WHY TRADE THE SWISS FRANC?
With its long tradition of political and military neutrality, Switzerland holds a position of elevated respect in the arena of international banking and finance. Countries undergoing social and political uncertainty frequently convert liquid assets to the Swiss Franc in hopes of achieving a modicum of economic stability and security.
The International Standards Organization (ISO) symbol for the Swiss Franc is CHF
which is an abbreviation for Confoederatio Helvetica (Latin for the Helvetian Confederation). This nomenclature avoids giving preference to any of the four official languages of Switzerland: German, French, Italian, and Romansh.
HISTORICAL PERSPECTIVE
The roots of modern Swiss sovereignty began in the 13th century. In 1291, the cantons
of Uri, Schwyz, and Unterwalden conspired against the ruling Habsburgs. Their union is recorded in the Federal Charter, a document probably written after the fact. At the battles of Morgarten in 1315 and Sempach in 1386, the Swiss defeated the Habsburg armyand secured a de facto independence.
By 1353, the three original cantons, joined by the cantons of Glarus and Zug and the
city states of Lucerne, Zurich, and Berne, formed the “Old Federation” of eight states that persisted during much of the 15th century.
In 1518 Huldrych Zwingli was elected priest of the Great Minster church in
Zurich. Zwingli’s Reformation of 1523 was supported by the magistrate and popula-
tion of Zürich and led to significant changes in civil life and state matters. The
reformation spread from Zürich to five other cantons of Switzerland, while the re-
maining five sternly held onto the Roman Catholic faith, leading to intercantonal
wars in 1529 and 1531.
The Thirty Years War (1618–1648), a religious conflict between Protestants and
Catholics, was fought principally on the territory of current day Germany, but in-
volved most of the major continental powers. During this period, Switzerland re-
mained a relative oasis of peace and prosperity in war-torn Europe, mostly because
all the major powers in Europe were depending on Swiss mercenaries, and they
would not let Switzerland fall into the hands of one of their rivals. This is probably the first example of Swiss neutrality being enforced by outsiders. At the Treaty of Westphalia in 1648, Switzerland attained legal independence from the Holy Roman Empire.
During the French Revolutionary Wars, Napoleon’s armies moved eastward through
Switzerland in their battles against Austria. In 1798 Switzerland was completely overrun by the French and became the Helvetic Republic. The Congress of Vienna of 1815 fully reestablished Swiss independence, and the European powers agreed to permanently recognize Swiss neutrality.
During both World War I and World War II, Switzerland managed to maintain a po-
sition of armed neutrality and was not involved militarily. Switzerland reacted to Nazi Germany’s invasion of Poland by a mobilization of some 430,000 troops. On May 11, 1940, the day following Hitler’s attack on Belgium, general mobilization of the full army was ordered, which for the first time included some 15,000 women. Switzerland observed a restrictive immigration policy during the war, but nevertheless some 26,000 Jews and other refugees were granted asylum. Nazi Germany drew up plans to invade Switzerland, most notably “Operation Tannenbaum,” but the invasion was never carried out.
In 1963, Switzerland joined the Council of Europe. Women were granted the right to
vote only in 1971, and an equal rights amendment was ratified in 1981. In 1979, parts of the canton of Berne attained independence, forming the new canton of Jura.
Switzerland’s role in many United Nations and international organizations helped to
mitigate the country’s concern for neutrality. In 2002, Switzerland was officially ratified as a member of the United Nations—the only country joining after agreement by a popular vote.
Switzerland is not a member state of the EU, but has been (together with Liechten-
stein) surrounded by EU territory since Austria joined the EU in 1995.
In 2005, Switzerland agreed by popular vote to join the Schengen Treaty (an
agreement among European states that allows for common immigration policies
and a border system) and the Dublin Convention (a European Union law to stream-
line the application process for refugees seeking political asylum under the Geneva
Convention).
The Swiss Franc has historically been considered a safe haven currency with virtu-
ally zero inflation and a legal requirement that a minimum 40 percent is backed by gold reserves. However, this link to gold, which dates from the 1920s, was terminated on May 1, 2000, following an amendment to the Swiss Constitution. The Swiss Franc has suffered devaluation only once, on September 27, 1936, during the Great Depression, when the currency was devalued by 30 percent following the devaluations of the British Pound, U.S. Dollar and French Franc.
BANKNOTES AND COINS
Since 1907, when the first series of Swiss banknotes was printed, eight series have been printed, six of which have been released for use by the general public. The current (8th) series of banknotes was designed by Jörg Zintzmeyer around the theme of the arts and was released starting in 1995.
The first Swiss coins were released in 1850. Before this date, the different Swiss
cantons had their own money, with different names and values. (See Table 11.1.)
In addition to these general circulation coins, numerous series of commemora-
tive coins have been issued, as well as gold coins including the well-known Vreneli.
These coins generally remain legal tender, but are not used as such because their
material or collector’s value usually exceeds their face value. (See Figures 11.3
through 11.5.)
For additional details, visit http://en.wikipedia.org.
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