the world of private banking

JEwISH PRIVAtE BANKS 219
in France and in the German States deeply mistrusted joint-stock banks, and it
took the crisis of 1848 to change their minds. A second motive also inspired the
bankers: creating a counterweight to the financial might of the Rothschilds.
In France, the Pereire brothers promoted the mixed banking model, which
prevailed from the foundation of the Crédit Mobilier until the collapse of the Union
Générale in 1882. Influenced, like Louis-Napoléon Bonaparte, by Saint-Simonian
ideals, the Pereires took advantage of his rise to power. With the founding in 1852
of the Crédit Mobilier they stamped their own imprint on the revolution in the
banking system, both by the broadness of their vision and by the energy with
which they defended and promoted their ideas.
The Crédit Mobilier’s vocation lay in financing the development of railways
and heavy industry, carrying out all operations with the public authorities, and
sustaining the companies’ share values on the stock market. The bank’s originality
was in its proposed method of collecting savings by issuing short- and long-term
redeemable bonds to mobilize all available funds. In this way, the Pereires aimed to
centralize the financial operations of the great railway and metallurgical companies
in order to merge all the firms from a given industrial sector into a single company.
The Crédit Mobilier, following one of the most fruitful ideas of the Pereires, would
eventually substitute its own shares and debentures, in a so-called omnium equity
share, for all the securities currently in circulation, in such a way as to establish a
joint and several obligation and thus gain the public’s confidence.
These schemes, with their monopolistic vision of the future great industrial
firms, extended far beyond France; they had particular appeal for continental
countries yet to engage fully in industrialization, like Austria, Switzerland, Italy,
Spain and the Russian Empire. After a promising start, favoured by political and
economic conditions, the Crédit Mobilier’s plans united the Rothschilds, the
regents of the Banque de France (many of whom belonged to the haute banque)
and the great railway barons against it. James de Rothschild was undoubtedly the
greatest opponent of the Crédit Mobilier. Not only did he attempt – unsuccessfully
– to dissuade Louis-Napoléon Bonaparte from supporting the Crédit Mobilier, but
he also struggled continuously against the Pereires on the stock market as well
as in all the sectors where they were involved in France and abroad. Thus, the
Rothschilds participated in all the railway and banking coalitions which opposed
the Pereire enterprises. Their opposition went as far as creating a Crédit Mobiliertype
institution in Austria, the well-known Credit-Anstalt, and in Italy where they
participated in founding the Caisse de Turin.
The Pereires collapsed. But it is worth noting that the Rothschilds were unable
to convince governments of the dangers of the type of credit institution they had
created. As a consequence, they chose to adapt to that type to preserve their own
position in European finance. But that choice was dictated by necessity.
In the German States, the promoters of mixed banking were frustrated during
the 1850s and 1860s by strong resistance from the Prussian government to the
creation of joint-stock banks. The circumstances of the foundation of the first D-