Adele Spitzeder

Spitzeder as a young actress (circa 1852)

Wanting to follow in her parents' footsteps and against her mother's wishes, Spitzeder studied with Munich actresses Konstanze Dahn and Charlotte von Hagn.[11][12] In 1856 or 1857, she debuted at the Hofbühne in Coburg to great acclaim playing Deborah and Mary Stuart.[13][14] In her memoirs, she claims that the Duke of Coburg and the Duke of Württemberg both praised her talent.[15] Since there were no vacancies at Coburg, she left the Hofbühne to take an engagement at Mannheim before returning to Munich for a few guest roles at the National Theatre.[16][14] Despite being offered a contract to play there, she knew that she would only be tasked with playing supporting roles due to fierce competition and thus decided to instead work at the theater of Brno.[17][14] According to her autobiography, her success there led to conflicts with the other actors which in turn led her to leave the engagement after six months for health reasons.[18] She then returned to Munich for six months to recuperate.[18][19] Despite her mother's urging, she returned to acting at Nuremberg where she was engaged for a year.[20][21] Afterwards, she played in Frankfurt, Bern, Zürich, Mainz and Karlsruhe.[22][23] After returning to Munich to visit her mother, she was offered an acting job in Pest with annual salary of 3,000 gulden which she turned down at her mother's wishes.[24][25] Her mother offered her 50 gulden per month for life if she turned the job down.[24][25] Nevertheless, she took one last engagement in Altona.[24][25] During one of her engagements, she met Emilie Stier, stage name Branizka, a fellow actress with whom she soon began a romantic relationship.[25]

Despite multiple engagements over a period of many years, she failed to achieve lasting success on the stage.[1][11] The contemporary source Der Neue Pitaval attested that she had the necessary talent but attributed her lack of success to her appearance.[26] In his biography of Spitzeder, Julian Nebel cites a contemporary describing her as having a "not very beautiful, square face with rough traits, out of which a long, broad nose protrudes; the mouth is broad, the chin pointy, the gray eyes hard to read, a real butch".[27] Her "masculine" behavior is generally highlighted, such as her cigar smoking and surrounding herself with beautiful young women.[28]

Unable to restrict her lifestyle, she began to live at the expense of her creditors and accrued significant debt in Hamburg and Zurich while working there.[26] In 1868, she returned to Munich with her girlfriend Emilie to await job offers from theatrical agents but did not receive any she wanted.[29] Dejected and penniless, she only had her mother's stipend of 50 gulden to live on.[1][30][31] The money, however, was not sufficient to pay for her lifestyle of residing in hotels and inns with her girlfriend and six dogs.[1][31]

Spitzeder's banking services quickly became the talk of the town in Munich's poorer communities thanks to favorable word-of-mouth advertising and soon, more people gave her their savings.[32][4] In 1869, she officially founded the Spitzedersche Privatbank.[35] Because her customers were mostly workers from the northern outskirts of Munich, especially the town of Dachau, her bank also came to be known as "Dachauer Bank".[4][34][36] Some farmers sold their farms to live off the interest alone.[36] Many lower-class Christians mistrusted the Jewish moneylenders, preferring to bank with a Christian,[4] and she soon had to rent additional rooms in her hotel to accommodate her up to forty employees.[4][37] One of her employees was Rosa Ehinger, whose beauty and charm Spitzeder used to attract young men to the bank.[38]

Spitzeder's business practices and accounting were unconventional and chaotic.[36] Money was deposited in large sacks and in various cupboards.[39][36][40] Her employees, all or almost all without training in accounting,[41][36] regularly simply took money, with the accounting being restricted to recording the names of depositors and the amounts they paid in, often only signed with "XXX" by her illiterate customers.[32][42] Her business relied solely on acquiring new customers quickly enough to pay existing customers with the newly acquired money.[43][44][45] According to some sources, hers was the first known Ponzi scheme.[46][47] Contemporaneous English-language publications such as Harper's Weekly referred to it as the "Spitzeder swindle".[48][49] In her doctoral thesis, Hannah Davies recounts the case of Johann Baptist Placht, who in 1874 was indicted for running a Ponzi scheme in Vienna and notes that contemporaries compared his business model to Spitzeder's.[50] Unlike Placht and other fraudsters, Spitzeder never made claims of investing the money and explicitly gave no securities, which paradoxically led customers to trust her more.[4][43][50]

By October 1871, the proprietor of the hotel in which she was living and working was no longer willing to tolerate the customer traffic.[51] Spitzeder moved into the house at No. 9 Schönfeld Street near the Englischer Garten which she bought for 54,000 gulden of her customers' money.[32][52] Including bank employees, there were 83 people who worked from her house, many of whom were brokers who received a five-to-seven percent commission for each new customer.[32] She soon expanded her business and started buying and selling houses and land throughout Bavaria, buying 17 houses in prime locations in Munich alone.[32][52] By 1871, she received 50,000 to 60,000 gulden each day, although she had lowered her returns paid to 8% per month.[37] Despite the size of her business, the bank had no premises of its own and all business was done first out of her hotel rooms and later her house.[53] By 1871, Spitzeder was in possession of multiple millions of gulden and artwork valued at several million.[33][54] According to a contemporary report in Harper's Weekly, at the height of her fortune in 1872 she was considered to be the wealthiest woman in Bavaria.[33]

From 1871, the authorities tried to find legal reasons to stop her business but since she was fulfilling her obligations to her customers as promised, she avoided official intervention.[36] While the city of Munich began taxing her as a "Bankier 2. Klasse" ("second class banker"), she avoided calls to be entered into the register of companies at this time.[37] In 1872, the Munich Commerce Court decided that she had to enter her business in the register of companies, revising its earlier decision, which included rules about proper accounting.[32] Since the court's ruling only applied to her money-lending business, she instead stopped lending and focused on taking in money.[55] To circumvent the official ban on lending money, she allowed her workers to take money from the bank and lend it to customers under their own name.[56] Some of her workers used this opportunity to enrich themselves, such as Franz Wagner, a scribe with a monthly salary of 60 gulden, who later bought a house for 59,000 gulden.[56]

The success of the Dachauer Bank led to customers withdrawing large amounts of funds from other banks, especially the Sparkassen, threatening their existence.[57] The Munich Sparkasse's leadership first discussed the competition by Spitzeder in May 1871, having lost some 50,000 gulden to her bank.[4] In the fall of 1872, Bavaria's Minister of the Interior had to report to the king that the Sparkasse of Altötting had to resort to drastic measures to pay out all its customers who wished to invest with Spitzeder instead and the president of the government of Upper Bavaria noted on 29 October 1872 that the large amount of withdrawals might force the Sparkasse of Ingolstadt to recall its debts to be able to meet payout demands.[57] Similar reports of large scale withdrawals were reported by the Sparkassen of Traunstein and Mühldorf.[57] As a consequence, the Bavarian Ministry of the Interior placed large scale advertisements in a major newspaper on 30 October and 5 November 1872, warning customers to no longer invest with Spitzeder.[58] On 7 November 1872, Munich's police also issued a lengthy statement detailing the bank's lack of reliability.[57]

Caricature of Spitzeder opening one of her soup kitchens, from the Münchner Neueste Nachrichten

Spitzeder cultivated an image of a resolute, pious woman concerned for the public welfare.[59][60] During banking hours at her house in Schönfeld Street she was often seen sitting on an elevated leather chair in the middle of her banking office wearing a red nightgown and a cross around her neck, demonstratively signing notes for the money she received.[61] In the halls of the building, cutouts of the negative articles from the Münchner Neueste Nachrichten were posted in an attempt to demonstrate that she had nothing to fear from such coverage.[62] The long lines of waiting customers were often entertained by musical groups playing outside the bank and she provided free meals and drinks at the tavern "Wilhelm Tell" next door.[61][63] She only allowed deposits after all payouts had been processed, which often took until noon, thereby creating long queues of waiting customers that enforced the impression that they should consider themselves lucky to be allowed to give her money.[64] Customers who reached her were treated with crass and direct language, with Spitzeder telling them that she did not call them nor would she give them any securities.[32][61][65] Her flaunted honesty combined with her demonstrative warnings and the focus on entertaining her customers served to enhance her standing with the common people.[65][66]

Spitzeder made generous donations to the Church, ostensibly for charity, and partook in regular pilgrimages to the Shrine of Our Lady of Altötting.[67][68] Whenever she ventured to the hinterland, she treated the masses – who often welcomed her with cheers and gifts – to beer and hearty snacks.[68] She also opened the "Münchner Volksküche" (Munich peoples' kitchen) at the Platzl, a tavern providing beer and food at discounted prices and with seating for up to 4,000 patrons, strengthening her image as the "angel for the poor".[4] In total, she opened and operated twelve such soup kitchens.[33] Her pious demeanor also persuaded local Catholic clergy to support her endeavors, bringing her new customers and shielding her from criticism by the government.[38][49][69][67]

The publicity Spitzeder generated soon attracted the interest of the local newspapers. The foremost of her critics was the liberal Münchner Neueste Nachrichten which in 1870 began calling Spitzeder a fraudster and kept questioning her honesty and business practices until the end.[70] In reaction to it, she placed an ad in every major newspaper – except the Münchner Neueste Nachrichten, which refused to print it – challenging her critics to demonstrate that she enticed her customers to give her money or that they were being disadvantaged.[71] After attempts to bribe the Münchner Neuste Nachrichten's editor in chief, August Napoleon Vecchioni, to cease their criticism failed,[72] Spitzeder turned to the newspaper's main rival, the Catholic-conservative Volksbote.[73] A newspaper circulated in similar numbers as the Münchner Neueste Nachrichten, the Volksbote was in serious financial troubles which it solved with a 13,000 gulden loan from Spitzeder; in turn, the Volksbote responded to each criticism in the Münchner Neueste Nachrichten.[74] Other conservative Catholic newspapers, especially Das Bayerische Vaterland published by Johann Baptist Sigl, also supported her and characterized criticism of Spitzeder as attempts by "Jewish capital" to discredit a pious and hard-working woman, tapping into the widespread antisemitism of the times.[75][76]

From 1871, Spitzeder began publishing her own newspapers.[33][77] She was granted ownership of the Süddeutscher Telegraph, the Neue Freie Volkszeitung and the Extrablatt when their respective publishers were unable to repay their loans.[78] Additionally, she founded her own newspaper, the Münchener Tageblatt.[79] Her popularity outside the city walls was enhanced significantly when she granted Theophil Bösl, the publisher of the Freier Landesboten, a loan of 14,000 gulden and Bösl in turn gave her written insurance not to report negatively on her business.[80] Positive coverage in the Landesboten led to a large number of customers traveling to Munich to invest with the Dachauer Bank.[80]

Spitzeder withstood the pressure levied against her by the authorities[32] and the Münchner Neueste Nachrichten[32] for a while, mainly because banking laws and financial regulations were non-existent[32] and because a few years prior, Bavaria had introduced legislation that allowed almost any business to operate with almost no oversight.[81] In February 1872, an attempt by the Münchner Neueste Nachrichten to discredit her made a lot of customers ask for their investments back, but also brought a rise in new customers.[82][83] In March 1872, Munich's police director had to admit that the attack, which the police had hoped would end Spitzeder's business, had failed.[83] The Münchner Neueste Nachrichten started a new attack on Spitzeder in the fall of 1872, repeating the warnings of the authorities, explaining the possible ways the government might intervene and prophesying the immediate demise of the bank.[57]

In November 1872, the withdrawals clearly exceeded the investments, forcing Spitzeder to limit withdrawals to an hour between six and seven in the morning, with no withdrawals on Wednesdays and Saturdays.[82] The police persuaded 40 of her customers to present their claims to the district court, which then ordered a review of the bank's books.[82] On 12 November 1872, a five-person inquiry commission arrived at the bank to perform a court-ordered review.[84] Additionally, 60 customers, organized by rival private banks, visited her residence and demanded all of their money back, which was more than Spitzeder had available, leading to the bank's collapse.[85]

Ehinger tried to flee with 50,000 gulden that she claimed was a gift from Spitzeder but both women were arrested and the money seized.[4][32] Spitzeder's house was closed by the police and soldiers and policemen were placed on the premises to safeguard the remaining items of value and prevent acts of aggression by the populace.[86] During her bank's existence, 32,000 customers were defrauded of 38 million gulden, roughly 400 million euros in 2017 money.[32] After review, only assets corresponding to 15 percent of the investments were recovered.[32] A wave of suicides by people who lost everything followed.[32]

Spitzeder was accused of failure to keep books, embezzlement of customers' funds and excessive wasting of money; she was sentenced in July 1873 to three years and ten months in prison for fraudulent bankruptcy.[4] She was not convicted of fraud itself because her business scheme did not meet the law's definition of fraud.[32] During and after the trial, she refused to acknowledge any wrongdoing and maintained that her business was completely legal.[87] The lack of legal requirements for accounting and the fact that she had never advertised any securities were accepted as mitigating circumstances.[87][88] Ehinger was sentenced to six months in prison for aiding Spitzeder.[38] For health reasons, Spitzeder was allowed to stay in the prison in Baader Street, Munich, where she wrote her memoir.[88][89][90]

• Adele Spitzeder: Geschichte meines Lebens. Stuttgarter Verlagscomptoir, Stuttgart 1878 (original available as e-book); reprinted in 1996 by Buchendorfer Verlag, München, ISBN 978-3-927984-54-7

• Julian Nebel: Adele Spitzeder: Der größte Bankenbetrug aller Zeiten, FinanzBuch Verlag, München 2017, ISBN 978-3-959720-48-9.
• Dirk Schumann: Der Fall Adele Spitzeder 1872. Eine Studie zur Mentalität der "kleinen Leute" in der Gründerzeit. In: Zeitschrift für Bayerische Landesgeschichte 58. Jg. 1995, pp. 991–1026

• Adele Spitzeder: Marionettenspiel um einen Münchner Finanzskandal im Jahre 1873 ; wortgetreue Wiedergabe einer alten Handschrift (in German). Puppentheatermuseum. 1981. ISBN 9780231546218. OCLC 75843921.
• Christine Spöcker: Das Geldmensch. Ein tragikomisches Stück über den kapitalistischen Exzess der Adele Spitzeder, Bankfrau zu München, die 1872 durch Bankrott ihrer Dachauer Bank 30860 Gläubiger ins Unglück trieb. Fischer, Frankfurt am Main 1973, ISBN 978-3-10-074201-8.
• Albrecht-Weinberger, Karl (1956). Adele Spitzeder; Roman einer seltsamen Frau (in German). Maindruck. ISBN 9780231546218. OCLC 36066656.
• Rehn, Heidi (2009). Tod im Englischen Garten: historischer Kriminalroman (in German). Cologne: Emons Verlag. ISBN 9783897055070. OCLC 682116597.