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The Swiss insist that they are trying to cooperate with Washington as best they can. As one piece of evidence, they note that the Swiss Bankers Association recently advised all members to abide by U.S. stock margin requirements. When it comes to tax dodging, however, the Swiss show a remarkable tolerance. Their own law forbids local tax authorities to obtain information from a taxpayer's bank, and the Swiss are understandably reluctant to supply information to foreign tax officials that they do not provide to their own. Felix Schulthess, chairman of the Swiss Credit Bank, argues that "it cannot be our responsibility to play district attorney for foreign countries."
Slap at Sovereignty. Still, Switzerland could easily take some helpful steps. One would be to tighten control over foreign-owned banks. A measure that would do just that is currently before the Swiss parliament, but few additional reforms seem likely soon.
Though U.S. officials have reason for concern, Wright Patman's proposed curb on financial dealings with secretive foreign banks is characteristically excessive. As TIME European Economic Correspondent Robert Ball notes, Patman's proposal bears some chilling similarities to Hitler's actions in prohibiting Germans from maintaining bank accounts abroad. "If it were ever enacted," says Ball, "little damage would be done to Swiss banks, whose American clients account for only a small share of their business. The Swiss would undoubtedly interpret such an action as a slap at their sovereignty, and the banks would surely batten down the hatches of bank secrecy even more tightly." Thus, before it takes drastic unilateral action, Washington is more likely to exhaust other efforts to win Switzerland's informal—and voluntary-help in dealing with the problems that its banking system now raises for U.S. law enforcement
* By coincidence, the hearing's two chief witnesses were sons of former U.S. Secretaries of the U.S. Treasury. Henry Morgenthau Jr., Robert's father, occupied that position longer than anybody else (1934-45), and was succeeded by Fred M. Vinson Sr. (1945-46).