Deutsche Bank - In the Weimar Republic

In the Weimar Republic

1919 - 1932

After the First World War bankers had to come to terms with a very different world. Before business was able to recover, Germany was hit by inflation.

At the peak of inflation in 1923: banknote for 20 billion marks

The immediate postwar period was a time of liquidations. Having already lost most of its foreign assets, Deutsche Bank was obliged to sell other holdings. A great deal of energy went into shoring up what had been achieved. But there was new business, too, some of which was to have an impact for a long time to come. The bank played a significant role in the establishment of the film production company, UFA, and the merger of Daimler and Benz.

The concentration of the German banking industry continued in the 1920s, peaking in 1929 when Deutsche Bank merged with its most powerful rival, Disconto-Gesellschaft. For eight years what was easily Germany's largest bank operated under a dual name - Deutsche Bank und Disconto-Gesellschaft - before reverting to its former, rather more memorable name in 1937.

Increasing costs were one reason for the merger. Another was the trend towards concentration throughout the industry. The merger was the most significant thing to have happened in the German financial world for decades, and it came at just the right time to help counteract the emerging world economic and banking crisis.

Banking crisis in Germany 1931

In terms of its political impact, that crisis was the most disastrous economic event of the century. The shortage of liquidity that paralyzed the banks was fuelled by a combination of short-term foreign debt and borrowers no longer able to pay their debts, while the inflexibility of the state exacerbated the situation. For German banks, the crisis in the industry was a watershed. A return to circumstances that might in some ways have been considered reminiscent of the "golden age" before the First World War was ruled out for many years. Instead, banks went onto the defensive, and there followed a period of subordination to the power of the state - a period that lasted until after 1945.

1920
Merger with Hannoversche Bank, Braunschweiger Privatbank and Privatbank zu Gotha

1924-25
Merger with Württembergische Vereinsbank in Stuttgart and Essener Credit-Anstalt

1926
Participation in the founding of Lufthansa and in the merger of Daimler Motoren-Gesellschaft, Stuttgart, with Benz & Cie., Mannheim, to form Daimler-Benz AG

1929
Merger of Deutsche Bank and Disconto-Gesellschaft; the company receives the name "Deutsche Bank und Disconto-Gesellschaft"

1931-32
Following the banking crisis, Deutsche Bank und Disconto-Gesellschaft has to deposit 50 million reichsmarks of its RM 144 million share capital with the state-owned Golddiskontbank

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