Imperialism, the Highest Stage of Capitalism

A POPULAR OUTLINE

II. BANKS AND THEIR NEW ROLE

The principal and primary function of banks is to serve as
middlemen in the making of payments. In so doing they transform
inactive money capital into active, that is, into capital
yielding a profit; they collect all kinds of money revenues and
place them at the disposal of the capitalist class.

As banking develops and becomes concentrated in a small number
of establishments, the banks grow from modest middlemen into
powerful monopolies having at their command almost the whole of
the money capital of all the capitalists and small businessmen
and also the larger part of the means of production and sources
of raw materials in any one country and in a number of countries. This transformation of numerous modest middlemen into
a handful of monopolists is one of the fundamental processes in
the growth of capitalism into capitalist imperialism; for this
reason we must first of all examine the concentration of
banking.

In 1907-08, the combined deposits of the German joint-stock
banks, each having a capital of more than a million marks,
amounted to 7,000 million marks; in 1912-13, these deposits
already amounted to 9,800 million marks, an increase of 40 per
cent in five years; and of the 2,800 million increase, 2,750
million was divided among 57 banks, each having a capital of
more than 10 million marks. The distribution of the deposits
between big and small banks was as follows: [1]

| PERCENTAGE OF TOTAL DEPOSITS |
| --- |
| | In 9 big Berlin banks | In the other 48 banks with
a capital of more than 10 million marks | In 115 banks with a
capital of 1-10 million marks | In small banks (with a capital of less than a million marks) |
| 1907-08..... | 47 | 32.5 | 16.5 | 4 |
| 1912-13...... | 49 | 36 | 12 | 3 |

The small banks are being squeezed out by the big banks, of
which only nine concentrate in their hands almost half the total
deposits. But we have left out of account many important
details, for instance, the transformation of numerous small
banks into actual branches of the big banks, etc. Of this I
shall speak later on.

At the end of 1913, Schulze-Gaevernitz estimated the deposits in
the nine big Berlin banks at 5,100 million marks, out of a total
of about 10,000 million marks. Taking into account not only the
deposits, but the total bank capital, this author wrote: “At the
end of 1909, the nine big Berlin banks, together with their affiliated banks , controlled 11,300 million marks, that is,
about 83 per cent of the total German bank capital. The Deutsche
Bank, which together with its affiliated banks controls
nearly 3,000 million marks, represents, parallel to the Prussian
State Railway Administration, the biggest and also the most
decentralised accumulation of capital in the Old
World.” [2]

I have emphasised the reference to the “affiliated” banks
because it is one of the most important distinguishing features
of modern capitalist concentration. The big enterprises, and the
banks in particular, not only completely absorb the small ones,
but also “annex” them, subordinate them, bring them into their
“own” group or “concern” (to use the technical term) by
acquiring “holdings” in their capital, by purchasing or
exchanging shares, by a system of credits, etc., etc. Professor
Liefmann has written a voluminous “work” of about 500 pages
describing modern “holding and finance companies,” [3] unfortunately
adding very dubious “theoretical” reflections to what is
frequently undigested raw material. To what results this
“holding” system leads in respect of concentration is best
illustrated in the book written on the big German banks by
Riesser, himself a banker. But before examining his data, let us
quote a concrete example of the “holding” system.

The Deutsche Bank “group” is one of the biggest, if not the
biggest, of the big banking groups. In order to trace the main
threads which connect all the banks in this group, a distinction
must be made between holdings of the first and second and third
degree, or what amounts to the same thing, between dependence
(of the lesser banks on the Deutsche Bank) in the first, second
and third degree. We then obtain the following picture: [4]

| The Deutsche
Bank has holdings: | Direct or 1st degree de- pendence | 2nd degree depen- dence | 3rd degree depen- dence |
| --- | --- | --- | --- |
| Permanently | in 17 other banks | 9 of the 17 have holdings in 34 other banks | 4 of the 9 have holdings in 7 other banks |
| For an indefinite period.... | in 5 other banks | — | — |
| Occasionally.... | in 8 other banks | 5 of the 8 have holdings in 14 other banks | 2 of the 5 have holdings in 2 other banks |
| Totals...... | in 30 other banks | 14 of the 30 have holdings in 48 other banks | 6 of the 14 have holdings in 9
other banks |

Included in the eight banks “occasionally” dependent on the
Deutsche Bank in the “first degree”, are three foreign banks:
one Austrian (the Wiener Bankverein) and two Russian (the
Siberian Commercial Bank and the Russian Bank for Foreign
Trade). Altogether, the Deutsche Bank group comprises, directly
and indirectly, partially and totally, 87 banks; and the total
capital—its own and that of others which it controls—is estimated at between two and three thousand million
marks.

It is obvious that a bank which stands at the head of such a
group, and which enters into agreement with half a dozen other
banks only slightly smaller than itself for the purpose of
conducting exceptionally big and profitable financial operations
like floating state loans, has already outgrown the part of
“middleman” and has become an association of a handful of
monopolists.

The rapidity with which the concentration of banking proceeded
in Germany at the turn of the twentieth century is shown by the
following data which we quote in an abbreviated form from
Riesser:

| SIX BIG BERLIN BANKS |
| --- |
| Year | Branches in Germany | Deposit banks and exchange offices | Constant holdings in German
joint- stock banks | Total establishments |
| 1895... | 16 | 14 | 1 | 42 |
| 1900... | 21 | 40 | 8 | 80 |
| 1911... | 104 | 276 | 63 | 450 |

We see the rapid expansion of a close network of channels which
cover the whole country, centralising all capital and all
revenues, transforming thousands and thousands of scattered
economic enterprises into a single national capitalist, and then
into a world capitalist economy. The “decentralisation” that
Schulze-Gaevernitz, as an exponent of present-day bourgeois
political economy, speaks of in the passage previously quoted,
really means the subordination to a single centre of an
increasing number of formerly relatively “independent,” or
rather, strictly local economic units. In reality it is
centralisation , the enhancement of the role, importance
and power of monopolist giants.

In the older capitalist countries this “banking network” is
still more close. In Great Britain and Ireland, in 1910, there
were in all 7,151 branches of banks. Four big banks had more
than 400 branches each (from 447 to 689); four had more than
200 branches each, and eleven more than 100 each.

In France, three very big banks, Crédit
Lyonnais, the Comptoir National and the Société
Générale extended their operations and their network of branches in the following
manner. [5]

| Number of branches and offices | Capital (000,000 francs) |
| --- | --- |
| Year | In the prov- inces | In Paris | Total | Own Capital | Deposits used as capital |
| 1870 | 47 | 17 | 64 | 200 | 427 |
| 1890 | 192 | 66 | 258 | 265 | 1,245 |
| 1909 | 1,033 | 196 | 1,229 | 887 | 4,363 |

In order to show the “connections” of a big modern bank, Riesser
gives the following figures of the number of letters dispatched
and received by the Disconto-Gesellschaft, one of the biggest
banks in Germany and in the world (its capital in 1914 amounted
to 300 million marks):

| Year | Letters received | Letters dispatched |
| --- | --- | --- |
| 1852... | 6,135 | 6,292 |
| 1870... | 85,800 | 87,513 |
| 1900... | 533,102 | 626,043 |

The number of accounts of the big Paris bank, the Crédit
Lyonnais, increased from 28,535 in 1875 to 633,539 in
1912. [6]

These simple figures show perhaps better than lengthy disquisitions how the concentration of capital and the growth of
bank turnover are radically changing the significance of the
banks. Scattered capitalists are transformed into a single
collective capitalist. When carrying the current accounts of a
few capitalists, a bank, as it were, transacts a purely
technical and exclusively auxiliary operation. When, however,
this operation grows to enormous dimensions we find that a
handful of monopolists subordinate to their will all the
operations, both commercial and industrial, of the whole of
capitalist society; for they are enabled by means of their
banking connections, their current accounts and other financial
operations—first, to ascertain exactly the financial position of the various capitalists, then to
control them, to influence them by restricting or enlarging, facilitating or hindering credits, and finally to
entirely determine their fate, determine their income, deprive them of capital, or permit them to increase their
capital rapidly and to enormous dimensions, etc.

We have just mentioned the 300 million marks capital of the
Disconto-Gesellschaft of Berlin. This increase of the capital of
the bank was one of the incidents in the struggle for hegemony
between two of the biggest Berlin banks - the Deutsche Bank and
the Disconto. In 1870, the first was still a novice and had a
capital of only 15 million marks, while the second had a
capital of 30 million marks. In 1908, the first had a capital
of 200 million, while the second had 170 million. In 1914, the
first increased its capital to 250 million and the second, by
merging with another first-class big bank, the
Schaaffhausenscher Bankverein, increased its capital to 300
million. And, of course, this struggle for hegemony went hand in
hand with the more and more frequent conclusion of “agreements”
of an increasingly durable character between the two banks. The
following are the conclusions that this development forces upon
banking specialists who regard economic questions from a
standpoint which does not in the least exceed the bounds of the
most moderate and cautious bourgeois reformism.

Commenting on the increase of the capital of the Disconto
Gesellschaft to 300 million marks, the German review, Die Bank , wrote: “Other banks will follow this same path and in
time the three hundred men, who today govern Germany economically, will gradually be reduced to fifty, twenty-five or
still fewer. It cannot be expected that this latest move towards
concentration will be confined to banking. The close relations
that exist between individual banks naturally lead to the
bringing together of the industrial syndicates which these banks
favour.... 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. 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.” [7]

This is an example of the impotence of bourgeois journalism
which differs from bourgeois science only in that the latter is
less sincere and strives to obscure the essence of the matter,
to hide the forest behind the trees. To be “surprised” at the
results of concentration, to “reproach” the government of
capitalist Germany, or capitalist “society” (“ourselves”), to
fear that the introduction of stocks and shares might “accelerate” concentration in the same way as the German
“cartel” specialist Tschierschky fears the American trusts and
“prefers” the German cartels on the grounds that they “may not,
like the trusts, excessively accelerate technical and economic
progress” [8]

—is not all this a sign of impotence?

But facts remain facts. There are no trusts in Germany; there
are “only” cartels—but Germany is governed by not more than three hundred magnates of capital, and the number
of these is constantly diminishing. At all events, banks greatly
intensify and accelerate the process of concentration of capital
and the formation of monopolies in all capitalist countries,
notwithstanding all the differences in their banking laws.

The banking system “possesses, indeed, the form of universal
book-keeping and distribution of means of production on a social
scale, but solely the form,” wrote Marx in Capital half a century ago (Russ. trans., Vol. III, part II,
p. 144. [24] )
The figures we have quoted on the growth of bank capital, on the increase in the number of the branches and
offices of the biggest banks, the increase in the number of
their accounts, etc., present a concrete picture of this
“universal book-keeping” of the whole capitalist class;
and not only of the capitalists, for the banks collect, even
though temporarily, all kinds of money revenues—of small
businessmen, office clerks, and of a tiny upper stratum of the
working class. “Universal distribution of means of production”—that, from the formal aspect, is what grows out of the
modern banks, which, numbering some three to six of the biggest in France, and six to eight in Germany, control millions and
millions. In substance , however, the distribution of means of production is not at all “universal,” but private,
i.e., it conforms to the interests of big capital, and primarily, of huge, monopoly capital, which operates under
conditions in which the masses live in want, in which the whole
development of agriculture hopelessly lags behind the development of industry, while within industry itself the “heavy
industries” exact tribute from all other branches of industry.

In the matter of socialising capitalist economy the savings-banks and post-offices are beginning to compete with the
banks; they are more “decentralised,” i.e., their influence
extends to a greater number of localities, to more remote
places, to wider sections of the population. Here is the data
collected by an American commission on the comparative growth of
deposits in banks and savings-banks: [9]

| DEPOSITS (000,000,000 marks) |
| --- |
| Year | Britain | France | Germany |
| | Banks | Savings- banks | Banks | Savings- banks | Banks | Credit Societies | Savings- banks |
| 1880... | 8.4 | 1.6 | ? | 0.9 | 0.5 | 0.4 | 2.6 |
| 1888... | 12.4 | 2.0 | 1.5 | 2.1 | 1.1 | 0.4 | 4.5 |
| 1908... | 23.2 | 4.2 | 3.7 | 4.2 | 7.1 | 2.2 | 13.9 |

As they pay interest at the rate of 4 per cent and 4 1/4 per
cent on deposits, the savings-banks must seek “profitable”
investments for their capital, they must deal in bills,
mortgages, etc. The boundaries between the banks and the
savings-banks “become more and more obliterated.” The Chambers
of Commerce of Bochum and Erfurt, for example, demand that
savings-banks be “prohibited” from engaging in “purely” banking
business, such as discounting bills; they demand the limitation
of the “banking” operations of the post-office. [10]

The banking magnates seem to be afraid that state monopoly will steal upon
them from an unexpected quarter. It goes without saying,
however, that this fear is no more than an expression of the
rivalry, so to speak, between two department managers in the
same office; for, on the one hand, the millions entrusted to the
savings-banks are in the final analysis actually controlled by
these very same bank capital magnates, while, on the other hand, state monopoly in capitalist society is merely a
means of increasing and guaranteeing the income of millionaires
in some branch of industry who are on the verge of bankruptcy.

The change from the old type of capitalism, in which free
competition predominated, to the new capitalism, in which
monopoly reigns, is expressed, among other things, by a decline
in the importance of the Stock Exchange. The review, Die Bank , writes: “The Stock Exchange has long ceased to be the
indispensable medium of circulation that it formerly was when
the banks were not yet able to place the bulk of new issues with
their clients.” [11] “’Every bank is a Stock Exchange,’ and the bigger the bank, and
the more successful the concentration of banking, the truer does
this modern aphorism ring.” [12] “While formerly, in the seventies,
the Stock Exchange, flushed with the exuberance of youth” (a
“subtle” allusion to the Stock Exchange crash of 1873, the company promotion scandals , [25] etc.), “opened the era of the
industrialisation of Germany, nowadays the banks and industry
are able to ‘manage it alone.’ The domination of our big banks
over the Stock Exchange ... is nothing else than the expression
of the completely organised German industrial state. If the
domain of the automatically functioning economic laws is thus
restricted, and if the domain of conscious regulation by the
banks is considerably enlarged, the national economic responsibility of a few guiding heads is immensely increased,”
so writes the German Professor
Schulze-Gaevernitz, [13] an apologist of German imperialism, who is regarded as an authority
by the imperialists of all countries, and who tries to gloss
over the “mere detail” that the “conscious regulation” of
economic life by the banks consists in the fleecing of the
public by a handful of “completely organised” monopolists.

The task of a bourgeois professor is not to lay bare the entire
mechanism, or to expose all the machinations of the bank
monopolists, but rather to present them in a favourable light.

In the same way, Riesser, a still more authoritative economist
and himself a banker, makes shift with meaningless phrases in
order to explain away undeniable facts: “... the Stock Exchange
is steadily losing the feature which is absolutely essential for
national economy as a whole and for the circulation of securities in particular—that of being not only a most
exact measuring-rod, but also an almost automatic regulator of
the economic movements which converge on it.” [14]

In other words, the old capitalism, the capitalism of free
competition with its indispensable regulator, the Stock
Exchange, is passing away. A new capitalism has come to take its
place, bearing obvious features of something transient, a
mixture of free competition and monopoly. The question naturally
arises: into what is this new capitalism “developing”? But the
bourgeois scholars are afraid to raise this question.

“Thirty years ago, businessmen, freely competing against one
another, performed nine-tenths of the work connected with their
business other than manual labour. At the present time,
nine-tenths of this ‘brain work’ is performed by employees . Banking is in the forefront of this
evolution.” [15]

This admission by
Schulze-Gaevernitz brings us once again to the question: into
what is this new capitalism, capitalism in its imperialist
stage, developing?

Among the few banks which remain at the head of all capitalist
economy as a result of the process of concentration, there is
naturally to be observed an increasingly marked tendency towards
monopolist agreements, towards a bank trust . In
America, not nine, but two very big banks, those of the
multimillionaires Rockefeller and Morgan, control a capital of
eleven thousand million marks. [16]

In Germany the absorption of the
Schaaffhausenscher Bankverein by the Disconto-Gesellschaft to
which I referred above, was commented on in the following terms
by the Frankfurter Zeitung , [26] an organ of Stock Exchange interests:

“The concentration movement of the banks is narrowing the circle
of establishments from which it is possible to obtain credits,
and is consequently increasing the dependence of big industry
upon a small number of banking groups. In view of the close
connection between industry and the financial world, the freedom
of movement of industrial companies which need banking capital
is restricted. For this reason, big industry is watching the
growing trustification of the banks with mixed feelings. Indeed,
we have repeatedly seen the beginnings of certain agreements
between the individual big banking concerns, which aim at
restricting competition.” [17]

Again and again, the final word in the development of banking is
monopoly.

As regards the close connection between the banks and industry,
it is precisely in this sphere that the new role of the banks
is, perhaps, most strikingly felt. When a bank discounts a bill
for a firm, opens a current account for it, etc., these
operations, taken separately, do not in the least diminish its
independence, and the bank plays no other part than that of a
modest middleman. But when such operations are multiplied and
become an established practice, when the bank “collects” in its
own hands enormous amounts of capital, when the running of a
current account for a given firm enables the bank—and this is what happens—to obtain fuller and more detailed
information about the economic position of its client, the
result is that the industrial capitalist becomes more completely
dependent on the bank.

At the same time a personal link-up, so to speak, is established
between the banks and the biggest industrial and commercial
enterprises, the merging of one with another through the
acquisition of shares, through the appointment of bank directors
to the Supervisory Boards (or Boards of Directors) of industrial
and commercial enterprises, and vice versa. The German economist, Jeidels, has compiled most detailed data on this form
of concentration of capital and of enterprises. Six of the
biggest Berlin banks were represented by their directors in 344
industrial companies; and by their board members in 407 others,
making a total of 751 companies. In 289 of these companies they
either had two of their representatives on each of the respective Supervisory Boards, or held the posts of chairmen. We
find these industrial and commercial companies in the most
diverse branches of industry: insurance, transport, restaurants,
theatres, art industry, etc. On the other hand, on the
Supervisory Boards of these six banks (in 1910) were fifty-one
of the biggest industrialists, including the director of Krupp,
of the powerful “Hapag” (Hamburg-Amerika Line), etc., etc. From
1895 to 1910, each of these six banks participated in the share
and bond issues of many hundreds of industrial companies (the
number ranging from 281 to
419). [18]

The “personal link-up” between the banks and industry is
supplemented by the “personal link-up” between both of them and
the government. “Seats on Supervisory Boards,” writes Jeidels,
“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.” . . . “Usually, on the
Supervisory Board of a big bank, there is a member of parliament
or a Berlin city councillor.”

The building and development, so to speak, of the big capitalist
monopolies is therefore going on full steam ahead in all
“natural” and “supernatural” ways. A sort of division of labour
is being systematically developed amongst the several hundred
kings of finance who reign over modern capitalist society:

“Simultaneously with this widening of the sphere of activity of
certain big industrialists (joining the boards of banks, etc.)
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 assumes the supervision of several
separate enterprises, or of a group of enterprises in the same
branch of industry or having similar interests.... (Capitalism
has already reached the stage of organised supervision of
individual enterprises.) One specialises in German industry,
sometimes even in West German industry alone (the West is the
most industrialised part of Germany), 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 is
often assigned a special locality or a special branch of
industry; one works chiefly on Supervisory Boards of electric
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 insurance companies.... In short, there can be no doubt that the growth in
the dimensions and diversity of the big banks’ operations is
accompanied by an increase in the 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 of the general problems of industry and
the special problems of each branch of industry, thus making
them more capable 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 men
who are experts in industrial affairs, such as industrialists,
former officials, especially those formerly in the railway
service or in mining,” etc. [19]

We find the same system only in a slightly different form in
French banking. For instance, one of the three biggest French
banks, the Crédit Lyonnais, has organised a financial research service ( service des études financières ), which permanently employs over fifty
engineers, statisticians, economists, lawyers, etc. This costs
from six to seven hundred thousand francs annually. The service
is in turn divided into eight departments: one specialises in
collecting information on industrial establishments, another
studies

general statistics, a third, railway and steamship companies, a fourth, securities, a fifth, financial reports,
etc. [20]

The result is, on the one hand, the ever-growing merger, or, as
N. I. Bukharin aptly calls it, coalescence, of bank and
industrial capital and, on the other hand, the growth of the
banks into institutions of a truly “universal character”. On
this question I find it necessary to quote the exact terms used
by Jeidels, who has best studied the subject:

“An examination of the sum total of industrial relationships
reveals the universal character of the financial establishments working on behalf of industry. 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 locality or branches of industry
and are striving to eliminate the unevenness in the distribution
of capital among localities and branches of industry resulting
from the historical development of individual enterprises.” “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.”

Quite often industrial and commercial circles complain of the
“terrorism” of the banks. And it is not surprising that such
complaints are heard, for the big banks “command,” as will be
seen from the following example. On November 19, 1901, one of
the big, so-called Berlin “D” banks (the names of the four
biggest banks begin with the letter D) wrote to the Board of
Directors of the German Central Northwest Cement Syndicate in
the following terms: “As we learn from the notice you published
in a certain newspaper of the 18th inst., we must reckon with
the possibility that the next general meeting of your syndicate,
to be held on the 30th of this month, may decide on measures
which are likely to effect changes in your enterprise which are
unacceptable to us. We deeply regret that, for these reasons, we
are obliged henceforth to withdraw the credit which had hitherto
been allowed you.... But if the said next general meeting does
not decide upon measures which are unacceptable to us, and if we
receive suitable guarantees on this matter for the future, we
shall be quite willing to open negotiations with you on the
grant of a new credit.” [21]

As a matter of fact, this is small capital’s old complaint about
being oppressed by big capital, but in this case it was a whole
syndicate that fell into the category of “small” capital! The
old struggle between small and big capital is being resumed at a
new and immeasurably higher stage of development. It stands to
reason that the big banks’ enterprises, worth many millions, can
accelerate technical progress with means that cannot possibly be
compared with those of the past. The banks, for example, set up
special technical research societies, and, of course, only
“friendly” industrial enterprises benefit from their work. To
this category belong the Electric Railway Research Association,
the Central Bureau of Scientific and Technical Research, etc.

The directors of the big banks themselves cannot fail to see
that new conditions of national economy are being created; but
they are powerless in the face of these phenomena.

“Anyone who has watched, in recent years,” writes Jeidels, “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 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,
disagreements on this subject of a business and often of a
personal nature are growing. The issue is whether or not the
banks, as credit institutions, will suffer from this intervention in industry, whether they are sacrificing tried
principles and an assured profit to engage in a field of
activity which has nothing in common with their role as
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, to the big banks and modern industrial banking. The
two parties are agreed only on one point: that there are neither
firm principles nor a concrete aim in the new activities of the
big banks.” [22]

The old capitalism has had its day. The new capitalism represents a transition towards something. It is hopeless, of
course, to seek for “firm principles and a concrete aim” for the
purpose of “reconciling” monopoly with free competition. The
admission of the practical men has quite a different ring from
the official praises of the charms of “organised” capitalism
sung by its apologists, Schulze-Gaevernitz, Liefmann and similar
“theoreticians.”

At precisely what period were the “new activities” of the big
banks finally established? Jeidels gives us a fairly exact
answer to this important question:

“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 decentralised basis, 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
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 the actual monopoly of the big banks, and made
this connection much closer and more active.” [23]

Thus, the twentieth century marks the turning-point from the old
capitalism to the new, from the domination of capital in general
to the domination of finance capital.

---
Notes:
[1]

Alfred
Lansburgh, “Fünf Jahre deutsches Bankwesen” in Die Bank , 1913, No. 8.
— Lenin

[2]

Schulze-Gaevernitz, “Die deutsche Kreditbank” in “ Grundriss der Sozialökonomik ”, Tübingen, 1915, 137.
— Lenin

[3]

R. Liefmann, Beteilgungs- und Finanzierungsgesellschaften. Eine Studie über den modernen Kapitalismus und das Effektenwesen , I., Jena, 1909, 212.
— Lenin

[4]

Alfred
Lansburgh, “Das Beteilgungssystem im deutschen Bankwesen”, in
Die Bank , 1910, 500.
— Lenin

[5]

Eugen
Kaufmann, Das französische Bankwesen , Tübingen, 1911, 356 and 362
— Lenin

[6]

Jean
Lescure, L’épargne en France , Paris, 1914,
p. 52.
— Lenin

[7]

A. Lansburgh, “Die Bank mit den 300 Millionen” in Die Bank , 1914, p. 426
— Lenin

[8]

S. Tschierschky, op. cit., 128.
— Lenin

[9]

Statistics of the National Monetary Commission, quoted in Die Bank , 1910, S. 1200.
— Lenin

[10]

Die Bank , 1913, S 811.
— Lenin

[11]

Die Bank , 1914, S 316.
— Lenin

[12]

Dr. Oscar Stillich, Geld- und Bankwesen, Berlin, 1907,
S. 169.
— Lenin

[13]

Schulze-Gaevernitz, “Die deutsche Kreditbank” in Grundriss der Sozialökonomik , Tübingen, 1915, S. 101
— Lenin

[14]

Riesser, op. cit., 4th ed., S 629.
— Lenin

[15]

Schulze-Gaevernitz, “Die deutsche Kreditbank” in Grundriss der Sozialökonomik, Tübingen, 1915, S. 151
— Lenin

[16]

Die Bank , 1912, S. 435.
— Lenin

[17]

Quoted by Schulze-Gaevernitz, op. cit., S 155
— Lenin

[18]

Jeidels, op. cit.; Riesser, op. cit.
— Lenin

[19]

Jeidels, op. cit., S 156-57
— Lenin

[20]

An
article by Eug. Kaufmann on French banks in Die Bank , 1909, 2, S 851 et. seq.
— Lenin

[21]

Dr. Oscar Stillich, Geld- und Bankwesen , Berlin, 1907, S. 147.
— Lenin

[22]

Jeidels, op. cit., S 183-84
— Lenin

[23]

ibid , S. 181.
— Lenin

[24]


[25]


[26]