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The Industrial Politics of the Kreditbanken, 1880–1914*

Published online by Cambridge University Press:  11 June 2012

Hugh Neuburger
Hugh Neuburger
Affiliation:
Assistant Professor of History, Columbia University
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Abstract

One of the most durable theories explaining the remarkable rise of German industry in the generation before World War I was that of the critical role of the Kreditbanken, the great commercial and investment banks of which the Deutsche Bank was the most prominent. Recently, however, historians have begun to question the power of the banks, and even to suggest that they were a drag on German economic development. In this brief study of how Georg Siemens, of the Deutsche Bank, kept the peace between the two leading German electrical equipment manufacturers, Professor Neuburger shows that the crucial factors were not merely the financial strength or weakness of the Bank, but also the diplomatic skill with which its leaders navigated the rapidly shifting currents of the era.

Type
Research Article
Information
Business History Review , Volume 51 , Issue 2 , Summer 1977 , pp. 190 - 207
Copyright
Copyright © The President and Fellows of Harvard College 1977

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References

1 A Kreditbank combines in one institution the functions of a commercial bank with those of an investment bank. See, Riesser, Jacob, Zur Entwicklungsgeschichte der deutschen Grossbanken mit besonderer Rücksicht auf die Konzentrationsbestrebungen (Jena, 1906)Google Scholar; Jeidels, Otto, “Das Verhältnis der deutschen Grossbanken zur Industrie mit besonderer Berücksichtigung der Eisenindustrie,” Staats- und sozialwissenschaftliche Forschungen, XXII (1905), 1–271Google Scholar; Gehr, Martin, “Das Verhältnis zwischen Banken und Industrie in Deutschland seit der Mitte des 19. Jahrhunderts bis zur Bankenkrise von 1931 unter besonderer Berücksichtigung des industriellen Grosskredits,” (doctoral dissertation, University of Tübingen, 1959)Google Scholar.

2 Gerschenkron, Alexander, Economic Backwardness in Historical Perspective (Cambridge, Mass., 1962)Google Scholar. Note that Gerschenkron argues that “follower” countries need some special institutional arrangements to overcome initial obstacles to industrialization. In Germany the Kreditbanken performed this function. By “substituting” for missing elements (i.e., capital, managerial skills), these banks sped economic growth, according to this view.

3 Riesser, Zur Entwicklungsgeschichte; Hilferding, Rudolf, Das Finanzkapital (Vienna, 1923)Google Scholar; and von Sehulze-Gaevernitz, Gerhard, Grundriss der Sozialökonomik, V Abteilung, II Teil, Die deutsche Kreditbank (Tübingen, 1922)Google Scholar.

4 Hilferding, Das Finanzkapital, 96.

5 Ibid., 283–284.

6 Neuburger, H. and Stokes, H. H., “German Banks and German Growth, 1883–1913: An Empirical View,” Journal of Economic History, XXXIV (1974), 710–731CrossRefGoogle Scholar; Neuburger, H. and Stokes, H. H., “German Baking and Japanese Banking: A Comparative Analysis,” Journal of Economic History, XXV (1975), 238–252CrossRefGoogle Scholar.

7 Kocka, Jürgen, Unternehmensverwaltung und Angestelltenschaft am Beispiel Siemens, 1847–1914 (Stuttgart, 1969), 429Google Scholar.

8 Borchardt, Knut, “The Industrial Revolution in Germany 1700–1914,” in The Fontana Economic History of Europe (London, 1973), 150Google Scholar.

9 Ibid., 150.

10 A multi-polar model would presumably be most useful. For a discussion of some interesting approaches, see, Kaplan, Morton A., ed.. New Approaches to International Relations (New York, 1968)Google Scholar.

11 Among the most useful references concerning these companies are Georg Siemens, History of the House of Siemens, trans. Rodger, A. F., Vol. I (Freiburg/Munich, 1957)Google Scholar; and Pinner, Felix, Emil Rathenau und das elektrische Zeitalter (Leipzig, 1918)Google Scholar.

12 Kocka, Unternehmensverwaltung, 567.

13 Kreller, Emil, “Die Entwicklung der deutschen elektrotechnischen Industrie und ihre Aussichten auf dem Weltmarkt,” Staats- und sozialwissenschaftliche Forschungen, XXII (1903), 21–22Google Scholar.

14 Ibid., 15.

15 Letter from Gwinner to Bödiker, March 31, 1898, Deutsche Bank, Historisches Archiv, Frankfurt am Main (Siemens and A.E.G. files).

16 Gwinner objected to the exclusive aspect of the agreement that Delbrück, Leo and Co. had made with the A.E.G.

17 Letter from Bödiker to Gwinner, April 1, 1898.

18 Letter from Gwinner to Bödiker, April 2, 1898.

19 These groups were the Siemens and Halske group, the A.E.G. group, the Schuckert group, the Union (or Loewe) group, the Helios group, the Lahmeyer group, and the Kummer group. Of these, the first four were the major forces of the industry. For a useful account of events in the electrical industry during this period, see, Siemens, G., History, Vol. I, 194–197Google Scholar.

20 Siemens and Halske, Minutes of the February 11, 1902 Board of Directors meeting.

21 Kocka, Unternehmensverwaltung, 323–327.

22 Letter from Wilhelm von Siemens to Roland-Lücke, August 24, 1903.

23 See Kocka, Unternehmens verwaltung, 396 ff. for a good discussion of this conflict.

24 For an interesting description of Alfred Berliner, see Siemens, G., History Vol. I, 321–322Google Scholar.

25 Berliner wanted to be appointed Generaldirector of the firm.

26 Letter from Wilhelm von Siemens to Roland-Lücke, December 1, 1906.

27 Letter from Holand-Lücke to Wilhelm von Siemens, December 3, 1906.

28 Kocka, Unternehmensverwaltung, 454–455.

29 Ibid., 429 ff.

30 In fact, a comparison of the strength of the Kreditbanken with that of the banks of other advanced countries in this era would certainly not place the Kreditbanken on the weaker end of the spectrum.

31 Letter from Wilhelm von Siemens to Roland-Lücke, August 15, 1902.

32 Letter from E. Heinemann to D. Heineman in Brussels, February 4, 1914.

33 Letter from E. Heinemann to D. Heineman in Brussels, March 9, 1914.

34 The Bank Enquete of 1908 is evidence of parliamentary concern for possible abuses in banking.

35 The Deutsche Bank often issued and sold the shares of firms it served. As a prominent underwriter of such issues, the bank assumed a tacit responsibility for the proper conduct of the firm's affairs. Supporting any action not in the best interests of the firm would have been perceived as a betrayal of the firm's shareholders. If two client firms of the bank came into conflict, the bank was expected to avoid taking sides or to terminate relations with one of the parties.

36 Letter from Berliner to Roland-Lücke, May 24, 1905.

37 Letter from Berliner to Klönne, May 24, 1905.

38 Letter from Roland-Lücke to Berliner, May 27, 1905.

39 Letter from Berliner to Roland-Lüeke, May 24, 1905.

40 Letter from Berliner to Roland-Lücke, May 27, 1905.

41 For a good discussion of Georg Siemens' career and some interesting excerpts from his letters, see, Helfferich, Karl, Georg von Siemens (Berlin, 1923)CrossRefGoogle Scholar; also see, G. Siemens, History, Vol. I.

42 For an explanation of this problem and its resolution, see, F. Pinner, Emil Rathenau, 146–154.

43 Letter from Rathenau to Georg Siemens, May 19, 1894.

44 Letter from Georg Siemens to Henry Villard in Eisenach, June 11, 1888.

45 Letter from Georg Siemens to Werner von Siemens, June 12, 1888.

46 Letter from Georg Siemens to Werner von Siemens, May 18, 1888.

47 Letter from Georg Siemens to Henri Abegg in Zurich, December 26, 1896.