Historical Association of Deutsche Bank Bank and History Historical Review

No. 12 December 2006

Roots in Thuringia: Privatbank zu Gotha The roots of Deutsche Bank in the Germaner, community representative as well as state of Thuringia are in Gotha, where thepatron of science and the arts.” One of his oldest predecessor bank in the region wasgreat achievements was the foundation of founded 150 years ago. the local insurance banks that still exist In the mid•19th century, around 20,000 people today. lived in Gotha, and the town was the capital of It is thus hardly surprising that the foundation the duchy of the same name, which of was Privatbank zu Gotha was connected with merged with Coburg in 1826 to form the Duchy this famous citizen. The bank’s establish• of Saxe•Coburg•Gotha. Friedenstein castle,ment was preceded by an initiative of the still today the town’s most imposing building, merchants’ guild, which had made a corre• served as the dukes’ residence, alternatelysponding advance three years earlier. On with Coburg. A late 19th century encyclopaedia June 24, 1856, the initiative was successful, praised Gotha for its predominantly wide streets when Ernst II, Duke of Saxe•Coburg and and attractive suburbs with villas, beautifulGotha, issued a “concession to establish a gardens and lovely parks. bank for the Duchies of Coburg and Gotha.” “The foresighted civic spirit of Gotha’s mer•The timing of the foundation of Privatbank zu chants in the tradition of Ernst Wilhelm Ar•Gotha was by no means a coincidence. It noldi as well as the general efforts in busi•took place during a literal wave of found• ness and politics of David Hansemann andations of stock corporation banks in Ger• Karl Mathy were the inspiration for the foun• many, lasting from around 1853 to 1856. dation of Privatbank zu Gotha.” This evalu•Other banks established in the same year, ation, published in 1932 to mark the 75thfor instance, were Schlesischer Bankverein anniversary of the bank that Deutsche Bank in Breslau, Mitteldeutsche Creditbank in had taken over a few years beforehand says Meiningen, Norddeutsche Bank in Hamburg a lot about the circumstances in which Privat• and Allgemeine Deutsche Credit•Anstalt in bank zu Gotha was founded in 1856•1857. It Leipzig. Together with Disconto•Gesellschaft also highlights the close connections be•and the merchants’ guild, Allgemeine tween Privatbank zu Gotha, Disconto•Gesell• Deutsche Credit•Anstalt was among the schaft and its founder David Hansemann, as credit institutions that participated in the well as the involvement of the liberal politi•foundation of Privatbank zu Gotha – a fact cian Karl Mathy and the economic situationworth mentioning as it had only started in Gotha at the time. business itself a few months beforehand. In fact, Gotha became well•known during the A special feature of the private banks found• first half of the 19th century as a center fored at this time was that they were often priv• scientific research and as a major publishing ileged in being allowed to issue bank notes. location. Trade and commerce developedThese “paper slip banks” – as they were also within the ducal city and became the mostknown – emerged mainly in smaller states important source of earnings for its citizens. such as Anhalt•Dessau, Reuss•Gera, Wei• One of the most outstanding representatives of mar, Braunschweig, Meiningen and also the Gotha bourgeoisie was Ernst Wilhelm Ar• Gotha. The cover requirements for the notes noldi (1778•1841) – mentioned in the quote issued by these banks were mostly rather above – who gained renown far beyond his loosely termed and thus certainly not an home town for being a “founder of insurance infrequent reason for the reservations these companies, manufacturer, economic reform• banks met with. The former Privatbank zu Gotha building from a photo taken in the 1970s The involvement of Disconto•Gesellschaft in men were very much at odds with each other the founding of Privatbank zu Gotha was not and did not settle their differences until much coincidental either. Disconto•Gesellschaft, a later. Mathy, who saw his director position bank founded in 1851, was interested in the more as a sinecure, was only to work at the establishment of similar institutes in Ger•bank for a short period. He soon left Gotha many, as reflected in its commitments in aand joined Allgemeine Deutsche Credit• number of German states. Originally intend• Anstalt in Leipzig. ed as a long•term participation, Disconto•Ge• Privatbank zu Gotha’s share capital at the sellschaft’s connection with Privatbank zutime of its founding in 1856 was four million Gotha was never realized in the plannedTaler. The privilege of issuing bank notes did form and was relinquished in the 1870s. not have an upper limit. The original concept The man responsible at Disconto•Gesell•of a note•issuing bank meant Privatbank zu schaft was David Hansemann (1790•1864). Gotha was placed under the supervision of He had good contacts with another banking the ducal state government. In 1876, the expert, also a famous representative of Ger• bank waived its issue rights, as this had man liberalism, Karl Mathy (1807•1868). Be• become less attractive as a result of the fore the establishment of Privatbank 1875 zu Reichsbank Act, and subsequently Gotha, Mathy had conducted negotiations in focused on other areas of the banking and Coburg on a license for a “private paper•slip credit business. However, the state con• bank” for Coburg•Gotha. And he tinued was to supervise the bank. involved in the foundation of Privatbank zuCompared with the busy goings•on in Gotha, which was presumably one reasonGermany’s main financial center Berlin, it that he was later offered the post of must the have been relatively quiet in Gotha. bank’s first director – a position he assumed Thus Mathy’s biographer Freytag highlighted at the beginning of 1858. Mathy’s joiningthe contrasts “between the many speculative Privatbank zu Gotha was against the wishes transactions of the big company in Berlin and of Hansemann – if we are to believe the quiet Privatbank zu Gotha at the foot of Mathy biographer Gustav Freytag – as both Friedenstein.” In later years, one of the

2 bank’s special lines of business was theGermany for some time, he reached the granting of loans to “municipalities, regional pinnacle of his career in 1872 by winning first boards or other public•law corporations inprize in the international competition for the return for the issue of bonds registered to the Reichstag building in Berlin, even though the bearer.” parliament building was not actually built on The connection between Privatbank the zu basis of his plans, but on those of archi• Gotha and Deutsche Bank began at thetect Paul Wallot. Bohnstedt designed several latest in 1877, when Deutsche Bank’s Man• buildings for his chosen city of residence in agement Board Spokesman Georg Thuringia. von Besides Privatbank zu Gotha, he Siemens succeeded Adolph von Hansemann was responsible for the designs of Grund• on Privatbank zu Gotha’s supervisory board. kreditbank and Feuerversicherungsbank, all This also marked the end of Privatbankconstructed in the style of the Italian zu Gotha’s connection with Disconto•Gesell• renaissance. With this “bank experience”, he schaft. This change, which was linked won to a competition in 1876 to design the new Privatbank zu Gotha’s conversion from Finish a National Bank, which was then built private bank into a standard banking insti•according to his plans in Helsinki. tution as mentioned above, was the be• ginning of a cooperation that ultimately ended in the takeover of Privatbank zu Gotha in 1920. Ties remained, however, to the other institutions in the ducal city, as the many connections in personnel showed. In the years following its foundation, Privat• bank zu Gotha became established as a bank with a presence in central Germany, operating branches in a number of cities. For instance, in 1883, an agency of the bank in Leipzig was converted into a branch. In the same year, a branch was opened in Erfurt, followed by an office in Weimar in 1891. Privatbank zu Gotha also expanded through mergers with existing banks. In May 1909, it The confiscation following the Second World War interrupted Deutsche Bank’s history in Gotha, and took over the Arnstadt•based bank Külmer, it was not able to return to the former ducal city Czarniakow & Co. – founded in 1878 – anduntil after Germany’s reunification. continued to operate it as a branch in Arnstadt. The bank also maintained an office The ties between Privatbank zu Gotha and in Mühlhausen and one in Schlotheim, which Deutsche Bank gradually intensified. As early was opened in 1918, not long before theas 1910, Berliner Börsen•Courier reported on merger with Deutsche Bank. the Thuringian bank as belonging to The bank’s capital was gradually increased. Deutsche Bank Group. In November 1920, The last increase, which was approved by an an extraordinary general meeting gave its extraordinary general meeting in 1905,approval to the conditions of a merger of the totalled 2.8 million marks, raising the bank’s two banks. Shares were exchanged at a ratio share capital to 10 million marks. The linkof two to one. Privatbank zu Gotha’s share• between Privatbank zu Gotha and Deutsche holders also received a cash payment of Bank was again highlighted in this capital20% for the shares they submitted for the ex• increase, as Deutsche Bank applied for thechange. For the personnel, the merger registration of the new shares at the Berlinchanged very little in Gotha: the new stock exchange. Deutsche Bank was alsoDeutsche Bank Thuringian branches were commissioned to issue the new shares. still managed from Gotha and by the same In the summer of 1876, Privatbank zu Gotha management board members Carl Cron and moved into a stately new bank building onVictor Steinohrt. Privatbank zu Gotha’s Karolinenplatz in Gotha. The building wasformer supervisory board was transformed planned by the famous architect Ludwiginto an advisory committee for Deutsche Bohnstedt in 1873 and constructed in theBank branches in Thuringia and additional following years. Bohnstedt had been living in financial leaders of the region were Gotha since 1863. Well•known throughoutappointed to this committee. Even the

3 representative premises on Karolinenplatzthat became Deutsche Bank’s Gotha branch. remained in the hands of the acquired bank

Cutting and pasting in the midst of war The massive aerial bombings of Berlin in the least parts of what had been lost. Companies night of November 22 and 23, 1943, reduced were requested to send their old annual Deutsche Bank’s head offices to rubble. The reports; the library had obtained more than main building was more or less completely1,000 volumes by 1944, and a substantial destroyed. The fire also devastated a hugeeffort was even made in restoring the files of number of bank files, including material thenewspaper cuttings. At the beginning of De• economics department had worked decades cember, the bank contacted the publishing to compile. The bank had possessed one of house of the Frankfurter Zeitung, a news• the most extensive economic archives thatpaper which had been banned shortly existed at any private company in Germany. beforehand, requesting it dispatch all issues Material in the archive had dated beenbetween 1939 and 1943 once again to supplemented through the merger Berlin. with Indeed, most of the volumes the bank Disconto•Gesellschaft in 1929. Besides had a requested were still available and so, for large library, the archive contained 285.60 the Reich marks (including postage), a annual reports, articles of association andtotal of 46 volumes were sent to the bank, prospectuses of all the German stock cor•each covering a month of newspapers. After porations and larger corporate entities. placing A the order, Ernst Wilhelm Schmidt, general business archive was also main•manager of the economics department, tained, comprising mainly newspaper andchanged it to a request for two copies of magazine clippings of reports on economiceach newspaper, stating that “it is absolutely issues, with a strong focus on national andessential for clipping purposes that we have international monetary issues, banking,a second copy of the same issue.” Although currency and finance. the stocks had gradually come to an end, the The largest part of these collections was lost bank managed to acquire 22 months’ of in 1943 in the building at Mauerstrasse 25.duplicate issues, which cost an additional Extensive older archives going back to the137 Reich marks. 1880s that had been moved to a building in Then came the painstaking task of cutting the adjacent Wilhelmstrasse were and also sorting. The great deal of work involved burned. in this action is concisely documented still It was remarkable that, directly after today the in a single folder of clippings. catastrophe, work began on reconstructing at

Lost & Found No wish to receive best wishes addressed to us or to any individual “We are certain that all our employees wish members of the Management Board.” us the very best for the new year 1930, just, (Memo circulated by the Management Board indeed, as we do them. We do, however,of Deutsche Bank (signed by Oscar Schlitter urgently request that they refrain from written and Eduard Mosler) dated December 20, or verbal expressions of New Year’s wishes 1929)

Imprint: This Historical Review is published by the Historical Association of Deutsche Bank e.V., Rossmarkt 18, 60311 Frankfurt am Main. Internet: http://www.banking•history.com. Responsible in accordance with the German Press Act: Professor Dr. Manfred Pohl.

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