Eugen Philippovich von Philippsberg, Die Verlängerung des Reichsbankprivilegiums (1890)

Philippovich’s journal article examines the December 1889 amendment to Germany’s Bank Act as a missed opportunity to reconsider the organization of note issuance and the ownership of the Reichsbank. Its argument moves from the amendment’s financial provisions through the controversy over private note banks and nationalization to the parliamentary defeat or neglect of broader reforms. The essential distinction is between state administration and state ownership: because the Reichsbank was already administered by imperial officials, nationalization principally meant replacing private capital with imperial funds. Philippovich therefore judges competing proposals by their actual institutional consequences rather than by their political labels.

The amendment preserved existing note-bank privileges for at least another ten years while revising the distribution of Reichsbank profits. It reduced shareholders’ preferential dividend from 4½ to 3½ percent and lowered the dividend threshold above which the Reich received three quarters of the remaining surplus from eight to six percent. Assuming a fully accumulated reserve and profits corresponding to the 1876–88 average, Philippovich calculates an additional annual imperial receipt of 742,692 marks. Yet this modest fiscal improvement was secondary to the decision to preserve the existing organization.

Es ist aber grundsätzlich die Stellung des Reiches zur Reichsbank nicht im geringsten verschoben worden, und die Regierung hat durch die Einbringung dieser Vorlage ihrer Stellung zu den verschiedenen schwebenden Bankfragen in keiner Weise präjudiziert.

English translation: But the position of the Reich in relation to the Reichsbank has not been altered in principle in the slightest, and by introducing this bill the government has in no way prejudged its position on the various outstanding banking questions.

Preservation did not amount to an affirmative endorsement of every existing arrangement. The government confined its proposal to a change considered unobjectionable from all sides, thereby avoiding a substantive declaration on unresolved issues. Its restraint also narrowed parliamentary discussion. What appeared formally to be a decision about renewal should, Philippovich argues, have rested on a comprehensive examination of the note banks, their monetary functions, and their relations with the state.

Private note banks presented one such unresolved problem. By maintaining lower discount rates or failing promptly to follow increases, they could obstruct the Reichsbank’s regulation of monetary circulation and protection of gold reserves. Philippovich weighs these criticisms against their regional services and the Reichsbank president’s claim that friendly advice generally secured cooperation. Abolition would require firmer evidence than a private observer could obtain. He also rejects unilateral suppression of Prussia’s remaining private note banks: the principal monetary objections concerned the larger southern banks, while selective action might weaken Prussia’s leverage for subsequent general reform.

The nationalization debate requires a different analysis. The chancellor already possessed extensive administrative authority; shareholders’ representatives were predominantly advisory, with limited powers over exceptional transactions with public financial administrations and purchases of securities. State acquisition thus promised no automatic transformation of banking practice. Its strongest argument was financial. Philippovich prefers the more conservative calculation, which preserves the reserve fund and measures savings against the amended dividend arrangement: an annual additional gain of approximately 2.93 million marks remained possible.

Demands for wider credit access must be separated from this ownership question. Lending through guilds and cooperatives could develop under the existing law. Similarly, broader representation of agriculture, industry, and commerce might help district committees understand borrowers’ needs, but could not replace the central committee’s expertise in international payments.

Der Centralausschuß ist nicht der Kreditnehmer, sondern der Reichsbank wegen da, und der Rat, den sie sich bei ihm holt, hängt mit der Ordnung des Geldumlaufes, nicht mit der Krediterteilung zusammen.

English translation: The central committee exists for the sake of the Reichsbank, not of the borrower, and the advice that it obtains from the committee concerns the regulation of monetary circulation, not the granting of credit.

This distinction separates monetary governance from the representation of sectoral credit demands. Even a wholly state-owned bank would need advisers familiar with international banking. Conversely, the claim that public ownership would necessarily produce bureaucratic sluggishness was unconvincing: the existing state administration had already demonstrated its capacity to conduct banking business commercially.

Philippovich treats risk and wartime exposure more seriously. Shareholders bore business losses while the Reich participated in profits, but their exposure was limited by reserves and by the practical interdependence of state and central bank. War might produce greater losses, disrupt operations, or expose assets and private deposits to seizure. Nevertheless, successful operations during the wars of 1866 and 1870 did not establish what would happen during an unsuccessful war or invasion.

Ob man dies Risiko für grofs genug erachtet, um es mit jährlich 3 Mill. Mark nicht für zu teuer erkauft zu halten, das ist die Kernfrage, um die es sich bei dem Streite um die Verstaatlichung der Bank handelte.

English translation: Whether one considers this risk great enough to regard paying 3 million marks annually for it as not too expensive is the central question at issue in the dispute over the nationalization of the bank.

The choice therefore concerned the price of leaving risk with private capital, not an abstract opposition between public and private enterprise. Philippovich suspects that reluctance to reopen connected institutional controversies also influenced the outcome. Parliament rejected nationalization and further reductions in shareholders’ dividends, while proposals concerning note denominations, legal-tender status, cash coverage, public treasury services, and clearer accounts remained largely untouched.

The conclusion turns parliamentary passivity into an observation about political power: resistance to government centralization was easier to organize than centralization against the government’s wishes. Reichsbank shares consequently traded above the amount payable on dissolution by more than the intervening returns could amortize within ten years. Their price expressed confidence that the Reich would again decline acquisition in 1900. The article’s enduring analytical value lies in distinguishing ownership, administration, monetary expertise, credit access, and risk—and in showing how governmental control of the legislative agenda could prevent those separate questions from receiving substantive examination.