ebruary 1939. Switzerland’s economy, and specifically its watch industry, was emerging from a decade of crisis, the likes of which had rarely been seen before. The 1929 Crash had left the sector on the brink of disaster and despite the creation in 1931 of ASUAG, a cartel formed to defend the interests of Swiss watch companies (not all of which were represented), there was still cause for concern.

Matters were further complicated by events in the USSR which, after the October Revolution of 1917, saw first Lenin then Stalin take power from 1922. A Marxist-type planned economy imposed a rate of growth that was framed by five-year plans, the first of which was introduced in 1928. Although the Soviet economy weathered the adverse effects of crisis surprisingly well – compared, for example, with the United States –, total exports of Swiss watches to the Soviet Union speak for themselves, falling from CHF 838,000 in 1929 to CHF 190,000 in 1938.

The crisis is part of the reason for this differential of 77% but not the only explanation. In these latter years of the 1930s, anticommunism was rife among a good part of the opinion in Switzerland, as well as among workers who watched what had been a promising market under the Tsars, particularly for brands such as Tissot, go up in smoke. For them, the Revolution spelled economic disaster. The political combats of left-wing republicans in Spain and advances in social welfare under the Front Populaire in France went some way towards redeeming socialism in Swiss eyes but despite this, its dogmatism never truly conquered opinion.

Communist propaganda poster, around 1920. The hand on the clock, representing communism, is about to cut off the head of the man who represents capitalism. The slogan reads “The Final Hour”.

Aurèle Jaccot, the “whistleblower”

They say the devil is in the details. Nowhere is this truer than in the letter, dated February 1 1939, which unemployed watchmaker Aurèle Jaccot addressed to the President of the Confederation, Philipp Etter (1891-1977). The neat, cursive handwriting points to a meticulous character but one whose anger is barely concealed. Why, Jaccot asks, is the Confederation refusing to export its watches to the USSR? “[We could] restore some well-being to the industry’s working masses and at the same time lighten the load for the State coffers(…),” he argues.

An eminently sensible remark that failed to resonate with the federal authorities, whose response came via the Chambre Suisse de l’Horlogerie in La Chaux-de-Fonds and the Secrétariat Fédéral de l’Economie in Berne. Industry archives record how employer circles railed that the working classes had once again shown themselves to be “entirely misled by the socialist press campaign and should imagine that selling watches in Russia [would suffice] (…)” to restore calm to the markets. Despite a tense economic situation, it appeared the watch sector was prisoner of an ideological combat.

Professor Marbach’s “white paper”

Still, there could be no denying the reality of the market and the Swiss watch industry would have to find solutions if it were to get out this rut. Which it did, by commissioning a report, through the Schweizerischer Metall- und Uhrenarbeiter Verband (the Swiss metalworkers’ and watchmakers’ union), from Professor Fritz Marbach (1892-1974). Published in May 1939, it gave a snapshot of trade relations between Switzerland and the USSR.

Marbach noted a conceptual similarity between reciprocity and bilateralism which governed trade between the two countries. Each quarter, Swiss and Soviet delegations met in Berne or in Belin, within the strict framework of bilateralism, to take stock. Marbach was opposed to diplomatic acknowledgement of the USSR and believed that any extension of trade relations must be on an experimental basis.

Switzerland was intransigent in its refusal to sell the USSR machinery for manufacturing watches or for chablonnage (assembling movements from exported Swiss-made components). The country was, understandably, intent on protecting its market and home-grown expertise. Little by little, however, under pressure from the Swiss political left in particular, the authorities came round to the idea of negotiating with the USSR. In early December 1940, following the signature of the stupefying Molotov-Ribbentrop Pact on 23 August 1939, an industrial delegation left Switzerland to negotiate trade deals with Moscow.

The Swiss delegation en route for Moscow. An agreement, reached after bitter negotiation, would not survive anti-communist sentiment in Switzerland.

Source: ETH Zeitgeschichte Zurich

February 24 1941, an agreement that is “dead on arrival”

From the outset, the atmosphere between Russians and Swiss was tense. Throughout negotiations, the Soviet delegation, led by Anastas Mikoyan, exerted enormous pressure on the Swiss to supply machinery for watch production and for chablonnage.

There was nothing innocent about this demand. The production of precision instruments was a focus of the third five-year plan ordered by Stalin and introduced in 1938, including and especially watches which the Soviets wanted to mass-produce, in particular for military issue. But the Swiss had other ideas and refused to give in to Soviet pressure.

Despite this, an agreement reached not without difficulty was signed on February 24 1941 but the Swiss delegation, led by Hans Ebrard, a diplomat seconded from the Département Fédéral de l’Economie, was barely off the plane from Moscow when already the prevailing anti-communist sentiment made itself felt. There would be no favourable outcome for the agreement while the launch of Operation Barbarossa resulted in the freezing of Soviet assets in Switzerland, effectively ending any form of economic collaboration between Switzerland and the USSR during the Second World War, including and especially for the watch industry.

Daniel Bujard is the author in 2023 of an academic dissertation at the University of Fribourg on relations between Switzerland and the USSR in 1941.