of the Federal Constitution
A few months ago we celebrated 175 years of the Federal Constitution and took the opportunity to look back on the eventful history of Swiss coins. Read the next instalment here.
Disbandment of the Latin Monetary Union (LMU)
The Latin Monetary Union was founded in 1865 and remained formally in force until 1926. The gold and silver coins minted according to the specifications of the LMU were accepted at face value throughout the entire territory of the monetary union and, according to the national government, represented a first step towards realising the idea of a universal coinage system. However, the great expectations of the monetary union were not fulfilled and the treaty was disbanded in 1926. Since then, only Swiss coins have been legal tender in Switzerland.
A coin minted to its full value, where the metal value corresponds to the face value of the coin according to the applicable standard of coinage.
The end of gold coins
As a result of the world economic crisis, most countries devalued their currencies or introduced capital controls from 1931 onwards. Switzerland and the other countries of the so-called gold bloc held on to the old parities the longest and tried to restore the competitiveness of their economies by lowering domestic costs and prices. However, this deflationary policy largely failed, so that the economic recovery in these countries began later than in those where the currencies had already been devalued between 1931 and 1935. When France, one of the last major trading powers, also devalued its currency on 25 September 1936, the economic situation for Switzerland became precarious. Just two days later, the Federal Council decided to adjust the Swiss currency to the changed international conditions and devalued the franc by around 30 %. As a result, the value of the gold full-bodied coins exceeded their face value, whereupon these coins disappeared from circulation. In the 1950s, gold coins were once again minted for circulation. For reasons of monetary policy and as a result of a rise in the price of gold, they have never been issued into circulation and form part of the National Bank’s gold reserves
You will find the first part of the eventful Swiss coin history in the last issue of the magazine: from coin chaos to coin reform and the Latin Monetary Union, to the old and new Federal Mint in Bern.
You missed the last issue? Then order your copy here:
«Die Eidgenössische Münzstätte in Bern» – Gesellschaft für Schweizerische Kunstgeschichte,
Bern 2006 – ISBN 3-85782-799-8 / ISBN 978-3-85782-799-0