SPINK UK will auction the Loans of the German Reich from the “Reichsbank vault” on Friday, Nov 20, in London. Here is the interesting history of these loans. The German version with more pictures can be viewed here as 14 pages pdf. Author: Peter Christen, SPINK CH
The Kaiserzeit 1871-1918
Kaiser Wilhelm I
The German Reich was founded following the German victory over France in the Franco-German War (1870/71) under the leadership of Kaiser Wilhelm I. Until 1890, the politics of the Reich was dominated by the so-called „Iron Chancellor“, Otto von Bismarck. His influence also extended to the establishment of the Reich’s fiscal administration.
Otto von Bismarck
The first fiscal measure was the unification and standardisation of the currencies with the introduction of the Mark and the Gold Standard. In building up the financial authorities, the Reich often fell back on existing Prussian institutions and assigned them the new Reich’s function.
Reich‘s Debt Administration (Reichsschuldenverwaltung)
The Reich’s Debt Administration was founded in 1871 and has its origins in the Prussian Main Administration of the States Debt. It took over the Administration of the Reich’s Debt and the conversion of the old loans into the new Mark. It was under the control of the Chancellor and under supervision of the Reich’s Debt Commission. The following persons were the directors of the Reich’s Debt Office during the existence of the German Reich: 1874–1879: Botho Heinrich zu Eulenburg, 1879–1892: Friedrich Hermann Sydow, 1892–1905: Otto von Hoffmann, 1905–1907: Rudolf von Bitter der Jüngere und 1907–1918: Alexander von Bischoffshausen. During the Weimar Republic, the directors were Carl Halle 1918–1928 and Ernst Articus 1929–1944. The later remained in office for the vast majority of Nazi rule. All Reich borrowing was signed off by the director of the Reich’s Debt Office. Their facsimile signature is always the first signature on the left of the signatures of all directors of the Debt Administration on the individual certificates of all loans of the German Reich.
As France was required to pay war reparation to the German Reich, it required virtually no additional finance in its infancy. The Constitution determined that all current expenditures had to be financed by tax, tariffs, post and railway and that any fiscal deficit had to be covered by the Länder. The Loan bill from 27.1.1875 enabled the Reich to obtain external finance and to issue new loans. The purpose of these loans were the development of a Reich’s army, marine, fortifications and coastal defences, a post and telegraph administration, financing the acquisition of the Reichsdruckerei, minting a new coin, the implementation of the customs-free zone for Hamburg and Bremen and the construction of the Nord-Ostsee-Canal.
Sales and Distribution of the bonds issued by the Reich’s Debt Administration was taken on by the new German Centralbank, the Reichsbank. It was founded in 1876 and, similarly to the Reichsschuldenverwaltung, originated from an old Prussian Institution, which was founded by Friedrich the Great under the Name „Königliche Giro- und Lehnbank“, laterly called the “Prussian Bank”. The loans that are being sold by Spink auction originate from the safes of the Reichsbank.