Reverend Johann Evangelist Traber – Founder of the Swiss Raiffeisen Bank

The crisis of the major Swiss bank Credit Suisse and its takeover by UBS have shown that we are living in uncertain times as far as the stability of our financial system is concerned. The question of making our financial system more resistant to crises that can have fatal consequences for the local as well as the global economy was recently addressed by the German professor of economics Christian Kreiss, among others. Basically, he advised to build smaller financial institutions: “One could learn from the financial crisis: the farther away bankers are from the customer, the more irresponsible the banking behaviour. Conversely, the more regionally rooted a bank is, the more responsibly it usually acts. From an ethical point of view, smaller regional banks are a real ray of hope.”¹

Such a bank was founded at the end of the 19^th century by Pastor Johann Evangelist Traber, and it is worthwhile to take a closer look at this example, especially in today's world. He laid the foundation for the first Swiss Raiffeisenkasse based on the principle of the German social reformer Friedrich Wilhelm Raiffeisen. Careful preparations eventually led to the successful founding of the bank in Bichelsee, opening on 1 January 1900. Since then, successfully operating Raiffeisen banks arose in many communities.

Helping people to help themselves

Poverty was very high in Switzerland at that time. It was therefore of great concern to Traber to help people to free themselves from poverty in an independent way. He saw one way to do this in the cooperative idea: “Capitalism is swelling more and more, and the middle class is suffering from consumption. ‘Help yourself!’ The effective self-help is the Raiffeisen banks,” Traber wrote in his “Kurze Aufklärung über Raiffeisensche Darlehenskassen-Vereine” (Brief information on the Raiffeisen Loan Associations)^.2
  The form of the cooperative corresponded best to this, because “the cooperative is the original form of joint activity in self-help, self-responsibility and self-administration. It is in accordance with human nature to tackle the tasks of life together. ”³ This tradition has been widespread in Switzerland for centuries.
  It is essentially about the economic promotion and development of all members through their own efforts. Let us take a look back at the time when this pioneering work was done.

Who was Rev. Johann Traber?

In 1885, Father Traber, who already had some life experience, was appointed as a priest to the parish of Bichelsee in Hinterthurgau. He worked at a time when people were very poor in many places. He saw their need. The majority of the population consisted of farmers and a few craftsmen.
  The textile industry, especially machine embroidery, spread rapidly in eastern Switzerland from around 1850. Families needed loans to build embroidery workshops for the embroidery machines. Mostly they were located at farms and were run by the farming families as a cottage industry in addition to agriculture. This provided them with additional income.
  Pastor Traber’s openness and his eye for all the questions that preoccupied people at that time motivated him to look for and develop solutions step by step. He always involved the people in the village in thinking, shaping and helping. This enabled them to improve their lives. His determined, courageous help for self-help was a distinctive trait of Traber. He never stood helplessly in front of a problem, his attitude was: “Where there is a will, there is also a way!”⁴

What did the help look like?

Pastor Traber promoted the associational life in the parish. Associations create opportunities for people to meet to discuss the issues that concern them. The first thing that was important to him after he took office was the women; they should have a framework to be able to discuss their questions. He founded the Christlicher Mütterverein Bichelsee (Christian Mothers’ Association of Bichelsee) with the aim of promoting the “[...] education of youth” for “mutual help and encouragement for all good that serves this purpose”.⁵ For further education, women and mothers could attend educational lectures on practical questions.
  In the same year (1896), the Männerverein (Men’s Association) was founded, to which Traber gave an important function and a comprehensive meaning: on the one hand, it was to educate the population in a religious-moral sense in order to enable them to contribute to the solution of the social question on a Christian basis; on the other hand, it was to offer enlightenment on other respectively burning political and scientific questions, as they were brought about by time and circumstances, e.g. on the question of common public interest.
  Father Johann Evangelist Traber studied in detail the encyclical “Rerum Novarum”, which Pope Leo XIII had published on 15 May 1891. It opposes the exploitation of labour, teaches in a convincing way how humanity can improve its situation through self-help and mutual support. Traber's entire work and the above-mentioned founding of associations is based on this idea.

Foundation of the Raiffeisen Bank

In the Thurgauer Wochenzeitung (Weekly Newspaper of Thurgovia), with which pastor Traber had a close relationship, different articles have been published about contemporary topics. In one article the Raiffeisen principle is being displayed, the peasant banking in another; yet another article is titled “Loan office clubs based on the Raiffeisen system; foundation and meaning”.⁶ Therein it is made clear that large banks cannot satisfy the needs of agriculture and therefore, agricultural credit cooperatives made a lot more sense.
  Pastor Traber discussed the following problems with members of the mens’ club: How can one increase the wellbeing of the people? How can people get out of their financial misery? How can you invest money in a useful way? How can one lend money with reasonable interest, e.g. when you want to invest in buildings or machinery, without being exposed to usurers? The club members set their wits to the principles of Friedrich Wilhelm Raiffeisen from Germany, studied and discussed them thoroughly.
  Following these conversations, those forty men with pastor Traber came to the conclusion to found the first bank based on the Raiffeisen system in Switzerland. On 21 December 1899 the real foundational meeting took place at the school house of Balterswil (Thurgovia). It was called “1. General Assembly of the Savings and Loan Office Club Bichelsee-Balterswil”. Pastor Johann Traber was elected Club and Board president. On 1 January 1900 the loan office Bichelsee was formally opened.
  In the statutes, several basic principles were fixated which proved themselves, survived all crises and are valid to this day. These statutes are in line with the Swiss Code of Obligations. One pillar states: “Deposits are accepted by the Raiffeisen Bank from everywhere; but its money can only be deposited with interest within its own club district and it cannot give loans beyond this district. Loans can only be granted to club members.”⁷ Because inside this district, people know one another, and it is known if one of them is in need of help, search for a loan righteously and gets that loan in the end.

Traber’s Principles

The successful inception of the Raiffeisen Bank got around really quick. Pastor Traber was invited by many communities, who were interested in founding a Raiffeisen Bank as well, to talk about the basics. He decided to formulate a script, a manual with which every community was able to found and run a Raiffeisen Bank by themselves. In his brochure “Brief Clarification about Raiffeisen Loan Office Clubs” he wrote down five basic principles with which must not be argued about if one wants to found a loan office based on Wilhelm Raiffeisens’ principle and run it successfully. They are:

1. Restriction to a close district of a couple of thousand citizens.
2. Unlimited solidary liability for all members.
3. Non-renumeration of administration excluding the cashier.
4. Loans can only be granted to members.
5. No distribution of dividends, but the real earnings shall be accumulated in the reserves fund, until the latter can be made fruitful for everyone as a support fund.⁸

Paster Traber soon came to the realization that the Raiffeisen idea could only work in Switzerland if there would be a central bank, a levelling office for the banks. Already on 25 September 1902 the national association was founded in Bichelsee. Pastor Traber was elected first Head of Association and Cashier.⁹
  In his last annual report in 1912 he shaped the phrase: “Observe the rule, and the rule observes you.”¹⁰ This basic thought is recognizable throughout his perspective on life and serves as a solid base for the Raiffeisen association as well. If one sticks to the basic principles that have proven themselves and avoids at all cost to give them up easily, one will have success and is safe in times of crisis.
  During the celebration of the 25^th anniversary of Switzerlands’ first Raiffeisen Bank, Traber was honoured and celebrated for his extraordinary services. The association celebrated Bichelsee as the “Cradle of the Swiss Raiffeisen movement”¹¹ and thanked the “honourable Swiss father of Raiffeisen” Johann Evangelist Traber for his brilliant example.
  The Raiffeisen bank has complied with its basic principle of not speculating on the stock market with the money they received in good trust by their members for a long time. Professor Kreiß therefore advised to make savings safer by transforming the major part of the finance branch into smaller institutions based on the model of Raiffeisen and Sparkasse.  •

¹ Kreiß, Christian. “Nothing is straightened out – the banking and debt crisis continues to smoulder” In: Current Concerns of 23 May 2023.
² Traber, Johann E., Pfarrer in Bichelsee. Kurze Aufklärung über Raiffeisensche Darlehenskassen-Vereine. (Brief information on the loan associations of Raiffeisen.) 12 February 1900, p. 5.
³ We are founding a cooperative, Verlag Zeit-Fragen (2014), p. 6.
⁴  Böhi, Alfred. Pfarrer und Dekan Johann Ev. Traber. Schweizerischer Raiffeisen-Pionier (Reverend and Dean Johann Ev. Traber. Swiss Raiffeisen pioneer). 1943, p. 32 and p. 21
⁵ op.cit., p. 49
⁶ loc. cit., p. 92
⁷ Traber, Johann E., Pastor in Bichelsee. Kurze Aufklärung über Raiffeisensche Darlehenskassen-Vereine. (Brief information on the loan associations of Raiffeisen.) 12 February 1900, p. 5
⁸ loc. cit., p. 15
⁹ Böhi, Alfred, loc. cit., p. 100
¹⁰ 100 Years Raiffeisen Bank Bichelsee-Turbenthal, 1999, p. 15/16
¹¹ Böhi, Alfred, loc. cit., p. 101