Richard Kerschagl’s economic-policy article assesses Austria’s first experiment in distributing shares in nationalized banks to private citizens. Moving from the aims of reprivatization through its legislative compromises and financial arrangements to an evaluation of public demand, he presents the 1957 issue as a successful, though politically restricted, attempt to broaden ownership. His central distinction concerns the purpose of the transaction:
Es handelt sich hierbei zumindest zunächst keineswegs um eine Kapitalbeschaffung, sondern um eine neue Kapitalverteilung.
English translation: What is involved here, at least initially, is by no means a raising of capital, but rather a new distribution of capital.
The initial sale of 30 percent of the capital of Creditanstalt-Bankverein and Österreichische Länderbank was intended to turn state-owned collective wealth into recognizable individual property yielding a visible return. Wider ownership would strengthen personal security without state assistance. Kerschagl connects this objective particularly with the Austrian People’s Party’s hope that distributing ownership of productive assets would soften class antagonisms. The scheme also sought to reduce risks to share values and regular income while preventing rapid reconcentration of ownership or acquisition by foreign buyers.
These ambitions depended on socialist agreement, since disposing of state property required a constitutional law and a two-thirds parliamentary majority. Kerschagl reads the law adopted on 28 December 1956 as a compromise between broader private ownership and continued state control. Publicly offered preference shares carried a minimum dividend but no voting rights; a further issue of ordinary voting shares was allocated principally through organizations and individuals associated with the two governing parties. The state retained 86 percent of voting capital, while the division of the remainder prevented a unified minority from reaching the 10 percent threshold for exercising minority rights. Kerschagl also criticizes the restriction to Austrian purchasers and the retention of capital-yield taxation, which he regards as multiple taxation of profits.
The article’s financial detail explains how accessibility and control were combined. Preference shares offered a 6 percent minimum dividend at an issue price of 115 percent of nominal value, producing an annual yield of 5.22 percent. Installment payments enabled smaller investors to participate. Voting shares cost 135 percent of nominal value and were largely bound into party-linked syndicates restricting their disposal or use as collateral. Strong subscriptions nevertheless gave Kerschagl concrete grounds for judging the launch favorably:
Alle Typen wurden stark überzeichnet, und es erfolgten beträchtliche Kürzungen bei der Zuweisung auf Kosten der Großzeichner.
English translation: All types were heavily oversubscribed, and considerable reductions were made in the allotment at the expense of the large subscribers.
Oversubscription demonstrated demand, while reductions imposed on large subscribers supported the intended dispersal of ownership. Yet Kerschagl does not explain the appeal simply through dividend rates. His final section shifts from distribution to the perceived security supplied by underlying real assets. Earlier Austrian legislation and legislation imposed during Nazi rule had undermined confidence in contractual value-protection clauses. The banks’ substantial industrial shareholdings instead offered investors an indirect material backing. Retaining those holdings—despite foreign experts’ proposals to separate them from ordinary banking—thus became an advantage in attracting purchasers, even if separation might have improved liquidity.
Kerschagl’s strongest reservation concerns the separation of ownership from participation:
Es besteht auch unseres Erachtens kaum ein Zweifel darüber, daß das Bewußtsein des Miteigentums durch das Vorhandensein eines selbst nur theoretischen oder ideellen Mitbestimmungsrechtes stark gefördert worden wäre.
English translation: In our view there is also hardly any doubt that the consciousness of co-ownership would have been strongly promoted by the existence of a right of co-determination, even a merely theoretical or notional one.
Voting rights matter here not merely as instruments of control but as a means of making co-ownership subjectively meaningful. The especially strong demand for the smaller voting-share issue, despite its lack of a minimum dividend, reinforces this concern, although Kerschagl acknowledges satisfactory demand for nonvoting shares as well.
The conclusion balances success against limits to replication. Industrial enterprises might prove harder to market than the two major banks because their value would be less immediately apparent to purchasers. Publicity also had to avoid emphasizing protection against monetary depreciation too strongly, lest it undermine confidence in currency stability or competing bond issues. The article’s relevance lies in this tension: broad property ownership was promoted as a source of independence and social integration, but its practical form preserved state and party control. Kerschagl endorses the experiment while showing why financial participation alone could not fully realize its promise of personal co-ownership.
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