Long paths: Protestant banking in Geneva, industrial finance in Zurich

Geneva and the Banque protestante

After 1600 the two paths diverge further. Their later history belongs to Part C of this book and to the companion volume on Geneva. It is nonetheless useful to sketch them briefly here, because they show how the sixteenth-century differences worked themselves out. The revocation of the Edict of Nantes in 1685 set off a second and larger Huguenot emigration. According to the Musée protestant, between 140,000 and 160,000 people left France through Switzerland in the decade from 1680 to 1690. Geneva received about 30,000 refugees between 1680 and 1689, with a peak of 12,000 in August and September 1687, but most of them moved on. The Confederation sheltered at least 60,000, of whom some 20,000 settled permanently.¹ Zurich participated in the reception of this second Refuge, with a number of Huguenot families settling there and contributing to its textile trade. Geneva, however, was again the principal gateway.

Out of the Huguenot diaspora grew the network that Herbert Lüthy, a Swiss historian, described in his two-volume work La Banque protestante en France de la Révocation de l’Édit de Nantes à la Révolution, published in Paris in 1959 and 1961.² The Protestant bankers of Geneva, Paris, Amsterdam, London and other cities formed a web of families linked by marriage, religion and correspondence. They became indispensable to the finances of the French crown, which had expelled their co-religionists. The article on banking and finance in the Encyclopédie de Genève, by Jean-François Bergier and co-authors, describes the eighteenth century as the golden age of Genevan finance. Genevan bankers lent to the French state, whose finances came to be directed by Jacques Necker, a Genevan banker. By 1785 Genevan investments in France are said to have yielded twelve million livres a year.³

The most famous instrument of that lending was the life annuity, the rente viagère. The French crown sold annuities whose price did not depend on the age of the person on whose life they were written. Genevan bankers recognised the opportunity: they wrote annuities on the lives of carefully selected Genevan girls of four to seven years, from healthy families, and pooled thirty such lives in a single investment, which they then sold in shares to investors. The biographical dictionary 100 Elles describes the system of the “thirty immortals of Geneva” and notes that it collapsed with the insolvency of the French state after 1789.⁴ Marc Cramer, in a study published in 1946 in the journal of the Swiss Society of Economics and Statistics, estimated that on the eve of the Revolution Genevan investors held some 10.3 million livres of annual annuities, corresponding to some 113.8 million livres of capital. He also identified three waves of speculation, in 1771, in 1778–1779 and in 1782–1783. The investors were numerous and socially diverse: clergy, merchants, widows, artisans and officials.⁵ A commentator for Finance Watch has compared the pooling of annuities to modern securitisation.⁶

The losses suffered by Genevan investors in the Revolution were severe, but the network survived. The private banks that still define the Genevan financial centre were founded in the following decades: Hentsch & Cie in 1796, Lombard, Odier & Cie in 1798, Pictet & Cie in 1805 and Mirabaud & Cie in 1819, according to the Encyclopédie de Genève.⁷ Their business was, from the beginning, the management of wealth for families, often across borders, together with lending to states and later the financing of industry. Their partners were the descendants of the families of the first and second Refuge. The line from the Bourse française and the Grande Boutique to the private banks of the Rue de la Corraterie runs through families, networks, skills and attitudes, without direct institutional continuity. The interpretation offered in this chapter is that this line is real.

Zurich and the finance of industry

Zurich’s path led through the textile trade. The silk and cotton industries organised in the putting-out system from the seventeenth century onwards, the private merchant banks that grew from them, and the foundation in 1755 of Leu & Co., the first bank in Zurich, which invested the savings of the state and of private persons largely abroad, are the subject of Part C. What matters here is the direction of travel. Zurich capital was accumulated in trade and manufacture, invested in land credit and in foreign loans, and mobilised in the nineteenth century for domestic industry and infrastructure.

The decisive moment came after the foundation of the federal state in 1848. Alfred Escher, the Zurich politician and entrepreneur, founded the Nordostbahn in 1853, promoted the federal Polytechnic School opened in 1855, and in 1856 founded the Schweizerische Kreditanstalt, the future Credit Suisse, in order to provide investment and risk capital for railway construction. The Kreditanstalt participated in 1857 in the foundation of the Schweizerische Lebensversicherungs- und Rentenanstalt, today Swiss Life.⁸ Swissinfo has described the Kreditanstalt as the first large Swiss commercial bank, created to finance railway construction without relying on foreign banks.⁹ On 19 December 1863 the Swiss Reinsurance Company was founded by the Helvetia General Insurance Company of St Gallen, the Kreditanstalt and the Basler Handelsbank, after the fire of Glarus in 1861 had shown that Swiss insurance capacity was inadequate for catastrophic losses. Its articles were approved by the Zurich government, whose cantonal secretary, the writer Gottfried Keller, signed the founding document.¹⁰

These foundations defined the Zurich financial centre for the following century and a half: large joint-stock banks, insurance and reinsurance companies, and capital markets, all closely connected with Swiss industry and infrastructure. The contrast with Geneva, where the Bourse had been founded in the mid-nineteenth century and where private banks continued to dominate, is marked. The official history of the city of Geneva dates the Geneva stock exchange to 1857 and emphasises that it preceded the exchanges of Basel and Zurich by a quarter of a century. Other accounts date its origins to an association of brokers in 1850.¹¹ The interpretation proposed here is that the sixteenth-century differences reappeared in a new form. Geneva, oriented towards families, networks and foreign states, specialised in private wealth, while Zurich, oriented towards its territory, its industry and the Confederation, specialised in institutional finance.

Notes

1. Musée protestant, “The Huguenot Refuge in Switzerland” (as above). ↩
2. Herbert Lüthy, La Banque protestante en France de la Révocation de l’Édit de Nantes à la Révolution, vol. I, Dispersion et regroupement (1685–1730) (Paris: SEVPEN, 1959), vol. II, De la banque aux finances (1730–1794) (Paris: SEVPEN, 1961), bibliographical details as given in the review by Paul J. Meier, Business History Review 36 (1962), no. 2, pp. 236–239, https://econpapers.repec.org/article/cupbuhirw/v_3a36_3ay_3a1962_3ai_3a02_3ap_3a236-239_5f01.htm. ↩
3. Jean-François Bergier, Armand Brulhart, Robert Iselin, Marian Stepczynski and Jean-Daniel Vermeil, “La banque et la finance”, Encyclopédie de Genève, online at https://encycloge.org/la-banque-et-la-financejean-francois-bergier-armand-brulhart-robert-iselinmarian-stepczynski-jean-daniel-vermeil.html. ↩
4. Daniela Solfaroli Camillocci, “Trente immortelles de Genève”, 100 Elles, https://100elles.ch/biographies/trente-immortelles-de-geneve/. ↩
5. Marc Cramer, “Les trente Demoiselles de Genève et les billets solidaires” (1946), https://www.sses.swiss/journal/archive/pdf/1946-II-2.pdf/. ↩
6. Fabien Hassan, “Les leçons de l’histoire II : Les ‘Trente Demoiselles de Genève’ et la Révolution française”, Finance Watch blog, 13 April 2013, https://www.finance-watch.org/blog/les-lecons-de-lhistoire-ii-les-trente-demoiselles-de-geneve-et-la-revolution-francaise/. ↩
7. Bergier et al., “La banque et la finance” (as above). The founding dates of the Genevan private banks are given differently in different sources, depending on whether the predecessor firms are counted; the dates here follow the Encyclopédie de Genève. ↩
8. Swiss Federal Department of Foreign Affairs, “Alfred Escher, ein Visionär der modernen Schweiz”, aboutswitzerland, https://www.aboutswitzerland.eda.admin.ch/de/alfred-escher-ein-visionaer-der-modernen-schweiz. ↩
9. SWI swissinfo.ch, “Alfred Escher – Bundesbaron und Eisenbahnkönig”, 27 May 2006, https://www.swissinfo.ch/ger/finanzplatz-schweiz/alfred-escher-bundesbaron-und-eisenbahnkoenig/5205196. ↩
10. Swiss Re, “Established 1863”, https://www.swissre.com/about-us/history/established-1863.html. ↩
11. Ville de Genève, “Genève, place financière” (as above); Wikipedia, “Geneva Stock Exchange”, https://en.wikipedia.org/wiki/Geneva_Stock_Exchange, which gives 1850 for the association of brokers and 1855 for its regulation. ↩

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.