Bank Bonanzas

Despite the touted fiscal straits of Britain, news came last week that the "Big Five Banks" have opened an average of one branch bank each week for the past twelvemonth.

The "Big Five," progressive runners-up to the sacrosanct Bank of England, are, of course, the Midland Bank, with 850 branches; Barclays Bank (richest of the "Five") with 1,000 branches; Lloyds Bank, with 1,650; the National Provincial Bank, 1,125; and the Westminster Bank, 926. The value of the premises is estimated at $250,000,000.

Since the War, the "Big Five" have built 100 times as many branch banks as there have been built churches in Great Britain and ten times as many branch banks as there have been built cinema theatres.

Irate citizens of many a rustic four-corners have protested, in let- ters to the Times, the "Yankee-fied" methods of the Big Five Banks which have acquired and torn down numerous picturesque and ancient inns, hostels, pubs, and replaced them with modern sanitary bank premises.

A far more docile citizenry, in Germany, has regarded with a kind of pride the growth of their own banks. At present the Berliner Handels, the Disconto Bank, the Dresdener Bank, the Darmstadter (Danat) Bank and the Deutsche Bank,* and to a lesser extent the Commerz & Privat Bank and the Mitteldeutsche Kredit Bank, may be said to control German industry.

This control became important during the War. But, even so, German industrialists could call their plants their own until 1923, when they were forced to pay 18% for their borrowed money. The banks profited well because they could borrow from their British and U. S. connections/- at barely more than 5%. In many cases, concerns could not repay loans, whose interest in less than six years equalled the entire principal. They capitulated to the banks, which became sole owners or at the least, important partners.

These banks have accumulated much business properties in the chief cities, and have profited from their valuations enhanced by passing years. They are financing more Russian business than banking competitors of any other nationality. They are in Egypt, Turkey, the Balkans. No one could underbid them for a recent offering of Belgian railway bonds, and, it is whispered; with a mischievous wink, at the dining tables of the Hotel Adlon in Berlin, that these German bankers have had the audacity to offer loans to both the Belgian and French governments.

That may well be within reason, for they have been able to loan money, with profit to themselves, at 2% interest. That was how they could prevent Dillon, Read & Co.* from underwriting all the $60,000,000 bonds of the newly organized German United Steel Works--the consolidation of Thyssen, Phenix, Rheinstal, Deutsch-Luxembourg steel corporations (TIME, July 5). They permitted Dillon, Read to take only one-half of the offering. They took the other half themselves.

All this explains why, between January and August of this year, shares of Berliners Handel have mounted from 135 to 214 1/2, those of Disconto from 102 3/4 to 164 1/2, those of Dresdener from 102 to 141 3/4, those of Darmstadter from 104 to 208 (doubled in eight months), and those of Deutsche from 104 to 160 3/4.

German bankers pontifically presume that, if they prosper, they can help their country prosper.

* These are the potent "D" banks.

/- Disconto has dealt with W. A. Harriman & Co. and more recently with Dillon, Read & Co. Deutsche's correspondents have been J. Henry Schroeder & Co. and Speyer & Co.

--Dillon, Read has vast plans for German financial penetration, would not needlessly provoke competitors. This week this U. S. investment house expects to offer about $30,000,000 of securities for the German electrical manufacturer, Siemens-Schuckert Halske, will market some in the Netherlands and Germany. The banks already control the German General Electric Co., which dominates the German electrical business.