the world of private banking

PRIVAtE BANKS AND tHE ONSEt OF tHE CORpORAtE EcONOmy 53
of Switzerland as a refuge for foreign capital. 37 Their activity, however, was not
confined to wealth management. They remained involved in investment banking,
in particular through finance companies linked to the nascent power industry, 38
with Guillaume Pictet, senior partner of Pictet & Cie, pioneering investment in
US electricity companies. 39
At the heart of the Habsburg Monarchy, Vienna had grown into a financial
centre of no mean standing. Banks could rely on a rich private clientele and served
a dynamic regional industrial Mittelstand. But above all, Vienna was the turntable
of Austria-Hungary’s international financial transactions, from foreign exchange
and bill discounting to the all-important reception and distribution of foreign
capital. 40 However, such financial activity did not benefit private bankers. From the
1880s, their decline was faster than in most other European countries, including
Germany. The haute banque was not spared, with the disappearance of such names
as Sina, Springer, or Wodianer. Schoeller, Austria’s second-largest private bank,
was able to survive, though its real independence was questioned following the
sale in 1910 of its industrial empire to the Credit-Anstalt. 41 The exception was of
course the Rothschilds, led by Albert de Rothschild and after his death in 1911 by
his son Louis. Not only were the Rothschilds the last surviving major private bank
in Austria; they were also a force to be reckoned with alongside the seven large
Vienna joint-stock banks. They remained the largest shareholders of the Credit-
Anstalt, Austria’s largest bank, which they had founded in 1855, though by the
late nineteenth century they were no longer in control. The Rothschilds’ strength
also derived from their role in government finance. They enjoyed a monopoly in
the issue of Austrian state loans until 1886; this monopoly was then granted to the
so-called Rothschild group until 1910, 42 when the issue of government stock was
entrusted to the Postsparkasse, the Post Office savings bank. Nevertheless, the
Rothschilds remained highly influential in government finance while increasingly
turning their attention towards industrial finance.
37
See Y. Cassis and J. Tanner, ‘Finance and Financiers in Switzerland, 1880–1960’,
in Y. Cassis (ed.), Finance and Financiers in European History, 1880–1960 (Cambridge,
1992), pp. 49–56, 106–7.
38
See S. Paquier, ‘Swiss Holding Companies from the Mid-nineteenth Century to
the Early 1930s: the Forerunners and Subsequent Waves of Creation’, in Financial History
Review, vol. 8, 2, 2001, pp. 163–82.
39
Pictet & Cie, 1805–1955 (Geneva, 1955), pp. 52–5.
40
See B. Michel, Banques et banquiers en Autriche au début du vingtième siècle
(Paris, 1976), pp. 49–56.
41
Ibid., pp. 106–7.
42
Besides the Rothschilds, the group included the Credit-Anstalt, the Boden
Creditanstalt, together with three Berlin banks: the Disconto-Gesellschaft, Bleichröder and
Mendelssohn.