Depositenbanken und Spekulationsbanken

Albert Hahn’s 1923 review of Adolf Weber’s third edition of Depositenbanken und Spekulationsbanken is a critical reassessment of an older German banking theory under postwar monetary conditions. Hahn treats Weber’s book as historically important but analytically belated: it was formed in the prewar climate of hostility to large credit banks and, in Hahn’s view, cannot simply be carried over into the inflationary present.

Das Webersche Werk ist bekanntlich in der kreditbankenfeindlichen Aera um die Jahrhundertwende entstanden.

English translation: Weber's work, as is well known, was written in the era around the turn of the century that was hostile to credit banks.

Hahn’s first charge is that Weber’s revision misses what now matters most. After war finance, inflation, and the transformation of bank balance sheets, the central problem is no longer the moralized contrast between English deposit banks and German speculation banks, but the preservation of banking capital, the role of foreign-exchange operations, and the monetary consequences of credit expansion.

Aber das, was die deutsche Bankwelt seit den letzten zwei Jahren, man möchte fast sagen, von morgens bis abends ausschließlich beschäftigt, nämlich die Sorge um die Kapitalsubstanzerhaltung der Banken, wird mit keinem Wort berührt.

English translation: But that which has occupied the German banking world almost exclusively for the past two years—one might almost say from morning till night—namely, concern for the preservation of the banks' capital substance, is not touched upon with a single word.

Against Weber’s typology, Hahn denies that German credit banks are essentially speculation banks. They mediate payments, take short-term outside funds, and lend largely through current accounts. Their practical norm is not entrepreneurial participation in industrial risk, but the financing of circulating business needs while keeping assets realizable. The banker, in this account, should not be confused with the industrial capitalist.

Das Kontokorrentgeschäft aber ist zweifellos das unspekulativste Geschäft, das überhaupt möglich ist, denn seine Gewinnchancen sind in den bedungenen Zinsen und Provisionen von vornherein festgelegt.

English translation: The current-account business, however, is undoubtedly the least speculative business that is possible at all, for its profit prospects are fixed in advance by the stipulated interest and commissions.

This reverses Weber’s classification. If speculation means bearing uncertain future price risk, merchants and manufacturers speculate more directly than banks do. The bank’s regular income comes from interest and commissions; its task is to judge creditworthiness, secure liquidity, and distribute securities rather than retain industrial risks on its own account. Exceptional profits from securities during inflation do not define the essence of German banking.

Hahn’s second line of criticism concerns liquidity. He argues that Weber treats liquidity too loosely, confusing cash reserves, economic realizability, and deliberate credit restriction. For Hahn, liquidity in a developed banking system depends less on idle cash than on access to the central bank through eligible assets.

Zunächst muß man sich in diesem Zusammenhang klarmachen, daß es etwas anderes ist, ob man die Liquidität der Banken verbessern will, oder ob man Kreditrestriktionen in der Volkswirtschaft herbeizuführen beabsichtigt.

English translation: First of all, in this context one must be clear that it is one thing to want to improve the liquidity of the banks, and quite another to intend to bring about credit restrictions in the national economy.

Larger cash balances are therefore not a simple remedy. They can be built only through prior recourse to the Reichsbank or by restricting lending; the latter is credit policy, not liquidity theory. Hahn’s point is institutional: in a clearing economy, the central bank is the bank of banks, and monetary liquidity means the capacity to obtain central-bank money when needed. Inflation cannot be explained by a failure of old reserve formulas, but by state finance and excessive creation of purchasing power.

The final section attacks Weber’s theory of capital and credit. Hahn faults him for ignoring Schumpeter and Mises and for treating credit mainly as a transfer or formal conversion of existing purchasing power. Hahn insists instead that the decisive monetary question is whether the granting of credit enlarges total purchasing power, whatever the legal form of the loan or bill.

Zusammenfassend ist sonach zu sagen, daß es, welcher Art Kredit auch immer gewährt wird, für die geldtheoretische und allgemein-volkswirtschaftliche Beurteilung des Kredites allein darauf ankommt, ob durch die Einräumung dieses Kredites die gleichzeitig in der Volkswirtschaft vorhandene Kaufkraft vermehrt wird.

English translation: To summarize, it must be said that, whatever kind of credit is granted, for the monetary-theoretical and general economic assessment of credit the only thing that matters is whether the granting of this credit increases the purchasing power simultaneously present in the national economy.

The essay’s significance lies in this shift from institutional labels to monetary mechanism. Hahn defends German credit banks against the charge of inherent speculation, but his larger purpose is theoretical: banking must be analyzed through risk transfer, liquidity access, central-bank relations, and the macroeconomic effects of credit creation.