Cheap credit for farmers and small trades

The credit problem of the Zurich countryside

The economic argument for a cantonal bank rested on the structure of rural credit in the canton. Zurich’s agriculture was dominated by small and medium holdings, many of them combined with homework in the textile industry. These households financed land purchases, inheritances and buildings through mortgages. They borrowed from private lenders, from the savings banks that had spread since the early nineteenth century, from notaries and from wealthy families of the towns. Being small and local, the savings banks had only a limited lending capacity. The large banks that had appeared in Zurich since the 1830s, the Bank in Zürich of 1836 and the Kreditanstalt of 1856 in particular, concentrated on note issue, commercial bills, railway finance and industrial credit (see Part C and Chapter D.II). According to the economic historian Matthias Wiesmann, quoted by Swiss radio on the bank’s 150th anniversary, the canton suffered from a shortage of credit and from excessive interest rates, so that trade and agriculture could not obtain money to invest.¹

Rising interest rates in the 1860s made the problem acute. When mortgage rates rose, farmers who had borrowed at variable rates faced higher annual charges while their incomes from textile homework fell. A creditor who called in a loan could force the sale of a farm. The democratic press described this dependence in moral and political terms. The debtor who had to go to a wealthy lender for an extension was, in the view of the democrats, neither economically nor politically free, since he could hardly vote against the interests of the man who held his mortgage. A state bank, lending at moderate rates on transparent terms and without regard to the political opinions of the borrower, would free him from that dependence.

Johann Jakob Keller, the “Bankvater”

The man who translated this programme into a concrete institution was Johann Jakob Keller of Fischenthal in the Zürcher Oberland. Born on 27 March 1823 at Lanzenmoos, the son of a small farmer and home weaver, Keller had to abandon his studies when his father’s weaving business collapsed. After his father’s death in 1843 he ran the family textile business, engaged in the embroidery trade and built up his own industrial enterprise. After obtaining a licence for mechanical weaving at Mühlebach in 1860, he established in 1863 a spinning mill at Gibswil with 7,000 spindles, which had grown to 12,500 spindles when he handed it to his sons in 1883. Keller was president of the commune of Fischenthal from 1851 to 1855, a district judge, a member of the Grand Council from 1854, a member of the constitutional council of 1868–1869 and a member of the National Council from 1869 to 1893.² He belonged to the type the democratic movement produced in the Oberland: a self-made rural manufacturer with deep roots in the peasant world, suspicious of the city, and convinced that political freedom required economic independence.

Keller’s campaign for a cantonal bank began long before the democratic revolt. In 1852 the commune of Fischenthal submitted his first proposal to the cantonal government. In 1866, as a member of the Grand Council, Keller renewed it. In January 1868 a commission dominated by the old majority buried the project, which the conservative finance director Felix Wild also opposed.³ Keller’s arguments were political as much as financial. Economic dependence, he argued, turned into political dependence. If citizens did not have to rely solely on capitalists and private banks but could turn to the state bank at any time, they would become more patriotic and freer towards their creditors. He used the democratic newspapers, the Volksblatt vom Bachtel and the Landbote, to make this case, describing the task of the movement as the repair of a state machine that had fallen into the wrong hands.⁴

On 20 March 1869, shortly before the vote on the constitution, Keller published a manifesto in the NZZ in which he demanded a cantonal bank. His best-known sentence expressed the hope that if the bank saved only a thousand citizens from the hands of the capitalists, these thousand would liberate ten thousand others.⁵ As a member of the constitutional council Keller secured the inclusion of a state bank for the credit needs of the rural population in the constitution. He thereby became known as the “Bankvater”, the father of the bank. He sat on the Bankrat from 1869 to 1899, which made him the most continuous personal link between the founding programme and the institution during its first three decades.⁶ The Tages-Anzeiger describes Keller as the moderate ally of the more radical Bürkli, whose ideas of public credit he translated into an institution that the voters could accept.⁷

The opposition of the liberal establishment

The liberal elite around Escher opposed the bank. The NZZ reports that Escher’s faction feared excessive competition for the private institutions. The conflict was fought as part of the wider struggle between the “system” and its opponents.⁸ The liberal objections combined principle and interest. In principle, the liberals of 1848 regarded banking as a matter for private enterprise and saw no reason for the state to take deposits and grant loans in competition with private capital. In practice, a state bank with an unlimited guarantee would attract savings away from the existing banks and savings institutions. A bank that issued its own notes would, moreover, compete with the Bank in Zürich, which had issued notes since the 1830s. The Kreditanstalt itself was less directly threatened, because its business lay in railway, industrial and international finance, but its founders understood the political meaning of a bank that the democrats had conceived as an instrument against them.

The liberals lost the argument because they had lost the political majority. Once the constitution of 1869 had been adopted, the establishment of the bank was a constitutional duty. The only open questions were how it would be organised and how quickly it could begin. The sociological weight of the democratic movement in the countryside ensured that the answer would reflect the needs of farmers and small trades, and that the new institution would be subordinated to the people and their elected representatives.

Notes

1. Schweizer Radio und Fernsehen (SRF), “150 Jahre Zürcher Kantonalbank – ‘Die Bürger aus den Händen der Kapitalisten retten’”, 2020, https://www.srf.ch/news/wirtschaft/150-jahre-zuercher-kantonalbank-die-buerger-aus-den-haenden-der-kapitalisten-retten. ↩
2. Wikipedia (German), “Johann Jakob Keller (Politiker)”, https://de.wikipedia.org/wiki/Johann_Jakob_Keller_(Politiker). ↩
3. Neue Zürcher Zeitung, “Sicheres Geld für freie Bürger: Wie ein Zürcher Fabrikant gegen die liberalen Eliten für eine Kantonalbank kämpfte”, https://www.nzz.ch/zuerich/sicheres-geld-fuer-freie-buerger-wie-ein-zuercher-fabrikant-gegen-die-liberalen-eliten-fuer-eine-kantonalbank-kaempfte-ld.1474134. ↩
4. NZZ, “Sicheres Geld für freie Bürger” (cited above). ↩
5. NZZ, “150 Jahre Zürcher Kantonalbank: ZKB, Retterin vor ‘Kapitalisten’” (cited above). ↩
6. Wikipedia (German), “Johann Jakob Keller (Politiker)” (cited above). SRF also refers to Keller as the “Bankvater”: SRF, “150 Jahre Zürcher Kantonalbank – ‘Die Bürger aus den Händen der Kapitalisten retten’” (cited above). ↩
7. Tages-Anzeiger, “Bernhardiner, Nashörner und ein Sachse” (cited above). ↩
8. NZZ, “150 Jahre Zürcher Kantonalbank: ZKB, Retterin vor ‘Kapitalisten’” (cited above). ↩

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 September 2025.