Nationalism and Municipal Savings Banks in Bohemia before 1914

Abstract

Bohemia was the most industrialized province of the Habsburg Monarchy in the late nineteenth century. It was also the site of what was, arguably, the decisive nationality conflict of late nineteenth-century Habsburg history-that between the Czechs and the Germans. National competition found its expression in cultural activities and associations, in the political arena, and in the economic sphere. Economic competition between Czechs and Germans focused on several areas, among them the ownership of property and its attendant voting rights; control of certain sectors of industry, for example, the sugar industry; and control of financial assets. The national affiliation of financial institutions became an issue during the second half of the nineteenth century. Czechs and other nationalities sometimes found it difficult to obtain credit from, or to influence the financial policies of, the Austrian National Bank or the large commercial banks located in the provincial capitals or in the imperial capital, Vienna. These large banks tended to be dominated by German financiers, and they generally restricted their loans to well-established businessmen, large landowners, and wealthy home-owners. The large banks therefore bypassed the small businessman, farmer, or homeowner, especially those living in the smaller provincial towns who formed the basis of the Czech national movement in its early years. As the Bohemian economy expanded in the nineteenth century, the need for financial services in the small towns of the provinces grew. To a large extent this demand was met by a secondary credit sector, made up of several new types of financial institution, including credit cooperatives, agricultural cooperatives, and municipal savings banks. These smaller banks were often deliberately allied with one national group or another. They formed the basis for financial self-help. Municipal savings banks, in particular, provided special services to support small-town business and to help modernize urban life in Bohemia.