The Encyclopedia Americana (1920)/Schaaffhausen'scher, A., Bankverein

SCHAAFFHAUSEN'SCHER, A., (shȧf-hou'zĕn-shĕr bănk-fĕr-īnė,) BANKVEREIN. The A. Schaaffhausen'scher Bankverein of Cologne was founded in 1848 as a reorganization of the firm of Abraham Schaafhausen (seriously affected by the troubles of the same year), with a capital of 5,187,000 thalers (about 15,600,000 marks), of which the initial issue was 3,199,800 thalers. In 1914 it was absorbed by the Disconto-Gesellschaft (q.v.), retaining its name and clientele under the management of W. L. Deichmann, Gustav Mevissen and Victor Wendelstadt, men of caution and experience, the institution began its activities in the fostering of important industrial enterprises. Its purpose may be inferred from an excerpt from the annual report for 1852 — &ldquo;the function of a great banking institution is not so much to start new branches of industry through extensive participation, as to induce the capitalists of the country, by recommendations based on exhaustive investigations, to turn idle capital toward such enterprises, which, when properly launched, in response to existing requirements, and offering the guarantee of expert management, bid fair to yield reasonable profits.&rdquo; Industrial in purpose, current account business was secondary, and deposits were received only on condition of three, six and 12 months' notice being given for their withdrawal, and then only at a low rate of interest. The close identification from the first with the prosperous and flourishing Rhenish-Westphalian industry, and the strict adherence to its original purpose, lent strength to the Bankverein to weather the financial crisis of 1857 without the necessity of canceling any of its outstanding credits — a strong factor in extending its influence during succeeding years. One after another it nurtured industrial enterprises within its banking zone, each becoming an added source of strength for the Bankverein. In 1891 a branch was opened at Berlin — a branch in fact as well as name — the parent institution remaining the only one of the five German &ldquo;great&rdquo; banks having its headquarters outside of Berlin. In 1908 the number of branches was 10, with one silent partnership, or &ldquo;Commandite&rdquo; and 15 deposit offices. Six subsidiary banking companies have been founded wholly or in part by the Bankverein (largely in co-operation with the Dresdner bank), giving foreign banking and exchange facilities, a small incident in the general scheme of the Bankverein. Four German banks with 13 branches have been absorbed wholly and another jointly with the Dresdner bank. In addition, through ownership of shares, it maintains community of interest relations with three important banks, having 21

branches and numerous agencies, deposit offices and subsidiary connections. Most important, however, is the community of interest, mutual in terms, between the Dresdner Bank and the Bankverein, beginning 1 Jan. 1904. Representation is maintained on the boards (1908) of 94 other industrial and financial institutions. The capital of the Bankverein (1908) was 145,000,000 marks; and 34,157,125 marks surplus. The total capital power of the A. Schaaffhausen'scher Bankverein group was (1908) 278,538,001 marks, of which 231,000,000 marks constituted the capital, and 47,538,001 marks the surplus. Consult Riesser, Dr. J. (1909), &lsquo;Die deutsche Grossbanken und ihre Konzentration&rsquo;; &lsquo;Germany's Economic Forces&rsquo; (1913); &lsquo;Report on Co-operation in American Export Trade&rsquo; (Washington 1916).