Credit before banks

Notaries, lenders and the land

Before 1858 the territory of Ticino had a dense web of credit but no bank. Loans were made between persons, recorded by notaries and secured on land, houses, livestock and future harvests. The notary was the central figure of this system. He drafted the contract, kept the original in his protocol, registered the security and often knew both parties well enough to bring them together. In the valleys of the Sopraceneri and in the villages around Lugano and Mendrisio, notaries were frequently also the local lenders or the agents of lenders. Many families of notaries became the political and financial notables of the nineteenth century.¹ Chapter A.IV describes the rural notarial credit of the transit economy and its instruments, and Chapter B.III the ecclesiastical economy of censi and livelli that financed parishes and peasants until the end of the Old Regime. After 1803 the new canton inherited both systems. The redemption of tithes and ground rents, which the liberal governments pursued after 1830, converted many old perpetual obligations into ordinary mortgage debts payable in money.²

The lenders were the families who had money to place: merchants of the market towns, owners of land and mills, returning emigrants, parish foundations and confraternities. Their loans were small, secured and long. Interest rates were fixed by contract and limited, at least in principle, by the cantonal rules against usury. After 1800 the old prohibitions of usury and the ceiling of five per cent, which had been introduced to protect debtors and applied above all to ground rents, generally remained in force in the cantons. Because a peasant who could not pay lost his land to the lender, the system concentrated property and gave the creditors social and political power.³ It also tied capital to the place where it was lent. A lender in Locarno could not easily lend in Lugano. A deposit made with a notary, for its part, was a private arrangement without any public guarantee. The nineteenth-century reformers, led by Stefano Franscini, regarded this fragmented and personal credit as one of the causes of the canton's poverty, since it kept interest high, savings idle and public investment dependent on the goodwill of a few families.⁴

Emigrant capital

The second source of capital was emigration. Chapter A.III describes the centuries-old migration of builders, stucco workers, chimney sweeps and artisans from the Ticinese valleys to Italy, Rome, Russia and the German lands, together with the remittances that paid for houses, churches and land at home. In the nineteenth century the destinations changed. After the crisis of the 1850s, when potato blight, cattle disease and the Austrian blockade of 1853 struck the canton at the same time, thousands of young men left for Australia and California.⁵ The historian Giorgio Cheda counted 4,227 overseas emigrants in the decade 1850–1859, almost 9,000 in the decade 1880–1890 and just over 4,000 in the following decade. Over the whole period from 1850 to the Second World War, he estimates that about 30,000 peasants of the Sopraceneri went to California while almost 12,000 people from the Sottoceneri went to Latin America, above all Argentina.⁶

Emigration was itself a credit transaction. The passage to Australia or California cost several hundred francs, which a peasant family did not have. Cheda's research shows that the young emigrants to Australia in the 1850s formed partnerships with joint and several liability, recorded by notaries, and borrowed the fare against the houses, cowsheds and land of their families. When the Australian venture failed and many partners died or returned without savings, the survivors and their families had to repay the debts. The debts were eventually cleared with money sent home by relatives who had gone to California.⁷ The Californian emigration followed a different pattern. Those who left in the second, third and fourth waves were usually financed by relatives already working on the dairy ranches of the Salinas Valley, Sonoma County and West Marin, and men who had established themselves sent the money for their brides to join them.⁸ A diary of 1883 records a fare of 490 francs, while a Californian farmhand earned about twenty dollars a month with board and lodging.⁹

The need for an institution

The flows of money between California, Argentina and the valleys of Ticino created a demand that notaries and private lenders could not meet. Emigrants needed a safe place to keep their savings at home, a way to transfer money across the Atlantic and an intermediary who could change dollars or Argentine pesos into francs. Families at home needed somewhere to deposit remittances that were not immediately spent on land or houses. Emigration agencies in Locarno and other towns organized passages, sold tickets and handled transfers. A publication of the Agenzia Generale d'Emigrazione Bonetti of Locarno from 1904 is one of the surviving traces of this trade.¹⁰ What was missing was an institution that collected small deposits, paid interest and lent the money again under public rules. The canton's first answer, in 1833, was a savings bank.

Common misconception. It is often assumed that a poor canton without banks also lacked credit. The opposite was true. Ticino before 1858 had a dense network of notarial loans, ecclesiastical rents, merchant credit and emigrant remittances. What it lacked was an institution that pooled small savings and lent them under transparent and public rules. The first banks did not create credit in the canton. They tried to centralize and formalize it. In doing so they inherited from the older system its close ties between lenders, notaries and political families.

Notes

1. Raffaello Ceschi (ed.), Storia del Cantone Ticino. L'Ottocento (Bellinzona 1998). Kathrin Utz Tremp and Alain Prêtre, "Notariato", in DSS, version of 8 August 2023, https://hls-dhs-dss.ch/it/articles/009640/, confirms the importance of Ticinese notarial records as sources of economic history and the French model of the notary in Ticino, but says nothing on notaries as lenders. ↩
2. See Chapter C.I. ↩
3. Anne-Marie Dubler, "Usura", in DSS, version of 18 November 2014, https://hls-dhs-dss.ch/it/articles/017472/ ("Per tutelare i debitori, i tassi per gli interessi in denaro, spec. per le rendite fondiarie, vennero fissati al 5%"; continuation of the cantonal usury rules after 1800; Art. 73 of the Code of Obligations left the matter to the cantons). The article does not deal with Ticino specifically. See also Ceschi (as above). ↩
4. Stefano Franscini, La Svizzera italiana, 3 vols (1837–1840); dates confirmed in Marco Marcacci, "Franscini, Stefano", in DSS, version of 21 April 2022, https://hls-dhs-dss.ch/it/articles/003508/. ↩
5. Giorgio Cheda, interviewed by swissinfo.ch, "Economic crisis and fool's gold", swissinfo.ch, https://www.swissinfo.ch/eng/swiss-politics/economic-crisis-and-fools-gold-interview/994310 (potato blight, livestock disease, Austrian embargo against Ticino, return of about 5,000 workers from Lombardy; about 2,000 Ticinesi recruited for Australia, nearly half from the Vallemaggia). On the blockade of 1853 see Chapter C.II. ↩
6. Giorgio Cheda, "Appunti per una storia dell'emigrazione ticinese oltremare", Scuola ticinese no. 102, https://www4.ti.ch/fileadmin/DECS/DS/Rivista_scuola_ticinese/ST_n.102/ ST_102_Cheda_appunti_per_storia_emigrazione_ticinese_oltremare.pdf. ↩
7. Giorgio Cheda, interviewed by swissinfo.ch, "Migrations interview: Part two", swissinfo.ch, 11 February 2009, https://www.swissinfo.ch/eng/migrations-interview--part-two/7135188. ↩
8. Cheda, "Migrations interview: Part two" (as above). ↩
9. Dipartimento dell'educazione, della cultura e dello sport, ScuolaLab, Viaggio verso la Terra promessa. Dossier emigrazione, https://scuolalab.edu.ti.ch/materialididattici/Documents/SE/Mostra-didattica/Viaggio-verso-la-Terra-promessa/Dossier-emigrazione.pdf (fare of 490 francs in 1883; wage of 20 US dollars a month plus board and lodging). ↩
10. Marc Perrenoud, "Colonie svizzere", in DSS, version of 13 October 2011, https://hls-dhs-dss.ch/it/articles/007989/2011-10-13/ (illustration: frontispiece of a publication of the Agenzia Generale d'Emigrazione Bonetti di Locarno, 1904). ↩

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.