175^th anniversary
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.

1926

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.

The 5-franc piece lost its function as a full-bodied coin in 1931.

1931

Revision of the oinage Act

The franc was newly defined in gold and the 5-franc piece lost its function as a full-bodied coin. Consequently, a new 5-franc coin was issued from 1931 onwards. Its diameter was reduced from 37 mm to 31 mm, its weight from 25 g to 15 g and its silver content from 0.900 to 0.835. The artist Paul Burkhard was commissioned to produce the new dies.

Full-bodied coins
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.

Paul Burkhard engraved his coin design proposals recessed and laterally reversed in slates. He made plaster casts of these, which he then submitted for the jury’s consideration.

1936

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

1969 mintings

1968

The end of silver coins

In the mid-sixties there was a huge boom in silver. This led to the material value of the ½-, 1- and 2-franc pieces exceeding their face value. Many coins were therefore moved abroad and melted down there. The number of coins in circulation was further reduced as the Swiss population hoarded silver coins. In 1967, the minting of most silver coins was abandoned. In 1969, the last 5-franc pieces were produced in silver and production was subsequently switched to copper-nickel. The demand for coins exceeded Switzerland’s minting capacity. To meet the large demand for coins, some of the coins were therefore minted at the Royal Mint in London.

1970: Revision of the Coinage Act and the end of full-bodied coins
The revision of the Coinage Act in 1970 marked the definitive end of full-bodied coins. In order to be able to react better to economic fluctuations, the Federal Council was given the power to determine the gold parity of the franc itself in consultation with the Swiss National Bank. It made use of this power only six weeks after the new law came into force and revalued the franc upwards by 7 %.

In 1969, the last 5-franc pieces were produced in silver and production was subsequently switched to copper-nickel.

In 1998, Swissmint acquired a new status

1998

New status for Swissmint

The Federal Mint acquired a new status on 1 January 1998. The division of the Federal Finance Administration which was responsible for the administrative aspects of the minting business and the production operations of the Federal Mint were united under the name Swissmint and given a performance mandate and a service budget. In October 1999, Swissmint took over the distribution of collector coins from the Swiss National Bank.

Federal Act of 22 December 1999 on Currency and Payment Instruments
The Federal Act on Currency and Payment Instruments, which came into force on 1 May 2000, defines the currency unit and regulates all the characteristics of currency and government-issued money. In addition to coins and banknotes, sight deposits with the Swiss National Bank denominated in Swiss francs are also considered legal tender. Payment institutions (commercial banks and some of their joint ventures, Swiss Post and larger cash transport companies) are entitled to open a sight deposit account with the National Bank.

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:

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Quelle
«Die Eidgenössische Münzstätte in Bern» – Gesellschaft für Schweizerische Kunstgeschichte,
Bern 2006 – ISBN 3-85782-799-8 / ISBN 978-3-85782-799-0