The rise of interlocking directorates in imperial Germany

Abstract

Bankers are thought by many to have played an important role as entrepreneurs and overseers in German industrialization, identifying promising new industries and investments, offering managerial advice to their client firms, and monitoring the use of investment funds. The German joint-stock credit banks were, in Gerschenkron’s words, the ‘paragon of the type of the universal bank’. In the writings of Hilferding, Riesser, Jeidels, Wallich, and, more recently, Gerschenkron, the idea has persisted that German universal banks fostered close, long-term relationships with industry and that these associations facilitated a hands-on style of financing. Gerschenkron, among others, claimed that ‘the German banks, and with them the Austrian and Italian banks, established the closest possible relations with industrial enterprises’.