RIESSER, GERMAN BIG BANKS AND THEIR CONCENTRATION (original) (raw)

Vladimir Ilyich Lenin

NOTEBOOK “θ”

(“THETA”)

RIESSER, GERMAN BIG BANKS AND THEIR CONCENTRATION

Dr. Riesser, German Big Banks and Their Concentration in Connection with Germany’s Economic Development, 3rd edition, Jena, 1910.

(Some figures, but not all, added from the fourth edition, 1912.)

The German electrical industry prior to 1900 (before the 1900 crisis, caused largely by over-production in the electrical industry) (Riesser, 3rd edition, p. 542 et seq.)[1]:

Seven groups (with 27 (sic!!) individual companies):

| Communityof interests1902-03.Fusion 1904 | 11— | I. | Siemens andHalske group(4 companies) | ←← | ||}|| | 1903 mergerSiemens-Schuckertgroup | | ----------------------------------------------------------------------------------------------------- | -------- | ------------------------------------------------------------------------------------------- | ------------------------------------ | -- | ------ | --------------------------------- | | { | 8— | II. | A.E.G. group(4 companies) | | | | | 8— | III. | Schuckertgroup (4 compa-nies) | | | | | | 1908 “Co-operation”—establishmentof Elektro-Treuhand-Gesellschaftwith a capital of 30,000,000 marks | | | | | | | | 6— | IV. | Union-Elektrizitäts-Gesellschaftgroup (2 companies) | | | | | | 9— | V. | Helios group (“went into liquidation”:p. 582, 4th edition) (5 companies) | | | | | | 2— | VII. | Lahmeyer group, in 1910 majorityof shares held by A.E.G. (p. 583,4th edition) (2 companies) | | | | | | 8— | VI. | Kummer group—failed in 1900(7 companies) | | | | | | manyrepetitions | 7 groups | | | | | |

[Total companies = 28, and not 27 as given by Riesser, p. 542 (p. 582, 4th edition). On p. 568 he, too, says: 28 companies)

Results of concentration process (p. 568 et seq.).

“The most modern of our industries” is the electrical ... seven groups, with a total of 28 companies belonging to concerns.... Chemical industry ... two chief groups (see below) Mining _industry_—two syndicates (Steel Association; Rhine-Westphalian Coal Syn- dicate).... Shipping_—_two companies (Hamburg-Amer- ica Steamship Co. (Hapag); and North- German Lloyd, “which are connected with each other and with an Anglo-American trust by a series of agreements”).... Banking_—_five groups (“embracing in all 41 banks belonging to concerns”). Now22225=13
18 groups, my total mytotal

Increase in the number of common-interest associations between big and provincial banks (p. 505).

Growth of concentration (p. 542, 4th edition):

1881— 1 1908— 32 (41)
1895— 2 1911— 26 (46)
1902— 18

(Riesser, p. 547 et seq.)

German chemical industry
(concentration)[2]

Sharecapital(mytotals)
I. ⎧⎪⎪⎪⎪⎪⎨⎪⎪⎪⎪⎪⎩ Farbwerke,formerlyMeister,Lucius& Brüningin Höchst-am-MainLeopoldCassella andCo. in Frank-furt-am-Main ⎛⎝ Share capi-tal—20loan capi-tal—10 ⎞⎠ ⎫⎪⎪⎪⎪⎬⎪⎪⎪⎪⎭ (“Dualalli-ance”)1904“asso-ciation”Exchangeofshares,inter-lockingdirec-tor-ships ⎫⎪⎪⎪⎪⎪⎬⎪⎪⎪⎪⎪⎪⎭ (“Triplealli-ance”)1908(ex-changeofshares) 20203
< millionmarks >
⎛⎝ share capi-tal—20loan capi- tal—10 ⎞⎠
Kalle & Co. (in Biebrich-on-Rhine (3.2)
43
II. ⎧⎪⎪⎪⎪⎨⎪⎪⎪⎪⎩ Badische Anilin-und Soda-Fabrik in Ludwigshafen(share capital 21 millionmarks).Farbenfabrik, formerlyFriedrich Bayer and Co. inElberfeld (21 millionmarks).Aktiengesellschaft für Ani-linfabrikation in Treptownear Berlin (share capital9 million marks). ⎫⎪⎪⎬⎪⎪⎭ 1904associ-ation ⎫⎪⎪⎪⎪⎬⎪⎪⎪⎪⎭ 1905“Triplealli-ance 2121
A “coming together” of groupsI and II has already begunin the form of “agreements”on prices, etc.
43% 43% 14% 9
100%profit 51

p. 560 et seq.: “Mining industry.”

Two names: August Thyssen and Hugo Stinnes. Their gigantic and growing role (in the coal and iron industries).[19]

...“The common-interest agreement concluded on Ja-nuary 1, 1905 between the Gelsenkirchen Bergwerks, theAachen Hütten-Verein Rote Erde and Thyssen’s SchalkerGruben und Hütten-Verein united in a joint enterprisea number of competing banks, viz. the Discontogesell-schaft, the Deutsche Bank, the Dresdner Bank and theSchaaffhausenscher Bankverein, but, at the same time,further increased the power of Hugo Stinnes and AugustThyssen, who became members of the ‘joint committee’of the new association” (p. 563) (p. 603 in the fourth edition).
(p. 577) idem, p. 624, fourth edition.
1882—28 banks with 50 or > employees: 2,697 employees
-11.8% of the total
1895—66 banks with 50 or > employees: 7,802 employees
-21.6%
+ 189.3% { up to 5 employees+59.9% }
6-50 employees+34.5%
Deutsche Bank 1907— 4,439 bank employees (p. 578)
1908— 4,860 ” ”

“I estimate the number of bank officials in the six big Berlin banks at 18,000 at the end of 1910” (p. 625, fourth edition).

Riesser’s book ends with a polemic against the socialists, upholds the official view and preaches harmony (in general, Riesser is like that):

Even the predicted socialisation “has not mate-rialised” (p. 585). { ha-ha!! }

p. 582 (p. 629, fourth edition):

“Banks and the Stock Exchange” (Riesser’s italics):

“As regards the effect of the process of concentration on the functions and structure of the Stock Exchange, it is a fact that, with the influx of commissions to the big banks the latter to a certain extent take over the functions of the Stock exchange by counter-balancing purchase and sale commissions, handing over to the Stock Exchange only commissions that do not counter-balance one another. This applies equally to trade in securities, i.e., to the capital market, and discounting operations, i.e., to the money market.

“As a result, the Stock Exchange, already greatly disorganised by the Stock-Exchange laws, is increasingly deprived of the materials indispensable for correctly fixing current prices. It is thus further weakened, and this can have very dangerous consequences, especially at critical times, as bad examples have proved (note: in the recent period one can point to the day of the outbreak of the Russo-Japanese war).

“It follows also that the Stock Exchange is steadilylosing the feature which is absolutely essential fornational economy as a whole and for the circulationof securities in particular—that of being not onlya most exact measuring-rod, but also an ‘almostautomatic regulator of the economic movements whichconverge on it’”[3] (Note. Quotations from Riesser: TheNeed for Revision of the Stock-Exchange Law, Berlin,1901), and that it is proving less and less able,to express, and control, “through price fluctuations,general public opinion on the credit-worthiness andadministration of the majority of states, municipali-ties, joint-stock companies and corporations.
N.B.
“In this way, Stock-Exchange establishment andquotation of current prices, which previously gave,as far as this is attainable, a faithful picture of‘economic processes nowhere else summed so reliably,and nowhere else so recognisable in their totality’,consequently, a picture of supply and demand, mustnow lose both in accuracy and in stability and relia-bility, which is extremely regrettable in thepublic interest.
“In addition, it is to be feared that this tendency,which increasingly leads to exclusion of intermediaries(brokers, etc.), may produce an ever sharper cont-radiction between the banks and the Stock Exchange,and this may be very serious. This contradiction,moreover, would be expressed not only in a certaintension, already noticeable between the banks andother circles interested in the Stock Exchange, butalso in the latter’s most fundamental field of activity,namely, the establishment of current prices.
“Actually, today even among experts the conceptsbank and Stock Exchange, which some consider,quite wrongly, to be completely equivalent, [note:that is the view of Eschenbach in the Transactionsof the Union for Social Politics of September 16, 1903: Schriften des Vereins für Sozialpolitik, Vol. CXIII]are in many cases termed direct opposites, whichis also quite wrong” (note: cf. Ernst Loeb in the Natio-nalzeitung of April 18, 1904, No. 244) (p. 583) (p. 630,fourth edition).

Riesser (3rd edition 1910), p. 499:
Increase in capital of the biggest (in 1908) banks

Germany[4] 1870 1908 1911
1. Deutsche Bank . . . . . . . . . . 15 200 200
2. Dresdner Bank . . . . . . . . . . 9.6 180 200
3. Discontogesellschaft . . . . . . . . . . 30 170 200
4. Darmstädter Bank . . . . . . . . . . 25.8 154 160
Σ (million marks) . . . . . . . . . . 80.4 704
Schaaffhausenscher Bankverein . . . . . . 15.6 145 145
Berliner Handels-gesellschaft . . . . . . 16.8 110 110
ΣΣ= 112.8 959 1,015
France 1870 1908
1. Crédit Lyonnais . . . . . . . . . . 20 250
2. Comptoir National . . . . . . . . . . 50 150
3. Crédit industriel . . . . . . . . . . 15 100
4. Société Générale . . . . . . . . . . 60 300
Σ (million francs) . . . . . . . . . . 145 800
=mill. marks 116 640
three biggest banks: Germany: 54.6 — 550 (marks)
France: 130 — 700 (francs)
(104 — 560(marks))
two biggest banks: Germany: 24.6 — 380 (marks)
France: 80 — 550 (francs)
(64) — (440)
p. 367
idem p. 398
Letters received and dispatched (number)[5]
1852 6,135 6,292
1870 85,800 87,513 (Discontogesellschaft)
1880 204,877 208,240 {big Berlin bank}
1890 341,318 452,166
1900 533,102 626,043

Riesser, 3rd edition, p. 693 (Supplement VIII) (p. 745, 4th edition):

_Development of Concentration Within Individual Big Banksand Banking Concerns_The eight big Berlin banks had[6]
Atendofyear Branches(office andbranches)in Germany Depositbanks andexchangeoffices Commanditeoperations Constantholdingsin Germanjoint-stockbanks Totalestablish-ments
⋕ ⋕ ⋕ ⋕ ⋕
1895189619001902190519081911 1618212942— 104 182025334669104 (5)(5)(5)(7)(8)(10)(9) 14184072110—276 23275387149264276 (12)(12)(17)(35)(44)(73)(93) 111111108—7 1314121112127 (—)(—)(—)(—)(1)(2)(2) 1181634—63 22916349763 (—)(—)(5)(5)(11)(31)(15) 424880127194—450 566393147241442450 (17)(17)(27)(47)(64)(116)(119)
p. 7474th edition

[N.B. The 3rd edition deals with eight banks, the 4th edition with six.]

⋕ Figures from the 4th edition, p. 745 (for six banks: Darmstädter Bank; Berliner Handelsgesellschaft; Deutsche Bank; Discontogesellschaft; Dresdner Bank and Schaaffhausenscher Bankverein).

(in brackets, figures for

the Deutsche Bank)

N.B. Deutsche Bank. Turnover:

(million marks)
1870 1875 1885 1895 1905 1908 1911
239 5,500 15,100 37,900 77,200 94,500 112,100

These eight banks include, firstly, five banks which form “groups”: Darmstädter Bank (Bank für Handel und Industrie), Deutsche Bank, Discontogesellschaft, Dresdner Bank and Schaaffhausenscher Bankverein,—and then the three following banks: Berliner Handelsgesellschaft, Commerz- und Disconto-Bank, National Bank für Deutschland.

Here are these “groups” [common-interest associations] of the (five) banks and their “capital strength” (p. 484 et seq.).

Swallowed up
banks (p. 520) Mil-lionmarks Millionmarks pri-vatebankof-fices banks
1. Group D.B. DeutscheBank . . 12 929.5 1,266.41) 786.8 1,045.41) 31 21
2. ” D.G. Disconto-gesell-schaft . . 6 662.6 — 564.7 23 8
3. ” Dr.B. DresdnerBank . . 8 321.3 — 285.7 7 1
4. ” S.BV Schasff-hausen-scherBank-verein . . 4 209.9 — 278.5 11 6
5. ” Dm.B.myab-brevi-ations Darmstäd-ter Bank(Bank fürHandelund In-dustrie) 5 260.6 — 297.4 17 7
5. 35 2,720.7 ΣΣ 2,471.7 89[7] 43
{2,750 million} i. e. almost2,500 mil-lion marks p. 500
N.B. This includes only share capital and reserves, i.e., only the banks’ own money, not borrowed money.

1) This includes “associated banks”.

p. 537on September30, 1911 41 concern banks belonging to thefive big-bank groups had, on December 31,1908: onOctober 1,1911
Swallowed up:
⎧⎪⎪⎪⎪⎪⎪⎨⎪⎪⎪⎪⎪⎪⎩ branches 241 ⎫⎪⎪⎪⎪⎪⎪⎬⎪⎪⎪⎪⎪⎪⎭ 285
Privatebankoffices
⎧⎪⎪⎪⎪⎨⎪⎪⎪⎪⎩
banks p. 697 agencies 325 377
Dm.B. — 8 — 3 41 banksinconcernsof thefive groups commandite banks 18 21
D.B. — 45 — 30 deposit banks 102 126
D.G. — 61 — 11 private bank offices 89 116
swallowed up
Dr.B. — 2 — 1 banks 43 45
116 45 common-interest associations based onpossession and exchange of shares . . 16 20
In all, the big banks and their concerns, taken together, had by December 31,1908, swallowed up 164 private bank offices+banks; N.B. (p. 500).

In Great Britain in 1899 there were 12 banks with 100 or more branches; altogether there were 2,304 branches (“Niederlassung”).

In 1901 there were 21 banks with 100 or more branches; altogether there were 6,672 branches (p. 521) (p. 558).

“At the beginning of 1905, a single bank, theLondon City and Midland Bank, had 447 branches,i.e., 257 more than the big Berlin banks and _52_provincial banks affiliated with them at the endof 1904; on December 31, 1907 (⋕), according to The Economist, the British Joint-stock banks, thennumbering only 74 (exclusive of colonial and foreignbanks), of which 35 had the right to issue banknotes,had not less than 6,809 branches and sub-branches”(522). N.B.

Riesser continued

(⋕) Fourth edition (p. 558): “On December 31, 1908, deposit banks in Great Britain and Ireland, numbering then 63, had not less than 6,801 branches and sub-branches. Towards the end of 1910 the number of branches was 7,151. At this time, four banks in England and Wales had more than 400 branches each, viz.:

London City and Midland Bank . . 689 (315 in 1900)
Lloyds Bank . . . . . . . . . . 589 (311 ” ” )
Barclay & Co . . . . . . . . . . 497 (269 ” ” )
Capital and Counties Bank . . . . . 447 (185 ” ” )

“Four other banks had more than 200 branches each and eleven (20, including Scottish and Irish) had more than 100 each”[8] (p. 559).

In France, the number of agencies and branches (p. 522) (p. 559) was:

1894 1908
Banks Parisand suburbs Prov-inces Paris and suburbs Prov-inces Abroad (and Algeria)
Crédit Lyonnais 27 — 96 62 — 175 20
Comptoir d’Escompte 15 — 24 49 — 150 —
Société Générale . . 37 — 141 88 — 637 2

As regards colonial banks (nearly all founded by the Berlin big banks), Riesser’s summary is as follows (additions for 1910 from the fourth edition, p. 375[9]:

N.B. “At the end of the nineties there were only four German overseas banks; in 1903 therewere six with 32 branches, and at the beginning of 1906 there were already 13, with not less than100,000,000 marks and more than 70 branches.“This, however, is relatively insignificant incomparison with the successes of other countries inthis field: already in 1904, Great Britain,for example, had 32 (1910: 36) colonial bankswith headquarters in London and 2,104(1910: 3,358) with headquarters in the colonies,and also 18 (1907: 30) (1910: 36) other Britishbanks abroad with 175 (2,091) branches. Alreadyin 1904-05, France had 18 colonial and foreignbanks with 104 branches; Holland had 16 overseasbanks with 68 branches” (p. 346).
1910 1904
Thus: Germany 13— 70
72—5,449 Great Britain 50— 2,279
France 18— 104
Holland 16— 68[10]
The first figure shows the number of colonial andforeign banks in general, the second—the number oftheir branches (or of individual banks in the colonies).

“Supplement VII” (p. 666 et seq.) contains a list of companies and banks in the big-bank “concerns”, from which I take foreign banks:

Sphere (location of branches) (Number of bran-ches) Location of bank Name of bank Capital million marks (etc.) Berlin big bank which founded it or has holdings in it
(—) Amsterdam Die AmsterdamscheBank 6 florins Darmstädter Bank
China, Japan,India,etc. (12) Shanghai Deutsch-AsiatischeBank 7.5 taels Darmstädter Bank+ Berliner Han-delsgesellschaft + Deutsche Bank + Discontogesellschaft + Dresdner Bank + Schaaffhausenscher Bank-verein
Italy (33) Milan Banca Commerciale Italiana 105 lire Darmstädter Bank + Berliner Han-delsgesellschaft + Deutsche Bank +Discontogesellschaft + DresdnerBank
(? Belgium) (—) Brussels Banque internatio-nale de Bruxelles 25 francs Darmstädter Bank + Berliner Han-delsgesellschaft + Discontogesell-schaft + Schaaffhausenscher Bank-verein
(? GreatBritain) (—) London Bankers Trading Syndicate £ 0.1 Darmstädter Bank
Rumania (—) Bucharest Banka Marmorosch Blank 10 lei Darmstädter Bank+ Berliner Han-delsgesellschaft
(? America) (—) ? Amerika-Bank 25 marks Darmstädter Bank
(?Great Britain) (—) London London and Hansea-tic Bank £0.4 Common-und Disconto-Bank
(South America, etc.) (22) Berlin Deutsche Über-seeische Bank 20 marks Deutsche Bank
EastAfrica (?) Berlin AktiengesellschaftfürÜberseeische Bauunternehmungen 2 marks Deutsche Bank
Central America (?) Berlin Zentral Amerika-Bank 10 marks Deutsche Bank
Mexico (2) Mexico Mexikanische Bankfür Handel undIndustrie 16 pesos Deutsche Bank
Polynesia (2) Hamburg Deutsche Handels-und Plantagen-Gesellschaft derSüdseeinseln 2¾ marks Discontogesellschaft
New Guinea (?) (?) Neu-Guinea-Kom-pagnie 6 marks ”
Brazil (5) Hamburg Brasilianische Bankfür Deutschland 10 marks ”
Chile andCentralAmerica (9) Hamburg Bank für Chile undDeutschland 10 marks Discontogesellschaft
Rumania (2) Bucharest Banca generalaRomana 10 lei ”
Belgium (?) Antwerp Compagnie commer-belge 5 francs ”
German Africa (15) (?) Deutsch-Afrika Bank 1 marks ”
Bulgaria (?) Sofia Banque de Crédit 3 leva ”
German West Africa (4) Berlin Deutsch-Westafri-kanische Bank 1 marks Dresdner Bank
Asia Minor,Turkey,Salonica,etc. (12) Berlin Deutsche Orientbank 16 marks Dresdner Bank + National-Bank fürDeutschland + SchaaffhausenscherBankverein
SouthAmerica (3) Berlin Deutsch-Südameri-kanische Bank 20 marks Dresdner Bank + SchaaffhausenscherBankverein
Connection Between the Banks and Industrial Enterprises (p. 383) (according to Jeidels) (1895-1903
Number of industrial stock issuesby years
p. 307 Number ofcompaniesfor whichthese stockissues weremade Bank of-fices atindus-trial en- terprises(p. 284 ) (p. 306) (p. 463) Number of industrial-ists on bank supervisory boards 1)
p. 413 Σ for sevenyears
1895-1910 1904-1910 Number ofindustrialstockissues
My abbre-viations p. 4141895-1910 (1903-04) (1911 ) (1908) (1910)
(p. 501)
424 204— Dr. B Dresdner Bank —220 —181—368 —191 —504 —11 —8
361 174— S. BV. SchaaffhausenscherBankverein . . —187 —207—364 —211 —290 —19 —17
312 142— B. HG. Berliner Handels-gesellschaft . . —170 —149—281 —95 —153 —15 —13
302 151— D. G. Discontogesell-schaft . . . . . —151 —154—290 —111 —362 —4 —2
456 306— D. B. Deutsche Bank . . —150 —139—419 —250 —488 —4 —5
314 166— Dm. B. Darmstädter Bank —148 —140—285 —161 —313 —4 —6[11]
1 ) Including the directors of the Krupp firm (Dr. B.); Hapag and NorddeutscherLloyd and Gelsenkirchener Bergwerks Aktiengesellschaft (D. Ges.); Hibernia; _Harpener_Aktiengesellschaft, Oberschlesische Eisenindustrie Aktiengesellschaft and others (B. H. Ges.), etc.
( Apparentlyincomplete data ) Number of overseas banks foundedby the big banks (list in Riesser,p. 327 et seq.) (p. 354 et seq.)
Σ D.B. D.G. Dr.B. Dm.B. B.HG. S.BV. N.B.f. D. Total
11 1880-89 3 3 1 1 1 1 1 11
22 1890-99 4 6 2 2 2 4 2 22
24 { 1900-04 3 3 1 — — — 1 8
1905, 1906-08 2 3 5 1 1 3 1 16

Not the whole decade, up to 1908-09.
------------⌄------------

R. E. May (in Schmoller’s Jahrbuch,1899, p. 271 et seq.)(p. 83) distributionof national incomein Germany (p. 82) data ofFinance Minis-ter RheinbabenPrussia 1908 (pp. 99-100)in Germany
Numberof people(mill.) Incomethous.mill.marks Number %of people(mill.) _Tax_mill.marks % Number ofjoint-stockcompanies Their cap-ital (thous.mill.marks
up to900 marks 18⅓ 12¾ 17.9 = 47.22 0
900-3,000 3⅔ 6½ 16.2 = 42.54 83.7 = 34.26 1883—1,311 —3.9
> 3,000 ⅓ 5¾ 1.9 = 5.50 66%[12] 1896—3,712 —6.8
Σ=22⅓ 25 36.0 95.26 1900—5,400 6.8 (7.8)

| | > 9,500 marks_0.87_% of popu- lation_43_% of tax | | | | | ---------------------------------------------------- | ---- | ---------- | ---- | | Gainfully em-ployed population | N.B. | 1908—6,249 | —9.4 | | | | | |

Riessergives list,not tableSupple-ment IV Number of Industrial and Commercial Companies with Bank Representation _on Supervisory Boards_Industries:
Banks Mining, iron and steel, salt works Quarrying Metalworking Machines and instruments1) Chemical Soap, oil, etc. Textile and leather Paper Pulp Food Trade Insurance Transport Foreign companies Building Hotels & Restaurants Rubber Art products Plantation companies Exhibitions Total
Darmstadter Bank 9 4 2 15 3 2 5 2 1 7 24 3 9 6 — — — — — —
Berliner Handelsgesellschaft 18 1 8 10 4 1 — — — 3 16 — 9 17 1 — — — — —
Commerz-und Disconto-Bank 1 2 2 7 1 — 1 — — 3 7 2 3 1 1 1 — — — —
Deutsche Bank 13 1 3 24 1 4 6 1 — 3 28 8 6 13 2 — 1 2 — — 116
Discontogesell-schaft 13 2 2 8 5 2 — — — 1 29 2 4 21 — — — — 2 1
6) Dresdner Bank 10 2 3 14 1 — 2 1 — 2 29 3 11 8 — 1 — — — —
National-Bank für Deutschland 13 4 3 18 2 3 1 — — 7 21 1 9 6 2 — — 4 2 —
8)Schaaffhaus-enscher Bank-verein 18 2 4 15 2 1 4 — — 1 20 1 16 6 3 — — 1 — —
Total 95 18 27 111 19 13 19 4 1 27 174 21 67 78 9 2 1 7 4 1
---------------⌄-------------- ------------------⌄----------------- --------------⌄------------- ----------------------------⌄---------------------------
140 +111 +83 +174 +166 +24 -698
1) including electrical industry.
“According to Board of Trade esti-mates for 1898, Great Britain’s total income from bank and other oper-ations amounted during that yearto £18 million (i.e., about 432 millionkronen)” (p. 399) (p. 431).... “‘Alleged-ly’ more than 6,000 million marks ofEuropean annual overseas trade pay-ments go through Great Britain”....[p. 431, 4th edition] income frombanking opera-tions !!!450 millionfrancs.

Britain’s annual income from shipping is 1,800 million marks; Germany’s is 200-300 million marks (p. 400) (p. 432 idem).

1907 poll on bank employees in Germany: replies from 1,247 firms with 24,146 employees (p. 579) (p. 626)

Number Age of employees (years) Average salary (marks) Average salary, all private employees
264 joint-stock banks 16,391 20-39 1,459-3,351 1,467-2,380
708 private banks 5,938 40-54 3,638-4,044 2,413-2,358
275 co-operative banks 1,817 55-70 3,899-2,592 2,264-1,879
“The number of clearing accounts increased from3,245 in 1876 to 24,821 (24,982) in 1908 (1910), but,apart from state bank offices, they are mainly han-dled by big commercial and industrial houses, so thatclearing operations by the State Bank have retaineda _somewhat plutocratic character_”(122) (p. 131).
N.B.

In 1907, the average amount of each account (State Bank) = 24,116 marks. Turnover = 260,600 million marks, 354,100 million in 1910 (p. 132). The postal cheque turnover (1909) = 23,847 owners of accounts and 49,853 in 1910, and their property = 94 million marks (p. 132).

Total Clearing House Transactions (p. 123)(thousand million marks)
1884 1908 1910
Germany 12.1 45.9 54.3
France 3.3 21.3 23.7
Great Britain 118.5 260.1 299
U.S.A. 143.2 366.2 422

Total turnover of the State Bank in Germany
1908 = 305,250 million marks
1910 = 354,100 ” ”

Number of cartels in Germany
(p. 137) 1896 about 250
(p. 149) 1905 ” 385
|
involving about 12,000 firms[13]
Deposits (in all banks) and in savings banks, thous-and million marks (pp. 162-63)
Germany
including savings 9 . . . . . . . 1900 about 10
bank deposits 13 . . . . . . . 1906 15.5
1909-15½
Great Britain . . . . . . . . . . (1903-05) — — 10.5
U.S.A . . . . . . . . . . (1905) — — 47 (59 in 1909)
France (only bank deposits) . . . . (1905) — — 4
Germany (only bank deposits) . . . 1900 — — 1
1906 — — 2.5
Great Britain (only bank deposits) (1905) — — 6.25
U.S.A. (only bank deposits) . . . — — 15
N.B. “The above data show that, even now, Germandeposits are not of major importance, compared withthose of Great Britain and the U.S.A., and appear equallyto lag considerably behind those of France” (164)(idem 177).

Riesser, p. 354 (p. 384):

“The progress of the preceding period (1848-70),which had not been exactly slow, compares withthe rapidity with which the whole of Germany’snational economy, and with it German banking,progressed during this period (1870-1905) in aboutthe same way as the speed of the mail coach in thegood old days compares with the speed of the present-day automobile... which is whizzing past so fastthat it endangers not only innocent pedestrians inits path, but also the occupants of the car”....[14]
N.B.

And alongside the above, in the very next sentence, Riesser, this bourgeois vulgarian (essentially an out-and-out philistine) and lackey of the money-bags, sees the guarantee of “public security” and “real progress” in the “_greatest virtue_” of the leader: moderation!!!

And on the next page (355—p. 385) he admits that banks are ... “enterprises which, by their very functions and development, ‘_are not of a purely private-business character_’, 1 ) but are more and more outgrowing _the sphere of purely private-business regulation_”.[15]

1) From Riesser’s speech as president of the first all-German bankers’ congress in Frankfurt-am-Main, September 19-20, 1902.

But this admission does not prevent this bourgeois idiot from writing:

“The other consequence, too, predicted by thesocialists, of the process of concentration, thatit is bound to lead finally to the socialisationof the means of production, which the socialistsaim at and which is to be realised in the ‘statehail of the future’, has not come true in Germany,and is hardly likely to come true later on”[16](p. 585) (p. 633).
!!ha-ha!!“refuta-tion....”

(The Deutsche Bank alone has a turnover of 94,500 million marks (p. 361) (112,100 million in 1910, p. 391), has connections with a group of 12 banks, controls a capital of 1,000 million marks—the capital of this group and “affiliated” banks—has swallowed up 52 banks, has 116 branches, bank offices, etc., in Germany—has seats on the Supervisory Boards of 120 trading and industrial companies, etc. And this is not “socialisation”!!)

Deutsche Bank:
Own capital = 200 million marks + 100 million reserves
turnover = 94,500 million marks
gross profit = 55 million marks (1908) (p. 352)
= 62.9 ” ” (1910) (p. 382).

The number of bank employees in the Deutsche Bank was 4,860 (1908)—p. 578 ((in 1895, there were 7,802 employees in 66 banks with 50 or more employees, ibidem)).

In discussing merchant shipping and its development in Germany on p. 114 et seq., Riesser notes the following:

H.-A.P.A.-G. (Hamburg-America), capital (1908) 125 million marks (+ 76 million in bonds), 162 ships (value 185.9 million marks).

North German Lloyd, capital (1908) 125 million marks (+ 76 million in bonds), 127 ships (value 189.1 million marks). 125 + 76 = 201.

“In 1902-03, both these companies concludedessentially identical agreements with the InternationalMercantile Marine Co., founded by American bankersand shipowners on January 1, 1903, with a capital of120 million dollars (= 480 million marks), and embracingnine American and British lines” (p. 115). This is theso-called Morgan trust.Content of the agreement: division of profits and division of the world (German companies would notcompete in Anglo-American freight traffic; agreementstipulated which ports were to be used by each, etc.,etc.). A joint control committee was set up. The agreementwas for twenty years (terminable after a year’s notice).It was to be annulled in the event of war (p. 116, end)(p. 125, 4th edition).[17] And this is not “socialisation”!!

“As regards the Reichsbank, according to the information given by the Bank Enquiry Commission (p. 179), on September 1, 1906, the number of German firms and individuals generally solvent in their dealings with bills of exchange was _70,480_”:

viz.: N.B.insignificant number solvent
a) merchants and trad-ing companies . . . . 29,020 = 41%
b) industrialists and indus-trial companies . . . 21,887 = 31
c) agriculturists and agri-cultural craft and fac-tory enterprises . . . 9,589 = 14
d) co-operatives of all kinds . . . . . . . . . . 883 = 1
e) rentiers, artisans and similar craftsmen 9,101 = 13
70,480 100
p. 194 idem

(Düsseldorfer) Stahlwerkverband founded March 30, 1904 (for three years and prolonged on April 30, 1907 for a further five years). Its output in 1904 was 7.9 million tons (p. 141) (p. 153).

On November 28, 1904, it concluded an agreement on export of rails between Great Britain 53.5%, Germany 28.83%, France and Belgium 17.67% (+ France 4.8-6.4%. ΣΣ = 104.8, 106.4%) (p. 147) (p. 159).
Railcartel Now, after the United StatesSteel Corporation joined the car-tel, Germany’s share = 21% Divisionof theworld
Cartel for sale of girders(export of girders)—shares:
Germany 73.45%
France 11.50%
Belgium 15.05%
“In February 1909 there was formed also theInternationaler Zinkhüttenverband (p. 159) at firstuntil December 31, 1910, and afterwards prolonged,evidently for three years. There are three groups(according to the geographical location of the fac-tories). Group A—all German and some Belgianplants, group B—ten Belgian, French and Spanishplants, and group C—British plants. Out of the totalEuropean output, about 513,000 tons in 1908,Germany’s share at that time was put at 226.9,Belgium’s—165, France’s and Spain’s together—55.8, Great Britain’s—54.5. Member plants accountedfor about 92 per cent of the total European output.
N.B.
“Under recent arrangements member companiescan increase production at will, irrespective offixed production quotas, with the proviso, however,that if stocks at a definite date (March 31, 1911,is the initial date) are 50,000 tons or more, then,under definite conditions, output must be cut bya certain percentage, in accordance with the compa-ny’s production quota” (p. 160, 4th edition).
N.B.

Banks unite into groups (or consortiums) for especially large-scale undertakings:

I. a) Prussian Consortium—in 1909 28 banks (p. 310).
b) State Loan Consortium— 29 ” (p. 311).
c) Rothschild group—in 1909 13 ” (p. 312)
(including the three Rothschild firms—Vienna, Lon-don and Paris).
2. Group for Asiatic business operations, etc. etc.
N.B. “The political patrol clashes are fought on the financial field. But the moment for these financialclashes, the opponents, and the mode of fighting,are determined solely by the country’s responsibleforeign policy leadership” (p. 402) (p. 434).

French capital in Tunisia and Morocco
” ” ” Russia

French capital in Italy (the beginning of political rap-
prochement through financial
rapprochement)

German ” ” Persia (struggle against Great Britain)

the struggle of European finance capital groups over
Chinese and Japanese loans

French and British capital in Portugal and Spain, etc.
(p. 403).[18]

{ First edition of Riesser’s book, preface dated July 4, 1905 }

Bills of exchange turnover in Germany (computed from the tax on bills) increased from 12,000 million marks in 1885 to 25,500 million marks in 1905, and to 31,500 million in 1907 (p. 228)—and to 33,400 million in 1910 (p. 246).

Germany’s national wealth (Mulhall 1895: 150,000 million) 130,000—216,000 million (Riesser): 200,000 million marks (p. 76) (Steinmann: 350,000).

Germany’s national income 25,000-30,000 million marks (p. 77).

France’s national wealth: Mulhall (1895)—198,000 million marks; Foville (1902)—161,000; Leroy-Beaulieu (1906)—205,000; Théry (1906)—161,000.

National income = 20,000 million marks (Leroy-Beaulieu) (p. 78).

Great Britain: 204,000 million marks (Giffen 1885)—235,000 (Mulhall 1895), 228,000 (Chiozza-Money 1908).

United States: national wealth = 430,000 million marks (1904, Census Bureau).

In Germany, “about 1,200 million marks, i.e., about 1/3 of the yearly savings of the nation, is annually invested in securities” (p. 81)—(p. 86 idem).

Source references in Riesser

(Those especially praised or especially important marked*.)

*Walther Lotz, The Technique of Securities Issues, 1890.

Alfred Lansburgh, German Banking, 1909.

* ” ” “The Control of National Wealth Through the Banks”—in Die Bank, 1908.

Schumacher on concentration of banking, Schmoller’s Jahrbuch, XXXth year, No. 3.

Warschauer, “Supervisory Boards”, Conrad’s Jahrbücher (III; Vol. XXVII).

Theodore E. Burton, Financial Crisis, etc., New York, 1902.

**J. W. Gilbart, The History, etc., of Banking, London, 1901.
Schriften des Vereins für Sozialpolitik, Vols. CX, CIX and others. (1900 crisis.)
CXIII: “Lessons of the Crisis.”

W. Sombart, The German National Economy in the Nineteenth Century, 2nd edition, 1909.

L. Pohle, The Development of German Economic Life in the Nineteenth Century, 2nd edition, 1908.

A. Saucke, “Has ... Large-Scale Enterprise ... Increased in Industry?” Conrad’s Jahrbücher III, Vol. XXXI.

von Halle, The German National Economy at the Turn of the Century, 1902.

May on distribution of the national income, Schmoller’s Jahrbuch, 1899.

*Glier, “The American Iron Industry”, Schmoller’s Jahrbuch, _27th_year, No. 3; _28th_year.

* ” idem, Conrad’s Jahrbücher, Vol. XXXV (1908).

Ed. Wagon, The Financial Development of German Joint-Stock Companies 1870-1900, Jena, 1903.

Jenks, “The Trusts”, Conrad’s Jahrbücher, 3rd series, Vol. I (1891).

Voelcker, “The German Metallurgical Industry”, Revue économique internationale, III, 4 (1904).

Kollmann, “The Steel Association”, Die Nation, 1905 (_22nd_year).

Waldemar Müller, “The Organisation of Credit in Germany”, Bank-Archiv, 1909 (8th year).

Warschauer, Physiology of German Banks, 1903.

E. Jaffé, British Banks, 1905.

S. Buff, Cheque Turnover in Germany, 1907.

*Ad. Weber, The Rhine-Westphalian Banks and the Crisis, 1903.

” idem. Schriften des Vereins für Sozialpolitik, Vol. CX.

*Ditto. “Deposit Banks and Speculative Banks.”

**Otto Jeidels, “Relation of the German Big Banks to Industry”, Schmoller’s Jahrbuch (? “Studies” ?), 1905.

**W. Prion, “German Bill Discounting”, 1907, Schmoller’s Forschungen No. 127.

Fr. Leitner, Banking and Its Technique, 1903.

**Br. Buchwald, The Technique of Banking, 5th edition, 1909.

H. Sattler, Investment Banks, 1890. (Riesser does not praise it.)
N.B. [preface by A. Wagner. Riesser is very angry with state socialist Wagner!!]

Fr. Eulenburg, “Supervisory Boards”. Conrad’s Jahrbücher.
3rd series, Vol. XXXII.

” ” “The Present Crisis”... ibidem, 3rd series, Vol. XXIV.

*G. Diouritch, The Expansion of German Banks Abroad, Paris, 1909.

R. Rosendorff, “German Overseas Banks”. Blätter für vergleichende Rechtswissenschaft, etc., 3rd year, 1908.

A. P. Brüning, The Development of Foreign Banking, 1907.

R. Rosendorff, “The German Banks in Overseas Business”, Schmoller’s Jahrbuch, XXVIII, No. 4.

R. Steinbach, “Managerial Costs of the Berlin Big Banks”, Schmoller’s Jahrbuch, 29th year, No. 2.

E. Moll, The Profitability of the Joint-Stock Company, Jena, 1908.

C. Hegemann, The Development of the French Big Banks, Münster, 1908.

Ch. J. Bullock, “Concentration of Banking Interests”, The Atlantic Monthly, 1903, August.

H. Voelcker, “Forms of Combination and Interest Sharing in German Big Industry”, Schmoller’s Jahrbuch, Vol. XXXIII.

L. Eschwege, “Revolutionising Tendencies in the German Iron Industry”, Die Bank, 1909, April.

J. Cockburn Macdonald, “The Economic Effects of the Concentration of Capital in Few Hands”, The Institute of Bankers, 1900, October. N.B. (?).
N.B. p. 70 et seq. (abbreviated)Tabular survey of outstanding events affectingthe development of German banking in the secondepoch:

1871-72: end of the war. Five thousand million. “Stormy” advance....
“The beginning of industrial cartellisation”....

1873. Crisis.

1874-78. Depression.

1879-82. Economic boom. Promotion of bubble companies.

1879. Gold currency. (Union with Austria.)

1883-87. Depression (1887. Union with Italy.)

1888-90. Boom. Promotion of bubble companies. Speculation.

1891-94. Depression.

1891. Failure of many Berlin banks.

1895. Beginning of boom.

1890-97. Boom intensified. Rapid development of electrical industry.

1897. Formation of the Rhine-Westphalian Iron Syndicate.

1898-1900. Favourable business conditions.

1899. Climax of reconstructions, formation of new companies and issues of stock.

1900-01. Crisis. Drop in mining securities, failure of many banks. “Vigorous intervention of the big banks. Intensified concentration”....

1901-02. “Prolonged and particularly marked demand for money” ... foundation of the United States Steel Corporation.

1902-06. “Revival.”

1904. Foundation of the Stahlwerkverband. Stormy development of concentration.

1907. American crisis. Bank rate increased to 7½ per cent.

1908. End of acute crisis in America. “Revival.” Money liquidity.

1909. Intensified money liquidity, etc.

1910. Progressive improvement... (4th edition, p. 78).

N.B.
N.B. 1895-1900 “for the first time excess of immigra- tion” N.B. (p. 75).

New literature

N.B. Dr. Max Augstin, The Development of Agriculture in the United States, Munich, 1914 (4 marks).

W. Wick, The Little Mercury, Zurich, 1914. (416 pp.) (“Commercial handbook”).

In the fourth edition, Riesser has this on foreign investments (capital invested abroad) (p. 426 et seq.):

Germany (1905), at least 24-25 thousand million marks (this now “undoubtedly” “greatly exceeded”, p. 436, end), including 16 thousand million marks in foreign securities....

“Of the total securities owned by France, estimated by Edmond Théry (Economic Progress in France... p. 307) at the end of 1906 at 100 thousand million francs, and Neymarck in 1906 at 97-100 thousand million francs (with a yield of 4½ thousand million francs), at the end of 1908, according to Théry, about 38½ thousand million wore in foreign securities.

“The estimates vary widely, of course, but an annual increment of at least 1,000 million francs is generally accepted. Henri Germain, former director of the Crédit Lyonnais, estimated this annual increase (in the years immediately preceding 1905) at 1,500 million francs; Paul Leroy-Beaulieu recently even put it at 2,500 million francs.

“The well-known British financial policy expert, Sir Edgar Speyer, in a lecture at the Institute of Bankers (‘Some Aspects of National Finance’) on June 7, 1900, estimated total British investments abroad at £2,500 million, i.e., about 50,000 million marks, with an annual yield of £110 million (✕); his estimate for the end of 1910, in a lecture in the Liberal Colonial Club, is £3,500 million, or about 70,000 million marks.

“This corresponds approximately to George Paish’s estimate for 1907-08, about £2,700 million, i.e., about 54,000 million marks, nearly equally divided between India and the colonies (£1,312 million), and other foreign countries (£1,381 million). The same author gives the figure of £3,192 million, or about 64,000 million marks, for the end of 1910, and in a lecture to the Royal Statistical Society he estimates the 1911 income from British investments abroad, on the basis of the yearly Reports of the Commissioners of Inland Revenue, at approximately £180 million which, however, Sir Felix Schuster in a discussion on Speyer’s lecture of May 27, 1911, regards as too high” (p. 427).

(✕) “Incidentally, in this lecture he validlyemphasised that intensified export, increased issuesof foreign securities and a big economic boom areonly different manifestations of the same phenomenon.One section of the second lecture is headed: Exportof British Capital, Chief Cause of the Empire’sProsperity” (p. 428).
N.B.

Notes

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

[2] See present edition, Vol. 22, pp. 204-05.—Ed.

[3] See present edition, Vol.,22, p. 219.—Ed.

[4] See present edition, Vol. 22, p. 215.—Ed.

[5] Ibid., p. 214.—Ed.

[6] See present edition vol22, p. 213—Ed.

[7] In the manuscript the total “89 private hank offices” is connected by an arrow with the same figure in the following table (“concern Banks”) (see p. 352 of this volume).—Ed.

[8] See present edition, Vol. 22, p. 212.—Ed.

[9] Round brackets in the text indicate additions made by Lenin from-the fourth edition of the book (p. 375). They were written in between the lines, above or below the figures to which they refer.—Ed.

[10] See present edition, Vol. 22, p. 245.—Ed.

[11] See present edition. Vol. 22, pp. 220-21.—Ed.

[12] So given by Riesser.—Ed.

[13] See present edition, Vol. 22, p. 202.—Ed.

[14] Ibid., p. 300.—Ed.

[15] Ibid., p. 302.—Ed.

[16] Ibid.—Ed.

[17] See present edition, Vol. 22, p. 251.—Ed.

[18] See present edition, Vol. 22, p. 296.—Ed.

[19] By the First World War, the Thyssen Steel Company, founded in 1871, was Europe’s biggest iron and steel complex—it included the entire metallurgical cycle, plus coal and iron mines, general engineering and munition plants, transport and trading enterprises. In 1926, the Thyssen family played a leading part in the formation of the Steel Trust—the largest German war-industry combine and one of the most powerful German monopolies. The Thyssen concern helped bring the nazis to power; it was closely connected with a number of industrial and banking monopolies in nazi Germany and with international monopoly capital. After the Second World War the Steel Trust was split into two large concerns—Thyssen and Rheinstahl. The Thyssen concern holds a leading place in the West German iron and steel industry.

Hugo Stinnes started a steel mill in 1893; after the First World War it grew into a large monopoly concern with more than 1,500 enterprises in different industries. The concern went bankrupt shortly after Stinnes’s death in 1924, but with the help of American banks his heirs managed to keep the concern in business. One of its off shoots, the Rhein-Elbe Union steel combine, became one of the main components of the Steel Trust. Control of the Stinnes concern passed to the Hugo Stinnes Corporation, a U.S. company in which the shares are held by Stinnes’s heirs and American bankers who heavily invested in the concern. p. 346

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