Switzerland . The Swiss government refused to extradite the alleged assassin David Frankfurter to Germany . Frankfurter was sentenced to 18 years in prison but was pardoned in 1946 . World War II . At the outbreak of World War II in 1939 , Switzerland immediately began to mobilize for a possible invasion . The entire country was fully mobilized in only three days . The Swiss government began to fortify positions throughout the country . In the course of the war , detailed invasion plans were drawn up by the German military command , such as Operation Tannenbaum , but Switzerland was never attacked . Switzerland was able to remain independent through a combination of military deterrence , economic concessions to Germany , and good fortune as larger events during the war delayed an invasion . Attempts by Switzerland ' s small Nazi party to effect an Anschluss with Germany failed miserably , largely as a result of Switzerland ' s multicultural heritage , strong sense of national identity , and long tradition of direct democracy and civil liberties . The Swiss press vigorously criticized the Third Reich , often infuriating its leadership . In turn , Berlin denounced Switzerland as a medieval rudiment and its people renegade Germans . Under General Henri Guisan , a massive mobilization of militia forces was ordered . The Swiss military strategy was changed from one of static defence at the borders , to a strategy of organized long - term attrition and withdrawal to strong , well - stockpiled positions high in the Alps known as the National Redoubt . This controversial strategy was essentially one of deterrence . The idea was to cause huge losses to German forces and render the cost of invading too high . During an invasion , the Swiss Army would cede control of the economic heartland and population centres , but retain control of crucial rail links and passes in the National Redoubt . Switzerland was an important base for espionage by both sides in the conflict and often mediated communications between the Axis and Allied powers by serving as a protecting power . Despite the prevailing public and political attitudes in Switzerland , some higher - ranking officers within the Swiss Army had pro - Nazi sympathies : notably Colonel Arthur Fonjallaz and Colonel Eugen Bircher , who led the Schweizerischer Vaterländischer Verband . In " Letters with Suzanne " ( French : " Lettres à Suzanne " , Lausanne , Switzerland , 1949 ) , the Swiss journalist Léon Savary retrospectively denounced in this sense " " the unconscious influence of hitlerism on Swiss people " " . Nazi Germany repeatedly violated Swiss airspace . During the Invasion of France , German aircraft violated Swiss airspace at least 197 times . In several air incidents , the Swiss ( ironically using 10 Bf - 109 D , 80 Bf - 109 E fighters bought from Germany prior to the war and some Morane - Saulnier M . S . 406 s built under license in Switzerland ) , shot down 11 Luftwaffe planes between 10 May 1940 and 17 June 1940 . Germany protested diplomatically on 5 June 1940 , and with a second note on 19 June 1940 which contained clear threats . Hitler was especially furious when he saw that " German " equipment was shooting down German pilots . He said they would respond " in another manner " . On 20 June 1940 , the Swiss air force was ordered to stop intercepting planes violating Swiss airspace . Swiss fighters began instead to force intruding aircraft to land at Swiss airfields . Anti - aircraft units still operated . Later , Hitler and Hermann Göring sent saboteurs to destroy Swiss airfields , but the sabotage team was captured by the Swiss army before it could cause any damage . Allied aircraft also intruded on Swiss airspace during the war , mostly Allied bombers returning from raids over Italy and Germany that had been damaged and whose crews preferred internment by the Swiss to becoming prisoners of war . Over a hundred Allied aircraft and their crews were interned . They were subsequently put up in various ski resorts that had been emptied from lack of tourists due to the war and held until it ended . At least 940 American airmen attempted to escape into France after the invasion of Normandy , but Swiss authorities intercepted 183 internees . Over 160 of these airmen were incarcerated in a prison camp called Wauwilermoos , which was located near Lucerne and commanded by a pro - Nazi Swiss officer . The American internees remained in Wauwilermoos until November 1944 , when the U . S . State Department lodged protests against the Swiss government and secured their release . Switzerland , surrounded by Axis - controlled territory , also suffered from Allied bombings during the war ; most notably from the accidental bombing of Schaffhausen by American planes on April 1 , 1944 . It was mistaken for Ludwigshafen am Rhein , a nearby German town , 40 people were killed and over 50 buildings destroyed , among them a group of small factories producing anti - aircraft shells , ball - bearings , and Bf - 109 parts for Germany . The bombing limited much of the leniency the Swiss had shown toward Allied airspace violations . Eventually , the problem became so bad that they declared a zero - tolerance policy for violation by either Axis or Allied aircraft and authorized attacks on American aircraft . Victims of these mistaken bombings were not limited to Swiss civilians , however , but included the often confused American aircrews , shot down by the Swiss fighters as well as several Swiss fighters shot down by American airmen . In February 1945 , 18 civilians were killed by Allied bombs dropped over Stein am Rhein , Vals , and Rafz . Arguably the most notorious incident came on March 4 , 1945 , when both Basel and Zurich were accidentally bombed by Allied aircraft . The attack on Basel ' s railway station led to the destruction of a passenger train , but no casualties were reported . However , a B - 24 Liberator dropped its bomb load over Zürich , destroying two buildings and killing five civilians . The aircraft ' s crew believed that they were attacking Freiburg in Germany . As John Helmreich points out , Sincock and Balides , in choosing a target of opportunity , " . . . missed the marshalling yard they were aiming for , missed the city they were aiming for , and even missed the country they were aiming for . " The Swiss , although somewhat skeptical , reacted by treating these violations of their neutrality as " accidents " . The United States was warned that single aircraft would be forced down , and their crews would still be allowed to seek refuge , while bomber formations in violation of airspace would be intercepted . While American politicians and diplomats tried to minimize the political damage caused by these incidents , others took a more hostile view . Some senior commanders argued that , as Switzerland was " full of German sympathizers " , it deserved to be bombed . General Henry H . Arnold , Commanding General of the U . S . Army Air Forces , even suggested that it was the Germans themselves who were flying captured Allied planes over Switzerland in an attempt to gain a propaganda victory . As a neutral state near Germany , Switzerland was easy to reach for refugees from the Nazis . However , Switzerland ' s refugee laws , especially with respect to Jews fleeing Germany , were strict and have caused controversy since the end of World War II . From 1933 until 1944 asylum for refugees could only be granted to those who were under personal threat owing to their political activities only ; it did not include those who were under threat due to race , religion or ethnicity . On the basis of this definition , Switzerland granted asylum to only 644 people between 1933 and 1945 ; of these , 252 cases were admitted during the war . All other refugees were admitted by the individual cantons and were granted different permits , including a " tolerance permit " that allowed them to live in the canton but not to work . Over the course of the war , Switzerland interned 300 , 000 refugees . Of these , 104 , 000 were foreign troops interned according to the Rights and Duties of Neutral Powers outlined in the Hague Conventions . The rest were foreign civilians and were either interned or granted tolerance or residence permits by the cantonal authorities . Refugees were not allowed to hold jobs . Of the refugees , 60 , 000 were civilians escaping persecution by the Nazis . Of these , 26 , 000 to 27 , 000 were Jews . Between 10 , 000 and 24 , 000 Jewish civilian refugees were refused entry . Although Switzerland harboured more Jewish refugees than any other country , these refugees were refused entry on the grounds of already dwindling supplies . Of those refused entry , a Swiss government representative said , " Our little lifeboat is full . " At the beginning of the war , Switzerland had a Jewish population of between 18 , 000 and 28 , 000 and a total population of about 4 million . By the end of the war , there were over 115 , 000 refuge - seeking people of all categories in Switzerland , representing the maximum number of refugees at any one time . Switzerland also acted as a refuge for Allied prisoners of war who escaped , including those from Oflag IV - C ( Colditz ) . Controversy over financial relationships with Nazi Germany . Switzerland ' s trade was blockaded by both the Allies and by the Axis . Each side openly exerted pressure on Switzerland not to trade with the other . Economic cooperation and extension of credit to the Third Reich varied according to the perceived likelihood of invasion , and the availability of other trading partners . Concessions reached their zenith after a crucial rail link through Vichy France was severed in 1942 , leaving Switzerland completely surrounded by the Axis . Switzerland relied on trade for half of its food and essentially all of its fuel , but controlled vital trans - alpine rail tunnels between Germany and Italy . Switzerland ' s most important exports during the war were precision machine tools , watches , jewel bearing s ( used in bombsights ) , electricity , and dairy products . Until 1936 , the Swiss franc was the only remaining major freely convertible currency in the world , and both the Allies and the Germans sold large amounts of gold to the Swiss National Bank . Between 1940 and 1945 , the German Reichsbank sold 1 . 3 billion francs worth of gold to Swiss Banks in exchange for Swiss francs and other foreign currency , which were used to buy strategically important raw materials like tungsten and oil from neutral countries . Hundreds of millions of francs worth of this gold was monetary gold plundered from the central banks of occupied countries . A total of 581 , 000 francs ' worth of " Melmer " gold taken from Holocaust victims in eastern Europe was sold to Swiss banks . In total , trade between Germany and Switzerland contributed about 0 . 5 % to the German war effort and did not significantly lengthen the war . In the 1990s , controversy over a class - action lawsuit brought in Brooklyn , New York , over Jewish assets in Holocaust - era bank accounts prompted the Swiss government to commission the most recent and authoritative study of Switzerland ' s interaction with the Nazi regime . The final report by this independent panel of international scholars , known as the Bergier Commission , was issued in 2002 .