Debtors and Lenders in Pest-Pilis-Solt County in the Second Half of the 18th-century and the First Half of the 19th-century
Using the intabulation books of a single county, Pest-Pilis-Solt, the paper discusses the credit market in Hungary before the emergence of banks and savings banks. Naturally, it does not want to come to general conclusions on the basis of a single county’s data, but it may provide valuable additions to our picture of credit and debt in the era.
Highlighting the problems with the county’s registers, the first part of the paper describes the characteristic features of intabulation books. Then it presents numbers for debtors and creditors, with a special focus on private, institutional and women lenders, their percentage and their respective significance in the credit business. In its third part, the paper makes an attempt to provide a longitudinal view of the various tendencies and changes in the credit market of the era.
The author concludes that by the 1840s the traditional lending structure had faltered, and maybe not only because of the lack of available credit, which should be seen as only one of many reasons. Another factor possibly contributing to the inadequacy of the traditional methods could have been the high percentage of defaults. The appearance of institutional lending and the introduction of land registers were attempts to solve this issue.
Credit Conditions in Pest and Buda in the First Half of the 19th-century
The paper discusses the changes that took place in the credit business of the two cities in the first half of the 19th-century. It examines not only the size of the capital in the credit market but also the proportion of traditional credit (provided by municipal offices and churches) and those provided by private individuals as well as the changes that, in the 1840s, followed the emergence of banks and savings banks in the towns. It describes the social composition of private individuals, both lenders and borrowers, and gives loan repayment statistics. The primary sources for the research were the so called intabulation (or mortgage) records from the years 1810, 1830 and 1850.
In the discussed period, the number of private lenders decreased and the proportion of loans provided by legal entities grew in both towns. In Pest, this was mainly attributable to the appearance of bank loans. In both towns, the percentage of the nobility decreased while that of the merchants increased among those lenders who provided larger amount of loans, in excess of 10,000 forints. It’s noteworthy that whereas previously it had been a general practice that persons of the same social status/occupation helped out each other, in the first half of the 19th-century loans given by the nobility to the middle class and, in a lesser extent, by the middle class to the nobility became more common.
Intabulation that followed the credit provision ever more rapidly did decrease credit risks to a certain degree. However, though the number of repayments within 5 years increased, about the half of the provided credits were not secured by mortgage.
Credit Conversions. The Credit Businesses of the Kállay Family in the Middle of the 19th-century
It is through three source groups that the paper examines the changes in credit conditions in the 19th-century. The first of these are data relating to the Kállay family from the so called intabulation books of Szabolcs county from the Reform Period; the second are the partial bonds (parciális obligációk) issued in 1847 by the Kállay dynasty, and the third are the diaries of Béni Kállay (who later became minister of finance of Austria-Hungary) written in the 1860s.
If it was the cover, expiration and integration of credit that Széchenyi had been mostly worried about then, by the 1860s, Béni Kállay could experience, both in theoretical inquiry and practice, the flexible transferability of various credit forms. A new credit system was about to emerge in which the old structures and the new institutions coexisted in peace. It was a world in which you could convert a bill credit into a longer term obligation even in the case of private credits. Only market rates could prevent transferring intabulated (mortgage) debts from one institutional creditor to another bank.
The Noble’s Bank of Zala County – the Birth of a Credit Institution
The paper focuses on the founding of the noble’s bank, financed from the cash reserves of the rebel army of noblemen from Zala county, and the nearly century-long operation of the institution. By analyzing the composition of the foundation board directly governing the bank as well as the the credit registries from the years 1861 and 1894, we can follow the transformation of the credit institution founded in a feudal environment. The results seem to suggest that this modernization process was rather ambiguous. While there were no changes in the composition of the governing and decision-making body of the bank, that is, in this sense the institution preserved its feudal character, on the “demand side”, as far as the customers were concerned there were obvious differences. The bank, which in the beginning had been open to but a chosen circle due to its feudal bonds, had become more and more available to the non-nobility and even women by the end of the century. The the composition of the beneficiaries of the charitable donations given by the bank also changed as the focus had moved away from the public sector towards civil society.
Casinos, Joint-Stock Companies and Credits
The paper examines the investment strategies of casinos through presenting examples of corporate headquarters construction projects. It describes four cases in which the casinos founded a separate joint-stock company (abbreviated in Hungarian by the letters Rt.) to manage and complete the task.
The Fővárosi Casino Épület Rt. [Capital City Casino Building Corp.] was founded on 22 April, 1884 in order to provide premises to the society then referred to as the VI-VII. Kerületi Kör [District VI-VII Circle] and later called Terézvárosi Casino. Completed in the fall of 1885, the building was designed by Gusztáv Petshacher. Despite personal ties with the Hungarian National Central Savings Bank, the 90,000 forint credit required to cover the costs of the construction was provided by the Budapest Capital City Guardian Bank. Budapest-Krisztinavárosi Casino-épület Rt. [Budapest-Krisztinaváros Casino Building Corp.] was founded in 1892 by members of the Budai Polgári Casino [Buda Civil Casino]. They obtained a credit of 50,000 forints from Unified Budapest-Capital Savings Bank, which was a large shareholder in the company and had been handling its equity capital as well. The building designed by Imre Francsek was completed in 1893.
Lipótvárosi Casino-épület Rt. [Lipótváros Casino Building Corp.] was founded in 1893 also as a casino initiative. There were both personal and institutional ties between the joint-stock company and the Lipótvárosi Casino. In this case they needed to obtain credit even for purchasing the land. This was the largest of the four constructions, and required three more lines of credit. Two of these were provided by the Pest First National Savings Bank, while one by the members themselves in the form of bonds. The building designed by Vilmos Freund was opened in 1896.
Budapest-Kőbányai Casino-Épület Rt. [Budapest-Kőbánya Casino Building Corp.] was founded on May 11, 1899 with the aim of constructing an appropriate main office building for the X. kerületi Kőbányai Kör [Tenth District Kőbánya Circle], later renamed Budapest- Kőbányai Casino. The building designed by Antal Steinhardt was completed in 1901. Credit was applied for three times. The largest sum was provided by Capital City Guardian Bank, and then they obtained further credits from the Pest Hungarian Commercial Bank and Kőbánya Savings Bank.
Ordinary Loans for Ordinary People in Late-Nineteenth-Century Budapest
One of little known areas of 19th-century credit business is the segment of small-scale loans given to private individuals. By examining János József Lowetinszky’s (1866–1935) 40-volume diary, an extremely valuable source material, we can have a look at the colorful world of the credit transactions of the lower middle class living in Budapest – a world that was almost completely interwoven by intertwining loan dependencies and cross- and circular debt. We can follow how, throughout the years, the structure and value of the outstanding loans of our penniless diary writer, a clerk by profession, changed and we can also have a glimpse of his relationships with his lenders and borrowers. With some of his colleagues, trying to preserve his social reputation, he paid special attention not make them wait for the payments. It was for the same motives that he gave smaller loans to such colleagues and friends who were unlikely to repay the entire amount. Throughout his life, there were several occasions when the diary writer was unable to repay larger loans, and some of the lenders – including three of his ex-partners – took the case to court.
The paper describes Lowetinszky’s annual budgets and loan businesses between the years 1889 and 1910, and examines in detail the frameworks of two-way lending in the years 1893 and 1900. The detailed statistics and balances of the diary writer are used parallel with his narration. The paper highlights that small-scale loans had a very strong societybonding role in the given period.
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