the world of private banking

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THE WORLD OF PRIVAtE BANKING
– Deutsche Bank (by almost all important Berlin bankers led by Delbrück,
Leo & Co. and many other bankers from Bremen, Cologne, Frankfurt and
other places),
– Commerz- und Discontobank (by several Hamburg bankers including
Hesse, Newman & Co. and C.H. Donner, but also by the Berlin banker
Mendelssohns & Co.). 29
In contrast to Schaaffhausenscher Bankverein and Barmer Bankverein, these
founding activities can be interpreted as an attempt to institutionalize some form of
cartel for those transactions which had become too large for a single private banking
house. Consequently, the relationship between the bankers and ‘their’ joint-stock
banks was more or less cordial and the bankers still kept both an influential position
and adequate quotas in all syndicate agreements. 30 In international syndicates their
foreign partners at times even refused the participation of the novel joint-stock
banks and cooperated only with the established private bankers. In all, the 1830s
to 1880s can be seen as the ‘heyday’ of private banking in Germany.
Private Banking in Decline?
Until recently, the substantial decline in the number of private banks after the turn
of the century has led to an unwarranted overestimation of their relative decline in
importance for the functioning of the universal banking system. A glance into the
statistics which reflect the quantitative development of private banking during the
first half of the twentieth century suggests that the significance of this type of bank
has declined considerably. Such quantitative data can be interpreted to the effect
that while many private bankers had played an important role in the early phase
of German industrialization, in the process of maturing economic development
their significance and influence in industry and commerce constantly declined.
The weakening of the formerly dominant position of the private bankers in the
banking system cannot and will not be denied on principle, but the simple fact has
to be qualified.
Despite some notorious cases of formerly first-rate private banks – M.A.
Rothschild & Söhne was sold to the Discontogesellschaft in 1901 and Robert
29
M. Pohl et al., Deutsche Bankengeschichte, 3 vols (Frankfurt/Main, 1982), vol. 2,
pp. 182–6, 264–8; Pohl, Konzentration, pp. 67–74, 107–16; C. Burhop, Die Kreditbanken
in der Gründerzeit (Stuttgart, 2004), pp. 90–106.
30
P. Hertner, ‘German Banks Abroad Before 1914’, in G. Jones (ed.), Banks
as Multinationals (London, 1990), pp. 99–119; R. Tilly, ‘International Aspects of the
Development of German Banking’, in R. Cameron and V. Bovykin (eds), International
Banking 1870–1914 (Oxford, 1991), pp. 90–112; B. Barth, ‘Deutsch-jüdisch-europäische
Privatbankengruppen vor und nach dem Ersten Weltkrieg’, Arbeitskreis für Bankgeschichte
der GUG, Arbeitspapier no. 5 (1997, unpublished).