Zurich People and Their Money
Every story gives rise to characters who actively intervened in contemporary history and whose activities radiated far into the future, quite regardless of whether they were already successful during their lifetime – and whether they were sympathetic or not. Thus people who "reinvented" the future. They have also left their mark on Zurich's history (of money): for example, such personalities as Pastor Huldrych Zwingli, Mayor Waser or the entrepreneurs Escher and Duttweiler. And last but not least, "unimportant" people also play a part in it. The exhibition Zurich People and Their Money has related this in 20 stages. This DVD takes up some of them in a booklet and video.
The exhibition “Zurich’s People and Their Money” was originally designed for the Bärengasse museum in Zurich. It is the result of a cooperation between the Swiss National Museum and the MoneyMuseum; its aim is to show a multi-faceted display of the relationship between money and the citizens of Zurich. An essential part of the exhibition is a tour of the town’s past, where stories about money are presented in separate exhibits including anecdotes illustrating the objects, archaeological drawings, and audio-tracks covering the time period from the Celtic era to the present. In these stories, we meet the people of Zurich – winners and losers, creative people as well as timid people. Some people in Zurich tried to hold on to their money and lost it anyway. Some people shaped the future with their decisions. Let’s take a look at some of them and how they changed either their own and their city’s fate for the better.
First let’s go to Station 3, “On the market”. This station provides us with an example of how people must act quickly in a crisis. However, success is also dependent on those in charge keeping their heads, behaving sensibly and restraining themselves. In times of crisis, extreme reactions are dangerous – but fortunately, the people of Zurich obviously already knew this, even back in 1336.
Let’s listen to a woman at the market talking to her customer:
Market woman: That’s it. Or do you need anything else?
Client: No, I think that’s it.
Market woman: That’s 4 shillings and 8 pennies.
Client: I didn’t have time to change my money, but I still have some Zurich pennies from my last visit.
Market woman: Show them to me. (Break) Sorry, I can’t accept them.
Client: Why not?
In the late Middle Ages, it was normal that certain coins were not accepted in certain markets.
The prohibition of foreign currencies was originally designed to protect the merchants from inferior coins. The city fathers, however, did not only have altruistic motives for limiting the circulation of money. One could also make a lot of money from the exchange of forbidden coins; by way of the so-called renovatio monetae, they could also collect a capital tax.
However, not all of the inhabitants of a town suffered equally. This capital tax applied only to the silver pennies with which the artisans and minor merchants paid for their wares.
This was also the situation in Zurich when the coin edict of 1335 was issued. It contained a provision that two old pennies had to be exchanged for one new penny. In this manner, the town council underhandedly imposed a capital tax of 50 percent on their citizens. This time, however, the nobles in the town council had gone too far!
Barely a year after this controversial coin edict was issued, the artisans stormed the town hall.
Similar rebellions happened in other towns. In most cases a revolutionary process like this one was followed by a period of conflict between the social classes, which severely damaged subsequent economic development. However, this was not the case in Zurich.
Instead of completely stripping the old regime of its power, the First Letter of the Jury was written in 1336,establishing, for the first time, that moneyed aristocracy was granted equal status with the hereditary nobility.
The new and old politicians set about side-by-side to the task of guiding Zurich safely into its economic future. The constitution of 1336 remained in force – with some changes, of course – for almost five centuries, until 1798.
- Station 7 “The 'robbery' of the church silver”
Here you will learn about the story of Zurich’s great reformer Huldrych Zwingli, and how he not only reshaped the faith of his fellow man, but also revitalised Zurich’s economy for centuries.
Huldrych Zwingli lived in a time of crisis. At the beginning of the 16th century when the modern state was beginning to emerge. The authorities tried to institute a more direct rule, which the citizens did not like when they realized they were suddenly being degraded from “citizens” to “mere subjects”. Many of the choices they had previously been able to make for themselves were now being legislated by the state.
In Zurich, conflicts arose especially over the issue of Swiss mercenaries. Previously, both the city and the individual mercenaries had received a profitable income from this activity. Now, Zurich’s town council proclaimed that mercenaries were to be used only at the discretion of the town council. Soldiers were to be lent out only to those governments whose politics were acceptable to the people of Zurich and who were willing to pay a large fee to the town council. Thereafter, individual mercenaries were forbidden from choosing their own employers.
A second problem was the Catholic Church. For many years its supreme leader, the Pope, had been one of the best patrons for Zurich mercenaries. Now, however, he was no longer acceptable as a political partner. The Reformers did not like his religious policies and the supporters of a rigidly organized modern state also realized they could only achieve their goals by simultaneously breaking the power of the church.
These clerical properties had grown enormously over the centuries. Countless believers had donated land, buildings, and other valuable articles to the church. However, in the Reformers’ opinion, the profits from these assets were being squandered uselessly. Communion cups were being decorated with gold and jewels. And the cost for beeswax candles alone consumed the income of entire villages.
So the town council faced a situation where, on the one hand, the public treasury had to manage without the Pope’s mercenary payments. And on the other hand, the Catholic Church owned huge assets in Zurich’s territory, which – in the Reformers’ opinion – were being wasted. Hence, the town council’s motivation for demanding the secularization of church property in 1524 was primarily economic. The council responded to the clergy’s protests by saying that the only meaningful Christian task was the care of the poor; managing property should no longer to be the church’s task. The city of Zurich could manage the property much more efficiently using the confiscated clerical assets.
Let’s now listen to how a Catholic believer might have reproached the people of Zurich in 1526:
Citizen of Lucerne: Pious words indeed. And how much has reached the poor? Don’t cape me! Your government has found a way to replace the yearly 24,000 gulden which used to be paid for your mercenaries by the Pope! You’ve compensated for your budgetary deficit with precious donations given by generations of Christians for their salvation. You billons of Zurich! Zwingli, this robber of chalices should be hanged by rights!
The Reformation, and the confiscation of church property that went hand-in-hand with it, helped the state of Zurich gain a large amount of territory. At the same time, Zurich had all of its financial problems solved for centuries to come since the yields from the former church properties vastly exceeded the expense of caring for the poor. The annual surplus grew to an impressive amount, which the city fathers did not simply keep in the city coffers but rather lent out as loans at a good interest rate.
So during the early modern period, Zurich was one of the few states that was not on the brink of bankruptcy, but rather had a healthy surplus in its state budget.
- Ziegler – the soldier millionaire
Station 12, “Ziegler, the soldier millionaire” takes us to India during the 19th century.
After his company’s in Zurich went bancrupt, Leonhard Ziegler had debts of more than 55,000 gulden, which he was not able to repay. For many people, that would have been a good enough reason to give up. But not Ziegler! He emigrated to India, which was then a land of boundless opportunities. With his quick mind, his spirit of entrepreneurial adventure, and his readiness to work no matter how hard, Ziegler slowly but surely made his way upwards: the simple soldier first became a foreman, then a manager and finally the owner of a plantation. With the help of cleverly invested profits from his plantation, Ziegler became one of the richest men in India.
Let’s listen as he speaks to his maid:
Ziegler: Oh, You should have seen me then, and how I arrived in India. I was a private soldier. But I worked my way up. I learned all these languages. So I became indispensable. You know, they hate to learn languages, these Englishmen. Otherwise damned clever people! They send their sons to the colonies in order to give them the chance to make a fortune. Half the men perish, half the men make it and bring back the wealth to good old England. Damned clever! (Proud) And I did the same. I took my chances. I realized immediately that it was a unique opportunity, when Major Grace introduced me to his friend Bond. He had an indigo plantation and he needed somebody to control it. I was the right man. And he paid 100 rupees a month. Damn it, that was a lot of money! As a soldier I only earned 40 rupees only.
As we already mentioned, Leonhard Ziegler, known in India as the “soldier-millionaire”, made his fortune from these assets.
- Migros revolutionizes the retail business
It is not only personal crises which offer us new opportunities. Gottlieb Duttweiler, the founder of Migros, proved that sometimes those economic branches which are most severely hit by a crisis are also the ones which offer the best profits.
Station 17, “Migros revolutionizes the retail business”, is our example of how a well devised concept can lead to success in the midst of crisis.
In the early 1920’s, Duttweiler returned to Zurich from Brazil. His attempt to escape from the economic malaise haunting Europe after World War I had failed. Now the former co owner of a colonial goods agency had to start anew. Unfortunately the goods trade, which Duttweiler knew the best, was in the midst of a severe crisis. Small unprofitable colonial stores were to be found on every street corner. And even though their prices were by no means too low, even under the best of circumstances, their owners could just about make a living. The strong competition had not led to a drop in prices but rather to huge trade margins which the shop owners tried to make up for with their low sales and high costs. Despite the high trade margins, the profits remained too low.
Like many other people in Zurich, Duttweiler recognized this problem. However, unlike other people, he did not just watch it happen but instead went to the Office of Statistics. There he checked the figures and discovered a good deal about high – but unnecessary – costs in retail trade. He drew up a business plan for Migros, cutting away all unnecessary factors – as he had seen it done in America. It became a huge success for Duttweiler.
In Station 17, a shop assistant explains the Migros principle to a customer:
Migros-salesman: (…) We get our products directly from the producers. This saves the cost the wholesaler charges. Then we offer only six products: Sugar, noodles, coffee, rice, soap and coconut fat. Now, these are products which everybody needs every day. We can sell them fast and they are not perishable. So no costs accrue from spoilt goods. And everything is fresh at the Migros because of its fast turnover.
Housewife: I realized that. The rice I buy at the grocer’s shop always smells a bit stale
Migros-salesman: After all, it is a shop! Our Migros-vans are means of transportation and a store in one. I’m simultaneously the forwarding agent, salesman and cashier. If you’ve got a normal shop, you will have to pay the rent, the fittings, the employees. The client gets a better service, but he has to pay dearly for it. At the Migros everything is rationalized. Normally I don’t have the time to chat. The only conversation is: a parcel of lump sugar, two parcels of coffee.
Housewife: By the way: I need a kilo of coffee, two kilos of rice and two kilos of powdered sugar.
Migros-salesman: With pleasure. (break) Now, that comes to 6 francs 40.
Housewife: Here you are.
In 1933, the Swiss government enacted a law prohibiting store branches. This “Lex Migros” was a law aimed specifically at undermining Duttweiler’s success. Migros had begun to edge out shops run by small and medium-sized companies and, in 1933, the government badly needed the goodwill of the middle classes.
Again, Duttweiler recognized the signs of the times. When the government protected the wealthy, he allied himself with the ordinary people. In 1941, he transferred his Migros company to the “people”. By changing his company into a cooperative, he secured the survival of his entrepreneurial and humanistic ideals even after his death. After this step, the Swiss people felt like they were the owners of Migros. Migros became Switzerland’s biggest national company after the prohibition of store branches was repealed at the end of World War II.
- Alfred Escher
Our final example is of a man who was a shining illustration of everything we have mentioned so far about acting in times of crisis. Alfred Escher was an outsider in Zurich’s society and as such he was ready to try and fight for new methods – despite opposition. Not only did he take matters into his own hands, but he also motivated other people to follow his lead . Thanks to Alfred Escher, Zurich became Switzerland’s economic centre. As a result of his farsightedness, this politician provided Zurich with the infrastructure it is still drawing on.
Alfred Escher was born in Zurich in 1819.
In the year 1848, when he was 29 years old, Switzerland’s National Assembly was formed. Escher was a member of the assembly from its inception until his death. He shaped Switzerland’s politics – and most of all, the politics of his hometown, Zurich.
Alfred Escher was a visionary. He saw Switzerland’s future as a European centre of goods transit. Until then, the stream of goods made a detour around Switzerland. With the construction of the Gotthard rail link, which Escher initiated and which was supposed to connect the production sites in Northern Europe to the harbours in Italy, this changed. Of course, an enormous amount of capital was needed to carry out a project of such a vast scale. Escher did not want to depend on other countries for this capital. Economic dependence could soon necessitate making political concessions. Instead, he relied on Swiss capital: he became a founding member of the Schweizerische Kreditanstalt, now the Credit Suisse. This first joint stock bank for trade and industry helped Zurich become one of Europe’s most important centres for banking and industry.
Economic success not only needs capital but also people with excellent training. Escher also recognized this. Thus he, played an important role in founding the Swiss Polytechnic College, now ETH. That way, Zurich could attract bright minds from all over Switzerland to be trained at the Polytechnic as engineers and scientists.
Quickly and systematically implementing his visions, and using well thought out plan and sustainable investment of capital – Escher’s behaviour in a time of crisis was exemplary. Even Escher, however, was not spared from criticism. Like many at the time, he believed that the economic success of a small select group of entrepreneurs meant progress for society as a whole. Hence, some politicians who stressed the social factors in politics mocked him by calling him “King Alfred” or the “Tsar of Zurich”.
We have now arrived at the end of our journey through Zurich’s past. Our examples have shown that it is not always easy to react adequately in time of crisis, but that dealing with the available options for change in a wise manner usually pays off.
The person who can chart his or her own course through a crisis has the best chance of success. Whereas a person who hides in the face of crisis has lost even before he or she has begun.
Of course it takes courage to react adequately to a crisis since there is always a risk of failure. But only the person who actively shapes the crisis by his or her own decisions – instead of trying to wait it out – can be successful.
The truth seems to be edged into the minds of the people of Zurich. Perhaps this is one reason why Zurich has become the home of so much money…