the world of private banking

50
THE WORLD OF PRIVAtE BANKING
The notion of haute banque does not easily fit the world of German banking
– even though several members of the London and Paris haute banque were of
German origin. The reasons have to be sought in the socio-economic context
as much as in the economics of German banking. The concept of haute banque
accurately describes a social status which, by the late nineteenth century, had
become characterized by great wealth, an aristocratic lifestyle and connections
with the world of high politics. German private bankers were unquestionably very
wealthy, 28 but the lack of a capital city, as well as a financial centre, of the calibre
of London or Paris was a hindrance to their reaching a truly global influence. 29 In
any case, no more than a dozen banking houses could be considered as belonging
to the haute banque, but they were scattered around a number of financial centres:
Bleichröder, Mendelssohn, Warschauer in Berlin; Bethmann, Rothschild and
Speyer in Frankfurt; Oppenheim in Cologne; Behrens and Warburg in Hamburg.
This was the core of a group whose frontiers inevitably shifted between 1870 and
1914, with the decline and the occasional disappearance of some, the mergers
and takeovers of others, the rise of a few newcomers. By the eve of the First
World War, only Mendelssohn in Berlin and Oppenheim in Cologne had retained
a top position; Frankfurt’s decline continued with the close of the Rothschild
house; while the most notable newcomers were Warburg, who were to become
Germany’s leading private bankers in the interwar years. 30 However, as in other
financial centres, numerous private houses, usually involved in banking as well
as other financial activities (stockbrokerage, arbitrage and others) were active in
Germany, especially in Berlin.
The problem faced by German private bankers was that the new universal
banks were competing in all fields of banking activity, from the provision of credit
to industrial customers and the financing of foreign trade to the issue of securities
on behalf of foreign companies and governments. Private bankers were able to
maintain a relative prominence in the 1870s and early 1880s. Thereafter, the credit
banks took the leading role in international finance. The issuing syndicates became
28
See W.E. Mosse, Jews in the German Economy: the German-Jewish Economic
Elite 1820–1935 (Oxford, 1987); D. Augustine, Patricians and Parvenus: Wealth and High
Society in Wilhelmine Germany (Oxford/Providence, 1994); M. Reitmayer, Bankiers im
Kaiserreich: Sozialprofil und Habitus der deutschen Hochfinanz (Göttingen, 1999).
29
See Cassis, Capitals of Capital, ch. 3.
30
See W. Treue, ‘Der Privatbankier am Wende der 19. zum 20. Jahrhundert, in
Tradition, vol. 5, 1970; M. Pohl, ‘Festigung und Ausdehnung des deutschen Bankwesens
zwischen 1870 und 1914’, in Institut für bankhistorische Forschung e.V. (ed.), Deutsche
Bankengeschichte, vol. 2 (Frankfurt, 1982), p. 263; Reitmayer, Bankiers; F. Stern, Gold and
Iron: Bismarck, Bleichröder and the Building of the German Empire (London, 1977); M.
Stürmer, G. Teichmann, W. Treue, Striking the Balance: Sal. Oppenheim jr. & Cie. a Family
and a Bank (London, 1994); R.R. Rosenbaum and A.J. Sherman, M.M. Warburg & Co.
1798–1938: Merchant Bankers of Hamburg (London, 1979); R. Chernow, The Warburgs:
The Twentieth-century Odyssey of a Remarkable Jewish Family (London, 1993).