I woluld like to thank the German Academic Exchange Service (DAAD) and the International Research Exchange Council (IREX) for grants that funded this research. I also gratefully acknowledge Otto Pflanze and James M. Diehl for their incisive comments and criticisms. I further thank the members of the dissertation wokshop of Indiana University's Department of History, which read an earlier draft.

1. Obermann, Karl quoting Riesser, Jacob, former director of the Darmstädter Bank, in “Die Rolle der ersten deutschen Aktienbanken 1848–1856,” Jahrbuch für Wirtschaftsgeschichte 2 (1960): 51.Google Scholar

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5. ibid., 49.

6. ibid., 52.

7. Böhme, Helmut, “Preussische Bankpolitik 1848–1852,” reprinted in idem, Probleme der Reichsgründungszeit, (Cologne, 1968), 117–58.Google Scholar

8. ibid., 141.

9. ibid., 130–42.

10. Bergengün, Alexander, David Hansemann (Berlin, 1901), 666;Google ScholarWalther, Däbritz, Gründung und Anfänge der Disconto-Gesellschaft Berlin (Munich, 1931), 43ff.Google Scholar

11. See the protocols of the Rhenish Railway directors, 1850–53, Historisches Archivder Stadt Köln (hereafter HAStK) 1028, #7, 65ff; HAStK 1028, #136, 1–7.

12. Deutsches Zentral Archiv Merseburg (hereafter DZAM), rep. 77, tit. 260, #3, vol. 1 103; DZAM, rep. 77, tit. 260, #6, vol. 1, 13–14, 44; HAStK 1028, #7, 196; von Unruh, Hans Viktor, Erinnerungen aus dem Leben von Hans Viktor von Unruh, edited by Heinrich, von Poschinger (Stuttgart, 1895), 170–73.Google Scholar

13. For the sealed and signed copy of the law, see “Verordnung, die Betheiligung stiller Gesellschaften mit Aktien an Handels-Unternehmungen betreffend,” DZAM 2.2.1., no. 30003, 120. The only historian to my knowledge who makes reference to this decree is the historian Thieme, Horst in his unpublished dissertation, “Die ökonomischen und politischen Widersprüche bei der Erteilung von Konzessionen zur Gründung von Aktiengesellschaften in Preussen von 1850–1857” (Leipzig, 1957).Google Scholar Although making reference to it, Thieme does not explore the problem. The obscurity of the event is also explained by its absence from Poschinger's, Heinrich three-volume collection of government documents of banking history, Bankwesen und Bankpolitik in Preussen (Berlin, 1879).Google Scholar

14. Most economic histories convey this impression, either glossing over the problem altogether or noting Prussia's reluctance to grant joint-stock privileges but tolerating commandite companies. See, for example, Treue, Wilhelm, Gesellschaft, Wirtschaft, Technik Deutschlands im 19. Jahrhundert 8th ed. (Munich, 1986), 238ff.;Google ScholarHenderson, W. O., The Rise of German Industrial Power, 123–29; Kiesewetter, Industrielle Revolution, 286–87. Richard Tilly's excellent work on banking does discuss the formation of the commandite banks in 1856, but although he alludes to the “hostility of Berlin bankers and the government,” he never mentions the actual tensions. See Tilly, Financial Institutions, 116.Google Scholar

15. State Ministry to King Friedric. Wilhelm IV, 1 July 1856. DZAM 2.2.1., no 30003, 87; Horst Blumberg, “Die Finanzierung der Neugründungen und Erweiterungen von Industriebetrieben in Form der Aktiengesellschaften während der fünfziger Jahre des 19. Jahrhunderts in Deutschland, am Beispiel der preussischen Verhältnisse erläutert,” in Mottek, Hans et al. , Studien zur Geschichte der industriellen Revolution in Deutschland (Berlin, 1960), 170.Google Scholar

16. Clapham, J. H. notes that commandite companies were common by the turn of the century in the Rhineland. The Economic Development of France and Germany, 1815–1914, 4th ed. (London, 1966), 130–31. Richard Tilly is probably more accurate in writing that the commandite company “was little known in Prussia until the middle of the century,” Tilly, Financial Institutions, 115.Google Scholar

17. Däbritz, , Gründung, 64.Google Scholar

18. ibid., 64.

19. Bergengün, Alexander, Staatsminister August von der Heydt (Leipzig, 1908), 223.Google Scholar

20. Richard Tilly has shown how Rhenish and—other German businessmen employed non-intermediated credit—bills of exchange and acceptance, running credit, promissory notes, etc.—to accomomodate expanding business in the face of money scarcity and deficient financial institutions. This circuventive merchant-house banking, Tilly convincingly argues, checked any negative impact state contorls might have had on long-term economic growth, yet one should also not overlook the entrepreneurs' short-term economic-political frustrations with Prussia's patermalism, which sharpened the moderate liberalism of the business class after 1830. Tilly, Financial Institutions, 129–133.

21. Radtke, Wolfgang, Die preussische Seehandlung zwischen Staat und Wirtschaft in der Frühphase der Industrialisierung (Berlin, 1981), 120–21.Google Scholar For the “minimal role” of Prussian financial institutions in the Industrial Revolution see Wehler, Hans-Ulrich, Deutsche Gesellschaftsgeschichte (Munich 1987), vol. 2, Von der Reformära bis zur industriellen and politischen “Deutschen Doppelrevolution,” 1815–1845/49, 638–39.Google Scholar

22. Radtke, , Die Preussishe Seehandlung, 123. For a list of the first 171 shareholders in the Prussian Bank see Geheimes Staatsarchiv Preussischer Kulturbesitz Berlin-Dahlem (hereafter GStA), Rep. 90, #3574, 26–27.Google Scholar

23. The most prominet critic was Harkort, but his demand for a private bank was similar to those of merchants and industrialists from Silesia, Posen, and the Rhineland. Radtke, Die Preussische Seehandlung, 126–29; Däbritz, Gründung, 4.

24. Pohl, Manfred, Deutsche Bankengeschichte, 173–78; Born, International Banking, 52.Google Scholar

25. Poschinger, , Bankwesen, vol. 2, Die; Jahre 1846 bis 1857, 136–37; Bergengrün, Heydt, 224–25; JosephHansen, Mevissen: Ein rheinischs Lebensbild, 2 vols. (Berlin, 1906), 1:660–61.Google Scholar

26. Heydt, for example, used these reforms to fend off criticism in the Landtag in 1851 and 1856. Poschinger, , Bankwesen, 2:138, 160.Google Scholar

27. See Heydt's, objections to private joint-stock banks in his Votum of 23 April 1853, GStA, Rep. 90, #1185, unpag.;Google ScholarPoschinger, , Bankwesen, 2:203–04;Google ScholarCameron, R. E., France and the Economic Development of Europe, 1800–1914, 2d ed. (Chicago, 1965), 96ff;Google ScholarCameron, R. E., “Founding the Bank of Darmstadt,” Explorations in Entrepreneurial History 8 (1955–1956): 116ff.;Google ScholarLandes, David, “The Old Bank and the New: The Financial Revolution of the Nineteenth Century,” in Crouzet, F. et al. , Essays in European Economic History, 1789–1914 (New York, 1969), 112–27;Google ScholarRiesser, J., The German Great Banks and Their Concentration (Washington, 1911), 49–51.Google Scholar

28. Born, , International Banking, 84.Google Scholar

29. Hansen, , Mevissen, 1:658.Google Scholar

30. Cameron, , “Darmstädter Bank,” 120ff.;Google Scholar see Mevissen's reports of the Darmstädter Bank in 1854 in Hansen, , Mevissen, 2:523–32; Born, International Banking, 84.Google Scholar

31. Friedrich Wilhelm IV to state ministry, 20 April 1853. GStA. Rep. 90, #1185, unpag.

32. Votum von der Heydts, 23 April 1853, GStA, Rep. 90, #1185, unpag; conclusum des Staatsministeriums, 27 April 1853, GStA, Rep. 90, #1185, unpag.

33. Riesser, , German Great Banks, 64.Google Scholar

34. von Delbrück, Rudolf, Lebenserinnerungen, 2 vols. (Leipzing, 1905), 2:34.Google Scholar

35. See the “Geheimprotokolle der Verwaltung der Bank für Handel und Industrie,” May 1853, HAStK 1073, no. 101a, unpag. Delbrück along with Regierungspräsident von Moeller, former Minister von Rabe, and Oberpräsident Kühlwetter had invested in a 5 percent ten-year bond. These officials and four other investors put together a sum of twenty thousand gulden.

36. Poschinger, , Bankwesen, 2:170–79.Google Scholar

37. Landes, , “The Old Bank and the New,” 114.Google Scholar

38. See Niebuhr's, L. M. position paper to the cabinet, 26 February 1856, DZAM 120A XI 2, #6, 130.Google Scholar

39. For copies of the petitions see DZAM 120A XI 2, #6, 190; GStA, Rep.90, #1185, unpag.

40. Hansen, , Mevissen, 1:667.Google Scholar

41. Niebuhr, L. M., 26 Feb. DZAM 120A XI, #6, 131 (emphasis original).Google Scholar

42. Heydt quoted by Poschinger, , Bankwesen, 1:158. Poschinger is vague about the date of Heydt's Denkschrift, placing it somewhere “in der Mitte der fünfziger Jahre” and does not cite the situation or the party for which it was written.Google Scholar

43. Niebuhr, L. M., 26 February 1856, DZAM 120A XI, #6, 130.Google Scholar

44. Heydt to Bodelschwingh, 7 March 1856, DZAM 120 XI, #6, 32–36. Here, 34. For a contrary view of Heydt's position compare Bengengrün, Heydt, 233–34.

45. Westphalen and Karl von Manteuffel to Otto von Manteuffel, 20 February 1856, DZAM 120A XI 2, #6, 16.

46. Königliches Preussisches Haupt Bank Direktorium to Heydt, 14 March 1856, DZAM XI 2, #6, 142–50.

47. Manteuffel, Karl vo. to Heydt, 18 March 1856, 120A XI 2, #6, 132–34.Google Scholar

48. ibid., 134.

49. Westphalen to Heydt, 24 March 1856, DZAM 120A XI 3, #6, 177–78.

50. ibid., 180.

51. ibid., 179.

52. Born, , International Banking, 29–30.Google Scholar

53. Westphalen to Heydt, 24 march 1856, DZAM 120A XI2, #6, 183. Westphalen did not consider that such securities did well precisely because of bad times, for they sented a safe investment. Prosperous times invited riskier but more profitable ventures.

54. ibid., 184.

55. ibid., 182.

56. Westphalen to Heydt, 22 March 1856, DZAM 120A XI 2, #6, 186–87.

57. Westphalen to Heydt, 25 March 1856, DZAM 120A XI 2, #6, 226.

58. Friedrich Wilhel. IV to Heydt, 11 March 1856, DZAM 120A XI 2, #6, 93.

59. See the letter of Emil Haber, Gerson Bleichröder, von Broch, and Graf Taironowsky Ludwig Erbprinz zu Bentheim to Heydt, 23 February 1856, DZAM 120A XI 2, #6, 39–42 in which members of the Preussiche Credit-Gesellschaft declared themselves willing to merge with the Preussiche Credit-Institut under certain conditions (a raised capital base and the assurance that certain members of the other company not be put on the board of directors). Heydt also wrote the Oberpräsident of Brandenburg, Heinrich Eduard von Flottwell on 23 February 1856 that a charrter would be granted to the Rothschild proposal but that the specifications had yet to be determined DZAM 120A XI 2, #6, 10. Heydt wanted charters for both proposals, but the other proponents for a charter, namely, Justice Minister Simons, Privy Councillors Niebuhr and Geppert, and the king, strove for a fusion. The king asked Heydt to work earnestly toward a fusion; if that did not work, he was inclined to grant a charter only to the Rothschild project. For all letters see DZAM 120A XI 2,#6. Simons to Heydt, 18 March 1856, 156–66; Friedrich Wilhel. IV to Heydt, 11 March 1856, 93; Geppert to Heydt, 9 March 1856, 82–86; Niebuhr's Stellungnahme, 26 February 1856, 130–31.

60. Berich des Staatsministeriums, 26 March 1856, DZAM 2.2.1., #30003, 79–81. For the official rejection see the Ordre of King Friedric. Wilhelm, 85.

61. Heydt to Illaire, 2 July 1856, DZAM 2.2.1., #30003, 95–96.

62. Carl, Conrad, Conrad, Paul Eduar., Gelpcke, Johann Friedrich Ludwig, Mevissen, Gustav, and Mendelssohn, A. were, for example, backers in the original crédit mobilier project and the Berliner Handelsgesellschaft. Petitioners of “Preussisches Credit-Institut”to state ministry, 14 February 1856, GStA, Rep. 90. #1185, unpag;Google ScholarPoschinger, , Bankwesen, 2:230.Google Scholar

63. Hasen, , Mevissen, 1:647 note 2.Google Scholar

64. Bergengrün, , Hansemann, 665–66.Google Scholar

65. Hansemann, David emphasized this point in his 1852 brochure, “Das Wesen de Disconto Gesellschaft in Berlin und ihre Bedeutung.” Däbritz, Gründung, 13.Google Scholar

66. Bergengrün, , Heydt, 236;Google ScholarPoschinger, , Bankwesen, 2:228 note 2.Google Scholar

67. Bergengrün, , quoting Hansemann's, letter to the directors of the Disconto Gesell schaft, 17 February 1856, Hansemann, 677–78.Google Scholar

68. Bergengrün, , Hansemann, 671.Google Scholar

69. Born, , International Banking, 85.Google Scholar

70. Report of the Prussian state ministry to the king on 1 July 1856, DZAM 2.2.1., no. 30003, 87; Heydt to Illaire, 2 july 1856, DZAM 2.2.1., 95. In the first year of its reorganization, the Disconto Gesellschaft paid a high dividend of 10 percent and was subscribed in Berlin as well as Cologne and Frandfurt. For the bank's stock returns see Riesser, The German Great Banks, 68. For the view that the “new [commandite] shares could not be placed in Berlin,” see Tilly, Financial Institutions, 116.

71. Bergengrün, , Heydt, 236.Google Scholar

72. Heydt to Illaire, 2 July 1856, DZAM 2.2.1., #30003, 95.

73. Stellungnahme des Staatsministeriums, 1 July 1856, DZAM 2.2.1., #30003, 86–92.

74. ibid., 92–96.

75. ibid., 93.

76. ibid.

77. ibid., 94.

78. Telegram of the Kgl. Preuss. Minister-Präsidenten [in The Haguel] an den Geheimen Cabinets-Rath Illaire in Marienbad, 8 July 1856, DZAM 2.2.1., #30003, 108.

79. Telegram Manteuffels an Illaire, 13 July 1856, DZAM 2.2.1., #30003, 109.

80. Poschinger, , Bankwesen, 2:135.Google Scholar

81. Although broad support existed for bank reform, agricultural interests failed to back Harkort because his bill did not includer provisions for easier agricultural credit. Sartorius von Waltershausen, A., Deutshe Wirtschaftsgeschichte 1815–1914, 2d ed. (Jena, 1923), 185.Google Scholar

82. ibid., 135–61.

83. On this point of Manteuffel's “mild absolutism” see Grünthal, Günther, Parlamentarismus in Preussen 1848/49–1858. Preussischer Konstitutionalismus, Parlament und Regierung in der Reaktionsära (Düsseldorf, 1982), 471, 474.Google Scholar

84. See the who telegrams from Geheim-Cabinettsrath Illaire to Geheim-Rechnungsrath Flender (Bureau des Staatsministeriums), 14 July 1856, 2.2.1., #30003, 100–11.

85. Manteuffel, Otto v. to the king, 18 July 1856, DZAM 2.2.1., #30003, 113.Google Scholar

86. Westphalen to king, 21 July 1856, DZAM 2.2.1., #30003, 114–16.

87. Delbrück, , Lebenserinnerungen, 2:82–84.Google Scholar

88. Immediat-Bericht des Staatsministeriums an den König, 19 August 1856, DZAM 2.2.1., #30003, 117–18.

89. ibid., 118.

90. Hansen, , Mevissen, 1:667 and note 4.Google Scholar

91. Riesser, , German Great Banks, 64–67; in 1856, for example, the Disconto Gesellschaft invested three million thalers in Ruhr industrial companies, whereas after 1857 the bank invested mostly in railroads and government securities. Tilly, Financial Institutions, 116.Google Scholar

92. For the alliance thesis see Böhme, Helmut, Deutschlands Weg, 16, 60, 137ff;Google Scholar and Zunkel, Friedrich, Der rheinisch-westgälische Untemehmer 1834–1879: Ein Beitrag zur Geschichte des deutschen Bürgertums im 19. Jahrhundert (Cologne, 1962), 249, 251;CrossRefGoogle Scholar for notions of a “symbiosis” see Machtan, Lothar and Milles, Dietrich, Klassensymbiose von Junkertum und Bourgeoisie: Zum Verhältnis von gesellschaftlicher und politischer Herrschaft in Preussen Deutschland 1850–1878/79 (Frankfurt am Main, 1980), 31ff.Google Scholar

93. Böhme, Helmut, Deutschlands Weg zur Grossmacht: Studien zum Verhältnis von Wirtschaft und Staat während der Reichsgründungszeit 1848–1881 (Cologne, 1966);Google ScholarZunkel, Friedrich, UnternehmerGoogle Scholar; Lothar Machtan and Dietrich Milles, Klassensymbiose; Gugel, Michael, Industrieller Aufstieg und bürgerliche Gesellschaft (Cologne, 1975).Google Scholar

94. With railroad construction, for instance, the Darmstädter, Bank, the Disconto Gesellschaft, and the Berliner Handelsgesellschaft, by evading government supervision, loosened the trade ministry's grip on railroad funding. which was a leading factor that frustrated Heydt's plan to nationalize all Prussian rail.

95. Insofar as this incident was a social action that circumvented and appropriated power from the government, it was politically oriented. For this definition of a “politically oriented” action, see Weber, Max, The Theory of Social and Economic Organization (New York, 1964), 95, 154.Google Scholar

96. The best parliamentary study of the 1850s is Günther Grünthal's Parlamentarismus whose work, because of its constitutions focus, does not address the economic and social issues brought to the parliamentary floor. Volkmann's, HeinrichDie Arbeiterfrage im preussischen Abgeordnetenhaus 1848–1869 (Berlin, 1968), although promising in title, also fails to link up economics, politics, and society.Google Scholar

97. Grünthal, also suggests the latent power of parliament. Parlamentarismus, 472–73.Google Scholar