By the 1860s even the most conservative elements in Prussia had come to see that industrial expansion had outgrown the smaller banks and would best be served by joint stock companies. These would also be based in Berlin. In 1856 David Hansemann founded the Diskonto Bank, which was soon followed by the Berliner Handels-Gesellschaft and the Berliner Bankverein.61 Soon even banks such as the Darmstadter and Dresdner moved to Berlin. By 1870 the ‘D-Banks’ – the Disconto Gesellschaft, Deutsche Bank, Dresdner Bank and the Darmstädter – were playing a vital role in rapid industrialization by raising capital for new enterprises, capital which in Britain had been supplied by the City of London. Here, however, the banks combined commercial banking with long-term industrial financing and provided the investment capital for a number of the new heavy industries in Germany which in turn gave them immense control over important sectors of the economy.62 The Reichsbank was founded in Berlin in 1857 to keep a watchful eye on the dealings of the new financial institutions.
Berlin’s economic importance increased dramatically: in 1850 the circulation of notes in Prussia was around 18 million thalers; by 1875 it was 290 million. The Berlin banking quarter came to reflect this increasing prosperity and security: all along the Behrenstrasse, which ran parallel to the south of Unter den Linden, enormous marble palaces were erected which projected Berliners’ unshakeable faith in the new system. (After the war the ruins of the old banks were torn down and the blocks of stone used to construct the new East German zoo.) Bankers themselves became well-known figures: Carl Fürstenburg was adored by Berliners for his biting wit; in describing a dinner given by the Prussian Minister of Finance he said, ‘Madame Minister appeared in a low but unsuccessful décolleté, a bit like her husband who also sports an uncovered deficit.’ When asked if he knew who had died that day he retorted, ‘Today, anyone will do!’ Hermann Sudermann hinted at Bleichröder’s new status in his notorious play Sodoms Ende when the character Weisse explains: ‘We cannot all scale the luminous heights of humanity where Goethe, Bismarck and Bleichröder stand … although if you open a newspaper in the provinces you will find my name.’63
The new Stock Exchange was closely linked to the industrial transformation and between 1851 and 1857 119 joint stock companies were founded in Prussia. In its second year the Berlin Stock Exchange reported a ‘very considerable and lively turnover in stocks and shares in internal and foreign accounts and for investment and speculation purposes’.64 Berlin trading was heaviest in commodities such as grain, coal and iron, but money was soon needed for growth in industries from metalwork to textiles. The resources of the propertied classes were restricted and financing with one’s own credit and capital was risky, so even in the 1850s entrepreneurs were going to the public to collect capital assets and use them to finance their new projects. The share quickly became a fashionable object in Berlin, a status symbol and topic of polite conversation amongst the very new members of the middle class. The money generated by industry helped to fuel investment, and Berlin found itself in a seemingly endless upward spiral of growth and prosperity. The immensely optimistic newly rich middle class began to change the social face of the city, and the late nineteenth century was to become the golden age of the Besitzbürgertum.
These propertied middle classes initially consisted of self-made men, often the sons of craftsmen or skilled labourers like Borsig or professionals like Siemens who had, through skill and sheer hard work, made fortunes for themselves in the new industries. These men could not aspire to ennoblement and instead worked towards non-hereditary titles and conferments which became highly coveted until well into the 1890s. Receiving the title of Kommerzienrat or Privy Councillor meant that a businessman had ‘arrived’; a title could greatly enhance the standing of the recipient’s business and substantially improve its credit rating. The titles were granted by the king on the recommendation of the Minister of Commerce and holders were nominated by public figures, noblemen, municipal corporations or dignitaries; sons sometimes recommended their fathers in connection with some business jubilee. At least until 1886 a candidate had to pass through a rigorous selection procedure. He had to own or be part owner of a successful enterprise and be active in its management; he might have developed a new branch of industry or enhanced Prussia’s business reputation abroad; he should have done charitable or Church or municipal government work; he had to have good labour relations in his factories, and he had to be considered a ‘notable’ and play a prominent public role. In Berlin a candidate required a minimum personal fortune of 1 million marks, although candidates from the provinces needed half that much. The political restrictions were made very clear: the candidate had to be ‘politically reliable’ – support for the liberals was a tremendous handicap which had to be compensated for by other qualifications; opposition to government made it very difficult for one to get a title and liberal activists and active supporters of the Fortschrittspartei (Progress party) were barred without question.65
The preferments were something of a meritocracy in the otherwise class-and code-ridden city, and one measure of this was the large number of titles granted to Jewish businessmen. The later tragedy of the Holocaust was particularly difficult to accept in a city which rose to prominence largely because of its entrepreneurial Jewish population; indeed without the input of these Jews the city would never have reached the economic and financial heights of the nineteenth century. Unlike areas such as the Ruhr, where most title holders were Gentiles, over 40 per cent of those in Berlin were Jewish and it was estimated that about half the economic activity in the city was generated by Jewish businessmen.66 Their success attracted more Jews to the city so that by the 1870s 80 per cent of Prussian Jews had moved to Berlin. The Jews were important in industries and services centred there; whereas Gentile millionaires tended to be in the coal, iron, steel, metallurgy and machine-building industries, Jews were particularly successful in banking, manufacturing and trade, all of which were highly represented in the Prussian capital. Berlin industrial history was shaped by important Jewish families not only in banking and finance but, like the Reichenbeims and Goldschmidts, also in clothing; the silk manufacturers the Meyers had royal patronage; the Liebermanns were an old trading family which made a fortune in calico and pioneered the use of mechanical manufacturing. Jews were also prominent in brewing and distilling and all the service industries. Thanks to the capital generated there economic decision-making came to be concentrated in Berlin, at the expense of Frank-furt-am-Main, Cologne, Hamburg and other older centres. Berlin was never free of anti-Semitism but Jews were given more freedom and were increasingly seen as important and respected members of mid nineteenth-century Berlin society. One measure of this acceptance was the increase in official recognition of their contribution in the form of orders which gave them a seal of respectability in the Gentile world. The fact that a candidate for honours like the Geheimer Kommerzienrat was Jewish was mentioned in the confidential reports as a minor flaw but not insurmountable as long as he showed Christian or patriotic ‘virtues’ – to be a liberal or even a Catholic was often seen as a more serious hurdle to advancement. One report stated that ‘the candidate, although Jewish, employed in his office mainly Christian clerks’ or ‘although a Jew, he has always acted in a Christian spirit’; of another, ‘it is precisely because he is a Jew and a traditional liberal, but in times of need a generous patriot, that his appointment would be generally welcomed’.67 It was only in the final quarter of the century, when racial anti-Semitism was on the rise, that such recommendations became rare. Ironically one of the triggers would be jealousy of increasing Jewish wealth and success which Berliners themselves had championed in the mid nineteenth century.
The economic rise of Berlin throughout the nineteenth century is one of the most remarkable success stories in history, made all the more dramatic given the depths to which it had fallen under Napoleon. In the early part of the century Berlin had been an economic backwater languishing on the edge of western Europe; when Napoleon marched in it had only one steam engine in the Royal Porcelain Works, and even that did not work. Compared with the new English industrial cities like Birmingham and Manchester Berlin was little more than