the world of private banking
the world of private banking
the world of private banking
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210<br />
THE WORLD OF PRIVAtE BANKING<br />
and at <strong>the</strong> same time <strong>the</strong> bank’s will to exert as much control on its corporate<br />
clients as possible.<br />
The activities <strong>of</strong> <strong>the</strong> Oppenheim Bank also give an example for <strong>the</strong> development<br />
<strong>of</strong> ‘mixed <strong>banking</strong>’ in Germany with its typical combination <strong>of</strong> corporate finance<br />
and investment <strong>banking</strong>, a <strong>banking</strong> culture quite different from <strong>the</strong> Anglo-Saxon<br />
<strong>world</strong>. Ano<strong>the</strong>r German peculiarity is that <strong>of</strong> <strong>the</strong> wide representation <strong>of</strong> bankers<br />
on supervisory boards. The Oppenheims, for example, held seats on almost all<br />
supervisory boards <strong>of</strong> companies <strong>the</strong>y had helped to establish and used <strong>the</strong>ir<br />
position to control and influence <strong>the</strong>se companies’ policies.<br />
My last suggestion for fur<strong>the</strong>r research is <strong>the</strong> question <strong>of</strong> synergies. Through<br />
its wide commitments in so many branches <strong>of</strong> industry and <strong>the</strong> intensity <strong>of</strong><br />
involvement in <strong>the</strong> individual companies, <strong>the</strong> Oppenheim Bank was bound to gain<br />
a survey <strong>of</strong> <strong>the</strong> economic situation unparalleled by any o<strong>the</strong>r institution – state or<br />
<strong>private</strong> – at least in <strong>the</strong> Rhineland. It seems logical that <strong>the</strong> Oppenheims used this<br />
key position to make one project benefit from ano<strong>the</strong>r for maximum pr<strong>of</strong>it. This is<br />
suggested by, for example, <strong>the</strong> fact that when <strong>the</strong> Oppenheim Bank established <strong>the</strong><br />
Rhineland railway it advocated a more costly routeing – <strong>the</strong> only one among <strong>the</strong><br />
Cologne founders to do so. The reason was that <strong>the</strong> coalmines around Aachen <strong>the</strong>y<br />
were investing in at <strong>the</strong> same time would <strong>the</strong>reby secure a railway link, opening<br />
up a much greater market for <strong>the</strong>se mines. <br />
Banking and <strong>the</strong> state<br />
There was a considerable clash <strong>of</strong> cultures and mentalities between <strong>the</strong> old<br />
Prussia east <strong>of</strong> <strong>the</strong> river Elbe, dominated by <strong>the</strong> agrarian interests <strong>of</strong> an ultraconservative<br />
aristocracy, and Prussia’s western territories acquired after 1815,<br />
governed by liberal political, social and economic ideas. Until at least <strong>the</strong> 1840s,<br />
<strong>the</strong> Prussian administration showed little understanding <strong>of</strong> <strong>the</strong> problems and<br />
needs <strong>of</strong> <strong>banking</strong> and industries developing in <strong>the</strong> Rhineland. Specifically, this<br />
meant that <strong>the</strong> Oppenheims could, for some time, nei<strong>the</strong>r expect financial support<br />
even for projects <strong>of</strong> public benefit like railways, nor meet with administrative<br />
support when trying to get concessions for new companies. Quite <strong>the</strong> contrary,<br />
<strong>the</strong> administration <strong>of</strong>ten used arguments like <strong>the</strong> fear <strong>of</strong> developing monopolies<br />
to delay such concessions. Interestingly, <strong>the</strong> administrative bodies in <strong>the</strong> Prussian<br />
Rhineland usually supported <strong>the</strong> bank’s interests. The retarding attitude <strong>of</strong> <strong>the</strong><br />
Prussian State was a motive behind <strong>the</strong> foundation <strong>of</strong> <strong>the</strong> Banque Internationale à<br />
Luxembourg as well as <strong>the</strong> Darmstädter Bank für Handel und Industrie. As <strong>the</strong>y<br />
were situated on foreign soil, <strong>the</strong>y could bypass Prussian legislation and restrictive<br />
fiscal policies. <br />
<br />
Teichmann, ‘Das Bankhaus Oppenheim’, p. 21.<br />
<br />
Tilly, Financial Institutions, pp. 13–15.