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| Home > Topics > North America > Deutsche Bank in the US |
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Henry Villard |
Deutsche Bank came into close contact with the dazzling railway tycoon Henry Villard. He came from Germany and had worked his way up from modest circumstances to the top of several railway companies.
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| Completion of the Northern Pacific Railway 1883 |
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He invited Siemens to the USA in 1883 and it was a veritable expedition corps that set out from Bremerhaven to celebrate the completion of the Northern Pacific Railway in the west of the USA in virtually Byzantine proportions together with Villard. However, it was in this excess that the fall had already been laid.
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Deutsche Bank employees in front of the Niagara Falls |
Siemens saw the risks clearly enough, but had gained a positive impression of the company's development potential. He backed Deutsche Bank's participation in the Northern Pacific. Thus, the year 1883 marked the beginning of Deutsche Bank's North American syndicate business that stretched over the following three decades.
Of course, the Northern Pacific did not remain the only railway in which Deutsche Bank had a stake or with which it maintained business relationships, but it was the one that caused the most concerns for the Board of Managing Directors. Again and again, it came into difficulties because it invested more than it could finance. The risks of the involvement were already clearly foreseeable when Deutsche Bank initiated the foundation of the Deutsch-Amerikanische Treuhand-Gesellschaft in 1890. It was, as the bank's annual report formulated, "to become a concentration point around which European owners of American stocks and bonds could group when it came to legal and financial representation of their ownership rights as part of regular business or in emergency situations".
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| Share certification Northern Pacific Railway |
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Just such an emergency situation occurred in 1893: the Northern Pacific became insolvent. In the interests of the German investors, Siemens saw himself with no other choice but to personally arrange for the bail out. With the help of an international syndicate, the company was placed on a solid financial basis.
It came to a fallout with Villard, who had personally not risked or lost anything: »The thing I feel most sorry about for you in the collapse of the Northern Pacific is that you have remained a rich man,« wrote Siemens acrimoniously, unusual for him.
It was the high-profile banker and industrialist Edward D. Adams that Deutsche Bank was able to win over to become Chairman of the Reorganization Committee for the Northern Pacific, and he was also to guard the bank's interests over the next 20 years until the First World War.
The bank did not have its own branch in the United States at this time. There were considerations in 1914 of opening a branch in New York to compensate for the loss of London as a business center caused by the First World War, but these never came to the final stages of planning.
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