The “Escher system” and its critics

The anatomy of a system

By the early 1860s Escher’s position in Zurich rested on an interlocking set of roles that no rival could match. He presided over the Nordostbahn and the Kreditanstalt, sat in the cantonal parliament and usually presided over it, led the Zurich liberals in the National Council and, through the board of the Polytechnikum, influenced appointments to the most important school of engineering in the country. Around him stood a circle of allies in the cantonal government, the courts, the press and the leading firms. Contemporaries and later historians called this network the “System Escher”, a term that captured the concentration of economic and political power in a single person and in the liberal elite that surrounded him.¹ The Zentralbibliothek Zürich, which holds part of Escher’s papers in the family archive of the Escher vom Glas, notes that his influence was so extensive that contemporaries spoke of the Escher system as a matter of course.²

It would be anachronistic to describe the system as corrupt in the modern legal sense. The accumulation of offices was lawful, since the canton had none of the modern rules on incompatibility between public office and company directorships. Yet the effects were real. The Nordostbahn needed cantonal concessions, cantonal support against competing projects and a friendly hearing in the Federal Assembly when concessions had to be approved. The Kreditanstalt profited from the railway business that the Nordostbahn generated. The cantonal government and parliament, in which Escher and his friends held the decisive positions, decided questions of taxation, public credit and education that affected the same interests. The overlap was not concealed. It was, on the contrary, presented as the natural leadership of the capable, which is precisely what made it vulnerable once economic conditions deteriorated. Political participation had in any case been low: in federal elections between 1848 and 1863 turnout frequently fell to 20 per cent or less.³

Escher himself governed through the representative institutions he believed in. The addresses with which he opened and closed the sessions as president of the National Council, which his nineteenth-century biographer already called his “throne speeches” and which a modern edition collects under that half-ironic title, set out the programme of the liberal majority in the confident tone of a head of state.⁴ The phrase is revealing. For his supporters it expressed respect for a leader who had done more than anyone else to modernise the canton. For his opponents it summed up everything that was wrong with the regime: a republic governed by an uncrowned monarch and his court.

Friedrich Locher and the pamphlets of 1866–1867

The most corrosive attack on the system came from an unlikely source. Friedrich Locher (1820–1911) was himself the son of a well-to-do Zurich family and a schoolmate of Gottfried Keller. He studied law in Zurich and Berlin, took a doctorate and practised as an advocate in Zurich. According to a recent portrait in the Neue Zürcher Zeitung, his transformation into a polemicist began after he had rejected, or believed he had been denied, a career under Escher’s patronage.⁵ In 1866 he published, anonymously at first, a pamphlet entitled Die Freiherren von Regensberg, which attacked provincial officials and, through them, the network of dependency that bound the administration and the courts to the Escher circle. The pamphlet sold out within five days.

Locher followed it with further pamphlets that exposed abuses in the administration and the judiciary. Portraying Escher as a prince who enriched himself and his friends through the state, he mocked the courts with rhymes suggesting that justice could be bought. When the president of the cantonal supreme court, Rudolf Ullmer, sued him for defamation, Locher answered by undertaking to prove that the accusations were true. His next pamphlet, which detailed alleged personal misconduct, forced Ullmer’s resignation. The pamphlets provided the democratic movement with its slogans, although Locher himself remained politically isolated and the movement’s leaders kept him at a distance.⁶ He died in 1911 in Paris, where he had gone to escape imprisonment.

From the perspective of the financial centre, Locher’s importance lies in the theme he made popular, whatever the truth of his individual allegations, many of which were exaggerated. He described Zurich as a state captured by a coalition of money and office. The phrase “System Escher” became the name for a structural problem: the danger that those who control capital also control the rules under which capital is raised, invested and taxed. That theme has accompanied the Zurich financial centre ever since, from the debates on bank secrecy to the discussion of revolving doors between regulators and regulated firms.

The crisis of 1867 and the democratic revision of 1869

Pamphlets alone would not have toppled the system. The democratic movement, which had begun in a small circle around 1860, gained broad support only in the summer of 1867, when an economic crisis and an epidemic combined. The end of the American Civil War in 1865 had disrupted the markets of Zurich’s silk industry, whose exports fell by about a quarter. Farmers suffered from rising mortgage interest rates, and food prices climbed steeply, bread by 28 per cent and potatoes by 63 per cent. When a cholera epidemic killed some 500 people in Zurich in the autumn of 1867, the helplessness of the authorities became a political issue in itself.⁷

On 15 December 1867, in pouring rain, about 18,000 voters gathered at four popular assemblies in Zurich, Uster, Winterthur and Bülach. Some 6,000 attended in Zurich alone. The movement collected about 27,000 signatures for a total revision of the constitution, far more than the 10,000 required.⁸ On 26 January 1868 the voters approved the revision by roughly 51,000 votes to 7,400. The new cantonal constitution, adopted on 18 April 1869 by 61 per cent of voters on a turnout of about 90 per cent, introduced the constitutional and legislative initiative, the compulsory referendum on laws and the direct election of the government. The democratic programme also contained an economic part: a fairer tax system, a reform of debt enforcement and cantonal banks that would provide credit on favourable terms.⁹

The most tangible economic result was the Zürcher Kantonalbank, founded in 1870 to meet the credit needs of trade and agriculture. It was conceived as a deliberate counterweight to Escher’s Kreditanstalt and is the subject of Chapter D.V. In Winterthur, where the democratic movement had its strongest base, the HLS sees the new constitutions as the result of a movement that overcame the so-called system of Alfred Escher and its concentration of economic and political power.¹⁰ Escher lost his presidency of the cantonal parliament in 1868 and never regained his former dominance in cantonal politics. He kept his seat in the National Council and his railway and banking positions, but the canton that had been his base was now governed by his opponents.

Notes

1. HLS, Markus Bürgi, “Demokratische Bewegung”, version of 6 January 2020, https://hls-dhs-dss.ch/de/articles/017382/2020-01-06/. The HLS describes the democratic movement in Zurich as reaching its peak in the struggle against the so-called Escher system. ↩
2. Zentralbibliothek Zürich, “Alfred Escher”, series Zürich im Mittelpunkt, https://www.zb.uzh.ch/en/fokus/beitrag/alfred-escher. The library also points to further material in the Swiss Federal Archives and on the e-manuscripta platform. ↩
3. Christian Koller, “Vor 150 Jahren: Die Demokratische Bewegung pflügt den Kanton Zürich um”, Schweizerisches Sozialarchiv, 24 February 2019, https://www.sozialarchiv.ch/2019/02/24/vor-150-jahren-die-demokratische-bewegung-pfluegt-den-kanton-zuerich-um/. ↩
4. Allgemeine Deutsche Biographie, article “Escher, Alfred”, via Deutsche Biographie, https://www.deutsche-biographie.de/sfz13722.html, on the “Thronreden” with which Escher opened and closed the sessions during his first presidency of the National Council in 1849/50, and on the six presidencies of the Zurich Grosser Rat. The edition is Joseph Jung (ed.), Alfred Eschers Thronreden. 1848 bis 1868 (2021), listed in HLS, Joseph Jung, “Escher, Alfred”, version of 26 August 2024, https://hls-dhs-dss.ch/de/articles/003626/2024-08-26/. ↩
5. Lucien Scherrer, “Populist, Rebell und Verleumder: das bewegte Leben des Friedrich Locher, ‘das Ungeheuer’”, NZZ, https://www.nzz.ch/zuerich/populist-rebell-und-verleumder-das-bewegte-leben-des-friedrich-locher-das-ungeheuer-ld.1307642. The article reports that Locher allegedly turned down a career offer from Escher. ↩
6. Scherrer, “Populist, Rebell und Verleumder” (cited above); Koller, “Vor 150 Jahren” (cited above); on the refusal of a leading role to Locher see also “Wie Zürichs Demokraten die moderne Schweiz formten”, History Reloaded (blog of the Tages-Anzeiger), https://blog.tagesanzeiger.ch/historyreloaded/index.php/4108/wie-zuerichs-demokraten-die-moderne-schweiz-formten/. ↩
7. HLS, “Demokratische Bewegung” (cited above); Koller, “Vor 150 Jahren” (cited above), which gives the figures for silk exports (minus 26 per cent), food prices and cholera deaths. ↩
8. Koller, “Vor 150 Jahren” (cited above), https://www.sozialarchiv.ch/2019/02/24/vor-150-jahren-die-demokratische-bewegung-pfluegt-den-kanton-zuerich-um/, which names the four assemblies of 15 December 1867 in Uster, Winterthur, Bülach and Zurich, gives about 18,000 participants in pouring rain (more than a quarter of the electorate), about 6,000 in Zurich, and about 27,000 signatures against the 10,000 required for a constitutional revision. ↩
9. “Als das Zürchervolk das ‘System’ stürzte”, NZZ, https://www.nzz.ch/zuerich/als-das-zuerchervolk-das-system-stuerzte-ld.1350950. The article names Salomon Bleuler and Friedrich Locher among the leading figures of the opposition campaign; Koller, “Vor 150 Jahren” (cited above); HLS, “Demokratische Bewegung” (cited above), list of the movement’s demands. ↩
10. “Vom Säumärt zum Paradeplatz und zurück – oder: Wie der Bankenplatz Zürich entstand”, Limmattaler Zeitung, https://www.limmattalerzeitung.ch/limmattal/zuerich/historisch-system-escher-und-demokraten-im-wettstreit-oder-wie-der-bankenplatz-zuerich-entstand-ld.2433825; HLS, “Winterthur” (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.