Sächsische Bank zu Dresden
Sächsische Bank zu Dresden was a nineteenth-century Saxon bank that became the only banknote-issuing bank in Saxony before losing that privilege under Nazi monetary legislation and being liquidated after World War II.
Last updated August 25, 2026
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Overview
Sächsische Bank zu Dresden, commonly rendered in English as the Bank of Saxony, was a former German banking institution headquartered in Dresden. It was established on 18 July 1865 under a state concession, with initial capital of 5 million thalers. The bank was created during a period in which the German states retained significant financial and monetary functions, and it initially served the Kingdom of Saxony as a commercial bank and issuer of banknotes. In 1869 the institution moved its head office to the former Hôtel de Pologne on Schloßstraße in central Dresden. The building’s façade was remodeled for the bank according to plans by architect Karl Eberhard, making the premises an important visible expression of the institution’s civic and financial role. The bank expanded its capital over time: it was increased by a further 5 million thalers in 1873 and was later denominated at 30 million marks. The foundation of the German Empire in 1871 changed the monetary environment. German states progressively lost their authority to legislate independently on currency matters, while the Reichsbank, created under imperial legislation in 1875, became the central institution in the German monetary system. The Reichsbank did not immediately receive an absolute monopoly over banknote issuance. Existing regional banks could continue issuing notes within limits established by law. Several other Saxon institutions surrendered their note-issuing privileges during the late nineteenth century, including Leipziger Bank in 1875 and Chemnitzer Stadtbank and Leipziger Kassenverein in 1890. As a result, the Bank of Saxony became the only remaining banknote-issuing bank in Saxony, and its notes could circulate throughout the German Empire. The institution also broadened its ordinary banking services. From 1888 it provided commission-free check and giro transactions, reflecting the growing importance of cashless payments and account-based commercial banking. During the 1920s, the bank diversified further through subsidiaries involved in bus operations. These companies frequently operated feeder routes connecting local communities with railway services, illustrating the bank’s involvement in transport-related businesses as well as finance. The hyperinflation of 1923 and subsequent monetary stabilization brought additional restrictions. The Private Central Bank Act of 30 August 1924 limited the Bank of Saxony’s annual note issue to a maximum of 70 million Reichsmarks, while its share capital was converted to 15 million Reichsmarks. The bank’s historic status as a regional note issuer was ultimately ended by Nazi legislation enacted on 18 November 1933. The legislation removed its authority to issue banknotes with effect from 31 December 1935. To avoid immediate liquidation, the Bank of Saxony cooperated with the Sächsische Staatsbank and assumed the Staatsbank’s customer business from 1 January 1937. By 1945, the Sächsische Staatsbank owned 80 percent of the Bank of Saxony’s capital. Following the end of the Second World War, Soviet occupation authorities expropriated both institutions without compensation. The Bank of Saxony was eventually removed from the commercial register in 1947. Assets and holdings located in western Germany were subsequently managed through a fiduciary entity appointed by the West German Federal Minister of Finance from 1950 to 1980. Those remaining assets were finally liquidated and distributed by 1981. The brand and institution are therefore historical rather than active banking entities.
History
The Sächsische Bank zu Dresden was founded under a state concession on 18 July 1865 in Dresden, the capital of the Kingdom of Saxony. Its initial capital amounted to 5 million thalers. The institution combined regional commercial-banking functions with the ability to issue banknotes, a role that remained possible because monetary authority was still distributed among the German states before the establishment of a unified imperial monetary framework. In 1869 the bank established its head office in the former Hôtel de Pologne at Schloßstraße 7 in central Dresden. The building was remodeled for banking use, including a redesigned façade prepared by architect Karl Eberhard. The bank increased its capital by another 5 million thalers in 1873 and later operated with capital denominated at 30 million marks. German unification in 1871 gradually constrained the monetary autonomy of Saxony. The Reichsbank was created by imperial legislation dated 14 March 1875. Although it became the central institution of the German monetary system, it initially did not hold an absolute monopoly over banknote issue. Existing regional banks retained note-issuing rights within statutory limits. Leipziger Bank surrendered its privilege in 1875, while Chemnitzer Stadtbank and Leipziger Kassenverein did so in 1890. The Bank of Saxony consequently became the only remaining note-issuing bank in Saxony, and its banknotes were permitted to circulate across the German Empire. Alongside note issuance, the bank developed modern account and payments services. From 1888 it offered customers commission-free check and giro transactions. In the 1920s it also operated bus routes through subsidiaries, often providing feeder services to state railway lines. This activity represented a diversification beyond conventional banking. The monetary crisis of 1923 was followed by legislation intended to stabilize and regulate private central banks. Under the Private Central Bank Act of 30 August 1924, the Bank of Saxony’s annual note issue was capped at 70 million Reichsmarks, and its share capital was converted to 15 million Reichsmarks. Nazi monetary legislation of 18 November 1933 then removed the bank’s right to issue notes, with the change taking effect on 31 December 1935. The bank cooperated with the Sächsische Staatsbank to avoid liquidation and took over that institution’s customer business on 1 January 1937. By 1945, the Sächsische Staatsbank controlled 80 percent of the Bank of Saxony’s capital. After the Second World War, Soviet occupation authorities expropriated both banks without compensation. The Bank of Saxony was deleted from the commercial register in 1947. Its western German holdings were administered by a fiduciary entity appointed by the West German Federal Minister of Finance between 1950 and 1980. The remaining assets were liquidated and paid off by 1981. The institution is now defunct and survives primarily as a subject of German banking and monetary history.
- 1981
Remaining assets liquidated
[1]Assets held through a fiduciary arrangement in West Germany were finally liquidated and paid off.
- 1947
Deleted from the commercial register
[1]The Bank of Saxony was removed from the commercial register.
- 1945
Expropriation under Soviet occupation
[1]The Bank of Saxony and Sächsische Staatsbank were expropriated without compensation by Soviet occupation authorities.
- 1937
Customer business transferred from Sächsische Staatsbank
[1]The Bank of Saxony took over the Sächsische Staatsbank’s customer business as part of its effort to continue operating after the loss of note issuance.
- 1935
Banknote-issuing privilege ends
[1]The bank lost its legal authority to issue banknotes on 31 December 1935 under Nazi legislation.
- 1924
Note issuance regulated after hyperinflation
[1]The Private Central Bank Act limited annual note issuance to 70 million Reichsmarks and converted share capital to 15 million Reichsmarks.
- 1888
Check and giro services introduced
[1]The bank began offering commission-free check and giro transactions.
- 1875
Becomes Saxony’s principal remaining note-issuing bank
[1]After Leipziger Bank relinquished its note-issuing privilege, the Bank of Saxony became increasingly prominent among Saxon issuing institutions.
- 1873
Capital increased
[1]The bank increased its capital by a further 5 million thalers; its capital was later stated at 30 million marks.
- 1869
Head office established at the Hôtel de Pologne
[1]The bank settled its head office in the former Hôtel de Pologne on Schloßstraße in central Dresden, whose façade was remodeled for the institution.
Products and positioning
A state-concessioned regional bank serving Saxony, with a distinctive nineteenth- and early twentieth-century role as Saxony’s sole surviving banknote-issuing institution.
Currency issuance · 1865
Banknotes
The bank issued its own notes under the monetary arrangements of Saxony and the German states. After other Saxon institutions surrendered their privileges, it became Saxony’s only remaining note-issuing bank. Its notes could circulate throughout the German Empire. This role was restricted after the 1924 stabilization legislation and ended entirely on 31 December 1935.
Payments and account services · 1888
Check and giro transactions
From 1888, the Bank of Saxony offered commission-free check and giro transactions. These services supported account-based payments and reflected the bank’s development beyond its historic function as a note issuer.
Banking services · 1865
Commercial and customer banking
The institution provided general banking and customer services in Saxony. In 1937 it assumed the Sächsische Staatsbank’s customer business, but the bank was later expropriated and removed from the commercial register.
Transport-related diversification
Bus-route subsidiaries
During the 1920s, subsidiaries associated with the Bank of Saxony operated bus routes. These services often connected local communities with state railway lines, providing feeder transportation rather than representing a conventional banking product.
Brand decisions
1937
Assumption of Sächsische Staatsbank customer businessStrategyBackground
The bank had lost its right to issue banknotes under legislation taking effect at the end of 1935 and faced the risk of liquidation.
Action taken
It cooperated with the Sächsische Staatsbank and took over that institution’s customer business from 1 January 1937.
Aftermath
The arrangement allowed the Bank of Saxony to continue operating for a period, although the institution was later expropriated after World War II.
Recent events
- 1945
Bank of Saxony is expropriated after World War II[1]
Regulation · Other
Soviet occupation authorities expropriated the Bank of Saxony and the Sächsische Staatsbank without compensation.
- 1937
Bank of Saxony assumes Sächsische Staatsbank customer business[1]
Other
As part of an effort to avoid liquidation after losing its note-issuing role, the Bank of Saxony took over the Sächsische Staatsbank’s customer business.
- 1935
Bank of Saxony loses its banknote-issuing privilege under Nazi legislation[1]
Regulation · Other
Legislation enacted in 1933 ended the Bank of Saxony’s authority to issue banknotes with effect from 31 December 1935.
Sources1 sources
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