the world of private banking

220
THE WORLD OF PRIVAtE BANKING
Banks, the Darmstädter (1853) and the Disconto-Gesllschaft (1851–6), on the
initiative of several Jewish private bankers are revealing in this respect.
The first of these houses was established on the initiative of a group of Cologne
private bankers who had participated in the rescue and conversion to a joint-stock
bank of the Schaaffhauser Bank during the crisis of 1848. At the outset, Abraham
Oppenheim, Gustav Mevissen and their partners encountered a double obstacle,
the Prussian government’s opposition and the Rothschilds’ hostility, which ruled
out any possibility of setting up the new bank in Frankfurt. However, thanks
to Oppenheim and Mevissen’s family connections, they were supported by the
grand-duke of Hesse, and on 13 April 1853 the Bank für Handel und Industrie
opened in Darmstadt. More than half of the initial capital of 10 millions florins
was subscribed by the Crédit Mobilier. The new bank wasted no time in increasing
its capital to 25 million florins by 1856 in order to reduce the influence of the
Pereire brothers. Since setting up branches or subsidiaries in Prussia or accessing
the Frankfurt money market was impossible, its expansion was focused on the rest
of Germany and abroad through partnerships with existing banking firms.
Despite his significant role in the management of the Bank of Prussia, David
Hansemann failed to convince the Prussian rulers that joint-stock banking offered
advantages. Indeed, after his own efforts to create such an establishment in Berlin
lost him his post, he chose to develop a different type of banking institution
by creating a discount house, the Direction der Disconto-Gesellschaft, under a
cooperative structure. Thanks to rapid growth in membership and in the volume of
its operations, Hansemann was soon able to convert the cooperative into a limited
partnership, the Disconto-Gesellschaft, with a capital of ten million thalers,
thereby raising it to the first rank of Prussian banks and second place in the whole
Zollverein behind the Darmstädter Bank für Handel und Industrie.
Meanwhile, a group of leading Jewish private bankers including Bleichröder
and Mendelssohn, with the help of Oppenheim and Mevissen, founded a rival
establishment, the Berliner Handelsgesellschaft. Its pattern was inspired by those
of the Crédit Mobilier and Darmstädter Bank.
In Germany, France and other countries of the continent, the Franco-Prussian
war decisively accelerated competition between private banks and joint-stock
banks. At the time, liberalization of legislation on joint-stock companies in both
countries as well as the huge business generated by financing the five billion francs
indemnity imposed upon France by the new German Empire promoted the birth
of new joint-stock banks. In January 1870, several Jewish bankers and politicians,
among them Ludwig Bamberger, the builder of the future Reichsbank, and Herman
Wallich, had participated in founding the Deutsche Bank with the aim of financing
international trade; the bank soon entered the same field as the other D-banks and
the Berliner Handelsgesellschaft. On the other hand, the indemnity loans raised in
1871 and 1872 by France, whose financial success stunned Europe, had multiple
benefits for the banking system. The haute banque and the new banks competed
to take up loans, thereby collecting guarantee commissions, underwriting fees and
profits from arbitrage dealings and bills. While the Rothschilds put together an