Zurich capital abroad

From capital scarcity to capital surplus

In the Middle Ages the Swiss cities had been net importers of capital, borrowing from Lombard and Jewish lenders and from the rentiers of the Upper Rhine (see Part A). In the seventeenth century, and especially after the outbreak of the Thirty Years’ War, the situation reversed. Spared from the devastation that ruined large parts of Germany, the Confederation accumulated a considerable surplus of capital. As a result the interest rate on Gülten fell from the customary 5 per cent to as low as 3 per cent.¹ The same point was made by the Neue Deutsche Biographie in explaining the foundation of the Zurich Zinskommission: the neutrality of the Confederation had produced a surplus of capital and declining interest rates at home.²

For the owners of capital in Zurich, falling domestic yields posed a problem. The traditional outlets, rural mortgages and loans to the city’s offices, could not absorb all the money seeking investment and offered only modest returns. The search for yield led abroad. According to Martin Körner, after 1700 an increasingly dense network of Reformed private and merchant bankers in Switzerland and their partners throughout Europe organised the transfer of capital from private and institutional investors in Bern, Solothurn and Zurich to France, England, Germany, Austria and Scandinavia.³ The Zurich merchants, with their correspondents in Lyon, Amsterdam and the German trading cities, were well placed to act as intermediaries in this flow.

Public and private investors

The state led the way. In 1727 the city of Zurich bought 120 shares of the English South Sea Company for about 100,000 gulden, retaining 75 of them for roughly a century.⁴ In 1755 the council created the Zinskommission, which under the direction of Säckelmeister and later Burgomaster Johann Jakob Leu operated from the town hall as Leu & Co., accepted deposits from the public on Tuesdays and Thursdays and invested them abroad. In 1798 it became a private bank.⁵ Its history, its investments in the loans of foreign states and its significance as a forerunner of Zurich’s public banking are the subject of Chapter C.II. Here it matters as evidence that by the mid-eighteenth century Zurich’s authorities regarded the export of capital as a normal and desirable function of the city’s economy.

Private investors followed the same path, in part through the Zinskommission and in part through their own correspondents. When the Zinskommission bought Danish royal obligations in the second half of the eighteenth century, some twenty Zurich families and institutions subscribed a further amount of the same order alongside it.⁶ The Swiss financier who lent to a foreign sovereign, a figure more commonly associated with Geneva and Bern, thus had a Zurich counterpart, although Zurich’s capital exports in this period were smaller in scale and more closely supervised by the state.

Zurich merchant bankers abroad

Some Zurich merchants established themselves in the great financial centres of Europe. The most striking example is Hans Konrad Hottinger (1764–1841), the son of a Zurich merchant and textile manufacturer. After training in textiles at Mulhouse and in banking in Geneva, he became a clerk at the important Paris bank of Lecoulteux. In 1786 he became co-director of Rougemont, Hottinguer & Cie, which was dissolved in 1790 after speculative losses. He then founded Hottinguer & Cie. He was president of the Paris chamber of commerce and one of the regents at the foundation of the Banque de France, and Napoleon made him a baron of the Empire in 1810. The HLS describes him as a promoter and creditor of the Zurich export trade to America.⁷ The historic family bank in Paris passed to Credit Suisse in the 1990s, although the Hottinguer name continues in Paris banking through a bank re-established by members of the family.⁸

Hottinger’s career illustrates a pattern. The Zurich merchant community produced men trained in the textile trade, schooled in correspondence and exchange, and connected through Reformed networks with Geneva, Basel, Mulhouse, Paris and Amsterdam. Some of them moved abroad and became bankers there, serving as correspondents and creditors for the merchants who stayed at home.

The Atlantic entanglement

The international orientation of Zurich capital and trade also connected the city with the Atlantic slave economy. The report commissioned by the city of Zurich from historians at the University of Zurich and published in 2020 found that, during the period of the city’s shareholding in the South Sea Company, the company transported 36,494 enslaved Africans, including those carried across the Atlantic and those shipped on from British islands to the Spanish colonies. Through the Zinskommission, Zurich capital flowed into Danish state loans connected with the colonial economy of the Danish Antilles. Zurich indiennes were among the printed cottons used in the eighteenth century as a medium of exchange for the purchase of enslaved people in West Africa. The report names individual Zurich merchants and bankers, among them members of the Escher family and Hans Konrad Hottinger, as investors in or financiers of slave-trading expeditions.⁹ The HLS entries of 2024 on the Escher family and on Hans Caspar Escher now record such connections explicitly.¹⁰

For the financial centre, this history is a matter of more than historical interest. Questions of provenance, the origins of family fortunes and the historical responsibility of financial institutions are now part of the reputational landscape in which Zurich banks and foundations operate. The candour with which the city and the HLS have addressed these connections since 2020 reflects a broader recognition that Zurich’s capital was, from the eighteenth century, embedded in a global economy whose profits and burdens were distributed very unequally.

Notes

1. HLS, Martin Körner, “Kapitalverkehr”, version of 2001 (edited 3 October 2013), https://hls-dhs-dss.ch/textes/d/D13839.php. ↩
2. Hans Rudolf Schmid, “Leu, Johann Jakob”, Neue Deutsche Biographie 14 (1985), https://www.deutsche-biographie.de/sfz50693.html. ↩
3. HLS, Körner, “Kapitalverkehr” (cited above). ↩
4. Brengard, Schubert and Zürcher, Die Beteiligung der Stadt Zürich (cited above). ↩
5. Schmid, “Leu, Johann Jakob” (cited above). The University of Zurich report cited above characterises the Zinskommission as a peculiar semi-state organism, a bank for foreign investments. ↩
6. Brengard, Schubert and Zürcher, Die Beteiligung der Stadt Zürich (cited above), which gives 20,000 écus as the purchase by Leu & Co. and a further 20,000 écus by about twenty Zurich families and institutions, in connection with Danish loans between 1757 and 1798. ↩
7. HLS, Martin Lassner, “Hottinger, Hans Konrad”, version of 2005 (edited 12 February 2008), https://hls-dhs-dss.ch/de/articles/028461/. ↩
8. Famille Hottinguer, “Family history”, https://famillehottinguer.com/en/familyhistory.html (sale of the historic Paris bank to Crédit Suisse and later authorisation of Banque Jean-Philippe Hottinguer & Cie, today Banque Hottinguer); Wikipedia (English), “Hottinger & Cie”, https://en.wikipedia.org/wiki/Hottinger_%26_Cie (Credit Suisse stake of 70 per cent in the original Banque Hottinguer in October 1997, renamed Credit Suisse Hottinguer, full control in 2001). ↩
9. University of Zurich, press release on the report by Marcel Brengard, Frank Schubert and Lukas Zürcher, 29 September 2020, https://idw-online.de/en/news?id=754915&print=1; Brengard, Schubert and Zürcher, Die Beteiligung der Stadt Zürich (cited above). ↩
10. HLS, Hürlimann and Zeuske, “Escher (vom Glas)” (cited above); HLS, Bruno Carl and Michael Zeuske, “Escher, Hans Caspar”, version of 26 August 2024, https://hls-dhs-dss.ch/de/articles/019847/2024-08-26/, noting that the cotton processed by the machines of Escher, Wyss & Cie came largely from the United States and northern Brazil, where it was produced by enslaved people. ↩

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.