Banking in Hungarian Economic Development, 1867-1919

Thomas Barcsay RyersonPolytechnical Institute

The year 1867 saw not only the creationof the dual monarchyof Austria-Hungary,but also marked the beginningof a half century of remarkableeconomic progress, especially for Hungary. The economicterms of the compromiseagreement established a customsand commercialunion betweenAustria and Hungary with free movementof labor,goods, and capital withina vastarea of centraland easternEurope--an area crisscrossedtoday by all manner of artificial economicbarriers. Financialstability was to be assuredby the creationof a joint ministryof finance(though both partners also maintainedtheir own financeministries), a commoncurrency, and a common bank of issue. The latter, the Austrian National Bank founded in 1816, had been the Habsburgmonarchy's central bank eversince, though not withoutrumbles of protestfrom the HungarianDiet and nationalistpoliticians. Despitethe agitation,the compromisemaintained the issuingprivileges of the bankfor a further ten years. Finally,in 1878,the Austrianand Hungarianparliaments approvedthe creationof theAustro-Hungarian National Bank with principal officesin both Vienna and Budapest.The new statutesobliged the bank to openbranches on an equitablebasis in both halvesof the monarchyand stipulatedthat the Hungarianminister of finance,together with hisAustrian counterpart,would nominate the bank'sgovernor. In returnthe Hungarian governmentundertook to respectthe bank'sprivileges as the solebank of •ssue in Austria-Hungary. This action seeminglylaid the politically controversial"bank question" to rest. However,nationalist politicians within the opposition Independenceparty were to wage a relentless--though ultimately unsuccessful--campaignduring the next fifty years for the establishmentof an independentHungarian bank of issue[7]. Though the Hungarian governmentwas thus obliged to share responsibilityfor the overallfiscal policy of the monarchywith its Austrian partner,it retainedconsiderable freedom in the field of domesticeconomic policy. Despiteoccasional conflict between agrarian and industrialinterests, successiveHungarian governments were remarkably successful in speedingup the modernizationof thecountry by creatingan efficienttransportation system and by encouragingindustrial development.

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Thanksto generoustax incentivesand outrightsubsidies, the railway networkgrew into one of the most extensivein east-centralEurope. The railwayboom of the 1860sand 1870sencouraged in turn the growth of ancillaryindustries in wagon,locomotive, and machine construction. A series of lawspassed in 1881,1890, 1907, and 1909provided tax exemptionor direct governmentaid to thoseprepared to expandexisting industrial enterprises or createnew ones. Specialincentives were providedfor thosewho introduced the latesttechnologies to their factories[21]. Thankspartly to government help and the dynamismof local and foreign entrepreneurs,Hungarian industrialproduction increased fourteen-fold between 1867 and 1913. During the sameperiod the averageannual growth rate of Hungarianindustry was one of the highestin Europe[6, p. 910]. Perhaps the most spectacularsymbol of the country'seconomic progresswas the emergenceof Budapestas a major Europeancapital. One of the fastestgrowing cities on the continent,it quadrupledits population between1868 and 1914. On the eveof WorldWar I, the erstwhileprovincial town had become,with overa millioninhabitants, the seventhlargest city in Europe. Much of Budapest'swealth was based on the millingindustry, which haddeveloped by leapsand bounds from the 1850sto 1900. Budapestwas the largestmilling center in the worlduntil 1900,when it wasgradually overtaken by Minneapolis.Despite this decline,Hungary remained the world'ssecond largestexporter of milled flour (after the United States),until the outbreak of the First World War [9; 12, p. 367]. In 1867, however, much of this was still in the future. As far as Hungary'sfinancial structure was concerned,the picture then was a fairly bleak one. The countryhad a total of four banks,one land credit institute, and fifty eight (mostlysmall), local savings banks. Amongthese, only the FirstPest Domestic Savings Bank (founded in 1839)and the PestHungarian CommercialBank (founded in 1841)could be consideredgenuinely Hungarian financial institutionsof any importance. Apart from these two, most significantbanking operationswere in the hands of the Austrian National Bankand the Pest branch of the ViennaCreditanstalt which had been opened in 1857[18, p. 19]. The economicand political optimismgenerated by the compromise agreementwas to usherin a five-yearperiod of rapid, occasionallyfrenzied expansionin theHungarian banking system. Between 1867 and 1873,120 new banks were established,as well as 206 savingsinstitutions of various descriptions.Only ten of thesemushrooming "banks," however, were of any financialimportance. The majority of the rest were speculativeventures destinedto go to the wall duringthe greateconomic crisis of 1873[18, p. 21]. Until that soberingmoment, however, the countrywent on a heedless spendingspree. In thewords of oneobserver writing in the 1890s,"It seemed as if the whole of societywas consumedby a feverishdesire for quick and easyprofits and the massof peopleblindly followed every audacious schemer, impostoror crook"[19, p. 216]. Hungarianswere not the onlyones caught up by the excitementof the moment. Foreigncapitalists also rushed in to take advantageof seemingly 218

limitlessopportunities. This new interestin Hungaryled to the establishment of two initiallypowerful banks, neither of whichwas to survivemore than a decade. The first, the Anglo-HungarianBank, was foundedin 1868 by a consortiumof Austrianand British capitalists with local Hungarian investors. Despite a board bristling with illustriousnames--Prince Sapieha, Count Szechenyi,and Budapest'sleading private banker, Maurice Wahrmann--the bankmade a numberof poorinvestments and was wound up in 1879[8]. The Franco-HungarianBank, establishedby the Franco-AustrianBank and the Erlanger Banking House, suffereda similar fate--despitean initial share capitalof 80 million francs[19, p. 215]. When the crashcame, in 1873 it camewith a vengeance.The total share capital of the five major Budapestbanks--which had stood at 59.1 millionflorins--plummeted to 16.7million florins by the end of the following year [1, p. 54]. The institutionsthat managedto survivethe storm,however, provedto be permanent.Foremost among them was the HungarianGeneral Credit Bank, foundedin 1867. The "Creditbank,"as it was to be generally knownuntil its nationalizationafter World War II, was an outgrowthof the Pest branch of the Creditanstalt. Two-thirds of the bank's shares were in the hands of the Creditanstaltand thus, indirectly,in those of the house of Rothschildand other foreigninvestors [18, pp. 20-21;1, pp. 54-55]. These powerfulbackers saved the Creditbankfrom the fate of the Anglo-Hungarian andthe Franco-Hungarianbanks. With the demiseof itstwo principal rivals, Creditbankbecame the largestbank in Hungary. Much of its prosperitywas based on its standingas banker to the government. Accordingto one estimate,in a singledecade--from 1880 to 1889--thebank participatedin the raisingof over 1.3 millionflorins in loansfor the Hungarianstate [18, p. 332]. Unfortunately,the Creditbankwas at this time no more than a subsidiaryof the Creditanstalt--andfully 40 % of its hugeprofits went to enrichthe mother institution[17, p. 5]. The bank'sdependence on Vienna was to lessengradually with the arrival from Pragueof SigmundKornfeld, the new and energeticgeneral manager.Kornfeld was to remainthe bank'sleading light from his arrivalin 1878until his deathin 1909. "It washis aim,"writes one of hisbiographers, "to createa powerfulinstitution which would act as guardianof Hungary's external credit and as a support for commerce and a pioneer of industrializationat home"[17, p. 63]. During his thirtyyears as managingdirector and president,Kornfeld wasable to achievethis. By 1899,the Creditbankhad become a completely independentinstitution, though it wasstill associatedwith the Creditanstalt andother banks of the Rothschildgroup. In 1913,it hadtotal assetsof nearly 553 millioncrowns ($111 million U.S.), whichput it in fourthplace among Hungary'smajor banks. In terms of profit for that year, however,the Creditbankoccupied second place [15, pp. 142-53]. The Creditbank'sprincipal rival during this period was the Pest HungarianCommercial Bank. Thisinstitution, established in 1841with native capital,pursued a prudentand conservative policy that had saved it duringthe boomyears and the crashthat followed.But this alsomeant that the bank had hardlygrown at all. A changecame about in 1881when the Parisian 219

banking house of Bontoux decided to invest in the Pest Hungarian Commercial Bank through its Austrian affiliate, the Oesterreichische Landerbank.Although the Bontouxbank was to collapsethe followingyear, the Commercial Bank was not affected and continued to maintain its relationshipwith the Oesterreichische Landerbank, which had managed to free itselffrom the Bontouxinterests in the nick of time [1, p. 54]. It was at this time that Leo Lanczyentered the bank's serviceas generalmanager. Like Kornfeld,he too wasto stayat the helm for overa generation,serving as presidentfrom 1896 to 1921. Again like Kornfeld, Lanczywas a man of visionand energywho knewhow to take advantageof the opportunitiespresented by Hungary's increasinglyrapid economic development. By the outbreak of World War I, the Pest Hungarian CommercialBank had becomethe largestbank in the country.Its total assets of over 1.2 billion crowns($242 million U.S.) made it an institutionof considerablecentral European importance [15, pp. 117-43]. Two formerlymodest banks also grew remarkablyduring the 1880s, thanksto generousinfusions of foreigncapital. The HungarianMortgage and Credit Bank was foundedin 1869but remainedrelatively inactive until 1881, whenthe Vienna Union Bank,the Banquede Pariset desPays-Bas, as well as the Soci6t6G6nerale raised its sharecapital from 1.4 millionflorins to 10 millionflorins [19]. The bankwas fortunate in havingas its presidentKalman Szell,who had been Hungarianminister of financefrom 1875 to 1878 and primeminister from 1899 to 1903. Szell'spolitical position and widespread influenceover Hungarianeconomic life undoubtedlygave the bank certain advantagesin attractingbusiness. Day-to-day affairs, however, were in the hands of Julius Madarassy-Beck,one of the few Hungariansat the time with foreignbanking experience.By 1913,with assetsof more than 834 million crowns($167 millionU.S.), theHungarian Mortgage and Credit Bank was the third largest financialinstitution in the country[15, pp. 154-64]. The HungarianDiscount and Exchange Bank was also formed in 1869 whenthe NiederoesterreichischeEscomptegesellschaft took overthe old Pest privatebanking house of C. J. Malvieux. [2, p. 76]. In 1881,the samegroup of Frenchand Austrian banks that had investedin the HungarianMortgage and CreditBank alsoraised the capitalof the Discountand Exchange Bank. The two thus becamesister institutions, a fact that was underlinedby the presenceof twofurther members of theMadarassy-Beck dan, Maximilian and Marcel, amongthe bank'sleading executives. The HungarianDiscount and ExchangeBank was fifth in size amongthe six major Hungarianbanks. In 1913,it had total assetsof 423 millioncrowns ($84.8 million U.S.) [15, pp. 165-84]. The newestand smallest of the Hungarian"big six" was the Hungarian Bank and CommercialCompany. It was foundedin 1890 by Hungarian, Belgian,and French capital. The CreditAnversois and the BanqueFrancaise Pour le Commerce et L'Industrie were the principal shareholders. Business-mindedaristocrat Count Imre Karolyiacted as president,but it was the flamboyant managing director Simon Krausz who was primarily responsiblefor the bank'sfinancial success. With total assetsof 295 million 220

crowns($59 million U.S.) in 1913,the HungarianBank was the smallestof the sixbut held third placein termsof profit. [15, pp. 185-92]. The country'soldest major financialinstitution, the Pest Domestic SavingBank, was differentin severalrespects from the other major banks. Its founder,Andrew Fay, had originallyintended it to operateon non-profit principlesto providecredit for smallmerchants and craftsmen who could not obtainit from the privatebanks. Despite Fay's altruistic intentions, the bank became a joint stock companyin 1844 and increasinglyparticipated in conventionalbanking operations. The sharesof the Pest DomesticSavings Bank were almostentirely in the handsof Hungarianinvestors, and the bank_ receivedno infusionsof foreign capital [5]. In 1895, it did join with an Austrianbank, the NiederoesterreichischeEscomptegesellschaft, to found the HomeBank (Hazai Bank) which acted principally as an investmentbank. The PestDomestic Savings Bank was the second largest financial institution in the countrywith total assets of 902million crowns ($180 million U.S.) in 1913[15, pp. 109-16]. The sixmajor banks were all establishedin Budapestand, until the late 1870s,did little to extendtheir operationsbeyond the capital. In the following decade,things were to changeradically. First of all, the major banks- -especiallythe CommercialBank--began to establishbranches in the larger provincialcities. If this provedbothersome or potentiallyunprofitable, the Budapestbanks would either enter into partnershipwith a local bank--or buy the minimumnumber of sharesrequired to control it. Another way of spreadingthe major bank'sinfluence was to establisha new bank with local investors.Using these techniques, the majorbanks continued to extendtheir economicinfluence [1; p. 18]. By 1900,the CommercialBank had six provincialbanks in its orbit fromTransylvania to Pozsony(also known as Pressburg or Bratislava)on the Austrian border. The Creditbankcontrolled three banks:the prestigious HungarianLand Credit Institute, the Flume Credit Bank, and (as of 1911)the Croatian General Creditbank--91% of whose shares remained in its hands until 1945. The HungarianMortgage and Credit Bank and the Discountand ExchangeBank extendedtheir influenceover the Hungarian Agrarian and Rent Bank and the Hungarian General SavingsBank. The First Pest DomesticSavings Bank was a shareholderin the Home Bank and in the Kolozsvar(Cluj) SavingsBank, one of the oldestfinancial institutions in Transylvania.The expansionof the majorBudapest banks created four major financialgroups in the country. The largestwas the Mortgageand Discount Bank group,followed by the Creditbankgroup, the CommercialBank group, andthe PestDomestic Savings Bank group. While thesefour bankinggroups madeup only.08% of the total numberof financialinstitutions in the country, they controlled46.9% of its capital[1; 18, p. 322]. By the 1880s,Hungarian bank executives,led by Leo Lanczyof the CommercialBank, realized there was money to be madein the Balkanstates, whichhad only recently freed themselves from Turkishrule. Lanczybelieved that Hungarianbanks could do three thingsin the region: help f'mance Hungarianindustrial exports, establish a strongHungarian banking presence in the variousBalkan states,and preparethe groundworkfor the inevitable 221

inflowof westerncapital. Lanczy's own bank began this process by entering into partnershipwith an establishedBelgrade bank, Andreevitset Cie. The bank successfullyhandled a numberof Serbianstate loans and, in 1908,was turned into a joint stock bank with the participationof the Berliner Handelsgesellschaft[1, p.116]. Much the same occurredin Romania, where the Commercial Bank at first enteredinto partnershipwith MarmoroschBlank and Co. in Bucharest. By 1903,that partnershiptoo had turnedinto a limitedcompany. Romanian investors--togetherwith the Berliner Handelsgesellschaft, The Banquede Paris et desPays-Bas, and the CommercialBank--put up the capital. The latter retained20% of the shares[25, p. 82]. The BanqueMarmorosch Blank et Cie.handled several Bucharest city loans, financed railways, breweries, and oil refineries,and wasactive in the grain trade. The Banquede Cornmercedde Sofia,established by the Commercial Bankin 1898,was the firstbank in Bulgariato be foundedby foreigncapital. It too followed the pattern set by Hungarian investmentsin Serbian and Romanianbanks by becominga joint stockbank, the BanqueGenerale de Bulgarie,with the Banque de Paris et des Pays-Basas the principal shareholderstogether with the CommercialBank [1, p.119]. Apart from their interestsin the Balkans,the majorHungarian banks alsohoped to establisha footholdin theAmerican market. Sometwo million Hungarian subjectshad settled in the United States,and the Budapest governmentwas anxious that the moneythey were sending back home should be handledby Hungarianbanks. In 1912,the Trans-AtlanticTrust Co. was establishedin New York by the CommercialBank, the Creditbank,and the DiscountBank with this aim in mind[11, p. 230]. Despitea heftygovernment subsidy,the projectdid not live up to expectations,largely because the outbreakof World War I eventuallymade its operationsimpossible. Fromthe 1890son, the major Hungarian banks increasingly played the role of investmentbanks by either foundingnew industrialenterprises or acquiringshares in establishedones. The Creditbankbegan the processin 1882by formingthe Fiume (Rijeka)First Hungarian Rice Mill andStarch Co. This wasfollowed by the FinmePetroleum Refinery Co., andby the Brasso (Brasov,Kronstatd) Cellulose Co. in 1888. By 1913,the first two companies hadtotal assets of some40 millioncrowns ($8 millionU.S.) [14]. The Hungarian governmentwished to speed up the processof industrialinvestment. In 1890 it began negotiationswith the Wiener Bankvereinto founda new bank whosepurpose would be "to improveand expandexisting plants and factoriesthrough the infusionof new capital,to establishnew branchesof industry,to enter into partnershipwith existing firms...andthereby assure their more effectivemanagement, and to make creditavailable to industrialconcerns and to individualindustrialists" [18, p. 364]. In return,the Viennesebank was assured--among other things--that any profitsit madebelow 6% wouldnot be taxedfor thirtyyears, and that the governmentwould not grantmore advantageous benefits to anyrival banking group. Law XIV of 1890 set up the Hungarian Bank of Industry and Commercewith a sharecapital of 5 millionflorins ($2 millionU.S.). The 222

presidentwas to be StephenTisza, son of Prime MinisterKalman Tisza, and soon to be prime minister himself. On the board of directorswas the prominentpolitician Count Julius Andrassy as well asEugene Guttman, who representedthe DresdnerBank of Germany.Although the bankremained in existencefor only ten years,it made numerousinvestments in industrialand commercialenterprises, and alsoaroused the attentionof the outsideworld to the opportunitiesexisting in Hungaryby mailingsome 15,000 brochures and lettersto industrialistsin Franceand Germany[18, p. 365; p. 16, p.46]. What theHungarian Bank of Industryand Commerce did above all was to spur other banksto investin industry. By the 1890sthe rushwas on. It wouldbe tediousto list here everyenterprise in whicha major Hungarian bank had a financial interest. But one or two cases do deserve mention. Duringthe twentyyears before World War I, the CommercialBank acquired a controllinginterest in one of Hungary'slargest iron and steelworks, The RimammuranyIron Works. It also had interestsin the SalgotarjanCoal Mines--with1913 assets of over63 millioncrowns ($12.7 million U.S.); in the "Adria"Shipping Company--with 1913 assetsof 46.3 million crowns($9.2 million U.S.); and in the First BudapestSteam Mill Company,which controlledfour othermajor mills. Alsowithin the controlof the bankwas the United Incandescentand ElectricalCompany, which was one of Europe's largestproducers of light bulbsduring the first ten yearsof the twentieth century[14; 1, pp. 133-39]. The Creditbank,together with the DiscountBank, managed to get one of Hungary'slargest and oldest engineeringworks, Ganz and Partner, Danubius,within its sphereof influence.The company,with total assetsof over58 millioncrowns in 1913,was an importantmanufacturer of machinery and locomotives,as well as a shipbuilder.The Ganz ElectricalCompany, also controlledby these two banks,was one of the pioneersof railway electrificationin Europeand worked through Austrian, Italian, and Turkish subsidiaries.Its assetsin 1913stood at 28 millioncrowns ($5.6 millionU.S.) [141. Even the smallerbanks participated in the rush. The Home Bank-- controlledby theFirst Pest Domestic Savings Bank--acquired the majorityof the sharesin SamuelGoldberger and Son, one of Hungary'soldest textile firms. The upstartMagyar Bank foundedthe Hungaria General Insurance Companyand the ChinoinPharmaceutical Company, which flourishes even today[15, pp. 185-92]. These random examplescan only hint at the scopeof banking involvementin tradeand industry.The big Budapestbanks naturally took a leadingrole in thisprocess. Of a total of 362 Hungarianfirms with outside investors,some 270 had investmentsfrom Budapestbanks. In 1900,only 17% of sharesin Hungarianindustry were in the handsof the big banks;by 1913, thatfigure had risen to 47% [19,p. 241]. Thoughthis process led to a certain degreeof concentrationof industrialshareholding, it alsopaved the way for greaterHungarian ownership of domesticindustry. As Budapestbanks and othernative investors gradually began to acquireincreasingly more industrial shares,the proportion held by foreignersfell dramatically.While in 1900over 223

60% of capitalinvested in Hungarianindustry was in foreignhands, by 1914 that figurehad fallento 36% [19,p. 244]. Between 1867 and 1914, the big Budapestbanks had grown spectacularly.As "universal"banks on the Germanmodel, they had a handin everyaspect of the country'sfinancial life. They actedas savingsbanks, mortgagelending institutions, providers of shortterm financefor commerce, and finally as merchantor investmentbanks. Their wealthhad increased impressively--ashad that of theHungarian economy as a whole.In 1913,the sixmajor Budapest banks had total assetsof over4.2 billioncrowns ($847 millionU.S.) [15, pp. 109-92]. What of the menwho controlled this wealth? Many have already been mentioned--SigismundKornfeld of the Creditbankand Leo Lanczy,the all- powerfulpresident of the CommercialBank. But therewere othersas well: JuliusMadarassy-Beck of the Mortgage Credit Bank, Maximilian and Marcel Madarassy-Beckof the Discountand ExchangeBank, Simon Krausz of the Magyar Bank, whoseflash and dashwere immortalizedin manyBudapest cabaretsongs of the era. Adolf Ullmann,a risingstar at the Creditbank,was a relativenewcomer to the group. Thoughall of them endedtheir livesas wealthymen, most came from comparativelyhumble beginnings. The Madarassy-Becksand Ullmann were childrenof provincialmerchants. Lanczy'sfather was a minorwholesaler in Pest. Kornfeld'sparents were middle-class,while Krausz'swere downrightpoor [13; 10]. All of the abovecame from Jewishbackgrounds, though some later convertedeither to Catholicism or to the Reformed church. Others, like Kornfeld,retained their ancient faith and played a leadingrole in Budapest's largeJewish community. With the exceptionof Kornfeld,all camefrom familiesthat had been establishedin Hungaryfor severalgenerations. All werepatriots but tended to avoidthe noisier kind of patriotismfavored by the oppositionIndependence party. The bankers,on the whole,tended to be governmentsupporters through and throughand stoodby the governing Liberalparty of KalmanTisza and its successor,the Partyof Work, led by Tisza'sson. This madeperfect sense from a businessas well as a political point of view. The Liberalssupported the compromisewith Austria,were inclinedto ignorenationalist demands for anindependent Hungarian bank of issueand customsterritory, and had a clear policy of encouragingthe developmentof bothfinance and industry. As far as the bankerswere concerned,the rewardsfor their political loyaltyand--to be fair--for their contributionto the country'seconomic developmentwere considerable. Kornfeld, the Madarassy-Becks,and Adolf Ullman were givenbaronies; Lanczy and Krauszwere ennobled.Kornfeld, Ullmann,and Lanczywere life membersof the Houseof Lords. Orders, decorationsand honorifictitles were showeredupon them by a grateful sovereign[13]. The titles and honors were but a reflection of the wealth these men had accumulated.Their great housesat the fashionabletop end of Andrassy Boulevardwere filled with antiquefurniture, bronzes, and fine porcelain. Theyprobably also owned country estates with a manor,horses, and suitably overawedservants. When contemplating all of this,such a bankercould be 224

excusedfor beingfilled with prideat the thought,"that his father, grandfather or, at best,his great-grandfather had been a poor,despised, struggling man" [24, p. 1421. But thiswealth certainly did not comefrom the salariesbank presidents andmanaging directors officially received. Kornfeld's salary at theCreditbank wasonly 35,000 crowns ($7000 U.S.), but he alsotouched a percentageof the bank'sprofits, was on theboard of directorsof severalmajor companies, and probablyowned some shares in themas well [17, pp. 60-61]. We have a better idea of Leo Lanczy'sincome. He was generally regardedas one of the richestmen in Hungaryand probablyrightly so. In 1910 his salaryat the CommercialBank was twice that of Kornfeld; in addition,he took 6% of the bank's profits as member of the board of directors,another 5% as managingdirector, and receiveda further 20,000 crownsas memberof the executivecommittee. He alsoheld the directorships of sixteenindustrial, mining, and transportationcompanies. In all, Lanczy's publishedincome that year stoodat 428,688crowns ($85,907 U.S.) [21, pp. 99-100]. But this was most certainlynot his whole income. He was a shareholderin a numberof major companies;the 14.5% of the shareshe ownedin the RimamuranyIronworks alone would havenetted him a tidy dividend[3, p. 114]. Accordingto oneestimate, his total incomein 1915was over 1.3 millioncrowns ($272,545 U.S.) [13]. Lanczy'sgreat wealth was, in a way,the symbolof the banks'success. It wouldbe tediousto repeatonce more that their developmentduring the lde of the Dual Monarchywas nothing short of remarkable.The figuresspeak for themselves.But the achievementsof the half dozenor somajor banks are just one part of the picture. On the eve of World War I, Hungaryhad over 5000 banks,savings associations, and credit cooperatives.Most were poor, struggling,undercapitalized ventures of no morethan local importance. Some constantlyteetered on the brink of bankruptcy.Not a few were the domain of dreamersor swindlers.At the top,however, the Hungarians had managed to establisha powerful,reliable, and imaginatively led banking system. Despite the dislocationcaused by World War I and the peacetreaties that followed, the majorBudapest banks managed to surviveuntil the mid-twentieth century. It wasonly then that politicaldogmatism and economicfoolishness were to bring abouttheir demise.

References

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