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History of banks

During the first half of the 19^th century, credit operations in Moldavia were controlled by money exchangers and usurers, most of them based in Jassy, but some also in Galaţi. Merchants such as Sechiari, Marcu Thal, the Avramovici brothers, the Schlinger brothers, I. Mendl, G. Vlasto, etc were also involved in such profitable investments. In 1834 there were four official money exchangers at Galaţi, and their number increased to seven in 1837. Their activity was extremely remunerative taking into account the large number of foreign currencies in use (the national Romanian currency was only coined in 1867) and their huge fluctuations on their rates on the local market. The activity of Marcu Thal deserves a special mention, as he also established a commercial exchange, called a “negotiating casino”; the Avramovici brothers were as important, acting as mediators in the payments of the Moldavian Treasury towards Constantinople[1].

During the second quarter of the 19^th century there were several intentions to establish a bank in Moldavia, but this was only possible in 1856 when a branch of the Ottoman Bank was opened at Galaţi, the first agency of a foreign bank that operated in the country. It was administered by two local enterprisers, A. Powell and H. A. Jackson, and was very active in crediting the export of Romanian goods. In 1866 it was called “The Bank of Romania”, the branch in Galaţi being led by H. A. Jackson. The interest for loans was 12 percent, but sometimes it was as high as 18 percent[2].

In October 1856 a branch of the “Prussian Bank” was also opened, and its capital was sufficiently large to allow its agent, Iosif Hamburger, to lease the export rights for Wallachian grain in 1857. In the same year a branch of the National Bank of Moldavia, established at Iaşi with German, English and French capital was opened at Galaţi, being led by the same enterpriser. Its activity seems rather prosperous: it had a capital of 160,000 ducats (4,992,000 lei), but it was dissolved after the onerous affairs of its director. After 1858 the Schlinger brothers took over several of the commercial businesses in which the local branch of the bank had invested[3].

In the following period there were established at Galaţi branches of the central banks settled in Bucharest, but the modern organisation of the Romanian banking system began after the gaining of national independence in 1878 and the foundation of the National Bank of Romania in 1880. Among the important state institutions created during this period, which had local branches at Galaţi, the following deserve a special mention:

The General Cashier. All incomes of the state, county and local institutions were collected at the General County Cashier, which also paid the expenses of the county. Among these incomes, several were directly paid to the cashier’s, others were collected by revenue officers, and others by the heads of different services, such as the Customs Office, the service of the Tobacco Monopoly, the Telegraph and Post Office, etc[4].

The Economy House. By a law passed in 1880 there was established an Economy House besides the House of Depositions and Consignments, which, in local counties, was represented by a special service, merged to the General Cashier’s, under the control and responsibility of the chief cashier. A branch was opened at Galaţi in April 1881. From its establishment and until October 1889, there were issued in Covurlui County 5,830 pass books, for a deposited amount of 1,406,042 lei, of which there were withdrawn 3,064 pass books worth of a total of 1,067,332.58 lei. The institution’s activity greatly increased during the 1880s. If in 1881 a total of 72,000 lei was deposited and 18,000 lei withdrawn, in 1890 the amounts were 315,000 lei and respectively 72,000 lei. The deponents were classified into the following professions: 340 free professions (doctors, lawyers, etc.), 15 workers, 165 employers, 113 servants, 85 merchants, and 1,647 pupils[5].

The National Bank. The Galaţi branch was opened in March 1881, and its director was A. Borghetti, former merchant and industrialist, followed in 1889 by T. Petrini. The bank discounted commercial effects, polices and order notes from merchants, bankers, manufacturers and wholesale traders. In its first year, the bank discounted 1,167 effects, worth of 5,845,007.67 lei, earning a net profit from interests taken (4 percent) of 54,100.79 lei. In 1889 there were discounted 6,122 effects worth 10,291,493.48 lei, with a net profit of 134,268.83 lei (6 percent interest). From its foundation until the end of 1889, the branch of the National Bank provided to the local traders the amount of 71,509,130.62 lei, with an interest that varied between 4 and 6 percent. Another operation was the loan on bonds and public effects[6].

During the following period, the number of private banks in Romania increased tremendously (to about 200 institutions), and many of them had branches at Galaţi. According to some information, the 228 banks that existed in Romania in 1914 had a capital of 228.3 million lei. The largest nine banks (eight of them with the headquarters in Bucharest) had a capital of 191 million lei (capital and reserve funds).

A branch of the “Romanian Bank” (Romanian capital) operated at Galaţi until 1889, when it was transferred to Brăila. In 1913 the branch was returned to Galaţi[7].

“The Marmorosch, Blank & Co. Bank” was founded as an anonymous society in 1904 and in the next years it opened branches in the main commercial cities of Romania. In 1913 a branch was operational at Galaţi, after taking over the bank of local enterpriser August dall’Orso. The latter had a banking society in 1907, and the “Marmorosch, Blank and Co. Bank”, the “Hungarian Commercial Bank”, etc. were among its main shareholders[8].

“The Bank of Romanian Credit” appeared as an anonymous society in 1904, as a continuation of the “Jeschek & Co.” house bank, established in 1888. In 1908 it merged with the “Dickins & Co. Bank”, controlled by a Viennese bank, which had a branch at Galaţi[9].

“The Romanian Commercial Bank” was founded in 1907 with capital from several large European banks and from other local investors. It established an agency at Galaţi in the same year, and then another one at Brăila[10].

“The Commercial Bank”, with Romanian capital (10 million lei), was founded in 1897 by state initiative (“The Agricultural Bank”). In 1914 it had several branches and agencies, including one at Galaţi.

“The Bank of Commerce and Agriculture”, with its headquarters at Galaţi, was opened in 1913, with a capital of 500,000 lei[11].

Picture 4.1.7.1_1. The National Bank, Galaţi branch (about 1912)
Source: www.bvau.ro

At the beginning of the 20^th century, at Galaţi there were branches of the following credit institutions: “The National Bank”, “The Discount Bank”, “Dunărea, Cooperative Society”. Among local bankers a special mention deserves the following enterprisers: Nicu and Vasile Apostolide, August dall’Orso, I. Ornstein, I. O. Rotemberg, Jacques Rubinştein, the Schaw brothers, I. Al. Urban, Filip Helpern. There also were several saving societies such as “Covurlui”, I. G. Aburel Exchange House, I. D. Hohn, Hafner, Kivovici, V. Stoicovici, etc.[12]. Other source mentions the banking operations done by A. Schwab, I. Loebel, Procopie Procopiu, the Ştefan brothers and Ion Stoicovici[13].

According to a statistics from 1913, there operated at Galaţi three banks with a capital under 100,000 lei (a total of 273,700 lei), one with a capital between 200,000 and 300,000 lei (295,600 lei), two between 300,000 and 500,000 lei (a total of 846,000 lei) and one with a capital between 500,000 and 1,000,000 lei (793,500 lei). The banks were established during the following periods: 1880–1890 – one, 1890–1900 – two, 1900–1910 – one and 1910–1913 – three. There were also four anonymous societies with a capital of 1,665,196 lei[14].

Table 4.1.7.1_1

The evolution of commercial banks, by number and capital, 1865–1913[15]

Year	Number	Capital (thousand lei)	Total	Capital (thousand lei)
1865	1	10,000.0	1	10,000.0
1871	1	0.3	2	10,000.3
1874	1	7.6	3	10,007.9
1881	2	12,000	5	22,007.9
1883	2	72.1	7	22,007.9
1885	1	1.0	8	22,080.0
1890	1	4.9	9	22,081.0
1892	1	5.0	10	22,085.9
1893	1	60.0	11	22,090.9
1894	2	12,234.1	13	22,150.9
1897	2	10,200.0	15	34,385.0
1898	3	2,300.0	18	44,585.0
1899	7	1,173.0	25	46,885.0
1900	7	1,300.0	32	48,058.0
1901	5	358.2	37	49,716.2
1902	3	128.0	40	49,844.2
1903	2	110.0	42	49,954.2
1904	3	3,200.0	45	53,154.2
1905	11	10,110.0	56	63,264.2
1906	7	1,929.0	63	65,193.2
1907	8	13,520.2	71	79,006.0
1908	12	12,520.2	83	91,527.0
1909	1	3,833.0	84	91,527.0
1910	35	18,206.0	118	113,660.0
1911	32	45,451.0	150	159,117.0
1912	35	32,343.0	185	191,460.0
1913	12	24,344.0	197	215,804.0

[1] Constantin C. Angelescu, “Creditul in Moldova de la 1848 la 1864”, in Dezvoltarea economiei Moldovei intre anii 1848 şi 1864. Contribuţii (Bucharest: Editura Academiei Republicii Populare Române, 1963), 389–390; Constantin Buşe, Comerţul exterior prin Galaţi sub regimul de port franc (1837–1883) (Bucharest: Editura Academiei Republicii Socialiste România, 1976), 84–85; Paul Păltănea, Istoria oraşului Galaţi de la origini până la 1918, second edition, edited by Eugen Drăgoi (Galaţi: Editura Partener, 2008), vol. I, 329–330 and vol. II, 38.

[2] Tezaur documentar gălăţean, edited by Cezar Bejan, Alexandru Duţă, Stelian Iordache, Viorica Solomon (Bucharest: Direcţia Generală a Arhivelor Statului, 1988), 180; Angelescu, “Creditul”, 390–395; Buşe, Comerţul, 85; Păltănea, Istoria, I, 330–331; II, 40, 129.

[3] Ibid.

[4] Moise N. Pacu, Cartea judeţului Covurluiu. Note geografice, istorice şi în deosebi statistice (Bucharest: Stabilimentul Grafic I. V. Socecu, 1891), 278–282.

[5] Ibid., 282.

[6] Ibid., 284–289; Toma Dragomirescu, Istoricul băncilor din România şi al tuturor instituţiunilor de credit şi societăţi de asigurări, urmat de o statistică generală (Bucharest: Speranţa, Institut de Arte Grafice, 1908), 7–11; Buşe, Comerţul, 173; Păltănea, Istoria, II, 198. Details on the building of the local branch in Valentin Bodea, Monumente istorice şi de arhitectură din oraşul Galaţi din a doua jumătate a secolului al XIX-lea – prima jumătate a secolului al XX-lea (Galaţi: Pax Aura Mundi, 2014), vol. 3, 52–54.

[7] Păltănea, Istoria, II, 198.

[8] Dragomirescu, Istoricul, 14–16; Păltănea, Istoria, II, 198.

[9] Dragomirescu, Istoricul, 17, 22.

[10] Ibid.; Păltănea, Istoria, II, 198.

[11] Statutele Băncei de comerţ şi agricultură, societate anonimă (Galaţi: Stabilimentul de Arte Grafice “Moldova”, 1912); Păltănea, Istoria, II, 198.

[12] Prefectura Poliţiei Galaţi, Indicatorul oraşului Galaţi, cuprinzând adresele tuturor autorităţilor civile şi militare, ale caselor mari comerciale şi ale tuturor instituţiunilor etc. etc. (s.l: s.e, s.a), 65–67. For such an institution, see Statutele societăţii cooperative de credit economic etc. “Zimbrul” din Galaţi (Galaţi: Tipografia “Buciumul Român”, 1902).

[13] Păltănea, Istoria, II, 198.

[14] Anuarul Statistic al României, 1915–1916 (Bucharest: Tipografia Regală F. Göbl Fii, 1919), 234–237.

[15] Victor Axenciuc, Evoluţia economică a României. Cercetări statistico-istorice, 1859–1947, vol. III, Monedă – credit – comerţ – finanţe publice (Bucharest: Editura Academiei Române, 2000), 96 (Table 37: The evolution of commercial banks, by number and capital, 1865–1913).

References

Websites:

Archival sources:

Serviciul Judeţean Galaţi al Arhivelor Naţionale (The National Archives, Galaţi Branch), Primăria oraşului Galaţi (The Municipality of Galaţi), files starting with 1831.

Bibliography:

Angelescu, Const. C., “Primele încercări de a înfiinţa instituţii de credit în Moldova” [The First Attempts to Establish Credit Institutions in Moldavia], SCS, History, 14:2 (1963).

Angelescu, Constantin C., “Creditul in Moldova de la 1848 la 1864” [The Credit in Moldavia from 1848 to 1864], in Dezvoltarea economiei Moldovei intre anii 1848 şi 1864. Contribuţii [The Development of Moldavia’s Economy between the Years 1848 and 1864. Contributions] (Bucharest: Editura Academiei Republicii Populare Române, 1963).

Anuarul Statistic al României, 1915–1916 [The Statistical Yearbook of Romania, 1915–1916] (Bucharest: Tipografia Regală F. Göbl Fii, 1919).

Axenciuc, Victor, Evoluţia economică a României. Cercetări statistico–istorice, 1859–1947, vol. III, Monedă – Credit – Comerţ – Finanţe publice [Romania’s Economic Evolution. Statistical–Historical Researches, 1859–1947, vol. III, Currency – Credit – Trade – Public Finance] (Bucharest: Editura Academiei Române, 2000).

Băicoianu, C. I., Istoria politicei noastre monetara şi a Băncii naţionale, 1880–1914 [The History of Our Monetary Policy and of the National Bank, 1880–1914], (Bucharest, Imprimeria Naţională, 1932).

Bodea, Valentin, Monumente istorice şi de arhitectură din oraşul Galaţi din a doua jumătate a secolului al XIX-lea – prima jumătate a secolului al XX-lea [Historical and Architectural Monuments from the City of Galaţi from the Second Half of the 19^th Century – the First Half of the 20^th Century], vol. 3 (Galaţi: Pax Aura Mundi, 2014).

Buşe, Constantin, Comerţul exterior prin Galaţi sub regimul de port franc (1837–1883) [The Foreign Trade through Galaţi under the Regime of Free Port (1837–1883)] (Bucharest: Editura Academiei Republicii Socialiste România, 1976).

Casias, B., Instituţiunile de credit. Rolul şi importanţa lor. Imprumutul naţional [The Credit Institutions. Their Role and Importance. The National Loan] (Bucharest: Tip. Idealul, 1918).

Dragomirescu, Toma, Istoricul băncilor din România şi al tuturor instituţiunilor de credit şi societăţi de asigurări, urmat de o statistică generală [The History of Banks in Romania and of All Credits Institutions and Insurance Companies, Followed by a General Statistics] (Bucharest: Speranţa, Institut de Arte Grafice, 1908).

Pacu, Moise N., Cartea Judeţului Covurlui. Note geografice, istorice şi în deosebi statistice [The Book of Covurlui County. Geographical, Historical and Mainly Statistical Notes] (Bucharest: Stabilimentul Grafic I. V. Socecu, 1891).

Păltănea, Paul, Istoria oraşului Galaţi de la origini până la 1918 [The History of Galaţi from Its Beginnings to 1918], second edition, edited by Eugen Drăgoi (Galaţi: Editura Partener, 2008).

Prefectura Poliţiei Galaţi, Indicatorul oraşului Galaţi, cuprinzând adresele tuturor autorităţilor civile şi militare, ale caselor mari comerciale şi ale tuturor instituţiunilor etc. etc. [The Indicator of Galaţi City, Containing the Addresses of All Civil and Military Authorities, of the Large Commercial Houses and of All Institutions etc.] (Galaţi: s.e, s.a).

Slăvescu, V., Băncile comerciale mijlocii din România [The Middle Commercial Banks in Romania] (Bucharest: Atelierele Grafice Universala, 1915).

Statutele Băncei de comerţ şi agricultură, societate anonimă [The Statutes of the Bank of Trade and Agriculture] (Galaţi: Stabilimentul de Arte Grafice “Moldova”, 1912).

Statutele societăţii cooperative de credit economic etc. “Zimbrul” din Galaţi [The Statutes of the “Zimbrul” Cooperative Company of Economic Credit] (Galaţi: Tipografia “Buciumul Român”, 1902).

Tezaur documentar gălăţean [Tresure of Documents on Galaţi], edited by Cezar Bejan, Alexandru Duţă, Stelian Iordache, Viorica Solomon (Bucharest: Direcţia Generală a Arhivelor Statului, 1988).

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