The League of Nations: what are the economic benefits for Switzerland and Geneva?

 

July 2012

The archives of the League of Nations are now housed in the Library of the United Nations Office at Geneva (UNOG). They are an exceptionally rich source of information, not only on the League itself (1919-1946), but also on the interwar period and international relations during that time. These archives include original documents of the League of Nations Secretariat: the private papers of certain high-ranking officials, as well as documents on the funding of external bodies, including those concerning the Financial Reconstruction of Austria and Hungary, the Saar Governing Commission and the Mixed Commission for the Exchange of Greek and Turkish Populations.

When searching in these archives, one can find two thick dossiers containing documents dating from 1933 to 1940, which deal with the benefits of establishing the League of Nations in Geneva for the canton, and Switzerland. It contains a particularly interesting document entitled: "The League of Nations and Geneva - economic and fiscal considerations". There are several versions, at various stages of completion, of which the most recent is dated November 22, 1938.

A tarnished image

In the 30s, and after being in existence for a little over ten years, the League was entering a phase of decline. The various setbacks it had met with had not inspired much confidence. The Swiss public were becoming more and more doubtful of its effectiveness but, above all, that money spent by the Swiss Confederation and the Geneva canton to keep it running smoothly could not be fully justified.

A letter dated February 11th, 1937 sent by Adrian Pelt, the League's Director of Information and addressed to the Secretary General at the time, the Frenchman Joseph Avenol, bears witness to this sentiment. It states that for some time now, indeed for many years, the Swiss public had been: "[...] influenced by particularly pernicious press campaigns trying to convince them that the League is costing Switzerland a considerable amount of money." Well aware of this sentiment, Joseph Avenol then requested a study to be carried out to show, using facts and figures, that the League was a definite economic advantage for Geneva and Switzerland.

To this end, a 25-page document, "The League of Nations and Geneva - economic and fiscal considerations", was produced jointly by the Information and Financial Administration sections of the League. Initially written as a financial report, it had to be rewritten in a more journalistic style. This was to emphasize its non-official nature and made it accessible to many more people. But its completion was delayed because the various figures required were difficult to obtain and it had to be revised over the period of a year or more. In November 1938 the Federal Department of Finance in Berne and the Cantonal Finance Department in Geneva, which had provided unofficial figures, gave their consent to the publication of the document.

As was indicated in a letter from Mr. Pelt dated November 25th 1938, addressed to the Secretary General Joseph Avenol, it was anticipated that this study would be published by l'Association des Intérêts de Genève, (known today as "Genève Tourisme"), as a brochure with a print run of a few hundred copies. The association's director, Paul Trachsel, showed such enthusiasm for this project that it seemed likely that they would bear the cost of publication. Moreover, as mentioned in a draft preface, it was envisaged that the document would be presented as a study by l'Association des Intérêts de Genève, with the support of the League and the cantonal and federal authorities, and not as an official League of Nations publication. The November 1938 version is the most recent available to us but it would seem that this document was never actually published.

The League of Nations in figures

Most of the study focuses on the spending by various employees of the League and the International Labour Office. It also includes the income generated by the presence of the League itself. Included are: international civil servants, session delegates, members of permanent missions and journalists. It also covers the expenditure of various international organizations which would established themselves in Geneva, attracted by the presence of the League, such as the International Peace Bureau and the International Bureau of Education. To these are added the researchers who would come from all parts of the world to consult the resources available in the League's library as well as the so-called 'common' tourists.

The study tells us that there were 125,000 visitors to the League in 1937, including 25,000 foreigners. After adding the various figures together a total of CHF 29 million is given as the amount spent, on average, every year in Geneva by the League and by individuals and institutions that it attracted. This amount includes payments for services rendered or goods purchased by the different parties mentioned above. It should be noted that the League itself spent CHF 16.5 million. The most substantial part of the study concludes with the significant amounts spent on infrastructure by the League from its foundation in 1938; a total of CHF 49 million. This amount includes the purchase of land, various buildings, architectural fees and a loss of CHF 1.9 million incurred from the sale of the Palais Wilson to the Swiss Confederation in 1936 for CHF 4 million. The expenditure of the ILO, included in this total, amounts to CHF 9.6 million.

The document also describes the joint expenditure of the Geneva canton and the Confederation for the League. It starts by giving the one-time expenditures related to infrastructure and the development of access roads, which amounted to just over CHF 13 million between 1921 and 1938. The structures in question are: The Armleder building (CHF 0.6 million), the Palais Wilson (50% paid by the federal government and 50% by the canton) and the building which would house the Conference on Disarmament (CHF 1.5 million). It is stated that the actual total amount comes to CHF 12.8 million after the deduction of the profit made on the sale of property to the League by the Geneva Canton in June 1938.

Too many grey areas

The annual contribution made by Switzerland including, among other items, the daily allowances paid to Swiss Assembly and conference delegates, is not included in the study as they were not considered part of League's operations. Unfortunately, there is also not much further detail of local and federal authority expenditures, except that these were essentially irregular and usually took the form of property investments. The conclusion of the study is that, taking into account the final balance, having the League based in the country was beneficial for both the Geneva Canton and for the Swiss Confederation.

This document contains a large number of approximations: the figures are presented mostly as estimates and they have sometimes been corrected by hand at a later date. Moreover, the sources are never given and it is often stated that it is impossible to verify certain data, as they are based on estimates. This study remains, nevertheless, very informative, especially in light of the correspondence between the Secretary General, Joseph Avenol, and Adrian Pelt, the League's Director of Information. Having coordinated the production of the document, the latter's comments tell us more about the League's situation than the document itself. As well as the content itself, its mere existence tells us so much and reveals the efforts, however clumsy they may have been, which were undertaken to restore the image of the League. 

 

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