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==Background==
The monetary institutions in Germany had been unsuited for its economic development for several decades before unification. In the [[Kingdom of Prussia]], the [[Bank of Prussia]] had been established in 1847 and, in the aftermath of the [[German revolutions of 1848–1849|revolution of 1848]], five additional banks had been granted a note-issuance privilege (the {{ill|Berliner Kassenverein|de}}, {{lang|de|Kölnische Privatbank}}, {{lang|de|Magdeburger Privatbank}}, {{lang|de|Ritterschaftliche Privatbank in Pommern}} at [[Stettin]], and {{lang|de|Städtische Bank in Breslau}}), but that was still insufficient to sustain adequate monetary conditions.<ref>{{citation |title=The Political Calculus of Capital: Banking and the Business Class in Prussia, 1848-1856 |author=James M. Brophy |journal=Central European History |issue=25:2 |year=1992 |pages=149-176 |url=https://www.jstor.org/stable/4546258 }}</ref>{{rp|156}}
By early 1870, 31 different banks held a note-issuance privilege in the territories that would become the [[German Reich]] the next year, typically private-sector entities (albeit often under specific government oversight) known in German as {{lang|de|Notenbanken}}.<ref name=NMC>{{citation |title=The German Great Banks and Their Concentration in connection with The Economic Development of Germany |url=https://historyofeconomicthought.mcmaster.ca/riesser/GreatGermanBanks.pdf |year=1911 |author=Jacob Riesser |publisher=National Monetary Commission |location=Washington DC}}</ref>{{rp|141}} Twelve of these, including the [[Bank of Prussia]], were established in the [[Kingdom of Prussia]], four in the [[Kingdom of Saxony]], one in the [[Kingdom of Bavaria]], and the other 14 in various duchies, principalities and [[Free imperial city|free cities]].▼
▲By early 1870, 31 different banks held a note-issuance privilege in the territories that would become the [[German Reich]] the next year, typically private-sector entities (albeit often under specific government oversight) known in German as {{lang|de|Notenbanken}}.<ref name=NMC>{{citation |title=The German Great Banks and Their Concentration in connection with The Economic Development of Germany |url=https://historyofeconomicthought.mcmaster.ca/riesser/GreatGermanBanks.pdf |year=1911 |author=Jacob Riesser |publisher=National Monetary Commission |location=Washington DC}}</ref>{{rp|141}} Twelve of these
On {{date|1870/03/27}}, a law was passed that forbade the formation of further {{lang|de|Notenbanken}} in the [[North German Confederation]]. Following the promulgation of the [[German Empire]] that law was extended to all German lands, with entry into force on {{date|1872/01/01}}. These Prussian initiatives precipitated action by the [[Grand Duchy of Baden]] and [[Kingdom of Württemberg]] to create note-issuing banks of their own, respectively the [[Badische Bank]] in [[Mannheim]] (est. 1870) and the [[Württembergische Notenbank]] in [[Stuttgart]] (est. 1871), bringing the total number of {{lang|de|Notenbanken}} to 33.{{R|NMCR|p=14}}
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