British Overseas Banking in Latin America and the Encroachment of German Competition, 1887–1914

Abstract

In January 1912 in an article on “British Banking Interests in South America,” theSouth American Journaladvised its readers that while British banks were unquestionably profitable investments they did not have the field entirely to themselves, “for they not only had to face the competition of local, in many cases State-owned banks, but also the competition of several very successful and strong German banking companies, such as the Deutsche Bank, etc.” Nevertheless, British banks had the advantage of considerable experience in the business, an experience at that time dating back nearly fifty years. This statement gives direct expression to the theme of this paper, namely, the continuing prosperity of the British overseas banks in Latin America despite the competition of the more recently established, but nonetheless very successful, German overseas banks. Moreover, aside from the inevitable competition from local Latin American banks, it is to be noted that the only foreign competitors mentioned are the German banks. This was because the several Spanish, French, and Italian banks in the region had much more the structure and character of Latin American institutions based on investment and support from the local immigrant communities of those nations rather than the structure of overseas banks run from Europe.