Former Austrian Lloyd building (on the right in front), shipping company founded 1833 in Trieste by seven insurance companies, among them “Assicurazioni Generali”, Austrian Generali insurance, founded  by Joseph Morpurgo 1831 in Trieste (on the left in the back). Piazza Unità d’Italia, Trieste (Italy)

The importance of the Austro-Hungarian banks in providing short-and long-term credit to industries has to be emphasised in contrast to the registrations of the stock exchange in the empire. In 1912 the share of foreign bonds in total registered securities was 48 per cent on the London Stock Exchange, 55 per cent in Paris, 5.6 per cent in Berlin and 0.7 per cent in Vienna. In Vienna the share of foreign bonds had not changed much since the 1890s. But after 1909 the Austro-Hungarian Empire was not only a capital importer, but owing to the leading banking groups it could also cover the deficit partly by re-exporting foreign bonds.


In the case of a country of such agricultural importance as the Austro-Hungarian Empire the turnover of mortgage bonds is of greatest importance. Neither bank loans nor the foreign placement of mortgage bonds took a dominant role in providing especially the Hungarian agriculture with credit. By the turn of the century the supply of agriculture with long-term credits seemed to have settled.…


Palais Ephrussi, family of Austrian bankers (Vienna – the bank opposite the Palais was destroyed in the 2nd World war), architect Theophil Hansen

The Austro-Hungarian Monarchy generally had an export surplus of securities, which means it was a net importer of long-term capital, except during the period 1903-1908. While in 1868 the majority of loans was taken by Amsterdam, Brussels, Frankfurt and Paris, in 1914 Berlin was the most important foreign creditor. Government securities and railway priority bonds constituted the largest categories. In terms of state debts, the Austro-Hungarian Empire was a debtor towards Western and Central Europe and a creditor towards the Balkans together with Germany. Yet compared to Germany and France, the Austrian banks in Serbia and Romania were insignificant, only in Bulgaria were they of importance. After 1878, most of the debts of the Balkan states financed railway construction. While lending for the infrastructural development of backward countries, the empire constructed its own railway network with the help of foreign capital. After 1855, when the railways were sold to private enterprise and the system of guaranteed interest was introduced, foreign capital penetrated the empire’s economy. The mobilier banks provided the needed capital for the railway construction. In Hungary 85 per cent of the railway system was owned and run by the state by 1891, while in the Austrian half of the empire only 55 per cent was run by the state and it owned only 43 per cent in 1897. More than 70 per cent of the railway priority bonds were still in the possession of foreign investors at the beginning of the 20th century.…


Former Länderbank (Vienna), founded 1880, architect Otto Wagner (built 1882-1884)

It can be said that the Austro-Hungarian credit institutions were established along French and German lines either as direct imitations (Prussian mortgage banks, credit cooperatives) or as combinations of German, English or French patterns (savings banks). At the same time very special types were developed in the monarchy, such as the Landesbanken or the dualistic organisation of the bi-national Austro-Hungarian Bank. They illustrate the special financial climate in the empire. The adjustment to this special climate can also be seen in the participation of the ownership in the banks and the management of the banks. For example, in their application to the ministry the founders of Credit-Anstalt guaranteed the subscription of the capital in the following way: 40 per cent was taken by the Rothschild houses in Vienna, Frankfurt and Paris, 50 per cent by Austrian and Bohemian aristocrats and 10 per cent by a private Prague banker. According to the founders’ statement of intention, it could only undertake Austrian transactions and a representative of the state had a seat in the governing body. Representatives of the Hungarian aristocracy also had seats in the first committee of the management. In this way the Credit-Anstalt wished to be a financial institution representing the multinational character of the monarchy. In the final distribution of shares the Credit-Anstalt revealed its “national” character according to the monarchy’s state philosophy: neither the dynasty itself, nor the aristocracy nor the Viennese Jews were excluded.…


Central European architecture: Prague, Czech Republic

A question to be asked is whether the historical and cultural entity of the Austro-Hungarian Empire in the Danube basin and special cultural relationships of the past in any way promoted the expansion of Austrian banks, insurances and other businesses in Central, Eastern and South Eastern Europe after 1989.
Robert Musil sarcastically describes in his famous novel “The Man Without Qualities“ the disintegration of Austrian hierarchical society and liberal-rational culture: “Kakania”. “Kakania was the first country at the present stage of development, from which God had withdrawn all credit, all love of life, all belief in itself and the capacity of all cultural nations to spread the useful imagination that they had a task to fullfill.” This Kakania is at the same time a model of an intellectual concept of Central Europe – more imaginary than a real geographically and historically defined area – today. Again Robert Musil: “…after having taken stock of the bulk of Central European ideas, he found out, not only to his regret, that it consisted only of contradictions, but to his astonishment he also realised that these contradictions are melting into each other when you look at them carefully.” “People who were not born then,” wrote Musil about the Austrian fin-de-siècle , “ will find it difficult to believe, but the fact is that even then time was moving faster than a cavalry camel…. But in those days, no one knew what it was moving towards; nor could anyone quite distinguish between what was above and what was below, between what was moving forward and what backward.”…


The Danube, Budapest

“When someone went up the Danube to Vienna, it was said that he went to Europe”, Elias Canetti (the name is derived from the Spanish city of “Canete”, from where the family seemed to have been expulsed) wrote in the first part of his autobiography “The Rescued Tongue” in 1977. Canetti was born in Rustschuk / Ruse, Bulgaria, at the Danube and his native town became the symbolic start of the journey of the later winner of the Noble prize for literature. His Jewish forefathers were expelled from Spain after the Christian Reconquista and settled in Rustschuk as merchants. This “second diaspora” made Canetti a “Sephardic Jew”, who chose German as the “mother tongue” of his literature. Canetti’s path of life was a European one and it started in Vienna after he had crossed an invisible frontier when going up the Danube. …