the world of private banking
the world of private banking
the world of private banking
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PRIVAtE BANKS AND tHE ONSEt OF tHE CORpORAtE EcONOmy 51<br />
dominated by <strong>the</strong> Deutsche Bank and <strong>the</strong> Disconto-Gesellschaft ra<strong>the</strong>r than by<br />
Mendelssohn and Bleichröder, especially in <strong>the</strong> new areas <strong>of</strong> capital exports such<br />
as Latin America, China and <strong>the</strong> Ottoman Empire; <strong>the</strong> more personal relations<br />
<strong>of</strong> <strong>the</strong> <strong>private</strong> <strong>banking</strong> networks continued to play an important role in financial<br />
transactions with <strong>the</strong> United States and Russia. Private bankers were usually <strong>of</strong>fered<br />
a share <strong>of</strong> <strong>the</strong> business and could occasionally take <strong>the</strong> lead, like Mendelssohn<br />
in Russia. But for a typical Argentinean loan to be issued in London, Paris and<br />
Berlin, Baring Bro<strong>the</strong>rs had as partners <strong>the</strong> Banque de Paris et des Pays-Bas and<br />
<strong>the</strong> Disconto-Gesellschaft ra<strong>the</strong>r than a <strong>private</strong> bank.<br />
In industrial finance, <strong>private</strong> bankers could no longer, by <strong>the</strong> 1880s, contemplate<br />
an intervention on a scale comparable to that <strong>of</strong> <strong>the</strong> credit banks. They managed,<br />
however, to retain a high degree <strong>of</strong> influence, visible through <strong>the</strong>ir presence on<br />
<strong>the</strong> supervisory boards <strong>of</strong> <strong>the</strong> country’s major companies. In 1900, according to<br />
a recent survey, half <strong>of</strong> <strong>the</strong> directorships <strong>of</strong> German leading industrial companies<br />
were held by <strong>private</strong> bankers, as against 42.5 per cent for <strong>the</strong> directors <strong>of</strong> <strong>the</strong> ‘great<br />
banks’ and 7.5 per cent for representatives <strong>of</strong> provincial banks. Private bankers<br />
were still ahead, by one per cent, in 1913 and did not lose ground in any dramatic<br />
way before <strong>the</strong> mid-1930s. They were able to <strong>of</strong>fer a more personalized service,<br />
highly valued by industrial companies, thus exploiting a niche and turning <strong>the</strong>ir<br />
limited resources into an advantage. 31 In all European countries, an aristocracy <strong>of</strong><br />
<strong>private</strong> bankers survived until <strong>the</strong> First World War, though <strong>the</strong>y did not necessarily<br />
belong to <strong>the</strong> international haute banque. Such a membership depended ei<strong>the</strong>r<br />
on family links or on <strong>the</strong> global importance <strong>of</strong> <strong>the</strong> financial centre from which a<br />
banker operated.<br />
After London, Paris and Berlin, Brussels probably ranked fourth in <strong>the</strong><br />
European hierarchy and was <strong>the</strong> most international <strong>of</strong> <strong>the</strong> second tier financial<br />
centres, mainly as a result <strong>of</strong> <strong>the</strong> strong presence <strong>of</strong> a cosmopolitan haute banque.<br />
The Belgian haute banque reached its apogee in <strong>the</strong> third quarter <strong>of</strong> <strong>the</strong> nineteenth<br />
century, with families such as <strong>the</strong> Bisch<strong>of</strong>fsheim (a name tied to <strong>the</strong> Banque de<br />
Belgique, founded in 1835, and <strong>the</strong> Banque de Paris et des Pays-Bas), Lambert<br />
(<strong>the</strong> Rothschilds’ representative in Brussels), Oppenheim and <strong>the</strong>ir networks <strong>of</strong><br />
relationships both in Belgium and across Europe. 32 Like most <strong>of</strong> <strong>the</strong>ir counterparts<br />
in continental Europe, Belgian <strong>private</strong> bankers lost ground to <strong>the</strong> universal banks,<br />
in <strong>the</strong> first place <strong>the</strong> Société Générale de Belgique, 33 in <strong>the</strong> course <strong>of</strong> <strong>the</strong> nineteenth<br />
century, though a few <strong>of</strong> <strong>the</strong>m remained highly influential. The most successful<br />
31<br />
D. Ziegler and H. Wixforth, ‘The Niche in <strong>the</strong> Universal Banking System: <strong>the</strong> Role<br />
and Significance <strong>of</strong> Private Bankers within German Industry, 1900–1933’, in Financial<br />
History Review, vol. 1, 2, 1994, pp. 99–119.<br />
32<br />
See S. Tilman, Les grands banquiers belges (1830–1935): Portrait collectif d’une<br />
élite (Bruxelles, 2006).<br />
33<br />
See G. Kurgan-van Hentenrynk, Gouverner la Générale de Belgique: Essai de<br />
biographie collective (Bruxelles, 1996); H. Van der Wee (ed.), The Generale Bank 1822–<br />
1897 (Tielt, 1997).