MONTHLY REPORT ON GENERAL CONDITIONS IN SWITZERLAND AND AUSTRIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83-00423R001200960004-9
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 4
• Document Creation Date: November 9, 2016
• Document Release Date: February 19, 1999
• Sequence Number: 4
• Publication Date: October 1, 1953
• Content Type: REPORT

Representative Office fi
Bank a Ametica NT. & SA. 298410
Pelikanstras+ roved For Release 1999/09/10 :CIA-RDP83-004j~ 001200
AWWE
Zurich 1. Switz r`
Y =PORT 014 GENERAL COW)ITT_O% IN S? TZF 1ANND AND AUSTRIA
O c t o b e r 1953
RA `+: .ACT'IVT T'",5,x:
ink acceptances, finance company bills ssoldc
Swiss National Bank, Zurich
Union Bank of Switzerland, Zurich
Leu Co.'s Bank, Ltd., Zurich
Industrial Commercial Bank Zurich Ltd., Zurich
Neue ?"uyerzealler Bank, Zurich
Wank Landau & ic'imche A.0., Zurich
Banco di Rena per la Svizzera., Lugano
n Langenthal, Langenthal
Hientsch & Co., Geneva,
Austrian National Bank, Vienna
New accounts opened:
Darter & Co., Geneva
Landau & Kimehe A.0., Zurich
Time deposits renewed:
Swiss Bank Corporation, Zurich, 90 days at 1-3/4%
Union ?Rank of Switzerland, Zurich, do
New time deposits:
Austrian National Bank,, Vienna, do
559,435.- N.Y.
2,251,783.- S.F.
15t?,0.- N.Y.
500,636.- N, Y.
360,0G.- N.Y.
200,000.- tri.Y.
1$50000m, . _ N.Y.
ioo,C .- "4
56.- N.,
4,079,136.- N.Y.
100,000.- N.Y.
220,,1.- N.Y.
250,C0rt0.- S.F.
500,000.- 5-F-
Some Swiss banks are now reducing purchases of dollar bank acceptances and
finance paper, in order to show larger cash reserves at the year-end (window
dressing). The money market continues very liquid. Many investors have reduced
their holdings of U.S. and Canadian shares and are watching political and
economic developments, particularly in regard to overproduction of farm products.
The change back to inflationary rates, forced on the Republican party, is
:tad here by the sound money advocates. Most central banks in
Europe, however, have reduced their abnormal discount rates this year and busi-
ness prospects are good. The Swiss textile trade, particularly in highgrade
fabrics, has booked orders for nine monthe'ahead. Importers of metals are still
holding back, but cotton imports have been resumed. More cotton than formerly
is now being purchased from Mexico, Syria and Egyypto
ring-terra loans to foreign borrowers are under preparation,
the Belgian Congo, Australia and the World Bank, Washington. Anticipating
amounts needed for transfer, the exchange rate of the U.S..Dollar has lately
risen from Fr.4.28Y2 to 4.29'2. A further loan to South Africa has also been
mentioned.
The Belgian Congo loan at 4%, guaranteed by Belgium, will be offered for
public subscription from November 3-9, namely Fr.60,0 00,00x..- at par, repayable
after 1967, at the rate of Fr.5,0 0,0000.- p.a. The last instalment will be due
in 1979 ? The underwriters Syndicate is headed by Credit Suisse and Swiss Bank
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Corporation. Interest and principal can also be received in Congolese francs.,
but must be paid outside the :.P.11. As the Previous Beltran Congo loan has la-
tely been selling at 103%, the r yr loan may sell quickly.
'+0ffshorefl purchase orders placed by the three branches of u`.S. Defense
are now reported with a total of 2-1/2 billions, principally for the re-
armament of our European friends. This may include airports and pipelines in
France, etc. In the fiscal year 1951/52 the total was $629 mill. and 1952/53
1, 59B mill. of orders were given to 15 European countries, including now also
'ortuga1, Spain, Turkey and Yugoslavia. The lion's share went to ,France, namely
3332,4 mill. the first year and #693,4 mill. for the year ending June 30/53?
Switzcrla.rsd so far. received orders for 50,2 mill., including some which France
could not handle.
The eighth meeting of GATT (General. Agreement on Tariffs.& Trade) was
held in Geneva from September 17, through October. It was under two big
shadows. One was Britain's attempt to increase the margins in her tariff rates
on farm products in favor of Commonwealth partners. The Europeans stopped this
so that British duties on non-Commonwealth products cannot be raised without
putting the same duties on imports from Commonwealth sources. The other was
the U.S. proposal to increase restrictions on imports of farm products, which
strenously criticized by the Danes, Dutch and others.
The E . S. Delegate Brown declared that hereafter all ,!J.5. negotiations con-
cerning tariff matters will be conducted within GATT r+a.les.Japan was admitted
as a member, despite strung ,opposition by Britain, Australia and New Zealand.
It is hoped that Japan, as a member, may be more easily prevented from re-
sumirag the unfair trading methods, dumping, copying, used freely before the war.
Switzerland is not a member because the organizers at Havana in 1948 were
unwilling to grant certain precautionary measures for the protection of her
sound balance of payments. The T elgians, however, have nowproposed certain
amendments, which the Swiss had already advocated in. 1948 and the possibility of
and joining GATT is drawing nearer.
International gold markets, depressed for some time, were recently disturbed
by new developments. ?rom"P~s the record low of Fr.454.- per gr., equal to
36 518 per ounce has been reported. Contributing to this were sales by French
hoarders and greater than usual 11 "e-from Russia as well as the decision of
South Africa to sell hereafter coinage go , Sine, to save the reconversion
cost due on industrial gold, of about 367? per ounce. Australia, Fhodesia and
other smaller producers stopped the sale of industrial gold last year. South
African sales in the free market will continue at the rate of 40% of total out-
put. Hongkong now allows trading in transit gold to re-establish its position
against the growing competition of Bangkok and Macao (via Saigon).
French private holdings of gold are estimated to exceed now seven billion
dollars or roughly one third of our reserves at Fort Knox. Other large holdings
are being accumulated vie Beirut by the Arab countries, out of oil. royalties.
The old proposal to freely issue Swiss gold coin again, is now being revived.
The efforts of some Swiss banks to obtain permission to issue and openly sell
here gold deposit certificates,. as certain banks in Tangier do it, have failed
so faar. The National i ark objects, as it might undermine confidence in paper
Toney.
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Austria's gold and foreign exchange reserves increased four times durix g the
past. year, namely from Sch?1,363 to 5,761 millions and her note issue is now co-
vexed $o. This miracle, as one banker in Vienna called its can, hci*ever, easily
be explainer Tourists last winter and this steer brought record amounts of
foreign exchange and exports have also improved, 'twit the increase is partly due to
the adjustment from Sch.2i to the uniform rate of 26 per dollar of the gold and
foreign balances. it helped also to cover losses taken for some, tine by
26 Soho to the tourists and selling at 23 to importers in order to hold down in-
dustrial prodnetion costs*
uniform rate was adopted at a fortunate moment last April when r)rld
cot rnodity prices began to decline, so that living costs have hardily been affected-
The The Austrians are also happy over the news that the Russians have stopped selling:
Schiili.a s in Switzerland, were Austrian notes are now nearly at par. TUe Russians
are even buying Schtl.3inga now from the Austrian National lank to refinance the
USIA enterprises they took over in 1945, of which the oil wells t and ries at
Zietersdorf are the largest. PayinF no taxes and shipping nearly the entire output
to =,ussias they have draiwd these enterprises of an reserves, so that supplies
and wages must now be paid every month from their exports to the Soviet countries.
Publication of Austrian bank statetaents has been delayed by the problem of
German war bonds and Treasury notes, which should be adjusted against Cerman
n Austria. Central over the letter was given to the Austrian gnverment
and the eraans are vehemently requesting their release. The Austrians
have also large claims, particularly the Oez n war 1r:ans forced on them, now
devalued ten to one and held blocked in ;tst Perlin. Some of the (omen invest-
vents were directly acquired with Austrian capital, borrowed from Vienna insurance
mpanies and passed on to a company in Berlin. Control was thus obtained for irr
leading Austrian power enterprises under the name of Alpen Elektrowerke.
The Austrian commercial barks, thanks to better earnings, have written off most
of their losses on war bonds, whereas some saving a banks may need government help
if their German bonis cannot be adjusted more favorably.
riodics1 statements of the National Sank are available a attached are
comparative figures.
"Rrita :i n and France., following Russia's examples have agreed to assn the
occupation costs beginning next Jay tarry. The USA did it since 1949. hor?+ce a sub-
dal reduction in the a peciaa1 war tax is expected. This tax was 2O' on income
corporations, of which roughly 10,% was for rebuilding and repairs, of bombed
property, the bulk of which is eorap1@tod. occupation costs paid by Austria to the
of 1953 will total Sch.7,2O6 mill., a stupendous mtm for a small country.
An ncGuraging business revival is reported. It began last spring' helped by
easier loan policies as the re ,.haeetiorta of., bank rates now 4%. The rat on
savings deposits has been reduced to 3-1/2%. But co r erei,a1 loans still cost 8'-112%s
reduced from 9-1/2%. Businessman, however, a -plain that this is still too ht# rand
demand 6-1/2 and reduce public irnrestmnnts for economic reconstruction.
The 'British wool edit has been renewed a sixth time, this time for
is 500,t .- and INdso batiks have started: this year to give certain credit facilities
to Austrian tanks.
Imports to September 3 s this year, amounted to Sch.8, 835 mill* and exports
9,309 mill. a.rshai1 imports were reduced to 716 atoll. This year may show the
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export surplus, co pa d to chronic deficits 4160 Of the
re 'o , Austria 3s prospects have materially inproved
for i i& Vienna may again be a most active clear r. ; point,
can be expected.
10,53
on, a g Ater diversification and larger vo1un in foreign trade
l .F.4 oeati
Representative
AUSTRIAN NATI NAL IIANX
?eb.193B! 243
End. 19461 0, 1.
1950" f
f 1951( 51
ept.1952
End 1952 0
1953
March ? i(Y
May
Jura
July
Aug.
Sept.
govt .
31,03; 1 740, 14 200 1
5,747
5,879
5,795
5, 749
5, 631
5,9387
555
545
1,403
}
118
730
5 "
3
196
76
116 {
75
: t1oraa1 Bank of Octo':)er
in million of Schilling
56'5412. 9~ 4,
#,1 6349.1:4416 is
2a,030 6032;1, 12.13 1, 51
1,752 97161 693 1#984,
A.d ~ v+1 1 r+ti+... f ; wy ~ .-r f f
1,777 9147; 843 1,99+
1,777 = 9471 1,90401 2,0751
2$00A
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