508. Miscellaneous Articles on German Banking
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61ST CONGRBSSI CTTIMATI? /DOCUMENT 2d Session ) biiJNAlh, j No. 508 NATIONAL MONETARY COMMISSION Miscellaneous Articles on German Banking Washington : Government Printing Office : 1910 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis NATIONAL MONETARY COMMISSION. NELSON W. ALDRICH, Rhode Island, Chairman. EDWARD B. VREELAND, New York, Vice-Chatrman. JULIUS C. BURROWS, Michigan. JESSE OVERSTREET, Indiana. EUGENE HALE, Maine. JOHN W. WEEKS, Massachusetts. PHILANDER C. KNOX, Pennsylvania. ROBERT W. BONYNGE, Colorado. THEODORE E. BURTON, Ohio. SYLVESTER C. SMITH, California. JOHN W. DANIEL, Virginia. LEMUEL P. PADGETT, Tennessee. HENRY M. TELLER, Colorado. GEORGE F. BURGESS, Texas. HERNANDO D. MONEY, Mississippi. ARSENE P. PUJO, Louisiana. JOSEPH W. BAILEY, Texas. ARTHUR B. SHELTON, Secretary. A. PIATT ANDREW, Special Assistant to Commission. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis TABLE OF CONTENTS. Page. I. THE STATISTICAL HISTORY OF THE GERMAN BANKING SYS TEM, I888-1907. By Robert Franz, editor of Der Deut sche Oekonomist, Berlin: 1. General section— (a) Introduction . — 7 (b) General sketch of bank and credit organiza tion in Germany 13 2. Statistical section— (a) General remarks regarding the basis and the scope of the statistical data 45 (b) The note-issuing banks 50 (c) The credit banks 69 (d) The land-mortgage banks 102 (e) The "Landschaften" (land credit associa tions) 112 II. THE ORGANIZATION OF CREDIT AND BANKING ARRANGEMENTS IN GERMANY. By Geh. Oberfinanzrat Waldemar Mueller, director of the Dresdner Bank, Berlin 117 III. THE METHOD OF PAYMENT BY MEANS OF BANK-ACCOUNT TRANSFERS AND THE USE OF CHECKS IN GERMANY. By Max Wittner and Siegfried Wolff: 1. The recent development of the mechanism of pay ments in the Empire 171 2. The giro system in Germany— (a) The giro business of the Reichsbank 177 (b) The Reichsbank and the public treasuries 198 (c) Giro business of the private banks of issue 206 3. The German post-check system 213 4. Clearing houses in the German Empire 227 (a) Clearings in connection with mortgage banks _ 231 (b) Bank des Berliner Kassenvereins 232 (c) The Frankfurter Bank 237 5. Industrial and agricultural cooperative societies 238 6. Public savings banks 244 7. Concerning the use of checks in Germany 247 (a) The use of checks in connection with the public treasuries 266 (b) Giro union of the Saxon communes 270 3 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis National Monetary Commission Page. IV. DIRECTORS' FEES IN GERMANY. By Dr. Carl Melchior 273 V. THE LAND MORTGAGE ASSOCIATIONS (LANDSCHAFTEN). By Dr. J. Hermes: (a) Introduction 287 (6) Review of the existing Landschaften 290 (c) Legal nature and external organization of the Land schaften—Privileges 291 (d) Principles of agricultural credit, especially mort gages and their funding—General guaranty 295 (e) Amount and kind of security afforded, liability to recall, amortization, etc 300 (/) Loans on peasant properties 305 (g) Subsidiary businesses of the Landschaft—Fire in surance and loan banks 306 (h) The Central Landschaft 307 (i) Results and further purposes 309 (/) The private land credit unions 322 VI. AGRICULTURAL IMPROVEMENT BANKS (LANDESKULTUR- RENTENBANKEN). By Dr. J. Hermes: 1. Principles of legislation 325 2. The organization of the Landeskultur-rentenbanken in detail 329 3. Results and criticism of the Landeskultur-renten banken 335 VII. THE GERMAN SAVINGS BANKS. By Dr. Seidel: 1. The origin and historical development of savings banks. 341 2. The conception, purpose, and legal nature of savings banks 349 3. The deposit of money of wards and minors (Mundel- geldern) in savings banks 359 4. Private savings banks 364 5. Economic and socio-political significance of savings banks 367 6. Savings banks and insurance 369 7. Practical arrangements (Einrichtung) of savings banks 378 8. The legal nature of the savings-bank books and other legal considerations in respect to the savings-bank business „ 391 VIII. THE HISTORY OF SAVINGS BANKS IN GERMANY. By B. Breslauer 405 IX. THE STATE AND COMMUNAL SAVINGS BANK LEGISLATION OF RECENT TIMES. By Dr. Robert Schachner 417 X. THE PREUSSISCHE-CENTRAL-GENOSSENSCHAFTS-KASSE, OR PRUSSIAN CENTRAL BANK FOR COOPERATIVE SOCIETIES. By C. Heiligenstadt 429 4 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis Miscellaneous Articles on German Banking Page. XI. COOPERATIVE CREDIT SOCIETIES (RAIFFEISENSCHE DAR- LEHNSKASSENVEREINE). By Hans Criiger: (a) Definition 441 (b) History 443 (c) Purpose and object of the Raiffeisen banks 447 (d) Central banks and the formation of federations 447 (e) Secession from Neuwied 449 (/) Other Neuwied institutions 450 (g) First reforms 451 (h) Fusion with the Imperial Federation—Additional reforms in the Neuwied Federation 453 (i) Crisis in the central loan bank 456 (/) The societies in relation to the Prussian Central Bank for Cooperative Societies 460 (k) The clergy and the Neuwied banks 462 (/) Schulze-Delitzsch and Raiffeisen 463 XII. SPECIAL LOAN BANKS (DARLEHNSKASSEN). By W. Lotz: (a) Object of the loan banks 467 (b) Establishment of loan banks in 1848, 1866, and 1870. 468 (c) Lessons for the future 475 5 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis I THE STATISTICAL HISTORY OF THE GERMAN BANKING SYSTEM: 1888-1907. By Robert Franz, editor of Der Deutsche Oekonomist, Berlin. (i) GENERAL SECTION. (a) INTRODUCTION. One of the characteristic features of the recent economic development of the world is the leading part taken by- German industry and trade. Products of German labor are found nowadays on all the leading highways of world commerce. But even the younger German generation finds it difficult to realize that the present economic status of Germany is for the greater part the result of a devel opment which has taken place during the comparatively short period of two decades. Except for temporary depressions, such as are observed in the economic life of all countries, the line of development during the period mentioned has been a vigorously ascending one. This is true particularly of the last decade, during which German economic activity has made extraordinary strides on the road of progressive development. A detailed account of the causes and results of this progress would exceed the compass of the present study. But the growth of German banking is so closely and organically interwoven with the general economic devel opment of the nation at large that a brief sketch of this general development, made somewhat more plastic by the presentation of certain characteristic statistical data, would seem to be in place. 7 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis National Monetary Commission The war of 1870-71 had at last brought to Germany the political and economic union for which she had longed and labored for decades. The German name had all at once become honored and respected among the nations of the world. This change may be said to have given the first powerful impetus to German enterprise. The new move ment was favored by the act of June 10, 1870, which abrogated the former obligation of obtaining a state con cession for the forming of stock companies and limited liability corporations. The new law greatly facilitated the consolidation of capital. The flower which it brought forth was, however, short-lived. The period of splendor, known in the pages of German economic history as " Gran der jahren (bubble era), ended finally in a severe crisis and a long-continued depression. The manifestations of unbridled enterprise and excesses of speculation were followed by a period of utmost depres sion and loss of all spirit of enterprise. The psychological factor of confidence, which must always be present in order to put economic forces into action, was missing. Such forces existed, on the one hand, in the natural resources of the country (treasures of the soil, etc.), and, on the other, in the living force of a rapidly increasing population. Particularly for the latter, however, there was little em ployment, and every year—as will be seen from the emigra tion statistics—Germany yielded of its best stock to the growing economic regions abroad, and particularly large numbers to North America. German transoceanic emigration during the years of 1872 to 1888 was as follows: 8 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis Miscellaneous Articles on German Banking To the Total. United States. 1872 125,650 119,780 1873 103,638 96, 641 1874 45.112 42,492 1875 30,773 27.834 1876 28,368 22,767 1877 21,964 18,240 1878 24,217 20,373 1879 33.327 30,808 1880 106,190 103,115 1881 210,547 206,189 1882 193.869 189.373 1883 166,119 159.894 1884 143,586 139,339 1885 107,238 102,224 1886 79.875 75.591 1887 99.712 95.976 103.951 94.364 The large increase of emigration in 1880, almost all of which was to North America, was probably for the greater part due to the vigorous economic growth of the United States, characteristic of those years, particularly to the energetic extension of the railroad systems which caused an increasing demand for workmen. This stimulation of the spirit of enterprise spread from America over the entire civilized world. In Germany the movement re ceived a special impetus through the railroad nationaliza tion started by Prussia. This raised hopes for a speedy extension of the railroad system and a prospective larger demand for the products of the mining and iron industries. Another factor working in the same direction was the revision of the customs tariff, undertaken in 1879 and based upon financial and economic considerations.