ABSTRACT

The tendency toward concentration in German banking is an old subject, albeit one that has been rekindled by important new work using freshly available sources and modern insights and methods. Thus the classic work of Jacob Riesser, The German Great Banks and their Concentration in Connection with the Economic Development of Germany', first appeared in 1905 and then in expanded editions in 1910 and 1912 and did exactly what the title of the book implied.1 It related the increasing concentration of the banks, above all the expansion of the great universal banks in Berlin, to industrial concentration and the requirements of Germany's growing economy. It was a celebratory and upbeat work, stressing the great advantages of the concentration movement in the mobilization and organization of the capital market and the capacity to withstand crises while more or less lightly skimming over such disadvantages as the increasing neglect of small and medium-sized business and the decline of private banking. Needless to say, post-1918 and post-1945 analysts could not take quite so self-satisfied an approach. Thus P. Barrett Whale, who published a major book on the German credit banks in 1930, and Manfred Pohl, who produced a massive account in 1982 as well as a variety of studies, were much more inclined to stress the role played by capital shortage and crises in dealing with concentration after 1918.2

Surprisingly little work, however, has been done on responses to banking concentration within the banking sector itself, and on the part of other sectors of the business community (especially industrial customers), bank employees, the public, and government. There has, to be sure, been some attention devoted to perceptions of the 'power of the banks', Bankenmacht, as it is termed in German, with its usual surrounding aura of suspicion and even paranoia. Nevertheless, much of the reaction to concentration has lacked specification. This paper is intended to be a modest contribution toward a remedying of the gaps in our knowledge of this other side of the banking concentration story. It is not based on systematic research on the subject and does not constitute

an effort to be comprehensive. Rather, it is a somewhat impressionistic account derived from my research with respect to other problems and issues. Perhaps, however, it will open up questions worth further exploration.