Notebook “β”

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Notebook Β. Pp. 1–106 (108)

Wallich, Concentration of German Banks.

1.Dietzel, Schumpeter, Vogelstein (a few words).
2.— — —
3–16.Extracts from Die Bank, 3–16; 92–103.
17.Security statistics....
18–30.Schilder. Vol. 1 of Development Trends in the World Economy.
31–33.Plenge, Marx and Hegel.[1]
34–36.Gerhard Hildebrand, The Shattering, etc.
37–39.P. Tafel, The North-American Trusts, etc.
x [[DOUBLE BOX: 40. Note on K. Kautsky versus imperialism ]]
41–62.E. Agahd, Big Banks and the World Market.
62.Ballod, Statistics.
63.Otto, German Overseas Banks.
63–65.Diouritch, The Expansion of German Banks Abroad.
66.Kaufmann, French Banks.
66.Hegemann, French Banks.
67.Hulftegger, The Bank of England. Jaffré, British Banks.Mehrens, French Banks.
68–69.Zollinger (international balance-sheet) and Neymarck.
70–74.Taylor (Shop Management).
74–75.Seubert, The Taylor System in Practice.
76–77.Gilbreth, Motion Study.
78–90.Jeidels, Relation of the Big Banks to Industry. |||
91.Stillich and World Economy (Halle). A note.
92–103.Die Bank, examined thoroughly, except 1908 and 1915.
[[DOUBLE BOX: N.B. 103 notes

N.B. ((on finance capital in general)) ]]

105–106+ 0 turnover + 108. (N.B.) Heymann
x [[DOUBLE BOX: 0 turnoverN.B. on the question of imperialism ]]

Source references: 1. 10. 16. 17. 40. 91. 98 (French).


Zurich Cantonal Library.

Dr. Heinrich Dietzel, World Economy and National Economy, Dresden, 1900. (= Jahrbuch der Gehe-Stiftung, Vol. V.)


Nothing of interest. Examination revealed merely polemic against autarchy in favour of world economy. Nil. (“Nationalisation”.)


Dr. Joseph Schumpeter, Theory of Economic Development, Leipzig, 1912.


Also nil. Deceptive title. Examination revealed somehing in the nature of “sociological” chatter. Might have o consult again, but on the subject of development nil


Theodor Vogelstein, Organisational Forms of the Iron and Textile Industries in Great Britain and America, Leipzig, 1910.

This is the first volume, in which the historical part, of little interest, and an enumeration of facts, predominate. ]]

See brief extracts from Vogelstein in another notebook.[2]

Franck, Changes in the Agriculture of W\urttemberg. Thesis, 1902.



? Johann Huber, Workers’ Participation in the Capital and Management of British Production Co-operatives, 1912, Stuttgart. (No. 4 of Basle Economic Studies.)

Goetz Briefs, The Alcohol Cartel, Karlsruhe, 1912 (No. 7 of Baden Higher School Economic Studies).

Kurt Goldschmidt, Concentration in the German Coal Industry, Karlsruhe, 1912.

Julius Wolf, National Economy of the Present and Future, Leipzig, 1912. Nil.

J. Lewin, The Present Position of Joint-Stock Banks in Russia (1900-10), Freiburg in Breissgau, 1912. (Thesis.)

K. Dove, Economic Geography, Leipzig, 1911.

” ” Economic Geography of the German Colonies, 1902.

Kurt Schwabe, In the German Diamond Country, Berlin, 1910. (South Africa and the German colonial economy.)

Rud. Lenz, The Copper Market under the Influence of Syndicates and Trusts, Berlin, 1910.

Léon Barety, Concentration of French Provincial Banks, || N.B. Paris, 1910. (The articles appeared in Annales des sciences politiques.)

Gustav Ruhland, Selected Articles, 1910 (published by the Farmers Union. Against plutocracy in Germany!!).

A. G. Raunig, Equilibrium Between Agriculture and Industry, Vienna, 1910.

EXTRACTS FROM DIE BANK [1][edit source]

Die Bank. A Monthly Journal of Finance and Banking (Publisher: Alfred Lansburgh), 1914, 2nd (half-year), p. 1042.

Imports and exports in million pounds sterling, from data of the Board of Trade (London):

(([3] 7 months

1/I-1/VIII ))

(First) Half-year
Great Britain . . . . .296.1319.7375.9225.3257.1255.4
Germany . . . . . . .260.6267.0269.3205.4243.1249.2
U.S.A.* . . . . . . . .215.3212.2237.7255.6271.8245.7
France* . . . . . . . .192.2196.4198.6149.0156.4153.8

(Ibidem, p. 713). Note on “Banks and the Post Office”. The boundary between ||| banks and the post office the banks and the savings banks “is being increasingly obliterated”. Hence complaints by the banks. The Erfurt Chamber of Commerce speaks in favour of the banks against the “recent intervention of the post office in currency circulation” (in the form of the “issue of postal letters of credit”). The editors remark that postal letters of credit operate only within the German Empire, whereas bank letters of credit serve mainly persons going abroad, and “after all, the public exists not only || this “not only” is magnificent!!! )) for the sake of the banks” (714).

From the article “Thoughts on the Thousand Million Loan”, p. 932: “A subscriber to the loan possesses liquid assets, but mostly in the form not of cash, but of a bank account or a savings bank, association, etc. deposit. In Germany these institutions control, in round figures, 35,000 million marks of such liquid assets, about half of which are at the immediate disposal of their owners, while the other half are available to them after preliminary notification—mostly after a month” (933).

What is involved is the transfer of ownership from private persons’ accounts to the state’s account (and vice versa in paying suppliers, etc.).

The credit institutions as a whole dispose of “not more than 500 million marks”, on the basis of “their total cash and deposits in the State Bank” (933).

In 1871, France paid 5,000 million in such a way that only 742.3 million was paid in gold, silver and banknotes, the remainder (4,248.3 million) being in bills. (France recovered so rapidly in 1870–71 because she did not tamper with her currency and made no excessive issue of “uncovered banknotes”.)

p. 9O3 et seq.: “The Ousting of London as the World’s Clearing House” by Alfred Lansburgh.

A very good article, explaining the causes of Britain’s power. The chief cause: “the absolute predominance of British trade and currency circulation over the trade of all other countries” (909). It exceeds German trade “by 50 per cent in round figures” (ibidem). In addition, there is the trade with the colonies!!

N.B. || “Britain accounts for three-quarters of world trade” (910).

“This means that three-quarters of all international payments pass directly or indirectly through Great Britain” (910).

“Sterling accounts” “predominate” also in Japan, China, Chile, Peru, South Persia, “the greater part of Turkey (910).—“Knowledge of English is widespread in commercial circles” (910).

Furthermore, Britain finances this trade of the whole world (the lowest rate of interest; the most stable gold currency; one pound sterling = 7 1/3 grams of gold, etc., etc.).

Great Britain’s “vast” monetary resources, her 60 colonial banks (911), etc., etc.

The maxim of a bank director (the Bank of Brazil), Kämmerer(a German):

(913) “The first essential for opening an overseas banking establishment is credit, an accepting banker || N.B.! || in London.”

[[LEFT-BOX-END: p. 912, note: “Regarding the difficulties encountered by German overseas banks in introducing bills of exchange in marks in South America, cf. Jaffé, British Banks, second edition, 98–101, Frankfurter Zeitung, August 29, 1914; Hamburger Nachrichten, September 15, 1914” (I omit other quotations). ]]

“For every country adopting a currency based on gold and holding, as occurs almost everywhere, a large portfolio of British bills of exchange in place of gold, not only subordinates a greater part of its international payments to the London Clearing House, but thereby also immediately assists the consolidation of British world financial power. The continual holding of a large portfolio of British bills of exchange means, in practice, that the country in question puts considerable resources at London’s disposal, which for its part London can, and does, use to further finance the foreign trade of other countries and in this way strength en its own sterling currency and its own clearing function. Thus, owing to the gold value of the pound sterling, Great Britain is always able to put at the service of her credit system, besides her own large capital assets, also several thousand million marks of foreign money” (913–14).

To deprive Britain of this role requires “huge financial resources and a low rate of interest” (916)... “And one must be in a position not only to pay out vast sums of money, but also to the absolute stability of the currency that is to replace the British, that is, one must be prepared at any time to pay in gold.”

Hence, the term “utopian” is applied to the plan of the National City Bank (Morgan’s Bank)[4] or the Swiss banks, “which believe that a little good will is quite sufficient to wrest from London the international clearing accounts, or a considerable part of them. That is indeed a highly desirable aim, but it cannot be achieved until some other country can put at the service of world trade the amount of credit, the complex of commercial, banking and interest advantages, and the reliable currency foundation, which, prior to the outbreak of the war at least, Britain put at the disposal of world trade” (920)....

(1914, November and December.) “The Covering of War Costs and Its Sources”, an article by Alfred Lansburgh.

Quotes Lloyd George as saying (in September 1914): “In my judgement, the last few hundred millions may win this war. This is my opinion. The first hundred millions our enemies can stand just as well as we can, but the last they cannot, thank God...” (p. 998).

Says Lloyd George is mistaken. There are four sources for covering war costs: (1) “First degree” reserves = cash (France and Russia have more than Germany, but Britain less. Here Germany is weaker). (2) “Second degree” reserves: short-term debt claims in world trade (Britain is much stronger: “Whereas Britain is the world’s banker and keeps her money liquid, France is the world’s financier and invests her money”) (1001). (3) Net income from the country’s production + (4) part of gross income devoted to depreciation (or accumulation). Here, he says, we are not weaker.

In this connection, however, Lansburgh is counting on exports which though secret (“hidden”), will not disappear.

Our (Germany’s) low discount rate proves (December 1914!!!), he says, that exports are inadequate, do not correspond to “our expenditure abroad” (1103).

N.B. || Cf. p. 1112: “Only when exports suffice fully to cover imports and war expenditure abroad will the national economy be really on a war footing.”

1914, 1 (May). “The Bank with 300 Million”, an article by A. Lansburgh.

The Discontogesellschaft swallowed up the Schaaffhausenscher Bankverein and increased its share capital to 300 million marks (p. 415).[5]

“Thus for the first time a really big German bank has become a victim of the concentration process” (415).

The Deutsche Bank increased its capital to 250,000,000 marks. The Discontogesellschaft replied to this by a “merger” with the Schaaffhausenscher Bankverein and increased its capital to 300,000,000.[6]

“With a capital of 300,000,000 marks, it becomes, for the time being, the biggest bank not only in Germany, but in the world” (422).

The “struggle for hegemony”, which had seemed decided in favour of the Deutsche Bank, now flared up afresh:

|| “Other banks will follow this same path ... and the three hundred men, who today govern Germany || N.B. economically, will gradually be reduced to fifty, twenty-five, or still fewer. It cannot be expected that this latest move towards concentration will be con fined to banking. The close relations that exist between individual banks naturally lead to the bringing together of the industrial syndicates these banks favour. This, and business fluctuations, will lead to still more mergers, and one fine morning we shall wake up in surprise to see nothing but trusts before || our eyes, and to find ourselves faced with the necessity of substituting state monopolies for private monopolies. |||| N.B. However, we have nothing to reproach ourselves with, except that we have allowed things to follow | their own course, slightly accelerated by the manipulation of stocks” (426).[7] (End of article.) |

SUBSIDIARY COMPANIES”, an article by Ludwig Eschwege, p. 544 et seq. (May 1914).

Early in 1912, the big banks (yielding to the pressure of the State Bank) introduced a new type of balance-sheet. But thousands of joint-stock companies continue to publish brief (“knappe”) balance-sheets, not going beyond the requirements of the law—the brevity of the balance-sheet being alleged to be a against speculation!!! In fact, however:

“In reality, what is achieved by this [the “brevity of balance-sheet”] is merely that a few better-informed || persons are able to enrich themselves at the expense of the mass of shareholders, especially if brevity is combined with a subtle system of misleading headings to make important data invisible to the ordinary shareholder. This gives the directors and their good friends a double advantage: being sole possessors of all information, they || can benefit from a rise in market values in favourable situations, and escape anticipated losses by a timely sale of shares in unfavourable ones.

good example! || “Thus, for example, the Spring-Steel Company of Kassel was regarded some years ago as being one of the most profitable enterprises in Germany. Through bad management its dividends fell in a few years from 15 per cent to nil. It appears that the Board, without consulting the shareholders, had loaned six million marks to one of its ‘subsidiary companies’, the Hassia Company, which had a nominal capital of only some hundreds of thousands of marks. This commitment, amounting to nearly treble the capital of the ‘parent company’, was never mentioned in its balance-sheet; this omission was quite legal and could be hushed up for two whole years because it did not violate any point of company law. !!! || The chairman of the Supervisory Board, who as the responsible head had signed the false balance-sheets, was, and still is, the president of the Kassel Chamber of Commerce. The shareholders learned of the Hassia loan only much later, after it had been proved to be a mistake and when Spring-Steel shares dropped nearly 100 per cent, because those in the know were getting rid of them. It was only then that the item in question was made evident by a change in the method of drawing up the balance-sheet. ||| N.B. This typical example of balance-sheet jugglery, quite common in joint-stock companies, explains why their Boards of Directors are willing to undertake risky transactions with a far lighter heart than individual business men. Modern methods of drawing up balance-sheets not only make it possible to conceal the risky deal from the ordinary shareholder, but also allow the main interested parties || to escape the consequence of an unsuccessful experiment, by selling their shares in time, whereas the individual businessman risks his own skin in everything he does” (545)....

“The balance-sheets of many joint-stock companies remind us of the palimpsests of the Middle Ages from which the visible inscription had first to be erased in # order to discover beneath it another inscription giving the real meaning of the document” (545)....

[[BOX: A palimpsest is a parchment from which the original inscription has been erased and then another inscription imposed. ]] #

...“The simplest and, therefore, most common procedure for making balance-sheets indecipherable is to divide a single business into several parts by setting up or attaching ‘subsidiary companies’. The advantages of this system || for various purposes—legal and illegal—are so evident that today big companies which do not employ it are quite the exception”[8] (545–46).

This assures “a certain impenetrability of their operations” (ibidem)....

An outstanding example is the Allgemeine Elektrizitäts Gesellschaft (with thousands of millions of marks in subsidiary companies)....

(( c.f. 1908. No. 8: “The Rathenau System”, Die Bank methods of the A.E.G. ))

(( ...Taxation is greater, for special taxes are imposed on them (subsidiary companies); on the other hand, profits are greater, and secrecy is assured!!... )

|| Author’s italics: “Subsidiary companies are an ideal means for compiling objectively false balance-sheets without contravening the provisions of company law” (549).

“The decisive factor is that the modern system of arranging balance-sheet items makes concealment possible” (ibidem)....

Another example:

The Oberschlesische Eisenindustrie Aktiengesellschaft (pp. 550–51) has in its balance-sheet “holdings” = 5,200,000 marks.

What holdings? The author ascertained privately: 60 per cent are shares of the Gleiwitzer Steinkohlengruben

(and this company has debts of 20,000,000 marks!!)


Ibidem p. 340 (April) (Berlin big banks, February 28, 1914).

Balance-sheets of Berlin big banks.


sheets: February 28,

eight banks (Deutsche Bank, Discontogesellschaft, Dresdner Bank, Darmstädter Bank, Schaaffhausenscher Bankverein, National Bank für Deutschland, Commerz- und Disconto-Bank + Mitteldeutsche Kreditbank).

[[BOX: Million marks ]]

Share capital=1,140.0 mill.Reserves=350.82
Bills, etc.=1,956.16 ”Consortium holdings=278.29
Debtors=3,036.63 ”Long-term holdings=286.81
Σ balances=8,103.71 ”

Savings banks (1910) (including post office savings banks)[9] (p. 446)





Great Britain4,518Rumania50
Holland464New Zealand319

p. 496: Criticism of “statistics of issues”: || N.B.

(( for the most part these statistics (in the Frankfurter Zeitung and Deutsche Oekonomist they are largely estimates) are very inexact, giving a maximum and not the reality. The issue of shares can be the transfer

of debt into a different form.

{{2 Cf. Dr. Hermann Kleiner, Statistics of Issues in Germany, Berlin, 1914.

{{2 and M. Marx (Thesis), Statistics of Issues in Germany and Some Foreign States, Altenburg, 1913.

1914. 1, p. 316 (article by Lansburgh). “The Stock Exchange versus the Banks”:

||| N.B. ...“The Stock Exchange has long ceased to be the indispensable medium of circulation that it was formerly, when the banks were not yet able to place the bulk of new issues with their clients.”[10]

(March 1914) pp. 298–99, “new era of concentration” ||| (in banking)—in connection with deteriorating business situation, etc.

(“The Bergisch-Märkische Bank, this 80-million Rhenish enterprise with its 35 branches, will soon be merged in the Deutsche Bank”: 298).

“For while merger does not always give strength, it nevertheless conceals from outside many weaknesses and sores” (299)—on the significance of mergers....

p. 94. “Bankruptcy statistics[11]—their significance for an appraisal of the business situation.

(From Quarterly Reviews of Statistics of the German Reich) especially “the most serious economic crashes, N.B. || i.e., cases where, owing to the lack of assets, liquidation proceedings either cannot be begun at all or have to be suspended” (p. 94).

[See the table on p. 87.—Ed.]

During this period the number of large towns has increased from 28 to 48 (and their population still more), but the percentage of very big bankruptcies (completed owing to lack of assets) was previously lower than the average, but is now higher.

p. 1 (January 1914), from an article (“Causes of Crises”) by Lansburgh: (N.B. Business situation).

ergo from 1913 |||| “For about a year now, the German business situation has been noticeably deteriorating.”

crisis of 1914 |||| “The period we are passing through reveals many, though not all, characteristic features of a crisis”...

“The most fatal cause of crises ... is progress” ...(11).

Counter-measures? “More effective (than a cartel) is a trust, which either deliberately suppresses all inventions and improvements, or buys them up, as was done, for example, N.B. good example!! || by the big German glass factories in respect of Owens’s bottle-working patent, which united into a sort of special-purpose trust to buy what appeared to them an exceedingly dangerous invention” (p. 15).[12]

My additionsTotal bankruptcies in the German ReichNo. of bankruptcies in large towns
[ according to Riesser ]]TotalOf which No. reject-


Per centTotalOwing to lack of assetsPer centTotalOf which No. reject-


Per centTotalOwing to lack of assetsPer cent
Start of boom18957,1116809.66,3623956.21,82324313.31,7241046.0
Business situation good18997,7428.8
American crisis19079,85517.8

good example! || “Transport Trust”, a note in Die Bank, 1914, 1, p. 89.

[[DITTO: || ] The formation is expected (perhaps in the near future) of a Berlin “transport trust”, i.e., an interest-community of the three Berlin transport companies—the elevated railway, tramway, and omnibus companies. We have been aware that this plan was contemplated ever since it became known that the majority of shares in the omnibus company had been acquired by the other two transport companies.... We may fully believe those who are pursuing this aim when they say that by uniting the transport services they will have economies, part of which will in time benefit the public. But the question is complicated by the fact that behind the transport trust that is being formed are the banks, which, !! || if they desire, can subordinate the means of transportation, which they have monopolised, to the interests of their real estate business. To be convinced of the reasonableness of such a conjecture, we need only recall that the interests of the big bank that encouraged the formation of the Elevated Railway Company were already involved at the time the company was formed. N.B. ||| Indeed, the interests of this transport undertaking were interlocked with the real estate interests and so an essential prerequisite for the foundation of the transport company was created. The point is that the eastern line of this railway was to run across land which, when it became !! '||' certain that the railway was to be constructed, this bank sold at an enormous profit for itself and some persons associated with it in the land company at the Schönhauser Allee railway station.[13] For it is common knowledge that land development, and the || resultant rise in land prices, is best achieved by means of new transport routes.” (There follows yet another example: no less than eleven lines already run to the Tempelhof area. Too many? The reason: many directors and members of Supervisory Boards live there!!! p. 90.)... ||| N.B. “A transport monopoly involves a real estate monopoly....”

The Oil Comedy”, Die Bank, 1913, No. 4 (p. 388).

Excellent note, reveals the essence of the struggle for monopoly of oil in Germany.

Before 1907. “Until 1907 the Deutsche Bank oil concern was engaged in a sharp conflict with the Standard Oil Company” (389). The outcome was clear: defeat of the Deutsche Bank. || N.B.: Struggle of the Deutsche Bank against Standard Oil Company In 1907, two courses were open to it: either liquidate its “oil interests” and lose millions, or submit. It chose the latter and concluded an agreement with Standard Oil (“not very advantageous” to the Deutsche Bank). The Deutsche Bank undertook “not to attempt anything which might injure American interests”, but... the agreement would cease to operate with legislation establishing a German oil monopoly.

[[DITTO: || ]] And then Herr von Gwinner (a Deutsche Bank director), through his (private) secretary (Stauss) (Die Bank, 1912, 2, p. 1034), launched a campaign for a state oil monopoly!! The entire machinery of the big bank was set in motion... but there was a snag. The government (though it had already draft ed a bill and put it before the Reichstag) feared that, without Standard Oil, Germany would not be able to obtain oil.

[[DITTO: || ]] See 1913, p. 736 et seq.

[[DITTO: || ]] The war preparations bill (July 3, 1913) came to the rescue—the oil bill had to be || postponed. Standard Oil won, for the monopoly (for the time being) did not eventuate.[14]

N.B. [[BOX ENDS: The struggle of the Deutsche Bank and Germany against the Standard Oil Company. ]] ||

Die Bank, 1913, No. 8 (August).

Alfred Lansburgh, “Five Years of German Banking”.

Growth of Concentration:
Deposits (of all banks with a capital> one million marks)
+2,800million +40%
{{9Berlin big banks
48banks with> 10 million marks capital
+115banks with> one million marks capital

Deposits of the 57 big banks increased by 2,750 million marks. Increase in 5 years (million marks)

{{All banks with>1mill. capital+2,818+390+148
57 banks with>10” ”+2,750+435+153

{The small banks show an absolute decrease: mergers, etc.}

Percentage of total deposits (p. 728)
N.B. |||Berlin big banks (9)Other banks with> 10 mill. marks capital (48)Banks with 1–10 mill. marks (115)Banks with <one mill. marks capital
1910–114933.5143 1/2||100

1913, No. 7, p. 628 et seq.

The State and Foreign Loans” (Alfred Lansburgh).

The German government has forbidden foreign loans? What impels the banks towards that policy? The fact that they are already “bogged” (Mexico, China, Turkey, etc., threaten to go bankrupt).

What induced the banks to grant loans to such states in the first place? Profit!

...“There is not a single business of this type within the country that brings in profits even approximately equal to those obtained from the flotation of foreign loans” (630)....[16] \\ /// \\ N.B. important

[[BOX ENDS: a difference of up to 7–8 per cent between the subscription price and the bank’s price; different conditions, for example, a deposit—six months’ interest as “”, etc., etc. ]]


concerning the question of imperialism!! ]]

especially— Then “high politics” (France and Germany grant loans in order to acquire allies, etc.).

|| well put! The dependence of France on Russia (“a one per cent decline in Russian securities costs France 100 million. The mere threat by Russia to stop interest payments means more to her main creditor than the loss of an army corps”—p. 633).

| well put! With such loans “it is not clear who is dancing and who calls the tune”, ibidem.

Mexico (p. 628) defaulted more than once (without complete bankruptcy), but is granted loans, for otherwise worse is threatened!!

Rivalry over Foreign Loans” (1913, No. 10, p. 1024 et seq. Editorial note).

“A comedy worthy of the pen of Aristophanes is lately being played on the international capital market. Numerous foreign countries, from Spain to the Balkan states, from Russia to Argentina, Brazil and China, are openly or secretly coming into the big money markets with demands, some times very persistent, for loans. The money markets are not very bright at the moment and the political outlook is not promising. But not a single money market dares to refuse a loan for fear that its neighbour may forestall it, consent to grant a loan and so secure some reciprocal “benefits” ||| service. In these international transactions the creditor always manages to secure some extra benefit: a favourable clause in a commercial treaty, a coaling station, a contract to construct N.B. || a harbour, a fat concession, or an order for guns...” (1025).[17] ||

[[BOLD BOX: the “benefits” of imperialism—important in examining the question of monopoly and finance capital ]]

1913, August, p. 811, note on “Savings Banks and the Banks”....

...“The keen rivalry between the savings banks and the banks, which flared up some years ago because each of these so dissimilar organisations is endeavouring to go beyond its own field of activity and penetrate that of the other, continues to occupy the attention of our Chambers of Commerce.” The Bochum Chamber of Commerce demands, for example, that measures be taken against the savings banks, including that they be prohibited from discounting bills, dealing with current accounts, etc. (but allowing them “safes”, cheques and endorsement).[18]

Same subject: “Banking Activity of Savings Banks” (p. 1022 et seq.) | The savings banks are being turned into institutions for the rich: in Prussia in | !! they want to go “back” to small capitalism (and not towards socialism) 1909, out of 10,300 million marks of deposits, 4,780 million 46 1/3 per cent consisted of deposits >3,000 marks (15 per cent of deposits >10,000 marks). Wealthy depositors often have more than one book. Savings banks engage in risky operations (bills, mortgages, etc.) under the spur of competition (4 or 4 1/4 per cent has to be paid!!). There is a proposal to “ban” this...

An article “The Swamp” (L. Eschwege) (1913, p. 952 et seq.) on the swindles of speculators in real estate (plots sold at exorbitant prices, builders going bankrupt, workers not paid and ruined, etc. etc.). Attempts by Haberland, head of the gang, to monopolise the “information bureaus”, i.e., monopolise all building work. The concluding words are typical:

“Unfortunately, the inevitable course of modern civilisation apparently leads to the economic productive forces falling more and more into the hands of powerful individuals who use them in a monopolistic way. The economic liberty d by the German Constitution has become, in many departments of economic life, a meaningless phrase. Under such circumstances, an incorruptible bureaucracy, conscious of its responsibility, is the granite rock that can save the public good from the encroaching flood of avarice. || ha-ha! If this rock should crumble, even the widest political liberty cannot save ||| only “would have”??? us from being converted into a nation of unfree people,[19] in which case even the monarchy would have merely a decorative significance” (p. 962).

N.B. [[BOX: | The author has a book entitled Land and Mortgage Problems, 1913 (2 vols.) || ]] N.B.


?? Eugen Schwiedland, Impact of the External World on the Economy (1913) (1 krone). One of the chapters: “Colonies and a League of States”.

Von der Heydt’s Colonial Handbook. (Published by Fr. Mensch and J. Hellmann.) 1913 (Seventh year (16 marks). Data (financial) on all banks and joint-stock companies in the colonies.

? Leopold Joseph, The Evolution of German Banking, London, 1913. Perhaps a rehash of Riesser? Or not?

Erh. Hübener, The German Iron Industry, 1913 (5.60 marks) (14th volume of “Higher Commercial School Library”).

Paul Hausmeister, Big Enterprise and Monopoly in German Banking (1912) (2 marks).

Arthur Raffalowitsch, The Money Market, 1911–12, Paris, Vol. 22, 1912–13.

Compass. Forty-sixth year. 1913 (Austrian financial yearbook; international statistics in Volume II). Published by R. Hanel.


“International Statistics of Securities and Stock Issues” by Dr. Zimmermann, Bank Archiv, 1912, July 1.

Statistics of “transferable securities”, according to

International Statistical Institute Bulletins (Alfred Neymarck).

In francs (000 million francs)

January 1, 1897—446,300 million.

January 1,


January 1,


January 1,


1897— inexact(p. 301) 1901— correctedGreat Britain182.6 —215 ——125–130(p. 302)

(( actually

existing securities ))
Belgium6.1 —8
Germany92.0 —80 ——60–75
Austria-Hungary24.5 —30 ——20–22
Italy17.5 —17 ——10–12
Rumania—1.2 —1.5
Norway0.7 —1.0
Denmark——2.7 —2.2
France—80.0 —135 ——95–100
Russia25.4 —35 ——20–25
Sweden and others——5
__ __ ____ __ __
United States of America . . . . . . . . . .110–115
Japan . . . . . . . . . .5
Other countries . . . . . . . . . .30–35


000 million
1897—446.3 189 9—460
1901—562.7 (342.4)
1907—732 (475–514)
1911—815 (570–600)

The figures in brackets = an attempt to deduct over lapping and repetitions (about 2/3 of the previous figure) (p. 301) (“securities actually existing in trade or in the possession of individual states”). See p. 68 of this notebook.[20]

Totalsfor entire five-year


(p. 317)

Issues 000 million francs


Vol. XIX,

No. II,

p. 206 {{

1871–7545.0[BOX:] [[ see pp. 68–69 here[21] ]]


Professor Dr. Joseph Grunzel, The Balance of Trade, Payments, and of the Economy, Vienna, 1914.

N.B. pp. 26–29: Short summary of data (mostly generally known) on export of capital, etc. Foreign capital:

In Austria-Hungary:9,809 million kronen(incl. 4,653 German and 3,270 French)
Argentina9,000 million marks
China3,737 ” ”(national debt; in railways>5O million pounds sterling in banks 34)
Japan1,765 million yen(this is national debt; 33 million yen in enterprises)
Canada1,750 million dollars(incl. 1,050 British, 500 American)
Mexico1,000 million dollarsAmerican+700 British


Dr. Sigmund Schilder, Development Trends in the World Economy, Vol. I, Berlin, 1912. (Vol. I: Planned?! Influences on the World Economy.)

[[DOUBLE BOX ENDS: The title is too sweeping, the subtitle plainly fraudulent, for the author has specialised in tariff policy = there you have his planned influence!! ]]

[[BOX ENDS: The author is secretary of a trade museum. ]]

p. 4—Disagrees with Sombart (with his theory of declining “export quota”). Says this “quota” is increasing.

p. 6. An apparent weakening of protectionism (“signs of this”), 1910–11.

p. 6—“Unrest caused by high prices” in France in August and September 1911. Dates (N.B.): Vienna, September 17, 1911.

27–28. Agriculture too, is developing (not only industry), “even” (“sogar”) (p. 28, line 8 from below): “in European industrial countries”. (This “even” is a gem!)

(( N.B.: approach to the problem of equilibrium—is “world agricultural purchasing power” sufficient? p. 27.)

28–29. The development of agricultural associations (even India has 3,498 with 231,000 members, according to The Times, July 27, 1911).

Especially rapid development of agriculture in the United States.

In the 20th century one can expect the same in Rhodesia,

30: Canada, Sudan (Egyptian), Mesopotamia.

31—Governments develop agriculture in the colonies “to obtain buyers of industrial goods”. (In India (until recently), and in Egypt, with this aim in view, Britain has artificially “hampered” the development of industry.)

35–36—Fear of a shortage of agricultural products is unfounded. Tropics and subtropics N.B. Philippines. Only 3–5 million acres are cultivated out of 74 million. (Population is 27 per square kilometre.)

|| N.B. 38: “Though it may sound paradoxical to some, the growth of the urban and industrial population in the more or less near future is more likely to be hindered by a shortage of industrial raw materials than by a shortage of food.”

A shortage of timber: it becomes steadily dearer; idem leather; idem textile raw materials (39).

“Associations of manufacturers are making efforts to create an equilibrium between ||| N.B. date! agriculture and industry in the whole of world economy; as an example of this we might mention the International Federation of Cotton Spinners’ Associations in several of the most important industrial countries, founded in 1904, and the European || N.B. Federation of Flax Spinners’ Associations, founded on this model in 1910” (42).[23]

Within the countries—an agreement between the growers of sugar beet and the manufacturers.

“Eastern Europe” (an economic and political concept....) ||| The agricultural crisis, the drop in prices from the seventies to the nineties of the nineteenth century. Caused by American competition? + the impoverished position of the farmer in “Eastern Europe” and India (cf. Engels).

well said! || (43–44) “Thanks alone to the agricultural co-operatives combined with better educational facilities in the countryside, the letter of the law on emancipation of the peasants became a real fact.”

47: The peasant revolt in Rumania in 1907 (spring) played a role, similar to that of the 1905–07 revolution in Russia, in improving the peasants’ position.

N.B. || 51: Only in New Zealand (from the early 1890s) has “Henry George’s theory,[24] that of British land nationalisation”, been applied “in practice” (population consists mostly of small-landowner families).... In Australia, from 1910, “a similar course”....

cartels 1882–1912 ||||| 63: The role of cartels (dumping and the struggle against free-trade countries) “during approximately the last three decades”....

[[DOUBLE-BOX-ENDS: The argument of English protectionists. N.B. ]]

[N.B.: This caused the protectionist trend in Great Britain, Belgium and Holland: 67.]

66: The Brussels sugar convention (March 5, 1902; renewed August 28, 1907) put an end to the unification of government and cartel export subsidies (for sugar).

N.B. || 72. Extreme protectionism resembles free trade in that, by making sales within the country more difficult (high prices), it stimulates foreign trade (imports (α) of cheap raw materials, etc.) (selling (Β) abroad, for its own population grows poorer).

87—It is not true that “trade agreements” have prayed “bankrupt”.

[[BOX: writing on questions of tariff policy, the author adduces a host of unnecessary and boring details; I omit them. ]]

98—Examples of trade agreements: an agrarian country needs cheap machinery (and its customers need cheap grain): the Bulgarian tariff of March 6–19, 1911—Austria’s agreement with Germany (1905) (chemicals; artificial indigo, etc.).

(99)—reciprocal concessions (Germany’s trade agreement with Portugal, November 30, 1908), etc.

Subtitle of Chapter IV, “Tariff Wars”:

118—“Examples of the considerably useful impact of specific tariff, wars in promoting international trade”... Russo-German war of 1893–94,—Franco-Swiss war of 1893–95.

Those of Switzerland and Spain in 1906 (from June to September 1, 1906) (they led to a lowering of tariffs).

Austria—Rumania (1886–94)[[BOX: Ended in agreements :1909 :1910 ]]
Austria—Serbia (1906–10)



Tariff wars are becoming rarer, giving way to threats, negotiations, etc.

145. British free trade has been based both on her military might (the navy) and colonies.

True, an attitude of indifference to maintaining and increasing colonial possessions prevailed in Britain up to 1860s (in 1864, she even gave Greece the Ionian Islands gratis, without political or economic compensation).

146–48: Intensified acquisition of colonies by Britain began in the eighties. ((Cf. Hobson.)) About 1/3 of Britain’s total exports goes to her colonies; no small amount and N.B.: this export is “especially profitable”

N.B. (149) {{ owing to:

  1. (1) investment of capital in the colonies
  2. (2) “contracts” (“public contracts”) (very important!!)
  3. (3) “Colonial preferential tariffs for British manufactures”: (in the majority of the colonies)

151: state power (concessions, municipal and state institutions, etc.) and trust likewise important for capital investments: in this respect

(among the factors of “imperialism”)

N.B. | 151—“Of service to the British” (facilitating investment) “is the legend, assiduously cultivated by ruling circles of the British Empire and by the British press, in spite of Ireland and of certain measures in India, Egypt, etc.—the legend of the special liberalism and humanity which are alleged to be characteristic of the British regime at all times and in all places.” (Written in 1912.)

154: “Inter-colonial preferential tariffs” are widely applied also in the British colonies.

(( (( (( N.B.: a step towards a customs union of the whole empire.

My addition. )) )) ))

Britain’s virtual protectorate over Portugal, and partly over Spain (1901–10) ... Norway (from 1905) ... Siam (the 1860s up to 1904; in 1904 a treaty with France; their joint protectorate)....

“More interesting and perhaps even more significant than the examples so far mentioned [Egypt, Zanzibar...], where subtropical or tropical semi-civilised countries, after relatively short transitional stages of some few decades, have become or appear to be becoming real British colonies, are a number of other cases. These are cases where for a long time, decades or even centuries, a country with a European civilisation may virtually be a British protectorate, without, at least formally, being deprived of any external mark of full sovereignty.

Portugal is the best known and outstanding example. Since the war of the Spanish Succession (1700–14) Great Britain has almost continuously used her navy, and on occasion her army, to defend Portugal’s European or over seas possessions from attacks or claims by Spain, France, etc. Conflicts between Britain, the protector, and Portugal, the protected, were accidental and, to a certain extent, family quarrels ... as, for example, the British ultimatum of January 11, 1890, against Portugal’s attempts to land-link her western and eastern colonies in Africa.

“At any rate, only British support enables Portugal to maintain her possessions—which, though not large, are nevertheless important for such a small country—on the west coast of India, in South China (Macao) and on Timor, in face of the intense international political rivalry in southern and eastern Asia. In Portuguese East Africa a kind of customs union with British South Africa has even been added to Britain’s political protectorate over Portugal” (treaty of December 18, 1901).... “And it has so far proved economically highly profitable for Portuguese East Africa. It is also a valuable acquisition, now and for the future, for British South Africa and, therefore, for Great Britain.

“This virtual protectorate of Great Britain over Portugal during its more than two hundred years’ existence has proved extremely useful to British trade and shipping [the 1703 treaty with Portugal]....

“However, ever since Great Britain adopted peaceful free trade, she has been able through diplomatic action to influence the Portuguese customs tariff in a way hardly to be achieved by any other country, even by the offer of commercial privileges or the threat of a tariff war. Besides, as the dominating power, Great Britain can make especially wide use of all export and investment opportunities involving Portuguese government concessions” (railways in Portuguese Africa, etc.)....

“And indirectly, again owing to her protectorate over Portugal, Great Britain maintains not only her position in South Africa and her influence in the Congo, but also her maritime supremacy, the firm pillar of her colonial and world-wide political and economic power. For in war or peace, Portugal puts her ports and islands at the disposal of the British fleet for training purposes and as intermediate shipping stations, allows the use of telegraph cables, etc.” (159–61)....[25]

Bismarck’s saying ||| 169—In wartime Britain used the European states as “excellent infantry” (“according to Bismarck’s description, as the ‘silly strong man’ of world politics”).

170—Britain supported Belgium’s separation from Holland (Holland was “cut in half” as a rival) so as not to permit a powerful state near London.

175–76. The struggle (of Britain it) against Russia over Persia (long-continued) until the agreement of June 9, 1908.

The struggle (of Britain) against France over Siam (long-continued) until the agreement of April 8, 1904.

178 et seq. “Four periods of British world politics” (their designation, p. 184):

  1. 1) First Asiatic period (against Russia), approximately 1870-85. {{ 1870—against Russia’s Black Sea rights. 1885—agreement on frontiers of Afghanistan.
  2. 2) African period (against France and in part Portugal and Germany), approximately 1885–1902 (1898 “Fashoda”). {{ 1885—agreement on the Congo: “independence” (Britain wanted to devour it). 1902—end of the Boer War.
  3. 3) Second Asiatic period (against Russia): approximately 1902–05. {{ Treaty with Japan, 1902. Russo-Japanese War, 1904–1905.
  4. 4) “European” period (against Germany), approximately = 1903—(“anti-German”)[26]1903: friction over the Baghdad railway.

194: The British Empire (with its colonies) accounts for: “>one-quarter of international trade turnover” (reference to Vol. II, appendix IX)

[[BOX: too small: cf. Lansburgh: 3/4[27] ]]

214. Bukharin’s table + Japan? + Portugal (216)— 2.18 million sq. kilometres—13 million inhabitants.

220. The outlying regions often have a special (tariff) structure (distances too great even for modern facilities).

  • — Eastern Siberia in Russia
  • — Philippines in America, etc.

226. Six “special economic areas” in Russia: (1) Poland (Poles speak of “exports to Russia”); (2) the South; (3) Archangel; (4) Urals; (5) Moscow; (6) the Baltic (+Finland). |||| N.B. 237 ...A trend “emerged” in 1911 towards a “Greater Colombia” in the northern part of South America against the United States.

237 and others. The union of the modern gigantic world states into a single economic whole is stated to be an “approach” to “universal free trade”.

“As far back as the eighteenth century, after the secession of the North American colonies from Great Britain, it became apparent to the more far-sighted colonial peoples that such a brutal colonial policy [suppression of all industry in the colony] aimed exclusively at promoting the real or apparent interests of export of manufactures from the metropolis, could not be maintained for long. At any rate, that applied to regions of the temperate zone with active, intelligent populations whose living conditions do not substantially differ from those of European nations. In the tropical and subtropical regions, however, with populations at a lower cultural level, less energetic and militarily and politically weaker, this old colonial policy was still retained, even though to a lesser extent. True, nowadays, in both the tropics and subtropics, outright suppression of incipient industrial activity is as a rule avoided. But in most | cases colonial governments devote more attention to developing agricultural and mining raw-material out put than to industrial and political problems. And that for the most part they can do this without much damage to the economic development of the tropical or sub tropical areas concerned is all the more important, since this enables them to operate this type of colonial policy for a long time. For the present acute political rivalry throughout the world, and the emergence of overseas Great Powers (U.S.A., Japan), afford the population of the tropics and subtropics—resentful N.B. at the forcible, ruinous retarding of its economic development—many means of creating difficulties for N.B. its oppressors and of giving them a distaste for brutal methods of rule” (240–41).

For example, Britain is more and more converting N.B. || Egypt into a country producing only cotton (in 1904, of 2,300,000 hectares of cultivated land, 600,000 were under cotton) and hampering industrial development (for instance, two cotton textile mills founded in Egypt in 1901 were made to pay the cotton tax, that is, the government imposed a “consumers’ tax” on cotton!!!) (244–45).

[[BOX-WITHOUT-BOTTOM: “Present-day colonial policy”. ]]

| In general, “modern” colonial policy is supposed to encourage production of raw materials and react to the development of industry “with indifference, if not with hostility” (247).

N.B. || “However, it is probably no longer possible to apply that type of colonial policy to the physically and intellectually more vigorous peoples of temperate climates; it can be applied only to the weaker peoples of the tropics and, in part, the subtropics. But even here it can be carried out only by the more powerful European metropolitan countries, Great Britain, France and Germany. The Netherlands, Spain and Portugal, on the other hand, have lost some of their colonial possessions and are able to retain others only ||| N.B. because of the good will and mutual rivalry of the big colonial powers. Belgium is a notable example.

||| “...But even the strongest colonial power, Great Britain, in its biggest and most important colony, India, is compelled to depart considerably from strict observance of the above—mentioned principle in its trade and industrial policy, so as not to make N.B. her position more difficult than it actually is in the ||| face of popular, hostile agitation” (247-48)....

247, note.

| N.B. N.B. the Americans in the Philip pines “After many years of stubborn bloody struggles against the natives in revolt, the U.S.A., in the end, conceded the Philippines parliamentary representation (a Congress) with wide powers. This testifies to the acumen of North American statesmen in colonial policy. Less flattering evidence of this acumen, however, | N.B. is the land policy of the North Americans in the Philippines, which is leading to the formation of latifundia.”

Methods of colonial exploitation: appointment of officials from the ruling nation; —seizure of land by ruling-nation magnates; high taxes (“training in labour”).

||| “For colonial peoples in subtropical areas ... such as the Indians of North India and the Egyptians, the educated strata of which have already assimilated European-American civilisation, the very fact of foreign rule ||| !!! is an insult that is borne with difficulty and thought of with extreme hatred” (249).

In Egypt, the population is much more homogeneous (in language, nationality, etc.) than in India, “and the country (Egypt) is || more European than, for instance, some areas of European Russia” (252).

(similarly, the “semi-civilised” population in Ceylon, the Straits Settlements, Algeria, Tunisia, etc.) (258).

||| Holland, like Great Britain..., in her colonies follows a “free-trade policy which, at the / N.B. \ same time, is mainly aimed at developing ||| the output of agricultural and mining raw materials” (259).

Germany waged a tariff war against Canada (from July 31, 1898 to March 1, 1910) because of the latter’s preferential tariffs in favour of Britain. It ended with the retention of these tariffs and a customs treaty with Germany.

Most British, Dutch and German colonies, “as far as can be foreseen”, will remain under the open-door regime in relation to a all countries (271). Trescher (Preferential Tariffs, 1908) contested this, and Schilder says that he has toned down his conclusions.

As regards state contracts (269–70), the custom every where is: preference for “one’s own” country.

“‘Open-door’ areas” (old type: Turkey (until 1908), Rumania, Bulgaria, Egypt, Morocco, Persia; new type: Congo, Afghanistan) “are almost always independent or, at least, formally independent states, and in most cases semi-civilised countries”... (274).

(1) They usually lack sovereignty. They usually pass into the hands of the Great Powers: separate parts of these areas split off.

N.B. || (2) “Individual areas of the ‘open-door’ country split themselves off from the state that previously ruled them and, after a more or less prolonged transitional period, acquire full political and economic sovereignty, the small and medium-sized Balkan states being in that category. On the whole, this phenomenon is not so frequent as that indicated under point 1” (274).

(3) Full independence (Japan) is extremely rare.

Ad. 2. Growth of independence:

Japan in the 1890s.

Bulgaria in 1897–1909 (fully sovereign!).

Siam just now.

Heading of § VI: “The swallowing-up of ‘open-door’ areas by the Great Powers: the world economic usefulness of this historical process is seen || apologist!! from the examples of Bosnia, Algeria, ...Formosa, the Belgian Congo, etc....”

{{ These advantages (like the benefits of independence of former “open-door” areas: § VII) the author sees in the growth of trade!! Only that!! The book is devoted mainly to customs policy. }}

Siam, especially since the Russo-Japanese War of 1904–05, has been developing towards independence (p. 318 et seq.).

Growth of the national movement in China—Persia—Arabia—Egypt (p. 329), etc., etc.

§ IX: “The disappearance of ‘open-door’ areas is an irreversible but beneficial process for the world economy (337)... These areas are “semi-barbarian”, mostly semi civilised.... “Apple of discord of the Great Powers” (337–38)....

Chapter IX. “Foreign Capital Investments”. || no longer free competition ||| (Subtitle of section I. “Foreign Investments as a Means of Promoting Exports”.) || N.B.

Customary condition: expenditure of part of the loan on products of the creditor country (“unusually frequent”, 342).

Examples: Paris refused Bulgaria a loan in December 1909, and Hungary in September 1910.

| N.B. ...“these conditions prevent extreme aggravation of competition on the world market. Inter national rivalry is replaced by a more restricted form of competition, involving only the relevant industrial enterprises of the creditor state, || “mildly” put in some cases—and-this borders on corruption[28] –only certain enterprises which I for one or another reason are especially favourably placed ... for example, Krupp in Germany, Schneider & Co. in Creusot in France, etc.” (346).... ||| “monopoly” “Although it might be thought that such a monopoly could not be abused”... I for one could apply to another country, in reality the choice is not easy... (346).

During the last two decades, France has especially often had recourse to this method.

348, note, “accumulated capital”... annually

in France> 3,000–4,000 million francs

in Germany 5,000 million francs

(Delbrückin the Reichstag, February 12, 1911).

|| The “tariff war” between Austria and Serbia (from July 7, 1906 to January 24, 1911 with a seven months’ interval in 1908–09) was partly caused by competition between Austria and France (both backward countries) N.B. for supplying war materials to Serbia: Paul Deschanel told the Chamber of Deputies in January 1912 that from 1908 to 1911 French firms had supplied war materials to Serbia to the value of 45,000,000 francs (350).[29]

Another method: granting a loan (or with a loan in view) to bargain for “advantages” in a trade treaty:

For example, Britain (my expressions “robbed”, “squeezed”, etc.)

Austria in thisway by the trade treaty ofDec. 16, 1865
France—Russia—” ” ”Sept. 16, 1905
(until 1917)
—Japan—” ” ”August 19, 1911

Sometimes countries which borrow capital lend it to other countries, “trading in capital”: e.g., the United States borrows from Britain and lends to South America, etc., etc. (p. 365 et seq.).

Switzerland readily lends to other countries (higher rate of interest), sets up factories in protectionist countries, and so on (p. 367). | ...“The 1909 annual report of the Austro-Hungarian consulate in Sao Paulo (Brazil) states: ‘The Brazilian railways are being built chiefly by French, Belgian, British and German capital. In the financial operations connected with the construction of these railways, the | countries concerned stipulate for orders for the necessary railway materials’” = (371)....[30]

The 1909 report of the Austro-Hungarian consulate in Buenos Aires calculates the capital invested in Argentina as follows (p. 371)

British . . . . . .8,750mill.francs (=£350,000,000)[31]
French . . . . . .800
German . . . . . .1,000

— Foreign capital in Canada (1910)—12,687 million francs (p. 373)

including 9,765 British

2,190 U.S.

372 French

__ __

— Foreign capital in Mexico (1886–1907)—3,343

including 1,771 U.S.

1,334 British

(the remainder) German, French, Spanish, etc.

British Imports and Exports (381–82)

(in £ million)




net without re-exports



Excess of

foreign trade imports

British capital

investment abroad and in the colonies £ million (seven-year periods) (pp. 386–87)

1860-64235193138 +55235(1856-62)
1865-69286237181 +56 =196(1863-1869)
1870-74346291235 +56 =+288(1870-76)
1875-79375320202 –118 +94(1877-83)
1880-84408344234 +110
1885-89379318226 –92 –+430(1884-1890)
1890-94419357234 +123
1895-99453393239 +154 +223(1891-1897)
1900-04533466290 +176 +107(1898-1904)
1905-09607522377 +143 –+792(1905-1911)
1910678575431 +144My total: Σ

= (1856–1911)

£2,365 million
1911578454124 –

The author gives the table only on pp. 381–82 (without + and –), the remaining figures (capital investment) from The Statist are only in the text, moreover (curiously!), while giving annual data on imports for 1870–1911, he does not compute them in seven-year periods!

The author’s conclusion is that, though the capital investment statistics are not fully accurate (none of private capital investments), they adequately show the correlation (between the decline in the excess of imports and the growth of capital investment) (p. 392).

{{ pp. 392–93: five industrial countries are “definitely pronounced creditor countries”: Great Britain, France, Germany, Belgium and Switzerland. Holland is “industrially little developed” (“industriell wenig entwickelt” (393)); the United States is a creditor country only in America[33] ; while Italy and Austria are “only gradually developing into creditor countries” (393). || End of Volume I || __ _

N.B. || p. 384, note. At the close of 1910, British foreign investments totalled £ 1,638 million (=40,950 million francs), of which £ 709 million (=17,725 million francs) in the United States =43.3% + £ 1,554 million (=38,850 million francs) in British colonies; foreign investments + private capital + £ 1,800 million (=45,000 million francs).


Gerhard Hildebrand, The Shattering of Industrial Domination and Industrial Socialism, 1910 (Jena).

A summary (mostly a random selection) of figures on the “increased industrial independence of peasant countries” (p. 88)—“the industrial self-development of hitherto peasant countries” (138)....

§ 11. “The Chinese danger”.... By 1920–25 the Chinese will have gone such a long way, etc., etc.

...“The industrial monopoly of the West-European sphere of civilisation is doomed”... (203).

|| p. 207. The question amounts to this: will the proletariat in the industrial countries be able “to replace or retain the vanishing peasant basis of food and clothing”?

[DITTO: || ] “The answer to the clear-cut question must be a downright, clear, remorseless No ” (207).

209: It is impossible to obtain (in Europe) 200 million sheep

15-20 million bales of cotton, etc.

“There is no point in it (the proletariat) wanting to expropriate the capitalists, for the industrial means of production are no longer utilisable” (210), and it will not be able to go over to agriculture (211)....

“The possibility is thus excluded of a democratic socialism in the sense of a uniform, tightly-knit regulation of production as a whole by the mass of the || ! people who possess nothing and rule everything.... Much more probable than the domination of peasant production by an industrial democracy is the || ! domination of industrial production by a peasant democracy” (213).

“However, the realisation of democratic socialism through an industrial democracy is absolutely ruled out if we accept: | ? “1. that peasant economy holds sway in the most important spheres of organic production;

[DITTO: | ] ? “2. that the peasant masses hold fast to the private basis of production;

[DITTO: | ] “3. that the peasant countries naturally endeavour to draw into their sphere the greatest possible share of industrial production;

[DITTO: | ] “4. that, under the prevailing conditions of inter national competition, especially with the Chinese quarter of mankind drawn into the nexus of world economy, and with the conversion of other hitherto agrarian countries into industrial states, they can quite freely dispose of their industrial incomes which have already been monopolised not by them (215);

“5. that, on the other hand, the industrial states are to a growing extent dependent on foreign peasant bases for their supplies of food and clothing raw materials” (216)....

...“The unfortunate thing is that the industrialisation !?! || of the East, following the penetration of Western technical culture, can proceed much faster than the agrarianisation of the West, with its industrial over-tension and, it can be safely said, its industrial degeneration” (219)....

“Agrarian educational colonies” (224)—“a peasant internal colonisation” (225)—those are the “means” proposed by the author. !!! || Conclusion (i.e., last chapter): “United States of Western Europe” (229)....[34]

The African peoples require “guidance and care” “for an indefinite time to come” (232).... In 20–30 years it will be difficult even for Russia + Great Britain + France “to oppose a Chinese-Japanese coalition” (231).... !! || there is the possibility of a “great Islamic movement” in Africa, which will be “simultaneously both revolutionary and reactionary” (233). !!!! || “To prevent” (p. 233 in fine) such a movement—is in the “vital interest” of Western Europe.

sic!! ||| 234—“Consequently” “joint action in Africa by all the West-European states” is essential.

sic!!! || 234—It is hopeless to expect Russia (+Japan, China and the United States) to join in agreements (on disarmament and so forth)—the West-European nations must unite. || 235: We must “slow up” (verlangsamen) “the tempo of capital formation in Western Europe”... “moderate” the “industrial tempo”... “strengthen the peasant basis” ... a customs union ... progressive taxation, etc.... || 236——an import duty on grain is needed, but a “moderate” one. || 238—a democratic union of workers (down with “Communist utopias”) and peasants (238).

|| 239—“as a matter of course”, a “United States of Western Europe” will need a strong army and navy. |||

240—Britain will prefer to join rather than remain in “imperialist isolation”.... ||

{{ Useful for understanding the tendencies of opportunism and imperialism within Social-Democracy! }}


Diplomingenieur Dr. Paul Tafel, The North American Trusts and Their Impact on Technical Progress, Stuttgart, 1913.

(Preface indicates that the author worked in the U.S.A. for seven years.)

{{ According to Liefmann, Cartels and Trusts. }}

p. 1—Beginning of trusts (about) 1880s.

1900—185 trusts.

1907—250 with 7,000 million dollars.

|| date of origin of trusts

p. 2—Number of shareholders (steel shares) >100,000!!

pp. 8–9—America passed directly to railways. “Even today there are still no main roads in the U.S.A. that can be used for travel in summer and winter” (71, note 9).... ||| !

Economic conditions and forms of trusts dealt with at length.

p. 48: “The chief rival of the Steel Trust, the Jones and Laughlin Co. of Pittsburgh, is said to have more modern equipment in its mills than the Trust.—Leather trust shareholders blamed the board for the business doing badly, because it had neglected the technical equipment of the factories. The harvester-machine trust was praised for sparing no expense to equip its factories with the most up-to-date machinery in order to reduce production costs and thereby raise competitive power. [Quoted from Kartellrundschau, 1910, pp. 53 and 902.]

“The tobacco trust has gone the farthest, perhaps, in this direction. An official report says: ‘The trust’s superiority over competitors is due to the magnitude of its enterprises and their excellent technical equipment. Since its inception, the tobacco trust has devoted all its efforts to the universal substitution of || mechanical for manual labour. With this end in view it has bought up all patents that have anything to do with the manufacture of tobacco and has spent ||| enormous sums for this purpose. Many of these patents at first proved to be of no use, and had to be modified by the engineers employed by the trust. At the end of 1906, two subsidiary companies were formed solely to acquire patents. With the same object in view, the trust has built its own foundries, machine shops and repair shops. One of these establishments, that in Brooklyn, employs on the average 300 workers; here experiments are carried out on inventions concerning N.B. || the manufacture of cigarettes, cheroots, snuff, tinfoil for packing, boxes, etc. Here, also, inventions are perfected.’”[35] (Report of the Commissioner of Corporations on the Tobacco Industry, Washington, 1909, p. 266.)

“It is quite obvious that such a policy greatly stimulates technical progress. Other trusts also employ what are called development engineers whose business it is to devise new methods of production and to test technical improvements. The Steel Trust grants big bonuses to its workers and engineers for all inventions that raise technical efficiency, or reduce cost of production.”[36]

Besides competition, the bad financial circumstances of the majority of trusts (owing to over-capitalisation (N.B.)) are a stimulus to technical progress.

The capital of the Steel Trust = about $1,000 million (“one-seventh of the total national N.B. ||| property”). The shareholders received three new shares for each old one. (Cf. also Glier in Conrad’s Jahrbücher, 1908, p. 594.)

Interest has to be “earned” on this triple capital!!! ! ||| The capital of the railways = $13,800 million. Of this, about 8,000 million is fictitious capital!! (p. 52).

To continue. What if there is a complete monopoly? (At present the greater part consists of

(α) outsiders

(Β) the world market


In the U.S.A., only the post office is run by the government. Everything else (including railways, telegraphs, etc.) belongs to private companies.

1880—177 telegraph and parcel-post companies with a capital of 66.5 million dollars;

1907—25 companies with a capital of 155 million dollars N.B. of which 6 &doublearrow; 97.7 per cent of the total receipts. Price is uniform and for telegrams “excessively high” compared with Europe (p. 60).

Railways in disorder: Michelsen (a leading authority!) calls them “anarchic, uneconomic, cumbersome, unscientific, unworthy of the genius of the American people” (p. 63).

—railway cars very often lacking, whenever there is a boom (1902, 1906), in a number of localities, etc., etc. }} }} N.B. }}

{ cf. Conrad’s Jahrbücher (Blum), 1908, p. 183 } ||| N.B.

In the recent period the technical condition of the American railways has deteriorated; they lag behind Europe (p. 63).

The process of railway concentration was completed in 1899; by 1904 the price per ton-mile had risen from 0.724 cents to 0.780 cents ((!! p. 62)).

The Role of Technology. Camphor



per pound

1868 export=0.616.4 dollars (!!)
1907 ”8.4168.5 ”

(( in 1905 it became possible to produce it artificially; &long_slanting_down_arrow; the price fell; but raw material (turpentine) was dear ))

The position of the trusts is shaky: “colossi with feet of clay” ... p. 67 (an American writer says)... the future is dark....

[[BOX: N.B. On the trusts, The North American Review is frequently quoted.... 1904; 1908; 1902, p. 779; 1906; 1910, p. 486; &double_lower_left_box_corner; and others ]]

E. A. Heber, Industrial Labour in Japan, Zurich, 1912. N.B. A very detailed work.

J. Grunzel is quoted, The Error in Regard to Productive Forces.

Zeitschrift für Volkswirtschaft, Sozialpolitik und Verwaltung, Vol. 20, Nos. 3 and 4.

Quoted by Tafel

?? J. Grunzel, The Triumph of Industrialism, 1911.


N.B. Kautsky on Imperialism

Hobson’s book on imperialism is useful in general, and especially useful because it helps to reveal the basic falsity of Kautskyism on this subject.

Imperialism continually gives rise to capitalism anew (from the barter economy of the colonies and backward countries), giving rise anew to transitions from small- scale to large-scale capitalism, from weakly developed to highly developed commodity exchange, etc., etc.

The Kautskyites (K. Kautsky, Spectator and Co.) quote these facts about “healthy”, “peaceful” capitalism, based on “peaceful relations”, and counterpose them to financial robbery, banking monopolies, deals by the banks with the state, colonial oppression, etc.; they counterpose them as the normal to the abnormal, the desirable to the undesirable, the progressive to the reactionary, the fundamental to the accidental, etc.

This is the new Proudhonism.[37] The old Proudhonism on a new basis and in a new form.

Petty-bourgeois reformism: in favour of a cleanish, sleek, moderate and genteel capitalism.

N.B. N.B. || || On the concept of imperialism + the artificial halting of progress (buying up of patents by the trusts: e.g., in this notebook the example of the German bottle manufacturers[38] ).

Approximately: N.B.


(1) banking capital

(2) monopolies (trusts, etc.) {{ (3) division of the world. [Colonies] (4) alliance (connection, merging) of banking (finance) capital with the state machine (5) highest degree of concentration


E. Agahd—St. Petersburg. Big Banks and the World Market.

“The economic and political significance of the big banks in the world market from the standpoint of their influence on Russia’s national economy and German-Russian relations.” Berlin, 1914. Preface dated: May 1914.

[[BOX: Reviewed by Spectator (author is often naïve and “exaggerates the importance of the big banks”, etc.) in Die Neue Zeit, 1915, 1 (33rd publication year), p. 61 et seq. ]]

{{ The author spent fifteen years in Russia as inspector of the Russo-Chinese Bank. There is much of the off end ed vanity of the unrecognised financial expert, much chatter (a host of phrases against “dilettantes” and “amateurs”, etc.). }}

[DITTO: {{ ] One can and should take Agahd’s figures and facts, but not his arguments in favour of the British banking system (separation of deposit banks providing short-term commercial and industrial credits from speculative banks), nor his arguments against protectionism, etc., etc. The author wants an “honest”, moderate and genteel capitalism, without monopolies, without speculation, without promotion of bubble companies, without “links” between the banks and the government, etc., etc. [DITTO: }} ]

{{ α) Société Générale, etc.

Β) Banque de Paris et des Pays Bas (popularly called “Paribas”)

γ) Banque de l’Union parisienne....

“The Paris banking trio, with assets of several thousand million francs, and with Russia as its chief market, controls the following Russian banks: (1) the Russo-Asiatic Bank, (2) the St. Petersburg Private Bank, (3) the Union Bank, and has introduced on the Paris stock exchange the shares of some industrial concerns that are closely connected with these banks” (55)....[39]

N.B. || “In 1905–06, large sums of Russian capital were transferred to European, especially Berlin, banks; but great as was the panic effect of the brief rule of the masses in revolt against private ownership, the latter rapidly recovered its calm and reaction was back in the saddle with renewed strength.

“In 1907–08 we already see Russian capital flowing back, bringing with it new international capital” (59).

Xp. 59,
Deposits{{x Siberian Commercial; Russian;

International; Discount; Azov-

Don; Private; “Petropari”??

(=St. Petersburg-Paris?); Vol-

ga-Kama; Northern and State.


in ten Russian



“The above-mentioned figures, it should be noted, illustrate only a difference of 261 million rubles in || St. Petersburg bank deposits during the two years when business was completely stagnant.” (Agahd’s italics.)

“If one adds the Moscow and provincial banks, and further the Crédit Lyonnais and private bankers, and undeposited money, the figure could well be doubled, and it would not be too high to estimate that about || 500 million rubles ofpanic-struck capital’ [Agahd’s italics] flowed abroad and back into the Russian banks in the form of cash”... (59).

“However, the total amount of ‘panic-struck capital’ must have been much larger.

“The current rate of Russian 4 per cent Consols was quoted as follows:


and, according to data of the Credit Office, dividend payments changed as follows:

Million rubles
abroadin Russia

“These figures, of course, do not allow of an absolutely certain conclusion because current security prices varied considerably and ruble encashment in Russia could often have been advantageous.

“Nevertheless, it can be assumed that a considerable part of the cash sent abroad returned in the form of Russian annuities. ||| N.B. Even if one puts this at only 500 million rubles, the amount of ‘panic-struck capital’ rises to about a thousand million rubles” (60).

| N.B. ...“The danger of a fall in the value of the ruble, and a financial crisis, which was developing at the close of 1905, were averted when the Russian syndicate in Paris, with the participation of the British money market, took up the 5 per cent loan in the spring of 1906.

“The government treasury thus received almost one thousand million rubles in cash. In the following quiet years of 1907–08 | the banks and the state treasury were in a very favourable position, that is to say, cash was freely available, the force of facts had powerfully stimulated thinking, and something sensible could be created on a realistic basis,—if desired.

N.B. “as well” N.B. ||| “These two years had a beneficial effect on trade and industry as well, and led to improvement and reconstruction. Private industry, i.e., industry not dependent on government orders (oil, sugar, textiles, paper, timber), remained thoroughly | healthy, and it was only the labour question that assumed quite a different, i.e., a political, character” (61)....

“The years of change, 1905–08, caused many Russian capitalists to deposit their liquid money in German banks”... (see above).

“Things went so far that one of the most conservative (and most independent) Russian banks sic!! || bought Prussian Consols as a reserve against unforeseen developments.

“At that time (1906) the Russian banks were not particularly rich in cash.—The intense peasant movement had caused much damage in the villages; the workers N.B. || in the towns, however, had left trade and industry comparatively unharmed. The fact is well known that, in spite of the numerous strikes, there were only a few acts of sabotage against private property and warehouses belonging to trade and industry (the sabotage in Baku should be attributed to Armenians and Tatars) (apart from the gross disorders on the railways, which, however, should not be ascribed to the free workers).”

N.B. The author, of course, is an arch-bourgeois and nationalist in his political sympathies!

“In fact, the number of bills protested at that time rose only slightly, which caused the more surprise in financial circles of the continent, the less the contemporary (peasant) movement was understood” (66).

Bills of Russian banks protested, according to balance-sheets of November 1, 1905 and following years (p. 66):

Million rubles
N.B. ||State Bank{{ Bills

discounted, of which protested

8 St. Petersburg


{{ Bills

discounted, of which protested


“Berlin financial circles particularly weakened their relations with Russian private industry in 1905–06, that is, precisely when there was a large flow of cash from all parts of Russia. Until then the Lodz weaving and spinning mills (mostly German-owned) had depended mainly on the Berlin financial market and had always been good clients; nevertheless the Berlin banks deprived these firms of considerable credits, forcing many of them not only substantially to reduce production, but even send a consortium of very wealthy Lodz textile industrialists to the Caucasus to take part in mining enterprises || !! there and seek contacts with the London and even the New York market. Contacts were not established chiefly due to the pogroms which took place at that time” (67)....

...“It should be borne in mind, that Russia’s losses in the Japanese war, including Port Arthur, Dalny and the southern part of the Chinese-Eastern rail way, amounted to approximately 4,500 million rubles, || N.B. i.e., half of the national debt, on which, consequently, the Russian peasants have to pay interest and amortisation, without receiving any of the capital” (72).

From Chapter V: “Participation of the German big banks in the St. Petersburg banks, etc.” || N.B.

How does the Deutsche Bank place shares of the Siberian Commercial Bank in Berlin?

...“The Deutsche Bank keeps new foreign shares N.B. !!! || in its portfolio for a year and then sells them on the Berlin Stock Exchange with a 50 per cent middleman’s profit. The public pays at the rate of 193 for 100”... (74)[40]

“so that a ‘German’ big bank comfortably and rapidly makes a profit (on the market price)”... (74).

...“Since, however, the Deutsche Bank has placed the shares among the Berlin public at 195 per cent, N.B. | and subsequently still dearer (at present the market price is 230 with a 15 per cent dividend—the rate of interest is therefore 6 1/2 per cent), the primary concern of the bank’s board in St. Petersburg must be to ensure that dividends remain at the same level. This is a categorical demand of the foreign bank. It is the only demand it makes.—How it is done is a matter of complete indifference to it, and the result is wild speculation on the Stock Exchange and speculative share-promoting into which the St. Petersburg banks are directly forced by the ‘holdings system’” (77).

“Statistically, from the German standpoint, the operation appears as follows:

“Increase of capital since 1906–07:

16,000,000 rubles—nominal share capital at the average market price of about 200 (when put on the Berlin Stock Exchange)

10,000,000—from issues on reserve account

26,000,000—in all

32,000,000—actual capital at 200

6,000,000 rubles—difference—middleman’s profit in favour of the Deutsche Bank and its clients” (78)....[41]

6 million rubles |||

! || ...“The Deutsche Bank thus offered the German public about 32,000,000 rubles of shares with the sole aim that it, the Deutsche Bank, should pocket the Judas reward of several millions in market price difference” (78).

At a general meeting of Siberian Commercial Bank shareholders on March 23, 1913, a small group of shareholders headed by a barrister, Bibikov, protested against the decisions of this general meeting. (Birzheviye Vedomosti No. 14017, February 21, 1914; S. Peterburgskaya Gazeta No. 51, February 22, 1914; S. Peterburgskaya Gazeta No. 54, February 23, 1914.) The protesters proved ... “that the bank’s director-general || !! (a certain Soloveichik, connected by family ties with one of the Deutsche Bank directors) had put to his own private account seven million rubles of government subsidies and had used the money to buy shares of his own bank and thus acquire the majority of votes needed for his re-election” (79)... “If it is borne in mind that German capital operates here, and that such business methods are encouraged by the famous Deutsche Bank, increased importance attaches to the conclusion which I am endeavouring to prove in this book, viz., that the ‘holdings system’ prevents even a serious Russian side from ensuring a sound and orderly management of the credit institutions that are so important to Russia. The Deutsche Bank is, of course, || !! in a position to procure for itself a majority of votes, but the Russian shareholders, who also participate in the bank, will never be able to secure a majority sufficient to put into practice their just wishes and reasonable views” (80).

...“Since 1906 there has been still further and greater German participation in the Russian Bank for Foreign Trade, known as the Russian Bank, and the St. Petersburg International Commercial Bank, known as the International; ||| the former belongs to the Deutsche Bank concern, the latter to the Discontogesellschaft in Berlin. | | | N.B. Both these Russian banks employ three—fourths German money (share capital).[42] The Russian Bank and the International are the two most important Russian banks. Both are strongly speculative”... (82).


Increase of Capital, million rubles (p. 84)
Russian Bank2050(+30)315(+12)
ΣΣ = 78+32 (Siberian Bank) =110

These banks have “obtained since 1906 a total share capital of 110 million rubles, whereby a middle man’s profit of several million rubles passed into the exchequer of the promoters” (84).... || N.B.

p. 97... “for that (The Times Russian Supplement) at any rate subsidies are paid from the Russian Ministry of Finance”.... || N.B.

Chapter 8: “Total Amount of St. Petersburg Banks Operating with Foreign Participation and Some Comments on the Figures.”

000 million rubles

“At that time (1911) the Russian Credit Office [N.B.: in other passages: its director Davydov] gave the Russian banks, for stock-exchange operations in Paris and Peters burg, first 120 million francs and later a further loan, altogether about 100 million rubles, to subsidise the wild banking speculations which had reached a deadlock (the official designation was: for stabilising the market price of Russian state securities)”... (86).

p. 121: 1912 the Russian commercial banks altogether had 548 branches....

[6] )

p. 116. I shortened the table

(October–November 1913


invest- ments (assets)

[BOX:] [[ Marked in pencil are my columns and my totals ↓ ]]Million rublesLiabilities


St. Petersburg deposit banks

α) Under theholdings system


tive (trade and in- dustry)


tive (Stock Exchange and finances)





Debts at

other banks and re-



|| 1) German holdings(4 banks: Siberian Commercial, Russian, International and Discount Bank) 413.7859.11,272.8207.1658.8429.048.6
|| 2) British holdings(2 banks: Russian Commercial and In dustrial; Russo-British) 239.3169.1408.455.2204.8111.516.2
|| 3) French holdings(5 banks: Russo-Asiatic, St. Petersburg Private; Azov-Don; Union-Moscow; Russo-French Commercial) 711.8661.21,373.0234.9736.4308.029.5
b) Independent Russian banks (St. Petersburg and Moscow)

(8 banks: Moscow Merchants, Volga-Kama, Junker and Co., St. Petersburg Commercial (formerly Wawelberg), Bank of Moscow (formerly Ryabushinsky), Moscow Discount, Moscow Commercial, Moscow Private)

Total . . . . .1,869.02,080.53,949.5666.22,199.6975.594.3
}} 3,949.5}} 3,935.6

The growth of “mutual credit societies” (p. 122)

(according to Credit Office figures)
million rubles
NumberMembersCapitalTotal assetsDepositsAccounts

N.B. N.B. | (136 and others.) Russian Ministers of Finance appoint bank directors (often from government officials), give the banks millions in subsidies through the “Credit Office”, etc.

well put! || “This gives the key to the activity of those St. Petersburg banks—‘Russian’ in their external appearance, ‘foreign’ in the sources of their funds, ‘dilettante’ in their conduct of business, and ‘ministerial’ in the risks they take—which have grown into parasites of Russian economic life.—And this precedent [reference is to the Siberian Bank, etc.] has now become a principle of organisation for the St. Petersburg banks. The Berlin and Paris directors of the big banks believe that the following their interests

“1) the direct Credit Office subsidies to St. Petersburg banks, !! N.B. || “2) the credit balance of the Russian Finance Ministry (of which about 60 per cent is in Paris and 40 per cent in Berlin)” (137)....

“The Finance Ministry authorised the Russo-Chinese Bank [in which the author served!!] to issue a series of state-d securities to provide it with the necessary cash resources, without being concerned as to how these were used. Thus, for example, it handed over to the bank the issue of state-d railway || shares in European Russia, and the income went directly into the bank’s coffers. The railways would need the money gradually, in the course of 4–5 years (during their construction), and in the meantime the bank could freely N.B. !! || dispose of the money and, in addition, earn profit from the issue of the shares. This became an established procedure, for it was repeated several times each year” (149).

(The shares of four railways total £ 12,800,000 = about 120 million rubles.)

“The director (who is also the president) of the bank is a board member of a number ||| 20 companies!! of big railway and industrial companies (at present about 20), which likewise have to keep their free cash on current account in the bank, knowing that the Finance Ministry is greatly interested in the bank and ||| N.B.!! supports it” (149).

[[BOX ENDS: That is how “business” is done.... ]]

This in Chapter 11: “The Merger of the Russo-Chinese Bank with the Northern Bank (Russo-Asiatic Bank) and the Protest against This at the 1910 General Meeting” (p. 147):

(the protest was moved by the author himself)

“Most of those present at the general meeting of the Russo-Chinese Bank, which was intended to || N.B. !! confirm the merger, were State Bank and Credit Office officials holding proxy votes”... (153).

The author registered a “dissenting opinion“, entered in the minutes of the meeting of March 30, 1910 (p. 154).

“The holdings system is nonsense”—the author argued in his protest... (p. 154).

A “merger” was carried out by the French banks (Banque de Paris et des Pays Bas + Société Générale) which were “interested” in the Russo-Chinese Bank, saw its affairs were in a bad state, wanted to “extricate” themselves and hoped

“by the merger [of the two banks into one—the Russo-Asiatic], to create such a big ‘Russian’ || N.B. !! institution that the Russian government would be compelled to ‘uphold’ the merged bank under all circumstances” (p. 151).

“When the merger took place, the share capital was reduced by 33 per cent and these sums were put !! || to reserve account. This gave the bank the appearance of having created this reserve capital as a result of good business management, while at the same time enabling the new administration in the future to distribute the entire profit () on a diminished capital at a higher rate of interest, because the reserve capital had, at one stroke, N.B. ||| reached the legal maximum and no interest had to be paid on it. The shareholders were helpless even against this manipulation, for they were in France, while the general meetings took place in St. Petersburg”... (152).

...“When the Russo-Asiatic Bank states that its || share capital is 45 million rubles and reserve capital 23.3 million rubles, every unprejudiced person will assume that the reserve has been derived from earned money, i.e., is the result of good business management. In reality, however, it comes out !! || of share capital, and is the result of bad business management. Neither bank had reserves prior to the merger” (153)....

And, in fact, this bank, with 120 branches (), has too little capital (a balance-sheet of 785 !! ||| million rubles with a capital of 73 1/2 million + reserves—October 1, 1913)—“the risk of this overloading has to be borne by the Credit Office” (153).

...“Furthermore, it is quite clear that under the ‘holdings system’, which prevents the share-owners from passing judgement on the management of the company, because between them and the || company stand the all—powerful big (foreign) banks, N.B. || which can use more or less ‘masked combinations’ to rob both sides, directors are appointed arbitrarily and according to private interests, so that, ha-ha! || in the end, any dilettante can become a bank director” (156–57).

The board of the Russo-Asiatic Bank consists of “a former Russian bureaucrat (as Director-General sic!! and President of the bank), a former Russian Governor, a former French diplomat, and a former French lawyer” (158).

All this criticism is stated to have been written in the autumn of 1913 and to have “become obsolete” owing to the Imperial rescript of January 30, 1914. [wavy |] [wavy |] ?

[[BOX: diplomacy? ]]

The union of deposit and speculative banks is harmful because it

(1) “ties up” the country’s productive means

(2) leads to a rise in prices, syndicates, etc.

“If clarity and order were established in banking conditions, I should indeed | ha-ha! that what it comes to!! like to see whether there could be trusts, monopolies and syndicates” (179)....

“Let it be legally laid down that firms concluding agreements which militate against the consumer by eliminating competition (by dishonest competition) will not | ha-ha!! simple!! be granted official bank credits and, therefore, will not be allowed to issue securities, and then monopolies and syndicates might very soon be dissolved” (180).

Subsidies of the Credit Office || !! (pp. 202 and 204) to the St. Petersburg banks amount to 800–1,000 million rubles[43] .

The Credit Office... “is the keyboard controlling all credit activity in the Empire”. “It is a bureaucratic apparatus without a statute and without public control” (200).

...“In 1910 it was ... reformed and since then its task has been to ‘co-ordinate’ the activities of all the credit institutions of the country,[44] and ‘it is the connecting link between these and the Stock Exchanges’”.... The St. Petersburg banks report to it every eight to fourteen days, and in more detail every three months (201).

Four “modes” of these subsidies[45] :



(1)Direct cash payments (to the banks) from assistance funds, up to . . .150
(2)Assets in foreign banks (as concealed cover)450
(3)“Assignment of state-d stock issues”150
(4)“Discounting of financial bills (accommodation bills) with or without the endorsement of a foreign bank” . . .about 50

“Deposits—1,648 million rubles, plus 800 in subsidies—amount to 2,448 million against 5,000 million, N.B. |||| the total amount of free working cash in the country, according to data of Mr. Davydov (Credit Office), i.e., ...half the free working cash in the Russian Empire is tied up in international speculative banks, by the system of holdings. Years may elapse before this money is gathered in again (and put back in circulation)”... (204).

Chapter 15 (p. 210): “Relative Strength of the N.B. || International Bank Trusts in the Russian Market”....

“Balance-sheet showing strength of the St. Petersburg banks (system of holdings)” (p. 211).

Million rubles
Control of Trade and TransportWorking Capital of the Banks
a)Industrial credits . .1,350a)Own funds . . . . .497
b)Shipping and private railways . . . . . .1,509b)Deposits (Russia) . .1,600
c)Control of Russian private holdings . .1,689c)Credits . . . . . . .942
Control of Production and IndustrySecurity Issues, 1908–12

(exclusive of government issues)

a)Syndicates incoal (Produgol)a)In Russia . . . . . .3,687
b)” ”iron (Prodamet)b)Abroad . . . . . . . .1,509
c)” ”oil (General Oil, etc.)5,196
d)” ”metallurgy (various)8,235
e)” ”cement, building (various)3,687

{Table in full on pp. 211–12.} “The strength relation of the three foreign groups of banks is:

{{(1)French bank trio plus 5 St. Petersburg banks55 per cent||N.B. (p. 212)
(2)German-Berlin “D” banks plus 4 St. Petersburg banks35 per cent
(3)British-London syndicates plus 2 St. Petersburg banks10 per cent”[46]

...“On the other hand, the division of material liabilities (all in nominal values) is:

a) Abroad(Million


Security issues . . . . . . . . . .1,509
Bank demands (excluding counterdemands of the Credit Office) . . .about 300
Holdings in bank shares . . . . . . . . . .295
Other share holdings . . . . . . . . . .500
2,604 ||
b) Russia
Security issues, deposits and miscellaneous . .4,831
Credit Office (without last railway loan) . . .800

“The clear meaning of these statistics of proportions is that the one-third minority of capital-exporting countries dominates the two-thirds majority of Russia as a capital-importing country (p. 213), and, moreover, in such forms (subsidies, syndicates, cartels, etc.) that this minority can protect neither its own interests nor those of others. In consequence of this, last but not least,[47] the private interests of a few boards of big banks dominate, not officially but secretly, and in such a way that all concerned suffer.”

{{ In this the author sees the cause of the rise of prices, even giving (p. 213) an approximate percentage rise of prices in 1908–13, but this cannot be taken seriously, it is not a proof, simply an unnecessary illustration.... }}

On p. 214 he gives the following official statistics from the Torgovo-Promyshlennaya Gazeta:



N.B.||Total amount of share capital (beginning of 1914) . . . . . . . . . . . .3,600
Plus industrial (stock) . . . . . . . . .400
” railway shares . . . . . . . . . . . .140
Plus state loans and d railway stock in Russian bands6,072
” private mortgages2,956

| The St. Petersburg banks, he says, are “artificially [?] created international money trusts” (215). |

...“the programme of a modern big bank director is quite clear and obvious; it reads: || “if” is amusing (“a Narodnik”!)

[DITTO: || ] “If we, the big banks, succeed in ruling over producers and consumers (through stock issues, credit and customs duties), then the profits will flow into our pockets and we become masters of the situation” (Agahd’s italics) (218).

[[TRIPLE BOX ENDS: Agahd “forgot” a trifle: capitalism and the capitalist class!! ]]]

||| “even” to war The consequence of this, he says, may be “excessive raising of customs duties” and because of that “open hostility in the world market, which could even lead to war, what may also suit the big bank monopolists, || one of the motives for war because with the force majeure of war they can purge their balance-sheets without being held personally responsible for the losses” (220)....

On p. 234 the author quotes S. Prokopovich (on the conditions of Russia’s industrial development)—

Capital of Russian origin

447.2 mill. rubles = 21.1%

Capital of foreign origin

762.4 mill. rubles = 35.9%

Capital “from sale of stock”

915.6 mill. rubles = 43.1%

[[BOX: Σ is 100.1% ]

| Here, says Agahd “the bank question, with which the author (Prokopovich) is not familiar”, plays the biggest role.

On the question of Russia’s balance of trade, the author writes that the excess of the credit over the debit side was

1909—570mill, rubles (p. 238)
600—minus coupon payments abroad of 200 million rubles per annum
771—“total excess in 3 years”.

“Concerning this sum, therefore, it can be said that it has in part (I put it at 500 million rubles) more than normally enriched the country in cash resources thanks to especially good harvests. But this figure proves, plainly and obviously, that the apparently gigantic upswing in Russia was by no means due only to favourable harvests.

“To this must be added the import of capital under d and private stock issues of about 1,509 million rubles, of which, however, only a negligible amount was put on the market in the form of cash (most of it went into special undertakings).

||' “The director of the Credit Office (Davydov) gives the following estimate of the growth of the country’s free working capital (by which he means private deposits in all the banks, savings-banks deposits (an increase of 576 million in cash and securities), current accounts of government agencies in the State Bank, excluding, however, current accounts of the Credit Office with foreign bankers and the debts of Russian banks abroad): N.B. ||'

1906—2,592 million rubles

1912—5,000 million rubles” (p. 238).

The growth, he says = about 2,500 million rubles, and import of capital about 1,600 + 771 (inflow due to good harvests) = 2,371 million rubles (p. 239)—“they approximately balance”....

“The Russian Finance Ministry utilises here” (in reference to Russia’s excessive gold reserve) “its cash just as unscientifically, just as unsoundly from the economic stand point, just as anti-nationally as most of the '|' is it not the reverse? “the influence” of the Parisian and Berlin banks compels?? continental big banks in Berlin and Paris use their deposits. Russian government money serves to ensure the influence of some Berlin and big banks over the St. Petersburg ||| banks (and their Russian deposits), while Parisian the country’s productive economic life is weakened precisely where it ought to be strengthened” (247).

||| N.B. The national income (the “national budget agricultural production, i.e., the grain harvest and all other products”) in Russia (1913) was only 9,000 million rubles (249).

[[LEFT BOOK END:]] ...“Raising productivity and popular consumption is still the most profitable business” (265) (author’s italics). ||| “Narodnik”

This is how the author criticises Witte’s financial policy: =

“Then, too, they [Witte] went in for speculation and combinations and shifted the risk on to the Treasury, instead of properly organising things” (275)....

[[BOX: Speculation versus organisation!! Narodnik!! idem 281–82 and many more. ]]

||| who is blaming whom? Author reproached Russian Finance Ministry: “No bounds were set for international speculation, nor was proper status allowed || “honest broker” loyally co-operating foreigners in recognition of their achievements” (276)....

| ... “good” banks ... ...“However, I again stress the difference between the speculating St. Petersburg banks (fiscal operations) and the productively employed Russian banks (national economy). One cannot but recommend the Volga-Kama Bank, the Moscow Merchants Bank, the Knoop and Wogau banks as models in directing banking business along lines that rule out speculation in deposit banks”... (280).

ha-ha! || “I have already expressed my regret that Russia is being involved in the ‘money market of the civilised world’” (283).

“Every country passing over to a money economy must reckon with the power of the Jewish international organisation,” but (he intimates) the Jews are useful when they are subjected to the interests of the whole, as !! in Germany, where their talents are kept within the bounds of “reason and ethics” (284).

well said! ||| ...“One can say: Under present circumstances the dividends of many big banks are paid out as if they were illegal payment for silence”... (286).

That “my” (Agahd’s) “programme” should be “un-national”?? God forbid!! I am not a cosmopolitan, I am a nationalist (pp. 287 and 288), I am for the independence of every nation, for good banking, for successful “deals”.

||| gem (a nationalist) ...“If such a programme is not ‘national’, then please explain to me what is really meant by ‘national’. Or will I be told that the founding and efficient management of lastingly profitable businesses does not come under this concept?” (288).

Author’s italics:

|| for “peace” and a (“United States of Europe”) “Reform of the continental big-banking business is therefore in general the first condition for an economic-political agreement in Europe, and this is wholly in accord with the interests of the nations” (290)

and the last phrases in the book:

“And my final propositions read as follows: ||| threat of “world war” If the European (continental) Great Powers continue unswervingly their hither to ‘well-tried system’, a world war will compel them to alter it. Freedom of the money market and freedom of the world market—through war or prudence. Let them choose and bear, in mind that Europe’s ruling classes carry the entire responsibility.”



Professor Dr. Karl Ballod, Fundamentals of Statistics, Berlin, 1913. ||__ Ballod

A very good summary, apparently, of statistical data, the author being, above all, interested in statistics of production (quantity of products)—cf. Atlanticus!!—

[[BOX ENDS: Ballod believes that in Germany there are two iron slaves (machines) for each worker ]]

§ “Technical Productive Power


Cermany (1907)

8.8 mill. h.p. in industry

(7.3+0.9+1.5)||(steam) machinery
America (U.S.A.)

16.0 mill. h.p. in industry

Britain (*) (1907)

10.7 mill. h.p. in industry

Total + locomotives 13 mill. h.p.(1895)

__ __ __ Britain | (*) Figures for Britain from Die Bank, 1913, p. 190—Board of Trade data. Results of the “census of production” for industry (all). Gross sale value = £ 1,765 million; cost of raw materials = £ 1.028 million; further processing = £ 25 million. Net value [1 — — (2 + 3)] = £ 712 million. Number of workers = 6,985,000. Machinery = 10,755,000 h.p. [+in agriculture, value = £ 196 million; workers, 2.8 million]. Total capital (in industry) = £ 1,500 million. __ __ __ Amount of Water-Power

Million h.p.
Switzerland1 1/2–3
Sweden + Norway8 (about 28 million)
Finland4–6 (p. 255)
Niagara4–5 (only one-tenth used)
Congo waterfalls (Africa)28
South America (??)1–2


Dr. Walter Otto, Loan Acceptance, Company Formation and Holdings Business of Big German Overseas Banks, Berlin, 1911.

(Lists each enterprise and gives tables of the “holdings” of the big banks, Part I according to continents and countries, Part II according to banks. Raw material.)

Percentages of the holdings of British and French, and North American groups are shown for individual enterprises, but there are no summaries.

Table on p. 245: “Total functioning capital of German overseas banks” (10 banks) (I abbreviate from the annual figures):



Georges Diouritch, The Expansion of German Banks Abroad, Its Connections with Germany’s Economic Development, Paris (and Berlin), 1909 (798 pp.).

A gigantic volume with heaps of data; part is already in Riesser; I select some additional data:

p. 37: According to figures of Der Deutsche Oekonomist (1906, p. 452), German banks have a capital of 11,394 million (their own and borrowed money).

Of which3,335controlled byDeutsche Bank group17 banks
2,145” ”Dresdner Bank + Schaaffhausenscher Bankverein13 ”
1,843” ”Discontogesellschaft8 ”
908” ”Darmstädter Bank6 ”
Σ 8,2314 groups44 ”
+4 less powerful groups

ΣΣ =9,566=in all about 80% {{ Commerz- und Disconto-Bank

Mitteldeutsche Kredit-Bank

National-Bank für Deutschland

Berliner Handelsgesellschaft

p. 84... French capital invested abroad:

{{ According to the

Journal officiel,

September 25, 1902 }}
Europe . . . . .21,012 million marks

(sic! misprint?). It is

now said to be about 40,000 million

Asia . . . . .1,121
Africa . . . . . .3,693
America . . . .3,972
Australia and Oceania . . .57

pp. 126–27: “Big German bank connections with industrial companies through participation in their supervisory boards” (table compiled by Hans Arends and Kurt Wossner from data in the Directory of Company Directors and Members of Supervisory Boards, Berlin, 1903): the author gives figures by industries; I take only the totals:

Methods of participationDeutsche BankDis-

conto- gesell- schaft


städter Bank

Dresdner BankSchaaff-

hausen- scher Bank- verein


liner Hand- els- gesell-

Through administrators . . .1013151536840
Through members of its own supervisory board . . . . .1206150806234
By one or the other of above methods . . . . . . . . . .2219210113313074
Through chairmanship of the board, or through more than two members . . . . . . . . . . .984336414633

p. 213. Participation of the chief countries in maritime telegraph cables of the world:

Britain . . . . . . . . . . . . .68.33%60.2
U.S.A. . . . . . . . . . . . . .11.1018.2
France . . . . . . . . . . . . .10.109.0
Germany . . . . . . . . . . . . .1.884.5
Russia . . . . . . . . . . . . .4.323.8
Japan . . . . . . . . . . . . . .0.900.8

p. 239... Electrical firms abroad (from Fasolt, The Seven Big Electrical Companies, Their Development... Dresden, 1904); I take only figures on Russia and totals (million marks):

Siemens and Halske . . . . . . . . .33.10104.39
A.E.G. . . . . . . . . . . . . . .2.8852.04
Schuckert . . . . . . . . . . . . . .1.6025.66
Union Elektrizitätsgesellschaft . . .2.8817.53
Hellos . . . . . . . . . . . . . . .21.6027.70
Lohmeyer . . . . . . . . . . . . . . .5.12
Kummer . . . . . . . . . . . . . . . .0.69

pp. 245 and 246. Oil output in Rumania

in 1886 . . . . . . . . . . . 53,000 tons

” 1907 . . . . . . . . . . . 900,000 ”

Foreign capital in this industry[49] :

{ Not a bad example }{{German . . . . .74 million francs
French . . . . .31
Dutch . . . . .22
Rumanian . . . .16
Italian . . . .15
American . . . .12.5/ \ / \ (54)

[Internet note: four lines point to 31, 16, 5 and 3 = 55]

Belgian . . . .5
British . . . .3
Other countries6.5

p. 283 et seq.

British colonial banks:
32 banks . . . 2,136 branches . . .£50,300,000 (share capital)

x25= 1,257,500,000 francs

French colonial banks:
20 banks 136 branches[50] . . . . .326,800,000 francs
Netherlands colonial banks:
16 banks 67 branches . . . . . .98 million florins

x2(??) = 196 million francs

((a mass of purely monographic data on each big bank and on some German overseas banks))

A few examples:||{{p. 743: Deutsch-


Bank, founded

January 5,1905


(=2 million

(p. 631) Deutsch-Asiatische Bank (in

Shanghai) (founded February 12,

Distribution of 5,000 shares (of 1,000

thalers each)

1.Board of Discontogesellschaft . . . . . .805 shares———250
” ” Seehandlung Bank . . . . . .175
Deutsche Bank . . . . . . . . . .555———250
Bleichröder . . . . . . . . . .555———100
5.Berliner Handelsgesellschaft . . . . .470
Bank für Handel und Industrie . . . . . . . . . .310
Robert Warschauer & Co . . . . . . . . . .310———100
Mendelsohn & Co . . . . . . . . . .310———100
10.Jacob Stern (Frankfurt-am-Main) . . . . .470
M. A. v. Rothschild (” ” ”) . . . . . .310
11.Norddeutsche Bank (Hamburg) . . . . . .380
12.Sal. Oppenheim & Co. (Cologne) . . . .175———100
13.Bayrische Hypotheken und Wechselbank (Munich)175
Deutsch-Ostafrikanische Gesellschaft . . . . . . . . . .2,800
Delbrück Lev . . . . . . . . . .100
Hansing & Co. . . . . . . . . . .100
Van der Heydt . . . . . . . . . .100
Discontogesellschaft . .800Bleichröder . . . . . . . . . .555
Deutsche Bank . . . . .555Mendelsohn . . . . . . . . . .310
Berliner Handelsgesellschaft . . . . . . . .470J. Stern . . . . . . . . . .470
Darmstädter Bank . . . .310Rothschild . . . . . . . . . .310


Dr. Eugen Kaufmann, French Banks, Tübingen, 1911 (Supplement I to Archiv far Sozialwissenschaft und Sozialpolitik).[51]

p. 362 (I abbreviate):

Development of the French network of branches since 1870 (3 big banks: Crédit Lyonnais; Comptoir National, and Société Générale)

p. 356

The same

three banks
p. 37 French

savings banks




of- fices in Paris

ΣOwn working

capital shown on balance- sheet


ed money


deposits (mill. francs)


of de- positors (mill.)

187047+17=64—(1872)200mill. fr.+427
19091,033+196=1,229—8874,363—4,773 (1906)12.5

!! The French Ministry of Finance has estimated (on the basis of inheritance taxes) the national wealth at 200,000 million francs (1903–05)—which is below the actual figure.

of which55(27%)belongs to18,000 persons (p. 37)
75(37%)” ”45,000

|| p. 85: Excursus: “French Ownership of Securities” ||| N.B.

000 million francsPer annum
Théry’s calculation (1907)61.4 French1,300 million (p. 87)
N.B. ||||38.5 foreign1—or rather (he says)

1,500 million francs


About 100,000 million francs Théry (1907) estimates ownership of securities throughout the world to be 730,000 million francs.

including115–130(Great Britain))) (*)
100–100(France){{ these are Ney-marck’s figures }}

(*) p. 287, a note (E. Kaufmann):... N.B. | “Thus the Deutsche Bank, which, according to the balance-sheet, has holdings of 72 million marks, dominates a group of joint-stock banks which together have about 500 million of capital and 1,300 million of borrowed money” (cf. Lansburgh, “The Holdings System in German National Banking”, Die Bank, 1910, June, p. 504)

Théry’s estimate
{{Russian (securities)—10.9 thousand million francs
British (including colonies)—1.30
Belgian( ” ” )—1.25
Balkan states (except Turkey)—1.050


C. Hegemann, The Development of French Big Banks, Münster in Westphalia, 1908.

From his Table II (No. of sections—branches and deposit offices—of the same three big French banks) (p. 47).



2 banks with2,001-5,000 employees;14—101-200;1,635—1–4
2 —1,001–2,00025— 51–100110 ?
1 —501–1,000148— 21–50__
3 —201–500261— 11–20Σ=2,945
744— 5–10


Otto Hulftegger, The Bank of England, Zurich, 1915. (Thesis.)

p. 400: Deposit increases in the Bank of England (exclusive of government money) and some big private banks:

Deposits (£ million)


Bank of England . . . . . .32.9936.9652.9560%
Lloyds Bank Ltd. . . . . . .19.2851.0289.39364%
London City and Midland Bank37.8483.66
London Joint-Stock Bank . .11.6217.1633.83191%
National Provincial Bank of England . . . . . . . . . .39.5951.0865.6666%
Parr’s Bank . . . . . . . . .6.2124.2241.68571%
London County and Westminster Bank . . . . . . .81.69


E. Jaffé, British Banks, (Schmoller’s Forschungen) No. 109).

Total deposits in all banks


No. of


(pp. 234–35)

No. of inhabitants per branch

1858 . . . . . . . . . .2,008
1872 . . . . . . . . . .2,92410,767
1880 500–510 . . . . . .3,554 (1878)
1881 . . . . . . . . . .9,461
1890 660–670 . . . . . .
1891 . . . . . . . . . .7,249
1900 840–850 . . . . . .6,512
1901 . . . . . . . . . .6,238
1903 840–850 . . . . . .7,046
1909: 915 . . . . . . . .

[BOX:] [1909 ONLY:] [[ from Dictionary of Statistics[BOX INSIDE BOX:]

[[ Webb, A Complement to Mulhall, 1911. August Webb. ]]

In the U.S.A. in 1907 there were 23,900 banks,

1 per 3,600 inhabitants ]]
7,861 (1908)5,280


Bernhard Mehrens, The Origin and Development of the Big French Credit Institutions, Berlin and Stuttgart, 1911. (Munich Economic Studies, Brentano and Lotz; No. 107.)

p. 311: French capital in securities (the same figures from Neymarck, as also in Kaufmann; see preceding page of this notebook).[52]

French capital in securities
000 millionfrancs
N.B. |1850—9||Annual accumulation of capital in France—about

1,500–2,000 million francs

according to Neymarck (pp. 311–12),—but

as much as 2,500–3,000 million

according to Leroy-Beaulieu (p. 312, note).
Total value of billsin France
{{ in 1908 the Banque de

France had 21.5 million bills valued at 12,300 million francs, p. 263 }}

1881—27.2 thousand mill. fr.
1890—25.2 (p. 211)
Capital Reserves

(million francs)

1892—250+69.5This is the capital and reserves of fourbanks: Crédit Lyonnais, Comptoir National,

Société Générale + Crédit

Industriel (p. 240).

in four banks


Paul Wallich, Concentration in German Banking, Berlin and Stuttgart, 1905 (Munich Economic Studies No. 74, (Brentano and Lotz)) (p. 173).

{{ judging from a cursory examination, nil after Riesser, a clear but minor study, much poorer than Riesser’s. }}


Dr. Walter Zollinger, Balance-Sheet of International Transfers of Securities, Jena, 1914. (Problems of World Economy No. 18, Leipzig, published by Harms.)

p. 106: Neymarck (Bulletin de l’institut international de statistique, t. XIX, livr. II, 1912) gives the following figures of issues (22 for five years)[53]

{{ cf. p. 17 in this notebook[54] }}

000 million francs
1871–75—45}76.1}1891–95—40.4}100.4}4–5% of 570,000 mil-

lion=22.8–28.25 mil-

lion fr.

p. 206 ]]

Ownership of Securities
(p. 223): {A. Neymarck}[55]
000 million francs
End of 1908End of 1910
Great Britain130–135N.B.||140–142}}my cal-






U.S.A. . . .115–120130–132{{Great Britain142}}
France . . .103–105106–110U.S.A. . . .132
Germany . .80–8590–95Germany95
Russia . . .25–2729–31|||369
Austria-Hungary . .21–2223–24=61%
Italy . . . . .10–1213–14
Japan . . .6–79–12
“Other countries” . .33–3835–40
Total . .523–551575–600

[[ Checked with Neymarck, p. 223 ]]

[4] :

My cal-


(*) The figures for these “other countries”,

for 1902 only (32,000 million)



12.5Holland . . . . . .10
7.5Belgium . . . . . .6
7.5Spain . . . . . . . .6
6.25Switzerland . . . .5<— [BOX:] [[ now 6, author believes ]]
3.75Denmark . . . . . .3
2.5Sweden, Norway,

Rumania, etc. . .

4032,000 million francs
[[BOX: This according to Zollinger ]]

__ __ __ (*) N.B. || W. Zollinger, “International Transfer of Securities and Investment of Capital Abroad, and Their Influence on Producers and Consumers”, in Zeitschrift für die gesamte Staatswissenschaft. 69th year, No. 3.

N.B. ||| Cf. Ferdinand Moos, “French Credit Institutions and French and English Capital Investments Abroad”. Jahrbuch für Nationaloekonomie und Statistik, third series, Vol. 39, 1910. __ __ __

Switzerland has about 2,600 million francs worth of “foreign securities” (p. 147),

while France has about 900 million francs in Switzerland—(1903) (148).

Swiss railway securities are held by



(Zollinger, p. 150)France420
__ __ __
Σ=500mill. fr.

[[BOX: In Switzerland, foreign workers in industry = 24.4 per cent of all workers (Σ = 625,299), including 85,866 = 13.7 per cent Italians. ]] (Zollinger, p. 108) Security issues in Germany (from Der Deutsche Oekonomist)

1886–904.4+2.3=6.7thousand million marks
1896–19008.2+2.4=10.6{{ same figures in Neymarck, p. 232 }}

Security issues in France (Zollinger, p. III)

FrenchForeign000 mil-

lion francs


“At the end of 1910, the world total of securities quoted and negotiable in the various financial markets was 815,000 million. Of this sum, 570,000–600,000 million are owned by nationals of various countries” (p. 223: Neymarck).

...“In fact, one must not confuse—as we always emphasise—the total value of securities quoted on one or several markets with the total owned by the capitalists of these countries. A security issue may be quoted and negotiated in several markets at the same time” (p. 203).

|| N.B. | The author deducts the approximate sum of these duplications, arriving at a total of 575,000–600,000 million instead of 815,000.[56]

p. 201 et seq. Bulletin. Alfred Neymarck, “International Statistics of Securities”.

Bulletin de l’institut international de statistique, p. 201. et seq.[57]

This article is Neymarck’s ninth study on this subject N.B. || (the other eight are in volumes IX; XI, 2; XII, 1; XIII, 3; XIV, 2; XV, 2; XVI, 1; XVII and XVIII, 2).

N.B. || They also contain several other of his articles on the same subject. See index in XIX, 3, for all 19 volumes ||

19 volumes (mostly with 2–3 numbers each)

Volume 1—1885

Volume 19—1911

In the present article, Neymarck also gives the following annual data on issues from 1871 to 1910:

39.1; 76.1—39.1=37.0÷7=5.3
/ | \
Foreign capital
N.B. ||Great Britain . . .85,000millionfrancs(1910) (p. 216)
France . . . . . . .40,000
Germany . . . . . .20,000–25,000
Foreign trade (imports and exports) of all countries

(000 million francs)

1867–6855,000millionfrancs}} Neumann-Spallart’s figures (p. 219)
1910132,000__ __ __}} Neymarck’s figure (p.218)
000 million francs
Great Britain25India (British)6
Austria-Hungary5.4South Africa (British)3
Switzerland2.8__ __
__ __
80.1+42.0 = 122, but author counted 132!!??, and only

for these countries!!!

The railways of the world (983,868 km. in 1909) are worth about 270,000 million francs (p. 223).

Europe195.2305.4325.2thousand km.

[[WAVY-|: cf. Kautsky on “ultra-imperialism”[58] ]] The concluding words are amusing. § IX is headed: “International Public and Private Wealth and World Peace” (p. 225)—...“Is it possible to believe that peace may be disturbed ... that in the face of these enormous figures anyone would risk starting a war?... Who would dare to incur such a responsibility?”...[59] “According to our previous statistics, the total of state funds and of securities, French and foreign, belonging to French capitalists could reach the following figures”:

000 million


of which


Years: end1850–9
N.B.||{Page 289}||1869–3310{{ cf. p. 67

of this

notebook[60] }}
1902–87 to 9025 to 27
1910–106 to 11038 to 40

Distribution of French capital invested abroad by countries (p. 290):

000 million


Russia10–11[61]Spain and Portugal3–4
Britain1/2U.S.A. and Canada2–3
Belgium and Holland1/2Egypt and Suez3–4
Germany1/2Argentina, Brazil and Mexico4–5
Turkey and Serbia2–2 1/2China and Japan1–2
Bulgaria, Rumania and Greece2–3Tunisia and French colonies2–3
Austria-Hungary2–2 1/2
Italy1–1 1/2
Switzerland1/2Σ (mine) = 34–43 1/2


Fred. W. Taylor, Shop Management (translation and additions by Wallichs). Second edition, Berlin, 1912.

Wallichs visited America in 1911. An example “from the Bethlehem steel plant” (p. 17):

Total cost of transporting 924,000 tons130,000280,000 marks
Cost per ton0.1390.304 ”
Earnings per worker7.804.80 ”
Tons transported per worker5716!!!

Another example (in marks) (p. 32)

Daily wage10.014.50
Machine costs14.014.00
Total daily costs24.0028.50
Costs÷5{ items per day }÷10
per item=4.80=2.85

sic!! || “It should be borne in mind that at first a certain resistance is to be expected, especially from the backward section of the workers, who will always try by persuasion to prevent piece-workers from reaching the highest productivity” (28).

“...the difficult period of transition from the slow pace of ordinary work to the high speed which is the leading characteristic of good management” (29)....

p. 9: “The main aim of systematic go-slow practices is to keep the shop management ignorant of the potential productivity of machines and workers.

“This go-slow technique is so universal that hardly a competent workman can be found in a large establishment with conventional wage systems who does not devote a consider able part of his time to studying just how slowly he can work and still convince his employer that he is going at a good pace” (9)....

!! || “Since 1883, the author has been introducing his method in the most diverse United States industries, and has never had to face strikes. He believes that, under his system, strikes are inevitable only if the majority of the workers belong to a union whose rules are so inflexible that members are allowed to work only on terms laid down by the union” (25)....

Another example (p. 33 et seq.). Girls tested polished steel balls by hand, rejecting them as spoilage if roughnesses, etc., were found.

Observation, control and “time studies” were introduced and the best workers chosen, etc., etc. “It turned out that the girls spent a considerable part of their time talking, or actually doing nothing. The most negligent girls were set apart or, if incorrigible, dismissed” (35)....

(p. 35)formerlynow
Results: number of girls12035
{their weekly wage15—19 marks27—35 marks
working day10 1/2 hours8 1/2 hours
quality of work100%158%

“System of functions” of the foremen

  1. I) in the workshop
    1. 1. Organising foremen (of the work itself)
    2. 2. Foremen to adjust speed of work
    3. 3. Testing foremen
    4. 4. General supervisory foremen (order).
  2. II. in the office
    1. 1. Route Clerk—sets tasks for each shop
    2. 2. Instruction Card Clerk—specifies how the job is to be done
    3. 3. Time and Cost Clerk
    4. 4. Shop Disciplinarian (general supervision)

N.B. || It is a mistake to suppose that the factory works the better the fewer the number of its “non-productive” workers (productive physical labour; “non-productive = supervisors, etc., foremen, etc.). On the contrary.

p. 50 [§ 133 (281–83)]. The best factories have one “non-productive” to six or seven productive workers. The worst have one “non-productive” to eleven productive.

[[BOX ENDS: p. 63. In the excellent Tabor Manufacturing Co. (with about 100 workers; makers of instruments and moulding-machines), Wallichs found one office employee to three workers!!! ]]

p. 67. Conditions for “reform” ((time required for it =2–4 years!!)) ... “that a body of workers of exceptionally high productivity should be enlisted, who will work extra hard and receive extra high wages”...

...“that the number of supervisory foremen and officials should be at least doubled” (67).

(( Written reports at least in the form of printed index cards for each worker!! not to speak of foremen!! )) ||| ...“however, quite a long time is still needed before they (the workers) learn to stay steadily at their work and make every minute count. N.B. || Many of them, with the best of intentions, will fail in this and find that they have no place in the new organisation” (69).

N.B. || ...“the opportunity of becoming a foreman or senior worker has become far greater, for under the new conditions an increased number of them are required” (75).

(winning over and buying up workers by turning them into foremen) | Time and motion studies are very difficult. A certain engineer (Sandford E. Thompson) (p. 81), for instance, spent six years conducting them in the building trades!!! He took every stop-watch observation himself and worked up and tabulated his data with the help of two assistants! ((Excavation, masonry, carpentry, cement work, plastering, and so on and so forth)) || ! ...“the tables and descriptive matter for one of these trades alone take up about 250 pages”....

Further, by tenths of a second (p. 84) (special watches)—the smallest operations were studied (putting down a spade; taking up a wheel barrow; moving a wheel barrow; placing a wheel barrow; taking up a spade, etc., etc.), and measurement made (cubic metres) of the size of a wheel barrow, idem of a spade, etc., etc.

For measurement, the best (91) workers are to be chosen and paid a higher pay (promising an increase of pay)....

Yet another example: overhauling and cleaning of boilers. The author told his assistant to study this. The latter was a novice and did nothing. The author personally carried out the work, making a careful time study. It turned out that a great part of the time was lost owing to the “constrained position” of the workman (99). “Protective pads” were made “to fasten to the elbows, knees and hips, and special tools and appliances were made for the various work operations,” etc., etc. (100).

“The whole scheme [many pages: how to perform the work] was much laughed at when it first went into use”.... The result: cost of overhauling and cleaning of a set of boilers || 250 and 44 of 300 h.p. fell from 250 marks to 44 marks!!!

In the ten years the author worked at the Midvale Steel Works there were no strikes. The best workers did not join the unions, for they received the best (highest) pay. | “The firm followed the policy of raising the wages of each employee on a suitable occasion and promoting all who deserved it. A careful record was kept of each man’s good points as well as his shortcomings, which was especially the duty of the foremen, so that justice could be done to each. When men throughout an establishment are paid according to their individual worth, it cannot he in the interest of those receiving high pay to join a union with the cheap men” (101).

There is a lot of talk about the unity of interests of the working class and the employers, etc. The author is for fines as the best disciplinary measure.... Fines for the benefit of the accident insurance fund ((from five pfennigs to 250 marks—the size of the fines both against officials and against oneself!!))....


Under capitalism

a “torture or a

conjuring trick

}}Wallichs’s supplementary chapter

(“Recent Successes”)—in all, he says,

about 60,000 workers in America

are working on the principles of the

reorganised institutions (well-thought-

out leadership) (109)....




Gilbreth introduced it into the work of bricklayers and raised the number of bricks laid per worker from 120 to 350 per hour (109) by reducing the number of operations from eighteen to five....

Congress has appointed a committee to study the Taylor system (109)....

of course! ||||| Very influential workers’ unions are against the Taylor system (110)....

(Wallichs): ...“The expression ‘well thought-out leadership’ is only a phrase, true!!! ||| the content of which is better denoted by ‘intensive productive activity’” (111–12) ...

Appendix. Discussion. Many maintain that Taylor is reckoning without his host: the workers’ organisations will not permit it (119, 116 and others).

p. 129: Oberlin Smith proposes teaching the Taylor system in the schools....



Dipl. Ing. Rudolf Seubert, The Taylor System in Practice, Berlin, 1914.

The author spent eight months studying the Tabor Manufacturing Co. (Philadelphia) and promises a detailed practical description.

[HUGE LEFT MARGIN:] p. 6: “Those well acquainted with German and American conditions will at once concede that, || as regards economic use of material, German industry is far in advance of American, but, on the other hand, as regards economic use of || characteristic! human labour-power, Germany has still much to learn from the U.S.A.” (7)....

“Time studies” are better called “productivity studies”: not only is the time observed, but the best work methods are studied and deduced (9–10)....

|||| N.B. —“The science of work” (10)

Movement is studied by the cinematograph—a slanting position facilitates handling of the material (without looking) etc., etc. ||| N.B. “No unnecessary or purposeless movements” (15).

The method must be put into effect cautiously, ||| sic!!!! N.B. in keeping with American democratic customs (p. 22) so that it shall not be regarded as “torture” (22).

The wage increase is usually one-third, whereby the worker receives ||||| N.B. bour- geoisi- fying!!! an amount that, “as regards his position, already puts him (if + one-third) at the economic level of a fairly well-paid tradesman or technician” (22)....

p. 30: “On the average” the Taylor reform takes “five years”. The Tabor Manufacturing Co. was “in danger of bankruptcy” !! because of the expense of introducing the Taylor system.

The Tabor Manufacturing Co. was founded in the 1890s. In 1904 there was a strike (half-won). Things were going badly. Taylor offered to provide money if he were allowed to reorganise (32). Accepted.

After five years: production increased 80%;

costs decreased 30%;

wages increased 25%;

in 1912

{{ 45 workers (33)

48 (!!sic!!!) officials and foremen ((usually 1 : 3)) (clerks) (office workers and foremen).

Next come copies of the “keys” (abbreviations), formulas, papers, instructions—a mass of written material, highly complex ... office workers call it the “talmud” (p. 35)....

One employee is engaged solely in studying productivity (time studies), which enables him to study deeply all hand movements and operations, and to improve them.

...“In this way, hardly a day passes in the Tabor Manufacturing Co. without some aspect of the work N.B. || being tested through productivity studies for its expediency and found capable of improvement” (107).

[[BOX: N.B. | ]] p. 153: “Time and motion studies” = the most “interesting” and the most “sensational” feature of the Taylor system. [[RIGHT BOX END:]]

[Hours—hours and hundredths of an hour (p. 124). More convenient.]

Difficulties in applying the system in Germany: “In Germany, the social stratification of the working classes is a difficulty that should not be under-estimated. !! N.B. ||| In Germany, an academically educated man prefers to address one not so educated in a tone of command, and the same thing applies between the engineer and the foreman, and between the foreman and the worker. Under the Taylor system, where they must feel themselves co-workers, such a tone will no longer be permissible” (152).... It will take years to become accustomed to “workers being promoted to the posts of foremen and officials”....



Frank B. Gilbreth, Motion Study as an Increase of National Wealth. (Annals of the American Academy, 1915, May, p. 96 et seq.)

...“The motions of every individual, no matter what his work may be, have been studied and standardised....

...“In laying bricks, the motions used in laying a single brick were reduced from 18 to 5, with an increase in output from 120 bricks an hour to 350 an hour. In folding cotton cloth, 20 to 30 motions were reduced to 10 or 12, with the result that instead of ? || 150 dozen pieces of cloth, 400 dozen were folded, with no added fatigue. The motions of a girl putting paper on boxes of shoe polish were studied. Her methods were-changed only slightly, and where she had been doing 24 boxes in 40 seconds, she did 24 in 20 seconds, with less effort. Similar studies have cut down the motions not only of men and women in other trades but also of surgeons, of nurses, of office workers; in fact, of workers in every type of work studied”... (96-97).

Assembly of braiding machines ... “where eighteen braiders had been assembled by one man in a day, it now becomes possible to assemble 66 braiders per man per day, with no increase in fatigue” (97)....

The latest method 1) micro-motion studies ... 2) use of the “chronocyclograph” (97)....

I. The “micro-motion clock” is placed in front of the worker and it registers “different times of day in each picture of a motion picture film” (98)....

II. “The chronocyclograph method of making motion study consists of fastening tiny electric light bulbs to the fingers of the operator, or to any part of the operator or of the material whose motion path it is desired to study”... (the movement of the light, its track, is photographed) (98).

These studies are in the interest of society as a whole.... “One typical result is the gradual filling in of the gap between the school and the plant. An intensive study of motions is proving that there are far greater likenesses in trades, and even professions, ||| !! N.B. on the mechanical side, than we have ever believed possible. The demand of the industrial world will be more and more for young workers trained to be fingerwise” (101)....

This must be taught in the schools.

...“fingerwise, that is, training his muscles so that they respond easily and quickly to demands for skilled work”....

At present an “enormous waste” (102) is occurring from scattered, duplicated, etc., “investigations”.... “It is the work of the United States Government to establish such a bureau of standardisation of mechanical trades. The standards there derived and collected would be public property, and original investigators could invent from these standards upwards” (103)....

[[BOX ENDS: a splendid example of technical progress under capitalism towards socialism. ]]


Dr. Otto Jeidels, Relation of the German Big Banks to Industry with Special Reference to the Iron Industry, Leipzig, 1905 ((Volume 24, No. 2 of Schmoller’s Forschungen)).

[[BOX: The preface is dated: June 1905 ]]

[[BOX: Impossible to read after Riesser: repetitions, raw material, minor facts, nothing new.

This refers only to the beginning of the book. Apparently, Riesser stole from it. When it comes to the relationship to industry, Jeidels is richer, livelier, cleverer, more scientific. ]]

a common pheno- menon || p. 18: An example: the buying up of shares (1904) of the Gelsenkirchener Bergwerksgesellschaft in order to elect Thyssen on to the “Supervisory Board” (!!).

p. 57: Number of (joint-stock) banks and private bankers taking part in the issue of industrial stocks:

No. of




No. of





p. 103: The brothers Mannesmann sold their patents for “seamless pipes” for 16 million marks (!) (1890).

Every crisis (1857, 1873, 1900) leads to concentration, but especially 1900:

“Side by side with the gigantic plants in the basic industries, the crisis of 1900 still found many plants organised on lines that today would be considered obsolete, the ‘pure’ [non-combined] plants, which were brought into being at the height of the industrial boom. The fall in prices and the falling off in demand put these ‘pure’ enterprises in a precarious positions which did not affect the gigantic combined enterprises at all or did so only for a very short time. As a consequence the crisis of 1900 resulted in a far greater concentration of industry || N.B. than the crisis of 1873; the latter crisis also produced a sort of selection of the best-equipped enterprises, but owing to the level of technical development at that time, this selection could not place the firms which success fully emerged from the crisis in a position of monopoly. Such a durable monopoly exists to a high degree in the gigantic enterprises in the modern iron and steel and electrical industries owing to their very complicated technique, far-reaching organisation and || monopoly magnitude of capital, and, to a lesser degree, in the engineering industry, certain branches of the metallurgical industry, transport, etc.” (108)....[62]

p. 111: When it was found necessary to make the firm Phoenix join the Stahlwerksverband, the Schaaffhausenscher Bankverein bought up the majority of its shares and ensured the adoption of the required decision.

In the same way, the Dresdner Bank “won” two places on the Supervisory Board of the Königs- und Laurahütte iron and steel mills (four years ago) and carried through what it wanted....

The role of the Supervisory Boards is very wide (in fact it could be = management)....

||| sic! (simple!) ...“Seats on Supervisory Boards are freely offered to persons of title, also to ex-civil servants, who are able to do a great deal to facilitate relations with the = authorities”...[63] (149).

||| the usual story!! “Usually, on the Supervisory Board of a big bank, there is ... a member of parliament or of the Berlin City Council” (152)....[64]

155 (in fine)... “But the cases quoted [a number of “names” are cited: Dernburg—director of the Darmstädter Bank, Gwinner—director of the Deutsche Bank] clearly show that Industrial leaders are mainly on the Supervisory Board of companies of the same branch or the same region, whereas directors of the big banks, on the other hand, are on the boards of the most diverse enterprises”....

1. The director of the Schaaffhausenscher Bankverein is on the Supervisory Boards of 33 companies!! (p. 155).

p. 150: an example of 35 seats on Supervisory Boards being in the same hands... (35).

p. 156... “Simultaneously with this widening of the sphere of activity of certain big industrialists and with the assignment of provincial bank managers to definite || industrial regions, there is a growth of specialisation among the directors of the big banks. Generally speaking, this specialisation is only conceivable when banking is conducted on a large scale, and particularly when it has widespread connections with industry. This division of labour proceeds along two lines: on the one hand, relations with industry as a whole are entrusted to one director, as his special function; on the other, each director || “supervision” of social economy assumes the supervision of separate enterprises, or of a group of enterprises in the same branch of industry or having similar interests. One specialises in German industry, sometimes even in West German industry alone, others specialise in relations ||| with foreign states and foreign industry, in information on the characters of industrialists, and others, in Stock Exchange questions, etc. Besides, each bank director often assigned a special locality or a special branch of industry; one works chiefly on Supervisory Boards of electric N.B. ||| companies; another, on chemical, brewing, or beet sugar plants, a third, in a few isolated industrial enterprises, but at the same time works on the Supervisory Boards of non-industrial companies, such as insurance companies. To demonstrate this from the example of some Berlin bank directors would take us too far into the personal sphere. In short, there can be no doubt that the growth in the dimensions and diversity of the big banks’ operations is accompanied by an ever greater division of labour among their directors with the object (and result) of, so to speak, lifting them somewhat out of pure banking and making them better experts, better judges ||| N.B. of the general problems of industry and the special problems of each branch of industry, thus making them more capable || “system” of acting within the respective bank’s industrial sphere of influence. This system is supplemented by the banks’ endeavours to elect to their Supervisory Boards or those of subordinate banks, men who are experts in industrial affairs, || such as industrialists, former officials, especially those with experience in the railway service or in mining,[65] from whom they want not so much connections with industrial enterprises as expert advice—advice, based less on academic education than on many years of technical, business and human experience”... (157).

...“But as member of a Supervisory Board, a bank director has not only the advantage of being interested in conscientious performance of his office because of his responsibility to the bank; he also is the best informed as to the state of the || N.B. market and can make his large office staff carry out the commercial and technical view of the “whole” ||| assignments of the Supervisory Board. It is his knowledge of many companies that facilitates his judgement of a particular one and guards him against the over estimation that is often observed when a private person sits on the board of only one company” (157–58).

At the end of 1903, representation of the German big banks on the SUPERVISORY BOARDS of industrial companies was as follows (pp. 161–62)[66] :










haus- enscher Bank-





for sixbigbanks
By directors1013151536840344
By members of

Supervisory Board . . .

Total . . .22192101133130741,040 {{751
By Chairman

or more than

two S.B. members . . .

[[DOUBLE BOX: Copied from Riesser? Cf. pp. 170–71: members of Supervisory Boards according to branches of industry... pp. 137 and 139: issue of industrial securities ]]

“universal nature” ||| ...“The universal nature of banking operations in industry, as so far described, the possibility and necessity for a big bank systematically to use regular business transactions, the granting of industrial credit, the issue of securities, and representation on Supervisory Boards, as a means of close and lasting relations with industrial enterprises—all this ||| “a tight net” weaves such a tight net around the bank and the industrial enterprise that a competitive struggle with the latter over a particular business operation is often, and in the case of many companies permanently, excluded” (163)....

“An examination of the sum total of industrial relationships reveals the ||| “universal character” universal character of the financial establishments working on behalf of industry. || “unlike” (the old) Unlike other kinds of banks, and contrary to the demand sometimes expressed in || the literature that banks should specialise in one kind of business or in one branch of industry in order to prevent the ground from slipping from under their feet—the big banks are striving to make their connections with industrial enterprises as varied ||| as possible in respect of the or branches of industry and are to eliminate the unevenness in the distribution of capital among localities and branches of industry resulting from the historical development of individual enterprises[67] . Hand in hand with this is the effort to base relations with industry on regular, lasting business connections, to || give expression to them and to afford them the possibility of becoming wider and deeper by means of a ramified system of seats on Supervisory Boards. Compared with these two spheres of influence, the issue of stock is of relatively less importance for the big banks’ relations with the “tendency” |||| industry. One tendency is to make the connections with industry general; another tendency is to make them durable and close. In the six big banks both these ||| tendencies are realised, not in full, but to a considerable extent and to an equal degree” (180)....[68]

“new” relations of industry and the banks ||| “The connections between the banks and industrial enterprises, with their new content, their new forms and their new organs, namely, the big banks which are organised on both a centralised and a de-centralised basis, “scarcely before the nineties” 1897 ||| were scarcely a characteristic economic phenomenon before the nineties; in one sense, indeed, this initial date may be advanced to the year 1897, when the important mergers took place, and when, for the first time, the new form of decentralised organisation was introduced to suit the industrial policy of the banks. This starting-point could perhaps be placed at an even later date, for it was the crisis (1900) ||| crisis of 1900 that enormously accelerated and intensified the process of concentration of industry and of banking, consolidated that process, for the first time transformed the connection with industry into an actual monopoly of the big banks, and made this connection much closer and more active” (181)[69] .... | after the crisis of 1900 (depression) ...“The sudden concentration in the Rhine-Westphalian mining industry, the formation of the Federation of Steel Plants, the mergers of the big electric companies, etc., have undoubtedly greatly accelerated practical solution of the question of the connections between the banks and industry” (182)....

...“Modern industry has led the banks into entirely new fields of economic life ... the bank is to a certain extent passing from its role, in the main, of intermediary into the sphere of industrial production.... In this way [through the connection with industry] the big banks are in touch not |||| N.B. only with development trends in individual plants, but also with the interrelationship between the different plants of a given industry and between different industries” (183)....

“Anyone who has watched, in recent years, the changes of incumbents of directorships and seats on the Supervisory Boards of the big banks, cannot fail to have noticed that power is gradually ||| N.B. passing into the hands of men who consider || the active intervention of the big banks in the general development of industry to be necessary and of increasing importance. Between these new men and the old bank directors, disagreement on this subject of a business and often of a personal nature is growing. The issue is whether or not the banks, as credit institutions, will suffer from this intervention in the industrial production process, and whether they are sacrificing tried principles and assured profit to engage in a field of activity which has nothing in common with their role of middlemen in providing credit and which is leading the banks into a field where they are more than ever before exposed to the blind forces of trade fluctuations. This is the opinion of many of the older bank directors, while most of the young men consider active intervention in industry to be a necessity as great as that which gave rise, simultaneously with big modern industry, transition... to what? ||| to the big banks and modern industrial banking. The two parties are agreed only on one point: there are neither firm principles nor a concrete aim in the new activities of the big banks” (184)[70] .

“Banking business with foreign countries and abroad falls into three divisions, 1


3 ||| each of which corresponds to a definite stage of development: international payments, the taking up of foreign loans? and participation in industrial enterprises broad ... each ... has impressed its stamp on a definite period in the foreign policy of the German big banks.

...“On the significance of loans for German home industry, a business manager of the Discontogesellschaft, which specialises in foreign operations, made the following statement ten years ago to the Stock Exchange Enquiry Commission (Proceedings of the Stock Exchange Enquiry Commission, p. 371, statement by Russel): ‘I should consider it a very great disadvantage if ... the floating of foreign loans in Germany was put, not in the hands of German capital and the German banks, but in N.B. |||| foreign hands. It was to avoid this that the Foreign Ministry was so greatly—and in my opinion so rightly—interested in N.B. || our having commercial offices, bank branches and contacts abroad. For only through such contacts can the desired foreign orders for German industry be found.

...“‘Theuniversal complaint of our export industry is that Germany lags greatly behind London in the big-order market. N.B. “orders” ||| Almost all orders are concentrated in London, in this great world market, and it is only our closer connection with individual foreign firms that gives rise to a business relationship and regular employment for industry’” (186–87)....

...“In the dealings of the German big banks with foreign industrial enterprises, || two stages we should distinguish two stages, differing in basis and in time. The first, taken historically, coincides approximately with the flourishing period of foreign loans and relates, therefore, to different years in different countries: the seventies and eighties can be regarded as the heyday of foreign railway construction” (187). ||| railways

Two subtypes (“opposite poles”): the Rumanian railways and participation in American railways.

“This first stage is marked by participation in foreign industry being closely bound up with loan activity, although German home industry, as a supplier, can derive some benefit from this. ||| The powerful initiative of the banks is decisive, but it only indirectly concerns industry, ||| their main attention being devoted to profitable investments in foreign securities. It requires a situation in which home industry is not yet so concentrated and, || since the nineties at the same time, so expanding as it has become since the nineties.

|| second stage In the second stage, on the contrary, foreign loans are of less importance, while the interest of the big banks in foreign industry increases, for this is less dependent on other financial connections with the country concerned. The big banks more frequently sponsor, or co-sponsor, industrial companies in other countries and, at the same time, collaborate closely with German home industry in foreign business operations” (188)....

...“In foreign expansion these [German concerns] are much more dependent on the banks than in their domestic operations.... The bank operating abroad [in contrast to domestic operations], however, feels itself at home, has its branches, ||| controls international payments, and might even be connected with the government of the given country by helping it float a loan” (189)....

4 forms ||| “Four forms of bank participation in foreign industrial enterprises can be distinguished: 1. The formation of branches or subsidiary enterprises for German home industry....

...“2. The formation ... of separate foreign enterprises which are only loosely or not at all connected with home industry.... But the really characteristic case is afford ed by the recent exotic railway projects and the East Asian enterprises of the big banks jointly participating in the German-Asiatic Bank”.... This is already my italics |a link in the conquest of an economic region” (190).

(Baghdad—China, etc. Colonies.)

...“3. A third form is attempts by the big banks to secure a place for themselves in an industry abroad by founding their own enterprises, or in many cases merely by acquiring an interest in existing ones”... (191) holdings in South African mining companies (Deutsche Bank since 1894, etc.).

4. ...“The German banking world has establish “its own” industry ||| also sought to secure for itself, or for German capital behind it, exclusive exploitation of some branch of industry abroad” (192) ... for example, the efforts “to organise under its control a part of the oil industry, mainly the Rumanian ....

division of the world ||| ...“The world oil market is even today still divided between two great financial groups—Rockefeller’s American Standard Oil Co., and Rothschild and Nobel, who control the Russian oilfields in Baku. The two groups are closely connected. But for several years five enemies have been threatening their monopoly” (193);

  1. (1) exhaustion of the American oil sources;
  2. (2) the competition of the firm of Mantashev & Co. in Baku;
  3. x (3) the Austrian oilfields;
  4. x (4) the Rumanian oilfields;
  5. x (5) overseas oilfields, particularly in the Dutch colonies (the extremely rich Samuel, and Shell Transport and Trading Co.).[71]

[[BOX ENDS: x = Participation of the Deutsche Bank and other German banks. ]]

...“The driving force of the banks’ activity abroad is not national zeal but the necessity, | an elementary truth which becomes ever more imperative at a certain stage of capitalist development, of establishing abroad a favourable field for the investment of free German capital” (197)....

“A similar role [aid to industrial enterprises] | technical role of the big banks (finance capital) is played by the banks in establishing societies for technical research, the results of which are intended to benefit friendly industrial enterprises. Such, for example, are the Electric Railway Research Association, the Central Bureau of Scientific and Technical Research, set up by the Loewe concern, and the Central Mining Bureau, Ltd., in Frankfurt-am-Main, which is financed by leading banks as well as big industrialists” (210–11).[72]

Sometimes the banks bring various industrial enterprises into closer association (in some cases leading to a cartel, in others assisting specialisation, etc.).... ||| bank = “inner connection” between enterprises ...“The bank to a certain extent embodies here the inner connection between a large number of enterprises which results from the development of large-scale industry; it represents the community of interests existing between them” (215)....

“What a rich opportunity of giving employment to friendly industrial enterprises is afforded the Deutsche Bank by such an undertaking as the Baghdad Railway!” (217)....

N.B. growth of connections || “However ‘incidental’, so far, the closer association has been of various enterprises and industries through the granting of bank-sponsored orders, it is at any rate an important symptom that with the growth of large-scale industry the connections become more numerous, || N.B. and increasingly complicated and imperspicuous. The connections and interdependence of various industries and enterprises find in the big banks an organ which gives them expression and more and more makes the latent connection into a real hand-in-hand collaboration” (219)....

!! )) Complaints are heard of the “terrorism” of the banks—(219–20)—they make it compulsory (for orders and so on) to deal with a particular firm (220). ||

In the electrical industry a special role was played by the crisis (apparently 1900), and the banks intensified and accelerated the ruin of the relatively small enterprises and their absorption by the big ones banks and ruin of enterprises || (pp. 230–32).... “The banks refused a helping hand to the very firms in greatest need of capital, and brought on first a frenzied || boom and then the hopeless failure of the companies which were not connected with them closely enough” (232).[73]

[[MINI BOX ENDS: details about the electrical industry not interesting. Cf. more recent ones in Die Neue Zeit. N.B. ]]

The Loewe group

The Loewe sewing-machine factory, founded in 1889, added production of armaments, then later (in the seventies and eighties) ordnance, boilers, etc., etc., and later still electrical industry, subsidiary companies, etc. [not very well described by Jeidels].

In a § on the relation of the big banks to the cartels (253–58), the author has somewhat “spread himself” and become incoherent. He distinguishes four forms: (1) indifference (to unimportant cartels); (2) “definite interest” (254) in cartels such as that of the coal industry (in cartels which are life-and-death questions for the industry); ||| difference from No. 2? not “definite interest”? (3) “help” for a cartel, e.g., steel industry;

(4) a purely “banking relation”—the organisation, for example, of a “syndicate office” at the Schaaffhausenscher Bankverein (1899).... || 258–65: description of concentration in the coal industry (Thyssen and others). See Werner’s better and newer material in Die Neue Zeit, 1913, in the other notebook.[74]

265 et seq., the electrical industry (see in Die Neue Zeit[75] ).

“The banks’ highest principle here is primarily conscious promotion of concentration, which they have already indirectly assisted by financial support of successful enterprises” (268)....

“The transformation of the big banks’ ||| “transformation” industrial policy from being the policy of a credit institution to a policy of industrial ||| concentration reveals a triple contradiction in the development of modern banking” (268)....

|| 1) ...“The fact of progressive exclusion of competition among the big banks” (269)....

2) “Decentralisation” of the banks (local branches and connection with provincial || banks) leads to an “increasing coalescence of capitals, uniting bank and industry into an integral whole”....

3) ...“increasing concentration implies a more purposeful organisation”.... (270)

“By expansion of industrial combination, various directions of which can be seen in the electrical and in large-scale iron and steel industries, the sphere of this consciously guided production can be considerably enlarged, and in this unmistakable movement the big banks are an important factor” (270)....

And the tendency is special patronage of heavy industry (coal and iron) to the detriment of any other....

N.B. || “The striving of the big banks for concentration and purposeful guidance of industry is contradictory when it is restricted to certain branches of industry and thereby results in a still greater lack of co-ordination in other branches” (271).[76]




Dr. Oskar Stillich, Economic Studies in Big Industrial Enterprise. Vol. I. The Iron and Steel Industry, Berlin, 1904.

II. The Coal Industry, Leipzig, 1906.

On looking through these, it is evident that they are descriptions of individual big enterprises (technical, commercial, and in part of the position of the workers).

{{ Only about individual enterprises. No summaries, no conclusions.... }}

Of the literature mentioned, note the reference | N.B. to J. German, “The Qualifications of Factory Workers”, in Die Neue Zeit, 21st year, Vol. II, No. 30.

((on the ousting of unskilled workers by machines and the increasing role of skilled workers where machines are used))

World Economy—“A Yearbook and Textbook.” Published by Ernst von Halle.

Year of publicationI.1906

Each volume consists of three parts: 1) International surveys; 2) Germany; 3) Other countries.

The surveys are worse than in Neumann-Spallart, for they are mostly without sum totals, giving only data by countries.

Fragmentary, incomplete, unsummarised. No data for different years (mostly none). Suitable, perhaps, for separate items of information.

[[BOX: There is absolutely none of the scientific approach, displayed in part by Calwer in his Introduction, to the analysis of the connections of world economy as a whole; only statistical raw material. ]]

EXTRACTS FROM DIE BANK [2][edit source]

Die Bank, 1912, 2.

Herr von Gwinner’s Oil Monopoly” (1032—) (Dr. Felix Pinner).

cf. p. 13 here[77] The Reichstag, on March 15, 1911, adopted almost unanimously a request for an oil monopoly. The government seized upon this “popular” (1032) idea. It turned out that the banks... “could not agree on the booty” (1033). Only the Deutsche Bank was in favour!! The others (headed by the Discontogesellschaft) were against, partly because they considered the Deutsche Bank’s booty excessive.[78]

The struggle between the banks is useful for sic! business: “Only when the interested parties exposed one another—and they did so thoroughly, in a masterly way and with intimate knowledge of their mutual weaknesses—did clarity become possible” (1034)....

The consumers are afraid of terrific (“colossal”, 1034) prices. The Standard Oil Co. served the consumer excellently.

The oil trust could be fought only by an electricity monopoly, by converting water-power into cheap electricity. But we shall get an electricity monopoly only when this becomes profitable to the producers.

“But the electricity monopoly will come '||' when the producers need it, that is to say, when the next great crash in the electrical industry is imminent, and when the gigantic, expensive power stations now being N.B. put up at great cost everywhere by private electrical ‘concerns’, which are already sic! ||| obtaining certain franchises from towns, from states, etc., can no longer work at a profit. Water-power will then have to be used. But it will be impossible to !! || convert it into cheap electricity at state expense; it will also have to be handed over to a ‘private monopoly controlled “tribute” to finance ||| by the state’, because private industry has already concluded a number of contracts and has stipulated for heavy compensation for its expensive steam-power plants, which will impose too great a burden on the ||| capital !! ground-rent of a state-controlled hydro-power monopoly. So it was with the nitrate monopoly, so it is with the oil monopoly, so it will be with the electric power monopoly. It is time our state socialists, who |||| allow themselves to be blinded by a beautiful principle, understood, at last, that in Germany the monopolies have never pursued the aim, nor have they had the result, of benefiting the consumer, or even of handing over to the state part of the promoter’s profits; they have served || only to facilitate, at the expense of the state, the recovery of private industries which were on the verge of bankruptcy”<nowiki>&lt;nowiki&gt;<ref>Ibid., pp. 250–51.—<i>Ed</i>.</ref>&lt;/nowiki&gt;</nowiki> || N.B. N.B. (1036, author’s italics).

The Deutsche Bank was defeated by the Standard Oil Co. and in 1907 concluded [MISSING "|"] there is a table of “interconnections” in oil “concerns” with the latter (under compulsion) a very disadvantageous agreement by which, in 1912, the Standard Oil Co. was able to buy up cheaply the oilfields of the Deutsche Bank.

And so the Deutsche Bank set to work to build up a monopoly!!

Opposing the Deutsche Bank was the Discontogesellschaft (with its Deutsche Erdöl Aktiengesellschaft), which worked very cautiously for an agreement with the Standard Oil Co.

Die Bank, 1912, 2, p. 695:

{{ Colonial banks }} “Statistics of English Joint-Stock Banks” (England and Wales).


(£ million)

N.B. ||1890—104 banks (joint-stock) with2,203 branches368
1911—44 ” ” ” ”5,417749
In Scotland
1890—10 ” ” ” ”975 ”[£ seems 2b missing -RjC]
1911—9 ” ” ” ”1,227 ”[£ seems 2b missing -RjC]
In Ireland
1890–9 banks (joint-stock) with456 branches
1911–9 ” ” ” ”739 ”
Colonial banks
N.B. ||1890–30 ” ” ” ”1,742 ”
1911–38 ” ” ” ”3,645 ”

Die Bank, 1912, 2 (629 et seq.). “Oil Strategy” by Felix Pinner:

on the one hand, the Germans (Discontogesellschaft and Erdöl Aktiengesellschaft) want to unite Rumania (and Russia) against the Standard Oil Co.;

N.B. division of the world by the oil trusts on the other hand, Standard Oil founded a company (Nederlandsche Koloniale Petroleum Maatschappy) in Holland herself, buying up oilfields (and concessions) in the Dutch Indies—a blow against its chief rival: the Anglo-Dutch trust Shell (Koninklijke Shell), etc.

Struggle for division of the world. “Division of the World”, p. 630.

Anglo-Dutch trust—Asia.

Standard Oil—rest of the world.

Standard Oil wants to seize everything.

The Germans want to defend themselves (+ Rumania + Holland + Russia??).

Die Bank, 1912, 1.

Cinema trust!! ||| “The Patriotism of the Trusts”, by L. Eschwege: in Germany a trust has been formed for buying up film distributors! (The firm of Pathé (Paris) produces 80,000 metres of film daily at one mark per metre. The cinemas of the world put together yield an income of about one thousand million marks per year!!) (pp. 216–17). This industry lags behind in Germany; it is especially developed in France. In Germany about forty distributing agencies buy up films and “lease” them to cinema owners. (A trust has been formed, Deutsche Filmindustrie A.-G. = Fiag, headed by the National-Liberal Deputy Paasche. Its capital = five million marks, of which “no small part”, obviously, was intend ed to be used as “founders’ profit”).... A monopoly is being launched. Will it succeed??

Die Bank, 1912, 1 (p. 223 et seq.), a short article by A. Lansburgh: “The Financial Transactions of the Princes’ Trust” (the name given by the Stock Exchange to the “business affairs” of Prince Fürstenberg and Prince Hohenlohe, wealthy financiers). They invested millions (of their own and of the Deutsche Bank) in the building firm of Boswau & Knauer, It raked in as much as 100,000,000 marks (!! p. 229), embarked on a host of very risky enterprises and went bankrupt. || true face of the Deutsche Bank!!! The Deutsche Bank lost about twelve million marks, Fürstenberg about eight million (p. 226), the whole extent of the crash being covered and concealed (p. 226). Extremely indignant, the author writes: “Our whole economic development is infected by some of the Knauer poison” (230).... || and sic!! “electrical concerns” “The principle by which they (Boswau & Knauer) have worked, is hardly different from that, for example, to which the two biggest German electrical concerns owe their successes” (228)....[79]

If Boswau & Knauer had managed to wriggle out by making others bear the risk, everyone would have praised them, and hundreds and hundreds would have been ruined!

Die Bank, 1912, 1.

L. Eschwege, Etatisation of Capitalism (p. 12—). The Reichstag elections. The battle of conservatives and democrats. “The question of whether the people or the bureaucracy should rule is still being debated, but the decision has already been made in favour of a third force, namely, the plutocracy” (12) ... “political freedom becomes an empty phrase in a country where the economic sources of wealth have become the monopoly of a few supermen” (12). Capitalism is being etatised: members of Zemstvos!! (municipality, district, etc.) are being appointed to Supervisory Boards. For example, in the Tempelhofer Feld Aktiengesellschaft. What a shady business!! “Petty hypocrisy” (15)—these delegates also receive bonuses, etc., etc. “A situation which is intrinsically dishonourable” results (16).... Government officials make “common cause with the plutocracy” (19)....

“Foreign Capital Investments in Canada”, p. 82 et seq.
British . . . . . . . . . .>2,000 million dollars
American . . . . . . . . . .420{{}}
French . . . . . . . . . .8080
German . . . . . . . . . .3232
Belgian . . . . . . . . . .{ 11.5
Dutch . . . . . . . . . .11

L. Eschwege, The History of a Company Promotion. (p. 420 et seq.)—an aerodrome company.

Flugplatz Johannisthal near Berlin. The director Arthur Müller enlisted princes and princelings, took millions from them (share capital = 4 1/2 million marks), “gratis shares” for himself, resold them (the expert opinion of a venal valuer was that this land would yield colossal profit... in 10–20 years!!)—in general a gross deception, and everything strictly legal!!

American banking magnates || A. Lansburgh, “The Money Trust” (p. 432 et seq.). <nowiki>[</nowiki>MISSING "|"] 2 banks–2,750 million dollars (=11,000 million marks)[80]

The National City Bank (Rockefeller and the Standard Oil Co.) controls a capital of about $1,000 million. The Bankers Trust Co. (Morgan) controls a capital of about $1,500–1,750 million.

The author points out that nowhere are banks so strictly regulated as in America (“deposit” banks are strictly separated from “investment” banks; branch banks are forbidden, also the loan to any one person of more than 10 per cent of the capital, and so on). America has 26,000 “Lilliputian” banks (438)—and all to no purpose!! In reality the multi-millionaires rule and control. A change in the laws will merely lead to a change in the form of their rule.

Die Bank, 1912, 1, p. 523 et seq.

L. Eschwege, “Cultural Fertiliser” = German immigrants in Brazil. Unscrupulous advertising of the Brazilian Government (like that of the Canadian). Agents are paid ten marks for each immigrant. Lies about the prosperity of the immigrants, their poverty, etc., etc. They are sold land at speculative prices, etc., etc.

Die Bank, 1911, 1, p. 1 et seq.

[[DOUBLE LOWER-LEFT BOX END: N.B. title! ]] A. Lansburgh, “Germany—A Rentier State”.

Deposits in German savings banks = about 16,500 million marks. This is a transfer of capital from a latent to a patent state, an aid to big capital, a conversion into loan capital (mostly in mortgages). || By refraining from disposing of their money themselves, the depositors “strengthen the power of big capital and weaken the strength of resistance of small-scale industry” (8).

N.B. '|' “People in Germany ate ready to sneer at the inclination to become rentiers that is observed in France. But they forget that as far as the bourgeoisie is concerned the situation in Germany is becoming more and more like if that in France”[81] (10–11).

About 45 of the amounts (45 per cent, apparently) in savings banks consist of deposits of 3,000 marks or over!!

Ibidem, p. 218: German Banks
BanksOwn capitalBorrowed capital
1883160890+ 850 (mill. marks)
19074404,450+7,750 ” ”
+175%+400%+ 812% ” ”
Austrian Banks
(million kronen)
BanksOwn capitalBorrowed capital

Die Bank, 1911, 2, p. 605 et seq. “Twenty Years of English Banking”, by Alfred Lansburgh.


and current accounts


(England+ Scotland+ Ireland)

Development of


||||1891[82]110408.5+91.6+38.5£ mill.69.836.4
Branches of 46 English banks—5,218 (1910)
Isle of Man29
p. 813 et seq. Germany
No. of banksOwn capital (thousand mill. marks)Borrowed moneyTotal capital at the disposal of the banks
1872174113,000 mill. marks|||Development

of banking

in Germany
191042251130,000 ” ”

1872... 23 banks out of 174 had a capital of 10 million and >. They controlled 60 per cent of borrowed money.

1910—11... 53 banks out of 422 had a capital of 10 million and >. They controlled 82.5 per cent of borrowed money (p. 818).

Germany, output of iron 1870: 1,346,000; 1910: 14,793,000 tons.[83]

L. Eschwege, “Plutocracy and Officialdom” (p. 825 et seq.). Typical of a petty-bourgeois reformist. Two examples:

“Some years ago, owing to the rigid attitude of the Rhine-Westphalian Coal Syndicate, a strong anti-cartel movement swept through Germany. The Reich government appointed an Enquiry Committee to study the problem of cartels. In the course of its proceedings, | good example! (finance capital and the government)[84] Government Counsellor Völker distinguished himself by his brilliant mastery of the subject and his sharp business-like speeches against the cartel representatives. Shortly thereafter, Counsellor Völker accepted a highly paid post as leader of the German Steel Association, Germany’s most powerful and closely-knit cartel organisation. With the government thus deprived of its best expert, the enquiry petered out” (827–28). There is no need, he remarks, to point to America!

There is an Imperial Private Insurance Supervisory Office, which has done much to control private insurance companies. And then the insurance companies come along and entice the “controllers” with offers of lucrative posts (including director ships). !! | “In recent years, no less than three control officials have made the leap from the Imperial Supervisory Office to a directorship in an insurance company” (831). |

Die Bank, 1911, 1, pp. 94–95. Recent statistics on the iron industry.

(Thousand tons)







Die Bank, 1910, 1 (p. 401 et seq.), Alfred Lansburgh, “The Bank in the Service of the National Economy”—in connection with Riesser’s book, whom the author accuses of optimism and of ignoring the defects of the German banks.

“holdings” of the modern bank!! ||| Idem: Alfred Lansburgh, “The Holdings System in German Banking” (497 et seq.) and “Dangers of the Holdings System”. Both articles yield very little; generalities, already known. The table of “holdings” (p. 500) alone is good.

The Deutsche Bank[85] has holdings (1) Permanently in 17 banks. Of these 9 have holdings in 34 banks; of which also in 7. (2) For an indefinite period ” 5 ” __ __ __ (3) Occasionally ” 8 ” ” ” 5 ” ” ” 14 ” ” ” 2 ” ” 2 __ __ __ __ __ __ __ __ __ __ ((My totals)) 30 14 48 6 9 N.B. [[BOX ENDS: of these, i.e., out of 8—two Russian: the Siberian Commercial Bank and the Russian Bank for Foreign Trade, and one Austrian; the Wiener Bankverein ]] [[BOX: both banks and bankers included ]] [[BOX: System of “holdings” N. B. ]] approximately thus ! | {{ in all the “concern” has about 500 million marks of its own money and 1,333 million marks of borrowed money }} [DIAGRAM] (( the author has squares with the name of the bank )) [[BOX: apparently, these data on the Deutsche Bank can be taken to illustrate the holdings system ]] | approximately thus: the size of the bank in the centre (the Deutsche Bank) is not in proportion, for among the subsidiaries are banks with a capital of 70–80 million marks! | [DIAGRAM]

Die Bank, 1910, 1, p. 288. A note: “German Concessions Abroad.”

The Chamber of Commerce in Barmen writes in a Memorandum to the Minister of Trade:

“A considerable amount of German capital is invested in the Transvaal gold mines, despite which, unfortunately, supplies from German engineering factories for the Transvaal mines good example of the role, significance and policy of finance capital | are only very small, because the technical management of the mines is predominantly in English hands. From this point of view, it would be extremely regrettable if the Mannesmann concessions (in Morocco) were to be absorbed in the French mining syndicate. If that were to happen the technical management of the Moroccan mines would quite certainly fall wholly into French hands, and there would be no prospect of supplying German machinery and equipment. It would be an irreparable mistake if German capital, while sharing in Moroccan mining enterprises, were to leave the technical management in French hands, just as it has been left in English hands in the Transvaal. The German engineering industry would not benefit from such an exploitation of the Mannesmann mines, and German capital participation would only benefit the French engineering industry. On the other hand, German industry would benefit immensely if even only a comparatively small part of the Moroccan mines were under German technical management”. (Quoted from pp. 288–89.)

“The Campaign Against the French Big Banks”, p. 236 et seq.

|| Articles by Lysis (at first in La Grande Revue, 1906).

|| The book by his supporter, Jules Domergue, The Question of Credit Societies.

[[DITTO: || ]] A reply to Lysis—Testis, The Role of Credit Institutions in France, 1907, a book (articles in Revue politique et parlementaire).

A superficial appraisal: Lysis exaggerates but, basically, is correct. The rentier state= France. Capital flows from a country with a low rate of interest into countries with a high rate of interest. Lysis, his critic alleges, is not an expert, etc.

According to Lysis, the banks charge up to 7 per cent [[TOP-LEFT-BOTTOM BOX: 7%!!! ]] as commission on the sale of foreign securities!!!

(1910, 2) p. 1200: from data of the American National Monetary Commission.

Statistics of Deposits and Savings
N.B.|||Great Britain (£ million)France (million francs)












(My) total
GermanyThousand million marks



in credit




And the editors remark that this “apparent” national wealth should not be identified with the national wealth in general.

From a note on the financier Eduard Engel, who died in November 1910:

career of bank directors || “Many Berlin directors only obtained their posts because their creditors saw no other way of saving their money except by launching the debtor on a career. While secretly cursing him for his frivolity, in public they praised his diligence—in their own well-understood business interests” (1202–03).

Die Bank, 1909, 1, p. 79. A note: “The Pull of the Bank”—government officials become directors of banks (Waldemar Muller, von Klitzing, Helfferich, Schönfeld) and in industry (Völker, Budde)....

“How about the integrity of a state official, whose secret longing is for a cosy niche in the Behrenstrasse [the Deutsche Bank]?”[86] (79).

p. 301 et seq. Alfred Lansburgh, “The Economic Importance of Byzantinism”—an ardent little article (petty bourgeois sentimentality) against the plutocracy’s connection with the Kaiser, etc.

well put! | “We recall the journey to Palestine and the immediate result of this journey, the construction of the Baghdad railway, that fatal ‘great product of German enterprise’, which is more responsible for the ‘encirclement’ than all our political blunders put together”[87] (307).

Ludwig Eschwege, “Revolutionising Tendencies in the German Iron Industry”.

technical revolution in the iron industry The main centre in Germany for ore extraction and iron has shifted from the Rhine-Westphalian area to Lorraine-Luxemburg (in the South-West). The rich phosphate ore (the Minette ore of Luxemburg and Lorraine) was previously of no value. It has become excellent owing to (1) the Thomas method; (2) electro-steel (electro-rods: 15 years’ against 9 years previously). Ores in Luxemburg-Lorraine amount to 2,000 million tons (enough for 200 years at the present rate of German consumption) (pp. 316–17) ||

A. Lansburgh, “How Great Is the German National Wealth?”, p. 319 et seq.

A criticism of the well-known book by Steinmann-Bücher and his estimate: 350 thousand million marks (190–200—Lexis and || German national wealth (350?? thousand million) Schmoller; Great Britain—250–300, France—200–225). The chief component figure given by Steinmann-Bücher (a) = 180 thousand million of “private property in real and personal estate”—two or three times (p. 324) the real amount, for he (Ballad p. 322), too, overlooked this!!) took insurance policies (162.6 thousand million, rounded off to 180!!), whereas insurance is always at the value replacement would cost, and not the real value. “They made the same mistake as the second-hand dealer who in taking stock listed old furniture and clothing at the price of new” (325). And a number of other mistakes of Steinmann-Bücher!!!

Ludwig Eschwege, “Cement”, 115 et seq. (1909, 1). ||| how do the syndicates operate? A strongly cartelised industry. Monopoly prices (cost of production 180 marks per carload, sale price 280 marks!!, 230 marks!!). Sale price with delivery 400 marks per carload!! Profits yield 12–16 per cent dividend. Every effort is made to eliminate competition: false reports of the bad situation in the industry, anonymous notices in the press (capitalists, beware of investing your money in cement factories!!); buying up of “outsiders” (examples: 60,000–80,000–150,000 marks in “compensation”: p.125). Cartels by regions: South German, Upper ||| Silesian, Central German, Hanoverian, Rhine Westphalian, North German and Lower Elbe syndicates.[88]

Die Bank, 1909, 2. Articles by Eugen Kaufmann on French banks. Three big banks—Crédit Lyonnais, Comptoir National, Société Génerale.

N.B. ||| For all three: 1908—749.1 million francs (capital + reserves) and 4,058 million deposits (in general, borrowed money).

incomes of directors and board members ||| Number of members of the board of management (administrative councils) 13–15–17. Their income 500,000–750,000 (!!) francs (Crédit Lyonnais) (p. 851).

|| Crédit Lyonnais has a “Financial Research Service” with >50 persons (engineers, economists, lawyers, “research service” |||| statisticians, etc.)—costing 0.6–0.7 million francs annually (it studies industrial enterprises, railways, etc., of various countries, collects information, and so on). The service is divided into eight departments: 1) industry; 2) railway and steamship companies; 3) general statistics; 4) information on securities; 5) financial reports, etc. Cuttings from financial news papers and journals of the whole world, and so on and so forth.[89]

The number of branches (in France) (1908) (p. 857):




big banks

|||Crédit Lyonnais . . . .5319224522(mostly

in the


(p. 954)

Comptoir National . . .5114019123
Société Générale . . . .896367252
________ __
1939681,161[[ 47 Σ mine ]] [:BOX]

The Société Générale figure includes 222mobile branches in the provinces (open once or twice a week on market days). Employees boys (grooms) ages 13–16—30–40 francs per month; lower-grade office workers, above 16–60 francs per month. Then up to 2,000–2,400 francs annually. Departmental heads in the Crédit Lyonnais—up to 40,000 francs annually.

Number of employees
Crédit Lyonnaisup to 5,000
Comptoir National4,000
(including Paris2,500)
Socidté Générale7,000
(including Paris1,000)
of whom 300-400 women.

|||| Baghdad railway p. 1101 (1909, 2). A note on the Baghdad railway “friction” with Great Britain, etc.: 500 million of German money |||| attitude to colonial policy in an unknown country, and friction with Great Britain and France; is not worth the bones of a single grenadier, is a “fatal adventure”, etc. etc. p. 799. A note: “Banking in Occupational Statistics”.

(No. of women in brackets)
(Headings)|| | |banks,




(1 and 2) bankers,

bank directors,

etc . . . . . . .
(3) bank (and savings


employees . . . .
(4 and 5) apprentices,

watchmen, members

of families,

working part

time, etc. . . . .
No. of (3) per 100

(of 1 and 2) [employees per 100 bosses] . .


Alfred Lansburgh, “German Capital Abroad”, p. 819 et seq. Die Bank, 1909, 2.

The author tries to prove Kautsky’s

favourite argument that trade develops

better with independent countries.[90]

cent in- crease






(of Ger-

Rumania . .48.270.8+47
Portugal . .19.032.8+73
Brazil . . .48.784.5+73
Chile . . . .28.352.4+85
Turkey . . .29.964.0+114
author does not give these totals {{

ly inde-



Great Britain651.8997.453
Dutch Indies8.840.7363
}} author does not give these totals

The author draws the conclusion:

cf. Kautsky (and Spectator) ||| “This much is certain; it is a gross error to regard foreign capital investment, in whatever form, as a specially effective force in favour of German products, to regard it as the pioneer of German trade” (828).

__ this especially N.B.!! || (The author did not sum up the results, which refute him!!)

My addition: || He is refuted even more emphatically by the concrete data he himself cites on the relationship between loans and exports (Pp. 826 and 827)[91] :

Years of loans: || “In 1890–91, a Rumanian loan was floated through the German banks, which || 1890–91 had already in previous years made advances on this loan. It was used chiefly to purchase railway materials in Germany. In 1901,[92] German exports to Rumania amounted to 55 million marks. The following year they dropped to 39.4 million marks and, with fluctuations, to 25.4 million in 1900. || ? ? Only in very recent years have they regained the level of 1891, thanks to two new loans.

|| 1888–89 “German exports to Portugal rose, following the loans of 1888–89, to 21,100,000 (1890); then, in the two following years, they dropped to 16,200,000 and 7,400,000 and regained their former level only in 1903. ||| “The figures of German trade with Argentina are still more striking. || 1888

1890 Loans were floated in 1888 and 1890; German exports to Argentina reached 60,700,000 marks (1889). Two years later they amounted to only 18,600,000 marks, less than one-third of the previous figure. It was not until 1901 that they regained and surpassed the level of 1889, || ? and then only as a result of new loans floated by the state and by municipalities, with advances to build power stations, and with other credit operations. || 1889

“Exports to Chile, as a consequence of the loan of 1889, rose to 45,200,000 marks (in 1892), and a year later dropped to 22,500,000 marks. A new Chilean loan floated by the German banks in 1906 || 1906 was followed by a rise of exports to 84,700,000 marks in 1907, only to fall again to 52,400,000 marks in 1908.”

[[BOX-ENDS: Strange that the author should not see how these facts refute him: the rise in exports occurs precisely after the loans and in consequence (infolge) of them. ]]

Lansburgh’s petty-bourgeois standpoint: “And German industry would profit [if the exported capital remained at home] not only in amount but in distribution. Capital would be distributed freely over many branches of industry, would flow !! ||| along numerous channels, whereas from abroad, as experience has shown, it flows into the order books of a few privileged firms which, in addition, have to pay dearly gem!! he has “persuaded” Krupp!!! for their privileges. Krupp could tell us a thing or two about how many millions in expenses, known as baksheesh or by some other name, have to be paid to support “natural”!! ha-ha German credit activity abroad. Yet the distribution of capital, which has to cover as many branches of industry as possible, is of prime importance for the whole industrial development of Germany” (824–25).... “Production that in this way “harmony” ||| constantly regenerates itself by its own forces [by the investment of capital within the country] s continued harmonious development”[93] (p. 825).

[[BOLD-BOX-ENDS: The export of capital does not produce stable trade connections: the author tries to prove this by the examples (pp. 826–27), cited by me above: pp. 101–02 of this notebook[94] ]]

A. Lansburgh, “Trends in the Modern Enterprise” (“Two books”),

||| Levy versus Liefmann p. 1043 et seq. A short review of Levy’s Monopolies and Trusts and Liefmann’s Financial and Industrial Companies. Lansburgh says, rightly, that both are one-sided: Levy’s accent is on the technical strength of concentration, Liefmann’s on the strength of financial (oligarchic) oppression.

“The growing role of stocks and securities (“Effektifizierung”) in industry vastly in creases the scale of production, reduces the number of independent producers and makes it easier for the few—if they are not prepared to be bought up by some giant trust—to unite in order to suppress all newly-arising competition. Though that '| |' point is made neither by Liefmann nor |||| Levy, it clearly emerges from both books. This might, perhaps, prompt someone to write a book that is urgently needed: a book that describes how a security-manipulating oligarchy has wrested control of the republic’s economic life” (1051–52).

Sometimes the development is through concentration to cartels (Levy has shown this particularly clearly). But not always. “Substitution of securities” can lead at one stroke to a trust, e.g., “in colonial railway construction”.... Technical concentration is progressive as regards technique; financial concentration can strengthen, and does strengthen, the omnipotence of monopoly capital alongside backward technique.


| Export to colonies (and financially dependent countries) versus export to independent countries:

[[DITTO: | ]] Let us assume that the latter is greater and increases at a faster rate than the former. Does this prove the “non-necessity” of colonies and networks of financial dependence? | (K. Kautsky.) No, for (1) even in relation to independent countries (taking all exports) the share of cartels, trusts, dumping, increases....

[[DITTO: | ]] (2) Finance capital does not abolish the lower (less developed, backward) forms of capitalism, but grows out of them, above them....

N.B. on finance capital and its significance || <nowiki>[</nowiki><nowiki>[</nowiki>DITTO: | ]] (3) There is a definite ratio between “normal” and monopoly sales, ergo between “normal” and monopoly exports. Capitalists cannot help selling staple commodities to millions of workers. Does this mean that it is “unnecessary” for them to acquire extra-profit through government, railway “contracts”, etc.?

[[DITTO: | ]] (4) The extra-profit from privileged and monopoly sales compensates for the low profit of “normal” sales.

[[DITTO: | ]] (5) Compare with the banks: extra-profit as intermediaries in floating loans, promoting bubble companies, etc., compensates for low profit (sometimes no profit) on “normal” credit operations.

[[DITTO: | ]] (6) The high technique of concentrated industry and the “high technique” of financial swindling, and the “high technique” (in reality, low technique) of oppression by finance capital—they are inseparably linked under capitalism. K. Kautsky wants to destroy the link, “whitewash” capitalism, take the good and throw away the bad: “modern Proudhonism”, petty-bourgeois reformism “under the mask of Marxism”.

[[DITTO: | ]] ΣΣ = finance capital (monopolies, banks, oligarchy, buying up, etc.) is not an accidental excrescence on capitalism, but its ineradicable continuation and product.... Not merely colonies, but also (a) export of capital; (b) monopolies; (c) a financial network of connections and dependencies; (d) omnipotence of the banks; (e) concessions and bribes, etc., etc.


Dr. S. Tschierschky. Cartel and Trust (A Comparative Study of Their Nature and Significance), Göttingen, 1903 (p. 129).

(Little of value. Bourgeois prattle in favour of cartels—German, our own, toned down—against trusts)....

A most commonplace petty-bourgeois, this author. A “practitioner” was employed by syndicates and cartels.

p. 12, par. 1. The American rectified spirit trust closed down 68 of the 80 factories it had bought up.

|| 1/3 million workers p. 13: The United States Steel Corporation has “almost one-third of a million workers”.

Its capital (1902)shares=$800 million|| a model!!
loans=$553 ”
Output:iron ore13.3million tons
coke9.1” ”
pig-iron, etc.7.1” ”
steel9.0” ”[95]
bars1.7” ”

||| last 1/3 or 1/4 of the 19th century p. 19—cartels and trusts developed “since the last third or quarter of the nineteenth century”.

p. 31—one weaver in the United States looks after 16 looms (Northrop looms, an improvement of 1895). ||| ha-ha! p. 56—...“The idea of the cartel is no more than the application to modern industrial production of the modified co-operative idea”....


| characteristic! (rather cowardly!) ...“On the basis of my investigations up now, I have no doubt that the trust embodies the advantages, but to a still greater extent the disadvantages, of capitalist large-scale industry, in the sense of an unceasing and reckless urge to go forward, whereas the policy of the cartel | much more strives to bridle and to distribute. If the world market were dominated by great national trusts, it would experience far-reaching struggles over prices and sales, carried to the sharpest extremes.... In this connection, the cartels can and should be as much concerned for !!! not accelerate!!! ||| technical and economic progress as free competition is; perhaps they will not accelerate it precipitately as the trusts” (128).[96]


Hans Gideon Heymann, Combined Enterprises in the German Large-Scale Iron Industry, Stuttgart, 1904 (No. 65 of Munich Economic Studies).

A summary of data (for the most part rather fragmentary) on the advantages of large-scale production, especially “combined” production, i.e., uniting various successive stages....

| a good example!! “The representative of the Krupp firm told the iron Enquiry Committee (Minutes (1878), p. 82): ‘I do not think that a plant producing 20,000–30,000 tons (annually) can stand up to one producing 100,000–150,000 tons.’ Twenty-five years later Carnegie considered that twenty times as much as 150,000 tons was necessary. (The Empire of Business, New York, Doubleday, Page and Co., 1902, p. 233): ‘Concerns making one thousand tons of steel per day have little chance against one making ten thousand’” (p. 232, note).

a condition for cartels.... |||

The growth of capital and its “immobilisation” (N.B.) is one of the most important conditions for monopoly and cartels.

“Combined enterprises often belong to more than a dozen cartels, as Völker’s interesting table shows”... (249)....

[[BOX ENDS: ? Völker? Iron cartels?

December 1903 (where?) (p. 256).... ]] —?

“We see ... everywhere the same spectacle in the production of finished goods. || N.B. Pure enterprises perish, are crushed between the high price of raw material and low price of the finished product, while the combined enterprises earn enough profit from the high prices of materials, and they find sales thanks to the low prices of finished goods; for the big plants avoid excessive prices for fear of inevitable subsequent reductions, ||| whereas the small ones in good times want to push up prices wildly. Exactly the same policy is pursued in America by the big Steel Corporation” (256). ||| N.B.

Now competition has been done away with. There remain two or three dozen big plants. At the head are Thyssen, Lueg and Kirdorf (261). “Two gigantic associations”: the coal syndicate and the steel syndicate ((87.5 per cent of steel output)) “must rule over the whole”.

———Monopoly of the means of production. The land has been bought up (coal and ore).

|| better than in Liefmann and earlier “The head of the concern controls the principal company [literally: the “mother company”]; the latter reigns over the subsidiary companies [“daughter companies”], which in their turn control still other subsidiaries [“grandchild companies”], etc. In this way, it is possible with a comparatively small capital to dominate immense spheres of production. Indeed, if holding 50 per cent of the capital is always sufficient to control a company, the head of the concern needs only one million to control eight million in the second subsidiaries. And if this ‘interlocking’ is extended, it is possible with one million to control sixteen million, thirty-two million, etc.”[97] (pp. 268–69).

The summing up:

| “There remain, on the one hand, the big coal companies, producing millions of tons yearly, strongly organised in their coal syndicate, and, on the other, the big steel plants, closely allied to the coal mines, having their own steel syndicate. These giant enterprises, producing 400,000 tons of steel per annum, with a tremendous output of ore and coal and producing finished steel goods, employing 10,000 workers quartered in company houses and sometimes owning their own railways and ports, are the typical representatives of the German iron and steel industry. And concentration goes on further and further. N.B. Individual enterprises are becoming larger and larger. An ever-increasing number of enterprises in one, or in several different industries, join together in giant enterprises, backed up and directed by half a dozen big Berlin banks. In relation to the German mining industry, the truth of the teachings of Karl Marx on concentration is definitely proved; true, this applies to a country where industry is protected by tariffs and freight rates. The German mining industry is ripe for expropriation”[98] (278–79). (The concluding words of Chapter 5 in the book.) ||

See p. 108.

Heymann’s statistics:

Twenty-four combined enterprises (these 24 include—Krupp, Stumm, Deutscher Kaiser (Thyssen), Avmetz Friede, etc., etc., all “leaders”).



thousand tons(1902)


for Germany
Iron ore6,93417,963
Steel8,2157,664 (?)
thousand tons(1902)


for Germany
(in oper-


Blast furnaces147=58.8%250
Open-hearth furnaces130=38.8335
No. of workers206,920 ??
Capital581.4 million marks
+ Reserves121.9 million marks
Growth of large-scale production in the German iron industry



in operation


(mill. tons)


per worker

No. of

workers per enterprise




End of extracts from Heymann.



On the question of imperialism:

Subjects: (approximately)

  • 5.1 Finance capital.
  • 4.2 Banks.
  • 2.3 Cartels and trusts.
  • 3. Monopoly.
  • 1.4 Concentration and big industry.
  • 6.5 Export of capital.
  • 7.6 Colonies. Their significance.
  • 8.7 History of the colonies.
  • 9.8 Division of the world. [[BOX: International trusts colonies Calwer ]]
  • 10.9 Free competition versus imperialism.
  • 11.10 Back to free competition or forward to overcoming imperialism and capitalism?
  • 12.11 Ultra-imperialism or inter-imperialism?
  • 12 bis: Uneven growth.
  • 13.12 Hobson, Kautsky, imperialism.
  • 14.13 Apologists and petty-bourgeois critics of imperialism.
  • 15.14 Parasitism in imperialist countries... (“decay”) ((“the rentier state”)).
  • 16.15 Definitive split of the working-class movement... [“imperialism and opportunism”].
  • {{2 17.16 Diplomacy and foreign policy 1871–1914.
  • {{2 18.17 The national question in the imperialist era.
  • 19.18 Interlocking versus “socialisation” (cf. Riesser). Component parts of the concept “imperialism”. Roughly:
    • {{4 1. I monopoly, as the result of concentration
    • {{4 2. II export of capital (as the chief thing)
    • {{4 4. III {{{2 division of {{{{2 (α) agreements of international capital
    • {{4 5. IV {{{2 the world {{{{2 (β) colonies
    • {{2 3. V bank capital and its “threads”
    • {{2 6. VI replacement of free trade and peaceful exchange by a policy of force (tariffs; seizures, etc., etc.).

Hilferding’s shortcomings:

  1. 1) Theoretical error concerning money.
  2. 2) Ignores (almost) the division of the world.
  3. 3) Ignores the relationship between finance capital and parasitism.
  4. 4) Ignores the relationship between imperialism and opportunism.

[[DOUBLE-BOX: “Imperialism, the highest (modern) stage of capitalism.” ]]

[[DOUBLE-BOX: Roughly:

these 6 {{{

  1. I. Three chief (fully independent) countries
    • {{{3 Great Britain
    • {{{3 Germany
    • {{{3 United States
  1. II. Secondary
    • (first class, but not fully independent)
      • {{3 France
      • {{3 Russia
      • {{3 Japan
  1. III.
    • Italy
    • Austria-Hungary


  1. See present edition, Vol. 38, pp. 390–93.—Ed.
  2. See pp. 71–78 of this volume.—Ed.
  3. Figures for the countries marked by an asterisk refer to January-July, the others, January-June.—Ed.
  4. The National City Bank (from 1955 First National City Hank of New York)—United States’ third largest bank and the centre of a financial-monopoly group embracing large industrial and financial corporations. p. 79
  5. See present edition, Vol. 22, p. 215—Ed.
  6. Ibid.—Ed.
  7. Ibid.—Ed.
  8. See present edition, Vol. 22, pp. 229–30.—Ed.
  9. All the data refer to 1910 ,except those for Switzerland (1908), and for Hungary and France (1909). p. 85
  10. See present edition, Vol. 22, p. 218.—Ed.
  11. Bankruptcy statistics—statistics of proceedings taken against insolvent debtors. p. 86
  12. See present edition, Vol. 22, p. 276.—Ed.
  13. See present edition, Vol. 22, pp. 236–37.—Ed.
  14. See present edition, Vol. 22, pp. 249–50.—Ed.
  15. Ibid., p. 211.—Ed.
  16. Ibid., p. 234.—Ed.
  17. See present edition, Vol. 22, p. 244.—Ed.
  18. Ibid., p. 217.—Ed.
  19. Ibid., p. 238.—Ed.
  20. See p. 147 of this volume.—Ed.
  21. See pp. 147–49 of this volume.—Ed.
  22. See present edition, Vol. 22, p. 239.—Ed.
  23. See present edition, Vol. 22. p. 261.—Ed.
  24. The petty-bourgeois American economist Henry George (1839–1897) maintained that the chief and universal cause for the division of the population into rich and poor was expropriation of the land from the people. Poverty was thus due to the land monopoly, and it could be eliminated, he declared, by the bourgeois state nationalising the land, leasing it to individuals and using the rent for social needs. In reality bourgeois land nationalisation does not undermine the foundations of capitalism, but assists its development, and does not save the working people from poverty and ruin. Of the “declamations of Henry George” and similar petty-bourgeois doctrines, Karl Marx wrote: “The whole thing is thus simply a socialistically decked-out attempt to save capitalist rule and actually re-establish it on an even wider basis than its present one.” (See Marx’s letter to Sorge, June 20, 1881, and Engels’s preface to the American edition of his Condition of the Working Class in England.) p. 98
  25. See present edition, Vol. 22, pp. 288–64.—Ed.
  26. Ibid., p. 296.—Ed.
  27. See p. 78 of this volume—Ed.
  28. See present edition, Vol. 22, p. 244.—Ed.
  29. See present edition, Vol. 22. p. 245.—Ed.
  30. Ibid., p. 245.—Ed.
  31. Ibid., p. 263.—Ed.
  32. Thus given by Schilder.—Ed.
  33. See present edition, Vol. 22, p. 278.—Ed.
  34. See present edition, Vol. 22, p. 281.—Ed.
  35. See present edition, Vol. 22, pp. 203–04.—Ed.
  36. Ibid., p. 204.—Ed.
  37. Proudhonism—an unscientific, anti-Marxist variety of petty-bourgeois socialism deriving its name from the French anarchist Pierre Joseph Proudhon. Proudhon criticised big capitalist ownership from a petty-bourgeois standpoint and dreamed of perpetuating small private ownership. He proposed the formation of a “people’s” bank and an “exchange bank”, through which the workers could acquire their own means of production and ensure the sale of their product at a “fair” price. Proudhon did not understand the role and significance of the proletariat, rejected the class struggle, the socialist revolution and the dictatorship of the proletariat. An anarchist, he denied the necessity for the state. The Proudhonists idealised small-scale commodity production and exchange. “Not abolishing capitalism and its basis—commodity production—but purging that basis of abuses, of excrescences, and so forth; not abolishing exchange and exchange value, but, on the contrary, making it ‘constitutional’, universal, absolute, ‘fair’, and free of fluctuations, crises and abuses—such was Proudhon’s idea” (see present edition, Vol. 20, p. 34).
    The new Proudhonism is how Lenin described the reformist theories of the Kautskyites, who depicted the dominance of the monopolies and banks, the omnipotence of the financial oligarchy, colonial plunder, annexations and other intrinsic features of imperialism as accidental excrescences on capitalism, and concocted all manner of plans for “reconstructing” capitalism, removing monopoly “abuses”, etc. Lenin exposed the reactionary nature of such theories, whose proponents “want to go ‘back’ to small capitalism (and not towards socialism)” (see p. 93 of this volume). p. 116
  38. See p. 86 of this volume.—Ed.
  39. See present edition, Vol. 22, p. 231.—Ed.
  40. See present edition, Vol. 22, p. 232.—Ed.
  41. Ibid., p. 232.—Ed.
  42. Ibid p. 232.—Ed.
  43. See present edition, Vol. 22, p. 238.—Ed.
  44. Ibid.—Ed.
  45. Subsidies of the credit office.—Ed.
  46. See present edition, Vol. 22, p. 232.—Ed.
  47. These four words are in English in the original.—Ed.
  48. So given by Agahd.—Ed.
  49. See present edition, Vol. 22, p. 249.—Ed.
  50. Ibid., p. 245.—Ed.
  51. See present edition, Vol. 22, p. 214.—Ed.
  52. See pp. 142–44 of this volume.—Ed.
  53. See present edition, Vol. 22, p. 239.—Ed.
  54. See pp. 94–95 of this volume.—Ed.
  55. Ibid., pp. 239–40.—Ed.
  56. Ibid., p. 239.—Ed.
  57. Ibid.—Ed.
  58. Kautsky’s theory of ultra-imperialism (super-imperialism)—an opportunist theory of a new phase of imperialism—“internationally united finance capital”—that would lead to an organised world economy, with imperialist contradictions abolished, by agreement between the capitalist countries. Lenin exposed the real social meaning and purpose of this “theory”, which whitewashes and seeks to perpetuate imperialism. He described it as “a most reactionary method of consoling the masses with hopes of permanent peace being possible under capitalism, by distracting their attention from the sharp antagonisms and acute problems of the present times, and directing it towards illusory prospects of an imaginary ‘ultra-imperialism’ of the future. Deception of the masses—that is all there is in Kautsky’s ‘Marxist’ theory” (see present edition, Vol. 22, p. 294).
    Kautsky’s theory of “ultra-imperialism” is repeated in different versions by latter-day apologists of imperialism. It finds expression in all manner of bourgeois and reformist projects for a world capitalist state with a single government, and so forth. (For Lenin’s criticism of Kautsky’s anti-Marxist theory, see present edition, Vol. 22, pp. 288–98). p. 151
  59. See present edition, Vol. 22, p. 258.—Ed.
  60. See p. 146. of this volume.—Ed.
  61. See present edition, Vol. 22, p. 243.—Ed.
  62. See present edition, Vol. 22, p. 209.—Ed.
  63. Ibid., p. 221.—Ed.
  64. Ibid.—Ed.
  65. See present edition, Vol. 22., pp. 221–22.—Ed.
  66. See present edition, Vol. 22, p. 221.—Ed.
  67. Ibid., p. 223.—Ed.
  68. See present edition, Vol. 22, p. 223.—Ed.
  69. Ibid., p. 225.–Ed. —Lenin
  70. See present edition, Vol. 22. pp. 224–25.—Ed.
  71. See present edition. Vol. 22, pp. 248–49.—Ed.
  72. Ibid, p. 224.—Ed.
  73. See present edition, Vol. 22, p. 246.—Ed.
  74. See Notebook “α”, pp. 33–25 of this volume.—Ed.
  75. See p. 338 of this volume.—Ed.
  76. See present edition, Vol. 22, p. 208.—Ed.
  77. See pp. 89–90 of this volume.—Ed.
  78. See present edition, Vol. 22, pp. 249–50.—Ed.
  79. See present edition, Vol. 22, p. 286.—Ed.
  80. See present edition, Vol. 22, p. 219.—Ed.
  81. See present edition, Vol. 22, p. 278.—Ed.
  82. In the first column the figures are for the years mentioned, in the following columns for 1890 and 1910.—Ed.
  83. The figures on German iron output, written by Lenin in the margin, are from a table in the January 1911 issue of Die Bank (p. 95), in an item headed: “Iron and Steel Industry after 100 Years”. Lenin quotes part of the table on p. 184 of this volume, under the heading “Recent Statistics on the Iron Industry”. p. 183
  84. The data on the relations between finance capital and the governments, and Lenin’s comments on them, were further developed in Imperialism, and other writings. Lenin showed that the development of monopoly and finance capital inevitably leads to a small group of industrial and financial magnates—a financial oligarchy—playing a decisive part in the economy and politics of the capitalist countries, the bourgeois state, too, being wholly subordinated to it. The monopolies subordinate and use the state machine by putting representatives of the government on their boards of directors and by having their own representatives enter capitalist governments. This has become a regular practice. In the U.S.A., for example, all the top government posts are held by men representing the main financial groups of Morgan, Rockefeller, etc. p. 183
  85. See present edition, Vol. 22, p. 212.—Ed.
  86. See present edition, Vol. 22, p. 237.—Ed.
  87. Ibid.—Ed.
  88. See present edition, Vol. 22, pp. 207–08.—Ed.
  89. Ibid., pp. 222–23.—Ed.
  90. See present edition, Vol. 22. p. 291.—Ed.
  91. Ibid., pp. 291–92.—Ed.
  92. Lansburgh’s mistake; should be 1891.—Ed.
  93. See present edition, Vol. 22, p. 292.—Ed.
  94. See pp. 192–94 of this volume.—Ed.
  95. See present edition, Vol. 22, p. 203.—Ed.
  96. See present edition, Vol. 22, p. 216.—Ed.
  97. Ibid., pp. 227–28.—Ed.
  98. See present edition, Vol. 22 pp. 198–99.—Ed.