Palais Ephrussi, Viennese Jewish banking Family (exiled): Edmund de Waal, “The Hare With Amber Eyes” describes the destiny of this banking family

The German state-owned VIAG (Vereinigte Industrieunternehmungen) and the Deutsche Bank gained control of the majority of shares of the Creditanstalt-Bankverein CA from the time of the “Anschluß” of Austria to the Nazi German “Third Reich” in 1938 onwards, originally by taking over the shares of the Austrian state. From the very beginning the German majority shareholders viewed the bank as an important tool for German penetration into South-Eastern Europe, not only because of the geographical position of Vienna, but also because the Viennese banks, many of which had merged with the Credit-Anstalt in the interwar years, had been very active in this area before 1918 and still had much experience in the region. Contrary to the image the CA wanted to create after 1945, the leadership of the CA, and especially its most important director, Josef Joham, viewed the German takeover of Austria as an opportunity to recover the position the CA had held in South-Eastern Europe before and to turn Vienna into the financial hub of the Nazis’ activities in Central Europe and the Balkans. In fact, the CA often took the initiative in expanding its banking activities in the German satellites and occupied territories. It constantly made reference to its historical role in the region and viewed its acquisitions as restitution and/or compensation for its losses and exclusion by the successor states after the collapse of the Austro-Hungarian Empire. The German control of Austria and the CA provided a welcome opportunity to restore the position Viennese banks had enjoyed during the Austro-Hungarian Empire. The close co-operation between the CA and the Deutsche Bank, namely between the two directors Josef Joham and Hermann Josef Abs, had already started before the “Anschluß”. As Joham had supported the old regime in Austria, but anticipated the “Anschluß” of March 1938, he sought protection for himself and the bank through the alliance with Abt and the Deutsche Bank. Yet first the German VIAG took over the majority of shares from the Austrian state and Deutsche Bank got hold of only 25 per cent of the shares of the CA, but in 1942 the Deutsche Bank finally acquired the majority of shares in the CA.


The first signs of the CA’s ambitions and its use of the historical past to legitimise claims were in the Czech Sudetenland. When Nazi Germany had annexed the Sudetenland in the autumn of 1938, the CA cautiously stated its wishes to the German Economics Ministry on 4 October 1938: “[the CA] appears predestined to take over such branches [in the Sudetenland], since they and the banks acquired in the period of fusions previously had their own branches in these territories which were taken over in the post-war period by Czech institutions, so that the re-acquisition of these branches should be considered as their repatriation.” (Feldman, Gerald D.,The Role of the Creditanstalt-Bankverein in the Expansion of Greater Germany, 1938-1945, in: Rathkolb, Oliver / Venus, Theodor / Zimmerl, Ulrike (eds.), Bank Austria Creditanstalt. 150 Jahre österreichische Bankengeschichte im Zentrum Europas, Zsolnay 2005, 318)


Joham and Abt kept in touch over this issue and Abt supported Joham, but the German Economics Ministry wanted to keep complete control over the developments, so the CA continued to approach the Economics Ministry to be able to participate in the distribution of the bounty. Yet the CA and the Deutsche Bank were not successful in reaching all their goals in the Sudetenland because of the influence of the competitor, Dresdner Bank, which owned the Länderbank Wien, the main competitor of the CA, and their connections to the Hermann Göring Werke. The basic decisions were determined not by the CA’s ambition of becoming the financial gateway to the east and south-east, but by the best way to exploit the industries of the Czech lands and by political lobbyism and wire-pulling in the “Third Reich”. So when the Czech banking sector in the Sudetenland was carved up, the CA only gained branches in Znaim/Znojmo and Lundenburg/Breclav and its affiliate the Bank für Oberösterreich und Salzburg branches in Böhmisch Krumau/Czesky Krumlov.


When the German troops marched into Prague in March 1939 and established Slovak “independence” and the Protectorate of Bohemia and Moravia, the CA’s leadership was already much more outspoken in its claims. The CA’s desire to play a significant role in Prague was hampered by the struggle between Deutsche Bank and Dresdner Bank. For the time being the CA had to accept smaller pickings in the Czech lands. Yet the most important and most complicated CA acquisitions in the Czech lands involved those in Slovakia. The CA director Ludwig Fritscher wanted to show that Vienna had both the financial and technical skills to handle the entire import and export trade with Slovakia and by that challenge the domineering position of Berlin. The CA set up an independent bank by taking over the branch of the Böhmische Escompte Bank in Bratislava and other former Czech bank holdings and formed the Union-Bank Preßburg. The CA was, of course, again competing with the Dresdner Bank and the Länderbank in this field, which had also set up its own bank in Bratislava and had taken over the Deutsche Industrie-und Handelsbank Pressburg. But there was plenty of business for both Viennese banks in Slovakia. The Union-Bank Preßburg became part of a larger complex of banks in Central, Eastern and South-Eastern Europe that were linked to the CA and the Deutsche Bank.


Hungary was an important part of this complex. Hungary and Slovakia were both satellite states that had economic interests of their own and a considerable degree of autonomy in operating their economies that they sought to protect in dealing with the Germans. Slovakia was a new state, having been part of Hungary in the Austro-Hungarian Empire until 1918 and having joined the Czech lands in 1919 until 1939. Hungary was the larger and more important satellite state with a long history and a strong national identity. Its link to the German “Third Reich” should provide it with the opportunity to regain the vast territories it had lost in the Paris Peace Treaties. In Slovakia the CA wanted to regain a position it had lost during the interwar years, while in Hungary it had maintained a presence during these years. The Budapest branch received the guidelines from Vienna that it was to devote itself to the service of German-Hungarian economic relations which included the elimination of Jewish personnel. The Hungarian government was rather slow in implementing the Nazi’s anti-Semitic measures, which had been speedily implemented in Austria because they feared the risks to Hungarian economy and finance where Jews played an important role. Only in 1944 when the Germans occupied Budapest, they implemented the measures with incredible brutality and finished off their task of expulsion and extermination of all Jews in this region. Due to Hungarian resistance, the expansion of the CA Budapest was rather modest and mainly served the ethnic German population and sometimes acted as a beneficiary of Hungary’s expansion into the partitioned states of Czechoslovakia, Yugoslavia and Romania.


Poland and Yugoslavia were destroyed by the Germans as political entities and the CA exercised its ambitions with great stubbornness in this unstable and war-ridden climate. In the case of Poland the German occupiers intended to eliminate Poland as a state and exploit its resources and engage in large-scale transfers of Poles and Jews to the east to provide space for German settlers. The expropriation of Jewish and Polish assets was the work of the German authorities. The big banks, including the CA, tried to establish themselves in the new political surrounding and had great expectations as the industrial and agricultural activity in Poland required funding. The CA proved to be strikingly aggressive in its ambitions to gain a prominent role in Poland. German and Austrian banks had not been very popular during the interwar years and doing business in this region had been very difficult for them. The Länderbank had been in the process of liquidating its Kommerzialbank in Krakow when the war broke out. The Deutsche Bank had high hopes of establishing itself in Krakow and other parts of Poland where suddenly the CA wanted to become its competitor. In the same way as in the other Central and Eastern European countries, the CA made its claims in Poland on the grounds of seeking “compensation for past losses”, a strategy that usually worked well in Berlin. They could prove that the Austrians had had a considerable presence in Polish territories before World War I where the Viennese banks had 20 branches and interests in Polish banks and enterprises. In fact, the CA had been forced to give up participations in four banks in former Austrian Galicia and participations in some industrial enterprises, but it had retained interests in five Polish banks and a dozen oil and heavy industrial enterprises, which it only lost because of its bankruptcy in 1931. But the CA was not only trying to regain a position it had held in the former Austro-Hungarian Empire, it wanted to establish its own banking network in Central Europe and become the dominant bank in South-Eastern Europe within Nazi Germany’s banking system. At that time it was still trying to make progress in Slovakia and Moravia, but without success. The CA leadership had high-flown plans of establishing a banking network of its own from the borders of the USSR through Galicia and Silesia to Slovakia and Moravia, but that of course was not in the interest of Deutsche Bank. Finally the CA managed to establish itself as the major bank in the Krakow region, but it had to make do with much less than its ambitions in the rest of Poland. The CA branches in Poland engaged in considerable business financing wheat harvests in shipments to the “Third Reich”. It also dealt in dirty business like the handling of accounts for Polish workers in concentration camps, accounts for the SS and credits to firms employing forced labour.


While in Poland the effort of the CA to take advantage of German conquests to re-establish a position it had lost in the interwar years failed, in Yugoslavia the CA tried to maintain and strengthen a position that already existed when the Germans took over and that attempt failed as well. The CA and the Deutsche Bank tried to use the majority interest of the CA in the Allgemeine Jugoslawische Bankverein Belgrad-Zagreb to pursue their strategy in South-Eastern Europe after the “Anschluß”. As the Germans had already shown a great interest in the penetration of Yugoslavia and the establishment of a banking network there before 1938, and they wanted to exploit the minerals resources and import food, the Deutsche Bank sought to co-operate with the CA in this region on the basis of the CA’s majority share in the Jugoslawische Bankverein. Also here the substantial number of Jewish personnel was eliminated immediately and after negotiations with the Belgian shareholders, the bank was almost completely “Germanised”. The CA, strengthened by the support of Deutsche Bank, retained its dominant position. In Belgrade the Bankverein became the major instrument for financing the exploitation of the Bor copper mines, which ended in a financial disaster when the Germans left in 1944. Its bank in Croatia was not really profitable and failed to expand into the countryside. In any case, by the beginning of 1945, the CA’s banking operations in Yugoslavia had ceased to function.


The Austrian banks’ aims with the CA at the helm to re-establish their position in Eastern and South-Eastern Europe between 1938 and 1945 was a complete failure as it was attempted under the auspices of a criminal regime. The criminality tainted the entire expansion effort from the “Aryanisation” of the banks and businesses they acquired shares in to the dismissals of Jewish directors and employees and the participation in the confiscation of Jewish assets at the banks where the CA and the Länderbank were shareholders. Ultimately, the expansion of the CA and Länderbank rested on the bayonets of the German “Wehrmacht” and the backing of the Deutsche Bank, respectively the Dresdner Bank. Vienna tried to become the hub of the German South-East programme with some space for independent development, which did not happen. The board of CA knew that a change could only come about with the end of the war, but the end meant that their programme was doomed and that their ambitions to regain their pre-1918 position had to be buried.

Literature: Feldman, Gerald D.,The Role of the Creditanstalt-Bankverein in the Expansion of Greater Germany, 1938-1945, in: Rathkolb, Oliver / Venus, Theodor / Zimmerl, Ulrike (eds.), Bank Austria Creditanstalt. 150 Jahre österreichische Bankengeschichte im Zentrum Europas, Zsolnay 2005, 317-334