The 160 Years of swiss franc

A brief historical discourse

The ubiquitous acceptance of legal tender in payment (banknotes and coins) has so long been a matter of course that it is difficult for us to imagine this once not being the case. And yet, prior to the Monetary Reform in 1850, utter currency chaos had been the order of the day for several centuries in Switzerland. During this time, numerous ruling bodies (e.g. cantons, municipalities, abbeys, etc.) simultaneously exercised their prerogative of minting huge quantities of coins in differing denominations, currencies and coinage systems. Moreover, a considerable influx of foreign coins originating from the wages of mercenaries as well as the first banknotes issued by private banks were also in circulation - a state of affairs which obviously rendered everyday monetary transactions exceedingly troublesome and complicated.
In order to put an end to this pandemonium, the Swiss Federal Constitution of 1848 stipulated the transfer of all minting rights to the Federal Government. As a logical extension, on 7th May 1850 the Federal Assembly passed the first Federal Coinage Act, which was closely modelled on the French standard. With this legislation, a uniform silver standard with the 'franc' as monetary unit was introduced in Switzerland. As Swiss minting facilities were inadequate at the time, the very first Federal coins were minted in Paris and Strasbourg. In the year 1853, the Federal Government took over the former mint of the Canton of Bern on a trial basis. The old Bernese mint was renamed the Federal Mint and, from 1890, became an official Federal institution.

 


In the run-up to the introduction of the new single currency, a heated debate broke out in 1849 on the coin unit to be selected. Whereas Zurich and eastern Switzerland campaigned for a coinage system based on the southern German florin, Basel and the French-speaking cantons campaigned for the French system. Surprisingly, Parliament finally clearly opted for the introduction of the French coin standard. Caption: Postheiri, no. 23, 1849

The former Federal Mint in Gerberngraben. In the background, the dome of the Parliament Building inaugurated in 1902. Photo: Zurich Central Library, graphics collection, postcard collection

The former Federal Mint in Gerberngraben. Photo: Burgerbibliothek Bern
Nevertheless, foreign coins continued to have a controlling influence on Swiss currency circulation. Although the Monetary Reform of 1850/52 was instrumental in replacing the multitude of old Swiss coinage, this did not primarily foresee nationalising the entire volume of money in circulation. At that time, some 80% of the money supply in Switzerland consisted of foreign currency. Of the high-quality silver coins in circulation, only a negligible percentage was of Swiss origin. The majority of this currency was French or Italian. Insofar as the silver coinage minted in France, Italy and Belgium conformed to the new Swiss standard, these were considered legal tender. At the same time, however, the newly issued Swiss coins were also circulated in these respective countries.
In the year 1865, ministers of France, Belgium, Italy and Switzerland signed a monetary treaty (the so-called Latin Monetary Union), which - apart from containing specific regulations pertaining to the weight, fineness, shape and exchange rate of gold and silver coins - also stipulated that the individual governments were only permitted to issue a fixed value of money per capita of population. It was agreed that these identically minted gold and silver coins would circulate freely within the territories of the union. In 1866, the Swiss Government declared that, 'The Federal Council regards the parity of the silver coinage originating from these four countries as a first step towards implementing the notion of a universal monetary system.' The Latin Monetary Union, of which Greece subsequently became another member, remained officially in force until 1926. From this year onwards, the legal tender of our country has been exclusively the Swiss franc. Today, the introduction of the Euro marks a renewed venture towards establishing a common European single-currency area - this time, however, without the participation of Switzerland.

 

Bild lateinische Münzunion
At the beginning of the 20th century, the premises and technical equipment of the old Mint were no longer adequate to either meet the escalating demand for circulation coins or to satisfy quality requirements that were becoming more exacting. The Swiss Federation, therefore, commissioned the building of today's Mint in Bern's Kirchenfeld district. This institution was inaugurated on 2nd July 1906. The yellow-brick and sandstone facade of this neo-renaissance edifice, which was designed by the Federal architect Theodor Gohl, features the Swiss national emblem under the canopied roof and two coin images carved in marble next to the entrance. The tall windows on the ground floor are protected by artistically crafted wrought-iron grilles. Constructional and technical improvements have repeatedly been made to the building during the course of the ensuing decades.

 

Bild Swissmint 1906 Bild Swissmint 1906
The Federal Mint opened in 1906 in Kirchenfeld, Bern, shortly after completion. Photo: Zurich Central Library, graphics collection, postcard collection

Coin production at the Federal Mint in 1918

The following photos come from the "Federal Mint" photo album of the Burgerbibliothek Bern and were taken in 1908 in the new Mint in Kirchenfeld. Note the transmission shaft on the hall ceiling through which the individual machines could be driven by means of belts.

Pressing on the big friction screw press.

Weighing of silver bars for melting.

A view of the smelter. In the foreground, the mobile battery with the moulds for the metal strips.

Casting the metal strips.

Rolling the metal strips.

Pickling the sheet metal strips in the boilery.

Punching the planchets.

Annealing the planchets in the annealing furnace.

Mintage. The blanks are filled by hand into the tubular filler pipes of the minting machine.

In the packing department, the coins counted by the two men on a counting board on the left are filled into the prefabricated paper rolls with a funnel by the women.

Between 1855 and 1930, the Federal Mint was also responsible for the production of postage stamps. From 1931, the Swiss Post produced stamps in its own right but remained on the premises of the Federal Mint (up to 1966). Photo: Museum for Communication, 1955.
Until 1936, gold coins were also circulated in Switzerland. Whereas initially these were exclusively coins from the member states of the Latin Monetary Union, in 1883, the first Swiss gold coins featuring the head of Libertas were put into circulation as well. This was a reaction to a rebuke from France, whereby Switzerland was justifiably accused of 'coinage parasitism'. As the gold rate was roughly equivalent to the face value of these coins, minting and issuing such coinage was unprofitable, and it was for this reason that Switzerland had refrained from producing its own gold coins for many years. The best-known Swiss gold coin is without doubt the 'Vreneli', which was issued for the first time in 1897. Beforehand, however, a perturbed magistrate insisted that a curling lock of hair on the young girl's brow (actually a portrayal of Helvetia) be removed, as this hairstyle was judged to give her an unseemly frivolous appearance..

 

Bild 20er Münzen

 

With the devaluation of the Swiss franc during the Great Depression in 1936, the metal value of gold coins - of which, at that point, only locally minted coinage was circulated in Switzerland - suddenly exceeded their face value, thereby causing this currency to lose its status as legal tender virtually overnight. In the 1950s, gold coins were once again minted for circulation. Owing to monetary policy and the mounting price of gold, however, these coins were never issued and are now part of the Swiss National Bank's gold reserves. In the last years the bigger part of these coins were melted down into ingots. Bild 50er Münzen

Counting of 25 francs gold coins with a counting machine and filling them into cups for bagging
The discontinuation of minting silver circulation coins in the year 1967 marked the end of a time-honoured tradition in Switzerland. As a result of sharply rising silver prices, the metal value of 2 ,1 and 1/2-franc coins exceeded their respective face value. These circumstances in turn led to large quantities of coins being transferred abroad for the unauthorised purpose of melting them down for silver bullion. In order to counteract this misuse of circulation coinage, the Federal Council prohibited the export of silver coins and furthermore decreed that as of 1968 all 5, 2, 1 and 1/2-franc coins would no longer be minted in silver, but in a copper-nickel alloy composition. With this ruling, all denominations of Swiss coinage were effectively disconnected from the prevailing metal values.

 

Bild vom Silber- zum Kupfernickel
1967: The end of silver stamping. From this time on, Helvetia and Alpine herdsman were minted in copper nickel, which also signified the end of planchet production for circulation coins. All planchets for circulation coins were thereafter supplied by the private sector (metal works, Dornach and Selve, Thun). The smelter, rolling department and stamping shop remained for the time being but were hardly used any more.

Coin verification on the conveyor belt.

A view into the Minting hall (up to 1970).

The rolling of half franc pieces in 1968.

Packing department: Rolling of circulation coins.
An appreciable decline in mintage, attributable to the advancing popularity of cashless transactions, plus the concomitant necessity of utilising state-of-the-art production facilities - notably in the areas of 'minting' and 'packing' - ultimately led to a downsizing of both workforce and premises in the year 1986. The staff was reduced from 30 to 17 persons, while the upper floor of the Mint was reallocated to satisfy other requirements of the Federal Administration. From 1990 to 1993, the Mint underwent extensive renovation and modernisation - an ongoing process to this day in that infrastructure and machinery alike are continually upgraded. In 1998, the Federal Mint was given a new organisational form and a new name: Swissmint. This traditional institution is now an independent unit within the Federal Finance Administration, a status which enhances Swissmint's ability to provide even more efficient and customer-oriented services. The twofold aim of the new organisation is the improved marketing of numismatic products (coin sets, commemorative coins, etc.) in conjunction with a more exact costing. The (telling) English name Swissmint has helped to establish this institution as a key player on the international numismatics market. Today Swissmint employs 22 people.

 

Bild Swissmint

 

Bild Swissmint heute

 

Apart from the ancient tradition of bartering with goods, coins have represented the most important medium of exchange for over 2,500 years. From the end of the 19th century, however, banknotes increasingly superseded coins as common currency. Nowadays, not only coins, but banknotes as well are in direct competition with cashless transactions. The latter encompass bank or postal account remittances and payment with so-called plastic money in the form of Postcards, ec-cards, and various credit or cash cards. As money, coins continue to lose significance and technology buffs have been predicting the imminent obsolescence of cash for years. Nevertheless, doing without hard cash would still be unthinkable. Comparatively high processing charges paired with oftentimes complicated handling make paying petty amounts by credit card or cash card uneconomical and time-consuming for both the consumer and the retail trade. Moreover, most consumers are very conservative in their paying habits. As a convenient, cheap and above all universally accepted means of payment, coins will continue to hold their ground also in future.

 

Bild Plastikgeld

 

Debit and credit cards

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Last update: 07.02.2017