From Trade Credit to Banking: the Merchant-Banking Houses — conclusion

Conclusion

In the eighteenth and early nineteenth centuries, the merchant houses of Basel became banks. As the municipal exchange declined, private houses took over its functions. Basel capital was invested abroad in the public debt of France, the Netherlands, England and Austria and in the shares of trading companies. It suffered heavy losses in the collapse of Law's System, the South Sea Bubble and the French state bankruptcy of 1797. The commission and forwarding business made Basel a hub of transit and gave rise to Danzas, one of the great forwarding companies of Europe.

The first private banks of Basel, among them the houses that formed the consortium of 1854, La Roche & Co and Dreyfus Söhne & Cie, were family partnerships whose partners were liable without limit. They discounted bills, accepted deposits, made loans, dealt in securities and managed the wealth of families, with a conservative culture of risk shaped by their unlimited liability and the memory of failures. The savings bank founded by the GGG in 1809 served the broader population. The consortium of 1854 for the financing of railways prepared the foundation of the Basler Bankverein in 1872, one of the roots of UBS. The next chapter turns to a darker side of Basel's commercial history: its involvement in the Atlantic economy and the slave trade.

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of August 2025.

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