the world of private banking

PRIVAtE BANKS AND tHE ONSEt OF tHE CORpORAtE EcONOmy 55
Local banks had their weaknesses. On the liability side, their resources tended
to be meagre. On the assets side, they were almost exclusively tied to the local
economy and their risks were insufficiently diversified. Nevertheless, they did
contribute positively to France’s economic growth. In particular, individual
weaknesses should not obscure the overall strength of the regional financial
structures which emerged at the end of the Second Empire. Two main factors
contributed to the working of the system. One was the relationships linking
together local banks of the same region, underpinned by constant credit flows, with
the larger among them connected to Parisian banks, to which they could turn if
necessary. Another was the spread of the branches of the Banque de France, whose
presence in provincial cities provided a steady source of credit and a reduction in
the cost of borrowing. 48 And while the bulk of country private banks remained
very small firms, some of them, such as Varin-Bernier in Bar-le-Duc (North-East),
Henri Delvider & Cie, or Verley, Decroix & Cie, both in Lille, grew into regional
banks and adopted modern banking techniques. 49
Estimates of the number of private banks in Germany reveal a similar order of
magnitude. According to the Banking Directory, there might have been as many as
2,180 private bankers in 1892 and 2,564 in 1902. These figures, however, should
be considered as the upper limit as they include a fair proportion of very short-lived
private banks as well as firms engaged in other, not strictly banking, activities. 50
The figure given by the Central Association of German Bankers, 1,800 for 1913,
is probably closer to the number of private bankers proper; while the number of
private banks keeping a giro account with the Reichsbank was somewhat smaller:
1,386 in 1902 and 1,221 in 1913. 51 Whichever set of figures is considered, it is
obvious that the number of private banks hardly declined before the First World
War. Moreover, their combined total assets increased from 2.5 to 4 billion Marks
between 1880 and 1913. However, their overall influence, measured by their per
centage of German banks’ total assets, considerably weakened, from 21 per cent in
1880 to 10 per cent in 1900 and just over 5 per cent in 1913. 52 But their contribution
to economic development cannot be doubted: they primarily catered for local small
business. Local private banks fitted into the ‘division of labour’ within the German
48
A. Plessis, ‘Les banques locales, de l’essor du Second Empire à la “crise” de la
Belle Epoque’, in M. Lescure and A. Plessis (eds), Banques locales et banques régionales
en France au XIX e siècle (Paris, 1999).
49
Bergeron, Les capitalistes en France; H. Bonin, Histoire de banques: Crédit du
Nord 1848–1998 (Paris, 1998).
50
Treue, ‘Der Privatbankier’, p. 228. The figures are based on the Deutsche Bankierbuch.
51
Pohl, ‘Festigung und Ausdehnung’; K.A. Donaubauer, Privatbankiers und
Bankenkonzentration in Deutschland von der Mitte des 19. Jahrhundert bis 1932 (Frankfurt
am Main, 1988), p. 13.
52
Calculated from Wixforth and Ziegler, ‘The Niche’, p. 103.