The foundation of July 1856

Constitution and public subscription

The Schweizerische Kreditanstalt was constituted in Zurich on 5 July 1856.¹ The English-language encyclopaedic literature gives the same date of foundation and adds that the bank opened for business on 16 July 1856.² Between these two dates lay the event that fixed the founding legend of the bank: a public subscription for its shares that exceeded every expectation. The Swiss financial museum summarises the episode in a single sentence, according to which shares worth a total of 3 million francs were issued, while subscriptions reached a total of 218 million francs within the first three days.³ Company histories compiled for an international business audience give the same pair of figures.⁴

A somewhat different set of figures appears in the account of Luca Froelicher, who writes that the bank made 9,000 shares available to the public, received 442,539 subscription requests from Germany and abroad and was thus oversubscribed by a factor of about fifty.⁵ The two sets of figures measure different things, since one counts francs and the other shares. They cannot be reconciled without the original prospectus and allotment records. Their common message is unmistakable. The public appetite for a Swiss bank of the new type exceeded the planned issue many times over, with demand coming from Zurich, from other cantons and from abroad. The subscription of 1856 was one of the first great manifestations of a mass investing public in Switzerland, anticipating the role that the Zurich market would later play in the placing of securities for railways, industry and foreign states.

The management of the oversubscription was itself a political act. Froelicher reports that the shares were allotted on a heavily reduced basis, chiefly to the wealthy elite of Zurich, among them representatives of the cotton and silk industries. The allocation ensured that the new bank would be anchored in the city’s merchant and industrial families, the same circles that dominated the Nordostbahn, the cantonal government and the liberal majority in the National Council. The founders thereby secured control of the institution while gaining the prestige of a triumphant public issue. The same allocation also laid the basis for one of the lasting grievances of the democratic movement of the 1860s, which saw the Kreditanstalt as the financial arm of a closed circle of “Herren” in Zurich. The fervour of the subscription thus marked the bank’s birth with both of its later characteristics: broad public confidence and a narrow circle of control.

Escher as chairman and the first board

Alfred Escher became president of the board of directors (Verwaltungsrat) of the new bank and held that office from 1856 to 1877 and again from 1880 until his death in 1882.⁶ In 1856 he was thirty-seven years old and occupied, at the same time, the position of director and leading figure of the Nordostbahn, a seat in the cantonal parliament of Zurich and a seat in the National Council, whose presidency he held in 1856 and 1857. Having left the cantonal government in 1855, he was also vice-president of the school board of the new Federal Polytechnic, whose foundation Chapter D.III describes.⁷ No other person in Switzerland combined such a range of political and economic offices, and contemporaries soon coined names for the phenomenon. Opponents spoke of the “Bundesbaron”, the “Eisenbahnbaron” and “King Alfred I”.⁸

The composition of the first board reflected the alliance between Zurich liberalism, the textile industry and the German co-founders. The encyclopaedic literature names Albert Dufour-Féronce and Gustav Harkort, both members of the founding committee of the Leipzig Credit-Anstalt, as co-founders alongside Escher.⁹ Their participation gave the Leipzig bank a voice in the early direction of the Zurich institution. On the Swiss side, the circle included silk and cotton industrialists of the kind whose representatives received shares in the reduced allotment. Johann Heinrich Fierz (1813–1877) of Meilen, who founded the silk firm Hüni & Fierz in 1843, built up an independent cotton business from 1850 and sat in the National Council, is a characteristic figure of that milieu.¹⁰

The management of the bank in its first years was a weak point. Froelicher notes that the bank lacked adequate banking expertise at management level and that reorganisations were frequent.¹¹ The founders were politicians, merchants and industrialists. Few of them had run a large bank, because there had been no large joint-stock bank in Zurich to run. The Bank in Zürich of 1836, described in Part C, was a note-issuing and discount bank of modest size, while the old house of Leu & Co. was a mortgage institution. The Kreditanstalt thus had to create its capital base, its professional staff, its accounting routines and its credit culture from scratch. The rapid expansion of the Polytechnic, the Zurich stock market and the private schools of commerce in the following decades belongs to the same process of building the human capital that a financial centre requires (see Chapters D.III and D.IV).

The legal form: a joint-stock company under cantonal law

The Kreditanstalt was founded as a company limited by shares, an Aktiengesellschaft, at a time when Swiss company law was still cantonal. The federal Code of Obligations, which unified the law of commercial companies for the whole country, entered into force only after its adoption in 1881.¹² In 1856, the foundation of a joint-stock company in the canton of Zurich still depended on cantonal legislation and on the approval of the cantonal authorities. The statutes of the new bank had to be approved by the government of a canton whose parliament Escher presided over at various times and whose governing majority belonged to his political camp. From the perspective of a modern lawyer, the arrangement raises obvious questions about conflicts of interest. From the perspective of the time, it was the normal way in which liberal governments promoted economic modernisation: by granting concessions to private companies led by trusted members of the political elite.

The joint-stock form itself was a decisive innovation for Zurich banking. The private bankers of the city operated as partnerships, whose capital consisted of the fortunes of a few families and whose partners bore unlimited liability. A joint-stock bank could raise capital from thousands of investors, each of whom risked only his contribution. It could also survive the death or withdrawal of individual founders and pursue a continuous business policy across generations. These features explain both the scale that the Kreditanstalt quickly reached and the suspicion with which it was regarded by those who feared anonymous capital. The historical encyclopaedia’s later observation that joint-stock companies multiplied thirty-fold between 1883 and 1933 describes a development that the railways and the new banks of the 1850s had begun.

The name chosen for the bank signalled its model and its ambition. “Kreditanstalt” was the German rendering of the crédit mobilier idea, as the name of its Leipzig co-founder shows. The adjective “schweizerische” announced that the new institution meant to be a national bank for Switzerland, even though it had its seat and its management in Zurich. In French the institution was known as Crédit Suisse, which became its international name.¹³ When the group adopted the name Credit Suisse for the whole of its business at the end of the twentieth century, it thus returned to the French form in which the bank had long been known outside German-speaking Switzerland.

Notes

1. Wikipedia (German), “Credit Suisse” (cited above): “Am 5. Juli 1856 gründete Alfred Escher gemeinsam mit der Allgemeinen Deutschen Kreditanstalt … die Schweizerische Kreditanstalt (SKA)”. ↩
2. Wikipedia (English), “Credit Suisse” (cited above), which gives 5 July 1856 as the date of foundation and 16 July 1856 as the opening date. A Swiss popular account dates the foundation itself to 16 July 1856, which appears to conflate the two events: Blick, “Das Ende der Credit Suisse: Von der Escher-Bank zur Krisen-Anstalt”, https://www.blick.ch/wirtschaft/das-ende-der-credit-suisse-von-der-escher-bank-zur-krisen-anstalt-id18414166.html. ↩
3. FINANCE MUSEUM (Finanzmuseum, Zurich), “Bye bye Credit Suisse – An era of over 160 years comes to an end”, https://www.finanzmuseum.ch/en/home/blog/credit-suisse.html: “Shares worth a total of CHF 3 million are issued, but within the first three days, subscriptions amount to a total of CHF 218 million.” The museum adds that the SKA quickly became Switzerland’s largest commercial bank and that its foundation laid the basis of the financial centre of Zurich. ↩
4. Encyclopedia.com, “Credit Suisse Group”, https://www.encyclopedia.com/social-sciences-and-law/economics-business-and-labor/businesses-and-occupations/credit-suisse-group, which states that Escher offered SFr 3 million in shares and received SFr 218 million in subscriptions within three days, the bank opening for business on 16 July. ↩
5. Froelicher, “The turbulent history of Credit Suisse” (cited above). Froelicher also states that the shares were distributed on a greatly reduced basis, mainly to members of the wealthy Zurich elite, including representatives of the cotton and silk industries. ↩
6. HLS, Markus Bürgi, “Escher, Alfred”, version of 20 January 2020, https://hls-dhs-dss.ch/de/articles/003626/2020-01-20/. The article records Escher’s presidency of the SKA board (1856–1877 and 1880–1882) and states that the bank contributed significantly to Zurich becoming the industrial and financial centre of Switzerland. ↩
7. HLS, “Escher, Alfred” (cited above), with Escher’s offices in the cantonal and federal parliaments, his membership of the Zurich government until 1855 and his vice-presidency of the Swiss school board from 1854 to 1882. ↩
8. aboutswitzerland, “Alfred Escher: a visionary of modern Switzerland” (cited above), which records these nicknames as expressions of criticism of Escher’s concentration of power. ↩
9. Wikipedia (English), “Credit Suisse” (cited above), and Wikipedia (German), “Allgemeine Deutsche Credit-Anstalt” (cited above), which lists Harkort and Dufour-Féronce among the members of the Leipzig founding committee of January 1856. ↩
10. Wikipedia (German), “Johann Heinrich Fierz”, https://de.wikipedia.org/wiki/Johann_Heinrich_Fierz, with his dates, his silk and cotton businesses, his seat in the National Council and his role as the Federal Council’s envoy at the opening of the Suez Canal. ↩
11. Froelicher, “The turbulent history of Credit Suisse” (cited above), on the lack of banking expertise, the concentrations of risk in the balance sheet and the repeated reorganisations of the early years. ↩
12. HLS, “Sociétés de capitaux”, version of 23 May 2013, https://hls-dhs-dss.ch/fr/articles/014185/2013-05-23/. The article notes that the first industrial joint-stock company in Switzerland was the Baumwollen-Spinnerey-Gesellschaft of St. Gallen (1801), that family enterprises long dominated, and that Swiss law evolved slowly under French and German influence until the federal Code of Obligations of 1881. ↩
13. HLS, Jan-Henning Baumann, “Crédit suisse”, French version of 27 November 2012, https://hls-dhs-dss.ch/fr/articles/041821/2012-11-27/. The French article names the institution Crédit suisse and refers to the Crédit mobilier (1852) and the Darmstadt bank (1853) as its foreign precursors. ↩

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.