State investment in eighteenth-century Berne

This article provides information about Berne's financial situation at the time the Economic Society was founded. The canton was in an exceptionally fortunate position, having accumulated a sizeable cash reserve that was in part used for loans and investments on the London capital market. Throughout the century, the Bernese government followed a very cautious investment strategy. The main reason for purchasing overseas securities was that they helped the patricians to become independent from tax-paying subjects. Economic imperatives ruled out increases of the cash reserve or further involvement in the overcrowded domestic capital market. However, by investing abroad Berne became increasingly dependent on the goodwill of its debtors, for which it was criticised by the Economic Patriots amongst others.