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Money form the Privatnotenbanken
The Privatnotenbank (private bank to issue banknotes) were banks within the German states that
were mostly owned or founded as an initiative of business people and other private (non-government)
institutions and investors. These banks had the privilege to issue legal tender, i.e. banknotes.
Many of the kingdoms and countries that made up Germany before 1871 had the need and desire to
create a bank that was responsible for the regional money supply. The foundation of these banks
were the roots of the Privatnotenbanks.
Most of the Privatnotenbanks were created in the 2nd half of the 19th century. Initially they
issued money for their associated areas in regional currency such as Thaler or Gulden. After the
unification of Germany in 1871, which brought the states into the Reich, the money was reformed,
too. The Mark became the new currency. Many of the banknotes
denominated in the old currency, however, was valid for many years still and used in parallel to the
Mark.
The Reichsbank in Berlin controlled the money supply
of the Mark centrally (as per the new banking law of 14. March 1875). Some of the Privatnotenbanks
in the states of the German Reich were allowed to continue to issue money. However this issuing
right was restricted and regulated by the Reichsbank. Therefore many of the banks with former rights
to issue banknote withdrew from it and focussed on their commercial business.
By 1875 in Germany 32 Privatnotenbanks had the right to issue money. Only 17 banks initially
complied with the new law. 6 banks gave up their issuing privilege voluntarily. More followed.
By 1892 only 10 Privatnotenbanks continued to issue banknotes and by 1906 only the 4 largest banks
were left: Badische Bank, Bayerische Notenbank, Sächsische Bank and Württembergische
Notenbank.
After the Inflation the new law of the Privatnotenbanken
(30. August 1924) allowed these banks to stay in business. This law entailed a cancellation clause,
which could be triggered at the 10th anniversary of the law. The Nazis used this clause to remove the
right to issue banknotes from all private Notenbanks in 1934.
The following pages contain more detailed information about the history and the banknotes issued
within the various regions and states of Germany:
Find out more about the historical background of the
imperial period and
Weimar Republic.
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