the world of private banking

PRIVAtE BANKS AND INDUStRy 209
stock investment bank in Europe. A year later, Oppenheim was the leading founder
of the first bank of this type in Germany, the Darmstädter Bank für Handel und
Industrie, aimed at challenging the power of the Frankfurt Rothschilds, who in
vain tried to prevent the establishment of this bank.
The Oppenheims as well as some Cologne and Frankfurt business partners
used these two banks as a model for the Banque Internationale à Luxembourg,
founded in 1856. With a share capital of 40 million francs – the whole budget of
Luxembourg came to 3.1 million francs – it was designed right from the start as
an international investment bank. The last in the series of banks founded on the
initiative of Oppenheim was the Preußische Central-Boden-Credit AG of 1870,
the first mortgage bank on a joint-stock basis in Prussia.
A Discussion of Possible Fields of Research
While it can be in no way exhaustive, this approach is designed to point out some
topics of research connected with the history of industrialization for which the
Oppenheim Archive holds valuable records.
Issues of economic history
The first batch of topics is obviously connected with issues of economic history.
The Oppenheim Archive holds interesting records for scholars of the actual
founding process of joint-stock companies in the early days of industrialization
and the problems the founders were faced with. One of these was capital raising.
As mentioned before, the Oppenheim Bank often used foreign, especially French,
capital, thus assuming a turn-table role for the capital market of western Germany
until the 1850s. This was necessary because German capital owners continued to
show little inclination for high-risk industrial investment, while preferring public
loans and property.
Another problem was risk management. The Oppenheim history provides
numerous examples of how newly founded companies soon ran into trouble. For
the Oppenheims, the risks were especially high because the bank often played
a double role of financial intermediary between capital supply and demand on
the one hand, and of major shareholder on the other. The latter role may have
developed because of the scarcity of venture capital in Germany just mentioned,
For further information on the role of Oppenheim and other private banks in the
foundation process of joint-stock banks, see M. Pohl, ‘Die Entwicklung des deutschen
Bankwesens zwischen 1848 und 1870’, Institut für Bankhistorische Forschung (ed.),
Deutsche Bankengeschichte (Frankfurt am Main, 1982–1983), pp. 159–60, 166–86.
W. Treue, ‘Die Gründung der Internationalen Bank von Luxemburg vor 125 Jahren’,
in Bankhistorisches Archiv, vol. 7, 1981, pp. 3–15.