Papers of the London banking house: Correspondence Department files (XI/111 series)
Special Subject files of the Correspondence Department in the XI/111 series cover the period from 1929 to 1936, and include substantial information on the question of cross-deposits and the steps that were taken by the international banking community to rescue the Creditanstalt.
The files start in 1919 (XI/111/167). This file deals with the purchase of 15,000 shares in Credit-Anstalt by NMR.
Three of the other files, XI/111/488, XI/111/521 and XI/111/596, cover the period 1929-1936, dealing mainly with the subject of cross deposits and the events that occurred surrounding that issue, and the measures that were taken by the foreign creditors after the Credit-Anstalt failed to rescue it. These files contain letters, telegrams and cables between New Court and the various other foreign banks involved and with the Austrian National Bank and also with various representatives of the Austrian Government. There are also copies of the legal documents that were produced as a result of the disagreement with the Austrian National Bank over the cross deposits issue and the Agreement that was finally reached between the parties in 1932.
XI/111/488 contains much detail about the cross deposits dispute in particular. According to Rothschilds in October 1929, Dr Ehrenfest, a Managing Director of the Credit-Anstalt, contacted New Court informing them that the Austrian National Bank wished to place on deposit with Rothschilds up to $3 million which was to be loaned to the Credit-Anstalt. There were other foreign banks involved, namely New York Trust Co., S. Japhet & Co. Ltd, Anglo International Bank and Banque des Pays de l’Europe Centrale who all received deposits in the same way. The arrangement was made because for political reasons the Austrian National Bank could not give foreign currency deposits direct to Credit-Anstalt. The matter was brought to a head in November 1931 by the Austrian National Bank who called in their deposits with Rothschilds who refused because “any moneys offered to us [Rothschilds] in this way by the Austrian National Bank could only be disposed of by the Credit-Anstalt”. Since the breakdown of the Credit-Anstalt, the Austrian National Bank “pretended that it had no knowledge of any such arrangement with the Credit-Anstalt”. Dr Brauneis of the Austrian National Bank “steadfastly denied that there could be any connection between the Austrian National Bank and the Credit-Anstalt in the case of these cross deposits”. They decided that “we have no alternative, but to have the question tested in the English Courts”. A writ was duly issued on Rothschilds. Eventually, in December 1932 an “Agreement of Compromise” was reached.
Also in XI/111/488 there is correspondence relating to the merger with the Boden-Credit-Anstalt in 1929, details of the claims of the various foreign banks and draft copies of the Standstill Agreement that was reached between the Austrian National Bank, the American banks and the British banks in August 1932.
XI/111/521 and XI/111/596 contain correspondence relating to the steps that were taken by the international banking community to rescue the Credit-Anstalt. There are discussions on setting up a committee in London to deal with the matter, various reports and comments on the situation, and more discussion on the cross-deposits issue. In addition there are letters debating the merits of the various plans that were put forward by Kindersley of Lazards and Dr Rintelen of the Austrian Government in late 1932 and early 1933 which eventually led to the second Credit-Anstalt Agreement being signed and ratified by all parties in May 1933.
A full listing of all available files in the XI/111 series relating to the Creditanstalt crisis will be found on a Rothschild Archive microsite. 'The Rothschild Business'. A Rothschild Research Forum account is required to access this site. Go to The Rothschild Business » or Apply for a Rothschild Research Forum account here »
Note: some files relating to the Creditanstalt remain closed.