JEIDELS, RELATION OF THE GERMAN BIG BANKS TO INDUSTRY (original) (raw)

Vladimir Ilyich Lenin

NOTEBOOK “β”

(“BETA”)

JEIDELS, RELATION OF THE GERMAN BIG BANKS TO INDUSTRY

Dr. Otto Jeidels, Relation of the German Big Banks to Industry with Special Reference to the Iron Industry,
Leipzig, 1905 ((Volume 24, No. 2 of Schmoller’s Forschungen)).

| | | | ---------------------------------- | | | | The preface is dated: June 1905 | | | | |

| | | | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | | | Impossible to read after Riesser: repetitions, raw mate-rial, minor facts, nothing new.This refers only to the beginning of the book. Appar-ently, Riesser stole from it. When it comes to the rela-tionship to industry, Jeidels is richer, livelier, cleverer,more scientific. | | | | |

| acommonpheno-menon | | | p. 18: An example: the buying up of shares(1904) of the Gelsenkirchener Bergwerksgesell-schaft in order to elect Thyssen on to the “Super-visory Board” (!!). | | ------------------ | | | --------------------------------------------------------------------------------------------------------------------------------------------------------------- |

p. 57: Number of (joint-stock) banks and private bankers taking part in the issue of industrial stocks:

| | No. of bankers | Issues per banker | No. of banks | Issues per bank | | | ----------------- | ----------------- | ------------ | --------------- | ---- | | 1871-72 | 90 | 4.4 | 31 | 6.1 | | 1899 | 34 | 2.7 | 16 | 12.4 |

p. 103: The brothers Mannesmann sold their patents for “seamless pipes” for 16 million marks (!) (1890).

Every crisis (1857, 1873, 1900) leads to concentration, but especially 1900:

p. 111: When it was found necessary to make the firm Phoenix join the Stahlwerksverband, the Schaaffhausenscher Bankverein bought up the majority of its shares and ensured the adoption of the required decision.

In the same way, the Dresdner Bank “won” two places on the Supervisory Board of the Königs- und Laurahütte iron and steel mills (four years ago) and carried through what it wanted....

The role of the Supervisory Boards is very wide (in fact it could be = management)....

| ...“Seats on Supervisory Boards are freelyoffered to persons of title, also to ex-civilservants, who are able to do a great dealto facilitate relations with the = authorities”...[2](149). | | | | sic!(simple!) | | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | | | ------------- |

| “Usually, on the Supervisory Board ofa big bank, there is ... a member of parlia-ment or of the Berlin City Council” (152)....[3] | | | | | the usualstory!! | | ---------------------------------------------------------------------------------------------------------------------------------------------------- | | | | | ---------------- |

155 (in fine)... “But the cases quoted [a number of “names” are cited: Dernburg—director of the Darmstädter Bank, Gwinner—director of the Deutsche Bank] clearly show that Industrial leaders are mainly on the Supervisory Board of companies of the same branch or the same region, whereas directors of the big banks, on the other hand, are on the boards of the most diverse enterprises”....

1. The director of the Schaaffhausenscher Bankverein is on the Supervisory Boards of 33 companies!! (p. 155).

p. 150: an example of 35 seats on Supervisory Boards being in the same hands... (35).

| | p. 156... “Simultaneously with this widen-ing of the sphere of activity of certainbig industrialists and with the assignmentof provincial bank managers to definiteindustrial regions, there is a growth ofspecialisation among the directors of thebig banks. Generally speaking, this spe-cialisation is only conceivable when bank-ing is conducted on a large scale, andparticularly when it has widespread con-nections with industry. This division oflabour proceeds along two lines: on theone hand, relations with industry as awhole are entrusted to one director, as hisspecial function; on the other, each directorassumes the supervision of separateenterprises, or of a group of enterprisesin the same branch of industry or havingsimilar interests. One specialises in Germanindustry, sometimes even in West Germanindustry alone, others specialise in rela-tions with foreign states and foreign indus-try, in information on the characters ofindustrialists, and others, in Stock Exchangequestions, etc. Besides, each bank directoroften assigned a special locality or aspecial branch of industry; one workschiefly on Supervisory Boards of electriccompanies; another, on chemical, brewing,or beet sugar plants, a third, in a few iso-lated industrial enterprises, but at thesame time works on the Supervisory Boardsof non-industrial companies, such as insur-ance companies. To demonstrate this fromthe example of some Berlin bank directorswould take us too far into the personalsphere. In short, there can be no doubtthat the growth in the dimensions anddiversity of the big banks’ operations isaccompanied by an ever greater divisionof labour among their directors with theobject (and result) of, so to speak, liftingthem somewhat out of pure banking andmaking them better experts, better judgesof the general problems of industry andthe special problems of each branch ofindustry, thus making them more capableof acting within the respective bank’s indus-trial sphere of influence. This system issupplemented by the banks’ endeavours toelect to their Supervisory Boards or thoseof subordinate banks, men who are expertsin industrial affairs, such as industrialists,former officials, especially those with expe-rience in the railway service or in mining,[4]from whom they want not so much con-nections with industrial enterprises as expertadvice—advice, based less on academiceducation than on many years of techni-cal, business and human experience”...(157)....“But as member of a SupervisoryBoard, a bank director has not only theadvantage of being interested in conscien-tious performance of his office because ofhis responsibility to the bank; he alsois the best informed as to the state of themarket and can make his large office staffcarry out the commercial and technicalassignments of the Supervisory Board.It is his knowledge of many companiesthat facilitates his judgement of a particu-lar one and guards him against the over-estimation that is often observed whena private person sits on the board of onlyone company” (157-58). | | | | | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | | -------- | | | | | | | | | | | | | | | | | | | “supervision”of socialeconomy | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | N.B. | | | | | | | | | | | | | | N.B. | | | | | | “system” | | | | | | | | | | | | | | | | | | | | | | N.B. | | | | | | | view ofthe “whole” | | | |

At the end of 1903, representation of the German big banks on the SUPERVISORY BOARDS of industrial companies was as follows (pp. 161-62)[5]:

| | Deutsche Bank | Discontogesell- schaft | Darmstädter Bank | Dresdner Bank | Schaaffhaus- enscher Bank- verein | Berliner Han-delsgesellschaft | (My) total for six bigbanks | | | | | ------------------------------------------------- | ---------------------- | ---------------- | ------------- | --------------------------------- | ----------------------------- | ----------------------------- | ----- | --- | --- | | By directors | 101 | 31 | 51 | 53 | 68 | 40 | 344 | | | | By members of Supervisory Board . . . | 120 | 61 | 50 | 80 | 62 | 34 | 407 | | | | ⎼⎼⎼ | ⎼⎼⎼ | ⎼⎼⎼ | ⎼⎼⎼ | ⎼⎼⎼ | ⎼⎼⎼ | ⎼⎼⎼ | | | | | Total . . . | 221 | 92 | 101 | 133 | 130 | 74 | 1,040 | ⎧⎨⎩ | 751 | | By Chairman or more than two S.B. members . . . | 98 | 43 | 36 | 41 | 38 | 33 | 289 | | |

| “universalnature” | | | ...“The universal nature of banking oper-ations in industry, as so far described,the possibility and necessity for a bigbank systematically to use regular businesstransactions, the granting of industrialcredit, the issue of securities, and repre-sentation on Supervisory Boards, as a meansof close and lasting relations with indus-trial enterprises-all this weaves sucha tight net around the bank and the indus-trial enterprise that a competitive strugglewith the latter over a particular businessoperation is often, and in the case of manycompanies permanently, excluded” (163).... | | ----------------- | | | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | | | | | | | | | | | “a tight net” | | | | | |

| | “An examination of the sum total ofindustrial relationships reveals the uni-versal character of the financial estab-lishments working on behalf of industry.Unlike other kinds of banks, and contraryto the demand sometimes expressed inthe literature that banks should specialisein one kind of business or in one branchof industry in order to prevent the groundfrom slipping from under their feet-thebig banks are striving to make their con-nections with industrial enterprises asvaried as possible in respect of the localityor branches of industry and are strivingto eliminate the unevenness in the distri-bution of capital among localities andbranches of industry resulting from thehistorical development of individual enter-prises[6]. Hand in hand with this is theeffort to base relations with industry onregular, lasting business connections, togive expression to them and to afford themthe possibility of becoming wider anddeeper by means of a ramified system ofseats on Supervisory Boards. Comparedwith these two spheres of influence, theissue of stock is of relatively less impor-tance for the big banks' relations withindustry. One tendency is to make theconnections with industry general; anothertendency is to make them durable andclose. In the six big banks both thesetendencies are realised, not in full, butto a considerable extent and to an equaldegree” (180)....[7] | | | | | | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | | -------------------- | | | | | | | “universalcharacter” | | | | | | | “unlike”(the old) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | the“tendency” | | | | | | | | | | | |

| “new”relations ofindustry andthe banks | | | | “The connections between the banksand industrial enterprises, with their newcontent, their new forms and their neworgans, namely, the big banks which areorganised on both a centralised and a de-centralised basis, were scarcely a charac-teristic economic phenomenon before thenineties; in one sense, indeed, this initialdate may be advanced to the year 1897,when the important mergers took place,and when, for the first time, the new formof decentralised organisation was intro-duced to suit the industrial policy of thebanks. This starting-point could perhapsbe placed at an even later date, for it wasthe crisis of 1900 that enormously accele-rated and intensified the process of con-centration of industry and of banking,consolidated that process, for the first timetransformed the connection with industryinto an actual monopoly of the big banks,and made this connection much closerand more active” (181)[8].... | | -------------------------------------- | | | | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | | | | | | | “scarcelybefore thenineties”1897 | | | | | | | | | | | | crisis(1900) | | | | | | | | | | |

| after thecrisis of1900 (de-pression) | | ...“The sudden concentration in theRhine-Westphalian mining industry, the for-mation of the Federation of Steel Plants,the mergers of the big electric companies,etc., have undoubtedly greatly acceleratedpractical solution of the question of theconnections between the banks and indus-try” (182).... | | ------------------------------------ | | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |

| ...“Modern industry has led the banksinto entirely new fields of economic life ...the bank is to a certain extent passingfrom its role, in the main, of intermediaryinto the sphere of industrial production....In this way [through the connection withindustry] the big banks are in touch notonly with development trends in individualplants, but also with the interrelationshipbetween the different plants of a givenindustry and between different industries”(183).... | | | | | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | | ---- | | | | | | N.B. | | | | | |

| | “Anyone who has watched, in recentyears, the changes of incumbents of direc-torships and seats on the SupervisoryBoards of the big banks, cannot fail tohave noticed that power is graduallypassing into the hands of men who considerthe active intervention of the big banksin the general development of industryto be necessary and of increasing impor-tance. Between these new men and theold bank directors, disagreement on thissubject of a business and often of a per-sonal nature is growing. The issue is wheth-er or not the banks, as credit institu-tions, will suffer from this interventionin the industrial production process, andwhether they are sacrificing tried prin-ciples and assured profit to engage in afield of activity which has nothing incommon with their role of middlemen inproviding credit and which is leadingthe banks into a field where they are morethan ever before exposed to the blindforces of trade fluctuations. This is theopinion of many of the older bank direc-tors, while most of the young men consi-der active intervention in industry to bea necessity as great as that which gaverise, simultaneously with big modern indus-try, to the big banks and modern indus-trial banking. The two parties are agreedonly on one point: there are neither firmprinciples nor a concrete aim in the newactivities of the big banks” (184)[9]. | | | | | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | | ---- | | | | | | N.B. | | | | | | | | | | | | | transition ...to what? | | | |

| | “Banking business with foreign countriesand abroad falls into three divisions,each of which corresponds to a definitestage of development: international pay-ments, the taking up of foreign loans,and participation in industrial enterprisesbroad ... each ... has impressed its stampon a definite period in the foreign policyof the German big banks. | | | | | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | | | | 123 | | | | | | | | |

| | ...“On the significance of loans for Ger-man home industry, a business managerof the Discontogesellschaft, which special-ises in foreign operations, made the follow-ing statement ten years ago to the StockExchange Enquiry Commission (Proceedingsof the Stock Exchange Enquiry Commission,p. 371, statement by Russel): ‘I shouldconsider it a very great disadvantageif ... the floating of foreign loans in Ger-many was put, not in the hands of Germancapital and the German banks, but inforeign hands. It was to avoid this thatthe Foreign Ministry was so greatly-andin my opinion so rightly-interested inour having commercial offices, bank branch-es and contacts abroad. For only throughsuch contacts can the desired foreign ordersfor German industry be found. | | | | | | | | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | | | | | | | N.B. | | | | | | | | N.B. | | | | | | | | | | | | | | |

| | ...“‘The universal complaint of our exportindustry is that Germany lags greatlybehind London in the big-order market.Almost all orders are concentrated in Lon-don, in this great world market, and itis only our closer connection with individ-ual foreign firms that gives rise to a busi-ness relationship and regular employmentfor industry’” (186-87).... | | | | | | | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | | | | | | N.B.“orders” | | | | | | | | | | | | | | | | | | | |

| ...“In the dealings of the German bigbanks with foreign industrial enterprises,we should distinguish two stages, differingin basis and in time. The first, taken histor-ically, coincides approximately with theflourishing period of foreign loans andrelates, therefore, to different years indifferent countries: the seventies and eigh-ties can be regarded as the heyday of _foreign railway construction_” (187). | | | | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | | --------- | | | | | twostages | | | | | | | | | railways |

Two subtypes (“opposite poles”): the Rumanian railways and participation in American railways.

| | “This first stage is marked by partici-pation in foreign industry being closelybound up with loan activity, althoughGerman home industry, as a supplier,can derive some benefit from this. Thepowerful initiative of the banks is deci-sive, but it only indirectly concerns indus-try, their main attention being devotedto profitable investments in foreign secu-rities. It requires a situation in whichhome industry is not yet so concentratedand, at the same time, so expanding as ithas become since the nineties. | | | | | | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | | | ----------------- | | | | | | | | | | | | | | | | | | | | | | | | | | since thenineties | |

| In the second stage, on the contrary,foreign loans are of less importance, whilethe interest of the big banks in foreignindustry increases, for this is less depend-ent on other financial connections withthe country concerned. The big banks morefrequently sponsor, or co-sponsor, indus-trial companies in other countries and,at the same time, collaborate closely withGerman home industry in foreign businessoperations” (188).... | | | secondstage | | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | | ----------- | | | | | |

| | ...“In foreign expansion these [Germanconcerns] are much more dependent onthe banks than in their domestic opera-tions.... The bank operating abroad [incontrast to domestic operations], however,feels itself at home, has its branches, con-trols international payments, and mighteven be connected with the governmentof the given country by helping it floata loan” (189).... | | | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | | | | | |

| 4 forms | | | | “Four forms of bank participation inforeign industrial enterprises can be dis-tinguished: 1. The formation of branchesor subsidiary enterprises for Ger-man home industry.... | | ------- | | | | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | | | | | | |

| | ...“2. The formation ... of separate foreignenterprises which are only loosely or notat all connected with home industry....But the really characteristic case is afford-ed by the recent exotic railway pro-jects and the East Asian enterprises ofthe big banks jointly participating inthe German-Asiatic Bank”.... This is already"a link in the conquest _of aneconomic region_” (190). | | | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | | myitalics | |

| | 4. ...“The German banking world hasalso sought to secure for itself, or forGerman capital behind it, exclusive exploi-tation of some branch of industry abroad”(192) ... for example, the efforts “to organiseunder its control a part of the oil industry,mainly the Rumanian .... | | | | | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | | | | establish“its own”industry | | | | | | | | |

| division ofthe world | | | | ...“The world oil market is even todaystill divided between two great financialgroups-Rockefeller's American StandardOil Co., and Rothschild and Nobel, whocontrol the Russian oilfields in Baku. Thetwo groups are closely connected. But forseveral years five enemies have been threat-ening their monopoly” (193); | | -------------------- | | | | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | | | | | |

(1) exhaustion of the American oil
sources;
(2) the competition of the firm of Manta-
shev & Co. in Baku;
✕ (3) the Austrian oilfields;
✕ (4) the Rumanian oilfields;
✕ (5) overseas oilfields, particularly in the
Dutch colonies (the extremely rich
Samuel, and Shell Transport and
Trading Co.).[10]

| | | | | ------------------------------------------------------------------ | | | | x = Participation of the DeutscheBank and other German banks. | | | | | |

| “A similar role [aid to industrial enter-prises] is played by the banks in estab-lishing societies for technical research,the results of which are intended to benefitfriendly industrial enterprises. Such, forexample, are the Electric Railway ResearchAssociation, the Central Bureau of Scien-tific and Technical Research, set up bythe Loewe concern, and the Central MiningBureau, Ltd., in Frankfurt-am-Main, whichis financed by leading banks as well asbig industrialists” (210-11).[11] | | | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | | | technicalrole of thebig banks(financecapital) | |

Sometimes the banks bring various industrial enterprises into closer association (in some cases leading to a cartel, in others assisting specialisation, etc.)....

| bank =“innerconnection”betweenenterprises | | | | ...“The bank to a certain extent embodieshere the inner connection between a largenumber of enterprises which results fromthe development of large-scale industry;it represents the community of interestsexisting between them” (215).... | | ----------------------------------------- | | | | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |

“What a rich opportunity of giving employment to friendly industrial enterprises is afforded the Deutsche Bank by such an undertaking as the Baghdad Railway!” (217)....

| N.B.growthofconnections | | | “However ‘incidental’, so far, the clos-er association has been of various enter-prises and industries through the grantingof bank-sponsored orders, it is at any ratean important symptom that with thegrowth of large-scale industry the connec-tions become more numerous, and increas-ingly complicated and imperspicuous. Theconnections and interdependence of vari-ous industries and enterprises find in thebig banks an organ which gives themexpression and more and more makes thelatent connection into a real hand-in-handcollaboration” (219).... | | | N.B. | | ----------------------- | | | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | | ---- | | | | | | | | |

| !! | ⎞⎞⎠⎠ | Complaints are heard of the “terrorism_”of the banks—(219-20)—_they make itcompulsory (for orders and so on)to deal with a particular firm (220). | | | | -- | -------- | --------------------------------------------------------------------------------------------------------------------------------------------------- | | |

| | In the electrical industry a special rolewas played by the crisis (apparently 1900),and the banks intensified and acceleratedthe ruin of the relatively small enterprisesand their absorption by the big ones(pp. 230-32).... “The banks refused a helpinghand to the very firms in greatest need ofcapital, and brought on first a frenziedboom and then the hopeless failure ofthe companies which were not connectedwith them closely enough”(232).[12] | | | | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | | | banks andruin ofenterprises | | | | | | | |

The Loewe group

The Loewe sewing-machine factory, founded in 1889, added production of armaments, then later (in the seventies and eighties) ordnance, boilers, etc., etc., and later still electrical industry, subsidiary companies, etc. [not very well described by Jeidels].

In a § on the relation of the big banks to the cartels (253-58), the author has somewhat “spread himself” and become incoherent. He distinguishes four forms: (1) indifference (to unimportant cartels); (2) “definite interest” (254) in cartels such as that of the coal industry (in cartels which are life-and-death questions for the industry);

| (3) “help” for a cartel, e.g., steel indus-try;(4) a purely “banking relation”—the organ-isation, for example, of a “syndicateoffice” at the Schaaffhausen-scher Bankverein (1899).... | | | differencefrom No. 2?not “definiteinterest”? | | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | | | -------------------------------------------- |

| 258-65: description of concentration inthe coal industry (Thyssen and others).See Werner’s better and newer materialin Die Neue Zeit, 1913, in the othernotebook.[13] | | | | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | | | | | |

265 et seq., the electrical industry (see in Die Neue Zeit[14]).

“The banks’ highest principle here is primarily conscious promotion of concentration, which they have already indirectly assisted by financial support of successful enterprises” (268)....

| | “The transformation of the big banks’industrial policy from being the policyof a credit institution to a policy of indus-trial concentration reveals a triple contra-diction in the development of modern banking”(268).... | | | | | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | | | ----------------- | | | | | | “trans-formation” | | | | | | | | | | | |

| | | 1) ...“The fact of progressive exclusionof competition among the big banks” (269).... | | - | ------------------------------------------------------------------------------------- |

| | 2) “Decentralisation” of the banks (localbranches and connection with provincialbanks) leads to an “increasing coalescenceof capitals, uniting bank and industry intoan integral whole”.... | | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | | |

1. ...“increasing concentration implies a more purposeful organisation”.... (270)

“By expansion of industrial combination, various directions of which can be seen in the electrical and in large-scale iron and steel industries, the sphere of this consciously guided production can be considerably enlarged, and in this unmistakable movement the big banks are an important factor” (270)....

And the tendency is special patronage of heavy industry (coal and iron) to the detriment of any other....

| N.B. | | | “The striving of the big banks for concentrationand purposeful guidance of industry is contradictorywhen it is restricted to certain branches of industryand thereby results in a still greater lack of co-ordi-nation in other branches” (271).[15] | | ---- | | | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |

End

Notes

[1] See present edition, Vol. 22, p. 209.—Ed.

[2] Ibid., p. 221.—Ed.

[3] Ibid.—Ed.

[4] See present edition, Vol. 22., pp. 221-22.—Ed.

[5] See present edition, Vol. 22, p. 221.—Ed.

[6] Ibid., p. 223.—Ed.

[7] See present edition, Vol. 22, p. 223.—Ed.

[8] Ibid., p. 225.-Ed.—Lenin

[9] See present edition, Vol. 22. pp. 224-25.—Ed.

[10] See present edition. Vol. 22, pp. 248-49.—Ed.

[11] Ibid, p. 224.—Ed.

[12] See present edition, Vol. 22, p. 246.—Ed.

[13] See Notebook “α”, pp. 33-25 of this volume.—Ed.

[14] See p. 338 of this volume.—Ed.

[15] See present edition, Vol. 22, p. 208.—Ed.