Alfred Escher: a visionary of modern Switzerland
As a key figure behind the construction of the first Gotthard tunnel as well as the forerunners to both Credit Suisse and ETH Zurich, Alfred Escher had a profound and lasting influence on Switzerland's transition to the modern age. In the fledging Swiss federal state of the mid-19th century, one man emerged like no other in Swiss history to capitalise on the changes taking place and shape so much of the country's political and economic development. Here we look at the extraordinary and enduring achievements of Zurich native Alfred Escher.
Johann Heinrich Alfred Escher vom Glas, known as Alfred Escher, was born on 20 February 1819 into an influential family of Zurich bankers and merchants. Despite his privileged background, he pursued his political career as a liberal, eschewing the more expected conservative path. He quickly built a network of allies and became one of Switzerland's leading proponents of economic liberalism.
King Alfred I
Alfred Escher began his political career at a young age, at both the cantonal and federal level. In 1844 he was elected to Zurich's cantonal parliament, the Grand Council, representing the liberals. He remained a member of the Grand Council until 1882 and served as its president several times. Among other political offices, he was a member of Zurich's cantonal government from 1848 to 1855.
Escher's rise through national politics was no less rapid. At just 29, he was elected to the first National Council of the new federal state and appointed vice-president. In 1849 he was elected President of the National Council, the highest representative of the Swiss people and a position he held four times in all. Escher deftly accumulated prominent political offices throughout his career and made strategic use of the power this brought. With his strong personality and broad political and business support, Escher became one of the most influential politicians in the young Swiss federal state. Holding so many public offices, however, he also faced severe criticism for his concentration of power, earning him the moniker 'King Alfred I'.
A railway pioneer
The Gotthard railway project was arguably Escher's greatest success. As Switzerland joined the race towards modernisation, Escher firmly believed in the importance of being part of the European railway network. He was determined to increase national railway efforts so that Switzerland would not be left isolated from its surrounding countries.
Railway construction was a topic of fierce debate in the newly founded federal state, with the main disagreement being over its implementation. Escher expanded his influence, however, and with the new Railway Act in 1852 he achieved his goal of placing railway construction and operation in private hands rather than under state control. In 1853 he founded the Swiss Northeastern Railway, which expanded over the years to become the largest railway company in German-speaking Switzerland.
The railway boom led to growing demand for a skilled workforce in this new industrial sector but Switzerland did not have any engineering and technical colleges at the time. Escher therefore campaigned in 1854/55 to establish the Federal Polytechnic Institute – today known as ETH Zurich and one of the world's top-ranking universities. The founding of ETH Zurich was an important milestone in Switzerland's education and research landscape.
While the Swiss railway network was greatly expanded in the 1850s, there was still no north-south link. Drawing on his business and political connections, Escher consulted with experts and with Swiss and foreign authorities to further his plans for a transalpine rail link. Thus was born the idea for the Gotthard project, a railway tunnel through the Saint-Gotthard Massif. The Gotthard Railway Company was founded in 1871, with Escher as its chairman. However, faced with growing criticism of the project's planning and implementation, combined with construction delays and massive budget overruns, Escher was later forced to step down. For the man who had pushed so hard for private ownership, it came as a serious blow for him of all people to have to resort to federal subsidies. He was not invited to the tunnel's ground-breaking ceremony in 1880 and, when the landmark project was completed in 1882, Escher was too ill to attend the inauguration. Today the Gotthard tunnel plays a key role in Swiss transport policy, and Switzerland is an important transit country for goods transportation across Europe.
A new bank for raising railway capital
As the demand for railway construction increased, so too did the need for capital finance. At the time, the colossal amount of finance needed was only available abroad: no Swiss financial institution could provide funding of this magnitude. And so, with a view to gaining more independence in raising capital, Escher set up a new investment bank, Schweizerische Kreditanstalt, in 1856. Now known as Credit Suisse, it has had its headquarters on Paradeplatz in central Zurich since 1873.
Creating this financial institution made it possible to raise railway capital from private investors and without foreign influence. The new bank also increasingly financed other private and state enterprises and evolved to become an important source of funding for the Swiss economy. In 1857 Escher was also involved in founding Schweizerische Lebensversicherungs- und Rentenanstalt, Switzerland's first insurance and annuity institution, now known as Swiss Life, with the capital of Schweizerische Kreditanstalt serving as collateral. Today, Swiss Life and also Swiss Re are international flagships for Swiss insurance and financial expertise. And Zurich has become Switzerland's main industrial and financial centre.
Alfred Escher was a pioneer in the early days of the modern Swiss federal state. Through astute use of his political and business skills, he realised projects of immense significance for Switzerland. He was the driving force of 19th-century Switzerland's political and economic development and was instrumental in leading the country into the modern age. Even now, almost 200 years later, his achievements live on in the economic reality of present-day Switzerland – as a major financial centre, a rail freight transit country and a world-leading centre for education and research.
A statue of Alfred Escher stands outside Zurich's main railway station at the top of Bahnhofstrasse, symbolising the point at which the world of business and finance meets that of industry and railways.
And deservedly so!