the world of private banking

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THE WORLD OF PRIVAtE BANKING
and at the same time the bank’s will to exert as much control on its corporate
clients as possible.
The activities of the Oppenheim Bank also give an example for the development
of ‘mixed banking’ in Germany with its typical combination of corporate finance
and investment banking, a banking culture quite different from the Anglo-Saxon
world. Another German peculiarity is that of the wide representation of bankers
on supervisory boards. The Oppenheims, for example, held seats on almost all
supervisory boards of companies they had helped to establish and used their
position to control and influence these companies’ policies.
My last suggestion for further research is the question of synergies. Through
its wide commitments in so many branches of industry and the intensity of
involvement in the individual companies, the Oppenheim Bank was bound to gain
a survey of the economic situation unparalleled by any other institution – state or
private – at least in the Rhineland. It seems logical that the Oppenheims used this
key position to make one project benefit from another for maximum profit. This is
suggested by, for example, the fact that when the Oppenheim Bank established the
Rhineland railway it advocated a more costly routeing – the only one among the
Cologne founders to do so. The reason was that the coalmines around Aachen they
were investing in at the same time would thereby secure a railway link, opening
up a much greater market for these mines.
Banking and the state
There was a considerable clash of cultures and mentalities between the old
Prussia east of the river Elbe, dominated by the agrarian interests of an ultraconservative
aristocracy, and Prussia’s western territories acquired after 1815,
governed by liberal political, social and economic ideas. Until at least the 1840s,
the Prussian administration showed little understanding of the problems and
needs of banking and industries developing in the Rhineland. Specifically, this
meant that the Oppenheims could, for some time, neither expect financial support
even for projects of public benefit like railways, nor meet with administrative
support when trying to get concessions for new companies. Quite the contrary,
the administration often used arguments like the fear of developing monopolies
to delay such concessions. Interestingly, the administrative bodies in the Prussian
Rhineland usually supported the bank’s interests. The retarding attitude of the
Prussian State was a motive behind the foundation of the Banque Internationale à
Luxembourg as well as the Darmstädter Bank für Handel und Industrie. As they
were situated on foreign soil, they could bypass Prussian legislation and restrictive
fiscal policies.
Teichmann, ‘Das Bankhaus Oppenheim’, p. 21.
Tilly, Financial Institutions, pp. 13–15.