Adele Spitzeder
Drawing of Spitzeder from the 1873 book "Die Gartenlaube", based on a photograph
Born	Adelheid Luise Spitzeder (1832-11-09)9 November 1832 Berlin, Kingdom of Prussia
Died	27 or 28 October 1895 (aged 62) Munich, Kingdom of Bavaria, German Empire
Resting place	Alter Südfriedhof, Munich 48°07′39″N 11°33′51″E / 48.1275°N 11.56425°E / 48.1275; 11.56425 (Grab von Adele Spitzeder)
Other names	Adele Vio
Occupation(s)	singer, actress, private banker
Years active	1856–1895
Known for	Introducing the first Ponzi scheme

Adelheid "Adele" Spitzeder (['aːdəlhaɪt aˈdeːlə ˈʃpɪt͡sːeːdɐ]; 9 November 1832 – 27 or 28 October 1895), also known by her stage name Adele Vio, was a German actress, folk singer, and confidence trickster. Initially a promising young actress, Spitzeder became a well-known private banker in 19th-century Munich when her theatrical success dwindled. Running what was possibly the first recorded Ponzi scheme, she offered large returns on investments by continually using the money of new investors to pay back the previous ones. At the height of her success, Spitzeder was estimated to be the wealthiest woman in Bavaria.

Opening her bank in 1869, Spitzeder managed to fend off attempts to discredit her for a few years before authorities were able to bring her to trial in 1872. Because Ponzi schemes were not yet illegal, she was convicted instead of bad accounting and mishandling customers' money and sentenced to three years in prison. Her bank was closed and 32,000 people lost 38 million gulden, the equivalent of almost 400 million euros in 2017 money, causing a wave of suicides. Her personal fortune in art and cash was stripped from her.

After her release from prison in 1876, Spitzeder was no longer employable and left Germany, but she returned in 1878 to publish her memoir. She was arrested again in 1880 for attempting to open a new bank without having the necessary permits. Afterwards, she performed as a folk singer, living off friends and benefactors, but she never left her criminal life completely behind her, resulting in further trials and periods of incarceration. She died of cardiac arrest on 27 or 28 October 1895 in Munich.

Spitzeder never married, but it was noted that she carried on more than one lesbian relationship. Outwardly, she maintained the persona of a pious Christian woman who helped the poor, which aided the success of her business.

Early life

Spitzeder was born Adelheid Luise Spitzeder on 9 November 1832 in Berlin.^[1][2] Her parents were the actors and singers Josef Spitzeder (1796–1832) and Elisabeth "Betty" Spitzeder-Vio (1808–1872).^[1] She had six half-siblings from her father's first marriage to Henriette Schüler (1800–1830).^[3] Bavaria's King Ludwig I was infatuated with the Spitzeders and agreed to pay them 6,000 gulden yearly.^[3] When Josef Spitzeder died shortly after Adele's birth, Ludwig I agreed to help Betty by paying for the children's tuition.^[3] When Betty moved to Vienna to marry Franz Maurer in 1840, Adele attended a high school for girls run by the order of the Ursulines; after a year, she entered the convent's boarding school.^[4][3][5] In 1844, she persuaded her mother to move back to Munich, where the family lived with Spitzeder's half-siblings and cousins.^[6] At age 16, Adele went to a renowned school led by Madame Tanche;^[7] she was tutored in foreign languages, composing and piano-playing.^[7]

Acting career

Wanting to follow in her parents' footsteps, Spitzeder studied with Munich actresses Konstanze Dahn and Charlotte von Hagn.^[8] In 1856, she debuted in Coburg to great acclaim and went on to work in Mannheim, Munich, Brno, Nuremberg, Frankfurt, Karlsruhe and Altona, but she failed to achieve success on the stage.^[1][8] She returned to Munich with her close friend Rosa Ehringer to await job offers from theatrical agents but did not receive any she wanted.^[9][10] Dejected and penniless, her mother gave her 50 gulden monthly for her living expenses.^[1][11][12] The money, however, was not sufficient to pay for her lifestyle of residing in hotels and inns with her companion and six dogs.^[1][12]

Spitzedersche Privatbank

Spitzeder soon had to borrow money from moneylenders to maintain her lifestyle.^[1] In late 1869, she met a carpenter's wife in Munich's Au district, then the city's poor neighborhood.^[13] After gaining her trust, Spitzeder claimed she knew someone who would pay the woman a return of 10 percent each month on her investments. The wife gave Spitzeder 100 gulden and immediately received 20 gulden, two months of returns, with the promise of another 110 gulden within three months.^[13] According to a contemporary story in Harper's Weekly, Spitzeder also placed an advertisement in the city's major newspaper, the Münchner Neueste Nachrichten, asking to borrow 150 gulden with the promise of 10 percent interest after two months.^[14]

Growth of business

Spitzeder's banking services quickly became the talk of the town in Munich's poorer communities and soon, more people gave her their savings.^[13] She continued to pay interest in cash, which was not common, leading to favorable word-of-mouth advertising.^[15][16] Officially founded shortly afterwards in 1869, the Spitzedersche Privatbank quickly grew from an insider tip to a large company.^[17] Because her customer base consisted mostly of workers from the northern outskirts of Munich, especially the town of Dachau, her bank acquired the moniker "Dachauer Bank".^[3][18] Some farmers sold their farms to live off the interest alone.^[19] Spitzeder also profited because many of her lower-class Christian customers mistrusted the established Jewish moneylenders and preferred to bank with someone of their faith.^[3] She soon began employing more than 40 people, requiring her to rent additional rooms in the hotel in which she was staying.^[3][20] One of her employees was Rosa Ehringer, whose beauty and charm Spitzeder used to attract young men to the bank.^[21]

In early 1871, Spitzeder survived the first public attempts to discredit her as the government failed to find a legal reason to stop her, considering that she was fulfilling her obligations to her customers as promised.^[19] While the city of Munich began taxing her as a "Bankier 2. Klasse" ("second class banker"), she successfully avoided calls to be entered into the register of companies, which would have led to closer scrutiny.^[20]

Spitzeder's business practices and accounting were unconventional and chaotic.^[19] Money was deposited in large sacks in her house and in the safe of a hairdresser.^[13] Her employees, all without training in accounting, 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.^[13] Her business relied solely on acquiring new customers quickly enough to pay existing customers with the newly acquired money.^[22][23][24] According to some sources, Spitzeder's was the first recorded Ponzi scheme anywhere.^[25][26] Contemporaneous English-language publications such as Harper's Weekly referred to it as the "Spitzeder swindle".^[14][21][27] Some point to similar cases in the 1870s, such as Johann Baptist Placht, who in 1874 was indicted for running a Ponzi scheme in Vienna.^[28] 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.^[3][22][28]

By October 1871, the proprietor of the hotel in which she was living and working was no longer willing to tolerate the customer traffic. Spitzeder moved into the house at No. 9 Schönfeld Street in one of Munich's most affluent areas. She had bought the house for 54,000 gulden and renovated it for her use.^[20] Her house, including the bank, had 83 employees, many of whom were brokers who received a five-to-seven percent commission for each new customer.^[13] Spitzeder soon expanded her business and started buying and selling houses and land throughout Bavaria, buying 17 houses in prime locations in Munich alone.^[13][29] By 1871, she received 50,000 to 60,000 gulden each day, although she had lowered her returns paid to 8% per month.^[20] Despite the size of her business, the bank had no premises of its own and all business was done first out of Spitzeder's hotel rooms and later her house.^[30] By 1871, Spitzeder was in possession of nearly nine million gulden and artwork valued at several million.^[14] She was considered to be the wealthiest woman in Bavaria in 1872, at the height of her wealth.^[14]

Public image

Spitzeder was aware of the value of good public relations and carefully crafted an image of a resolute, pious woman who was interested in the public welfare.^[13][31] She was often seen sitting on a leather chair in the middle of her banking office wearing a high-cut black dress and a cross around her neck, barking orders at underlings, which served to enhance her credibility.^[13] She made generous donations to the poor and opened the "Münchner Volksküche" (Munich peoples' kitchen) at the Platzl, a tavern serving beer and food at discounted prices to up to 4,000 patrons, strengthening her image as the "angel for the poor".^[3] She opened and operated twelve such soup kitchens to feed lower-class citizens.^[14] Her pious demeanor also persuaded local Catholic clergy to support her endeavors, bringing her new customers and shielding her from criticism by the government.^[21][27][32] Some newspapers described her as a fraudster, such as the Münchner Neueste Nachrichten, while others defended her, for example the Volksbote, whose editors were bribed by Spitzeder.^[13][14] Beginning in 1871, Spitzeder even published her own newspaper.^[14][33] Conservative Catholic newspapers, especially Das Bayerische Vaterland published by Johann Baptist Sigl, characterized criticism of Spitzeder as attempts by the "Jewish capital" to discredit a pious and hard-working woman, tapping into the widespread antisemitism of the times.^[34]

Bankruptcy and criminal charges

Spitzeder withstood the public pressure levied against her by the government, some banks and newspapers for a while, mainly because banking laws were non-existent and because a few years prior, Bavaria had introduced legislation that allowed almost any business to operate with almost no oversight.^[35] In February 1872, an attempt by the Münchner Neueste Nachrichten to discredit her led some customers to ask for their investments back but also brought a rise in new customers.^[36][37]

In late 1872, the Munich District Court decided Spitzeder's business had to be registered and follow the laws for tradesmen, which included rules about accounting.^[13] Soon after, 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.^[36] On 12 November 1872, a five-person inquiry commission arrived at the bank to perform a court-ordered review.^[38] 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.^[39]

Ehringer tried to flee with 50,000 gulden that she claimed was a gift from Spitzeder, but she and Spitzeder were arrested with the money.^[3][13] The bank was closed by the police and staffed with soldiers to prevent angry customers from trying to take their money by force.^[40] During the two years of her bank's existence, 32,000 customers were defrauded of 38 million gulden, roughly 400 million euros in 2017 money.^[13] After review, only 15 percent of the investments were recovered.^[13] A wave of suicides by people who lost everything followed.^[13]

Adele Spitzeder was accused of failure to keep books, embezzlement of customers' funds and excessive wasting of money and sentenced in July 1873 to nearly four years in prison for fraudulent bankruptcy.^[3] She was not convicted of fraud itself because her business scheme was not illegal.^[13] During and after the trial, Spitzeder refused to acknowledge any wrongdoing and maintained that her business was completely legal.^[41] The lack of legal requirements for accounting and the fact that she had never advertised any securities were accepted as mitigating circumstances.^[41][42] Ehringer was sentenced to six months in prison for aiding Spitzeder.^[21] For health reasons, Spitzeder was incarcerated in the prison in Baader Street, Munich, where she wrote her memoirs.^[42][43]

Personal life

Spitzeder never married, and she rejected numerous proposals, including ones from men of the aristocracy.^[14] Despite her demonstrative Christian demeanor at a time when official Catholic doctrine declared homosexuality a sin, she tended to have an entourage composed mostly of young, attractive women. Sources chiefly mention two women as Spitzeder's close friends: Rosa Ehringer^[1] and Emilie Stier (later Emilie Branizka).^[44] During Spitzeder's trial, the court's president emphasized the intimate relationship between Spitzeder and Stier, who shared a bed "breast to breast".^[10][45]

Later life and death

After her release from prison in 1876, Spitzeder went abroad as no one in Germany wanted to hire her as an actress.^[30] In 1878, she returned to Munich where she published her memoirs entitled Geschichte meines Lebens (Story of my life).^[42][46] In it, she formulated plans for after her release, such as opening a brewery in the Au, a large restaurant in western Munich, and a horse racing track near Nymphenburg Palace, none of which came to fruition.^[42] In 1880, she tried to open a new bank but was immediately arrested for a lack of permits.^[42][46] She then performed as a folk singer under the name Adele Vio and lived off friends and benefactors.^[19][30][42] Minor swindles led to further trials and periods of incarceration.^[47] She died of cardiac arrest in Munich on 27 or 28 October 1895^[19][30][42] at age 62 and was buried in her family's plot in Munich's Alten Südlichen Friedhof cemetery with her parents.^{[48][46][47][49]} Her family posthumously changed her name to Adele Schmid, although the name is no longer found on the tombstone.^[50]

Works about Spitzeder

Soon after her arrest, on 12 February 1873, the Königsberg municipal theater performed a play written by Cäsar Beck titled Adele Spitzeder als Ehehinderniß, oder: Die aufgehobene Dachauerbank und der unterbrochene Kaffeeklatsch ("Adele Spitzeder as a detriment to marriage, or: The abolished Dachau bank and the interrupted coffee klatsch"). Gabriel Gailler brought Adele Spitzeder's story to the stage as a play for marionettes in the 1870s,^[1] and in 1966 the comedic novel Das Gold von Bayern by Reinhard Raffalt was published. In 1972, Martin Sperr wrote a television movie that was directed by Peer Raben and starred Ruth Drexel as Spitzeder.^[1] The play Die Spitzeder by Sperr was first performed on 11 September 1977.^[1]

In 1992, the Bayerischer Rundfunk broadcast the documentary Adele Spitzeder oder das Märchen von den Zinsen ("Adele Spitzeder or the fairy tale about the interest") by Hannes Spring. Xaver Schwarzenberger adapted the story again as a television movie titled Die Verführerin Adele Spitzeder ("The seducer Adele Spitzeder").^[16] It was produced by the Bayerischer Rundfunk and the ORF, starred Birgit Minichmayr as Adele Spitzeder and was first broadcast on 11 January 2012.^[1][51]

Literature

Books by Spitzeder

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

Literature about Spitzeder

Historical documentary

• 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

Plays and novels

• Adele Spitzeder: Marionettenspiel um einen Münchner Finanzskandal im Jahre 1873 ; wortgetreue Wiedergabe einer alten Handschrift (in German). Puppentheatermuseum. 1981. 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 3-10-074201-X.
• Albrecht-Weinberger, Karl (1956). Adele Spitzeder; Roman einer seltsamen Frau (in German). Maindruck. OCLC 36066656.
• Rehn, Heidi (2009). Tod im Englischen Garten: historischer Kriminalroman (in German). Cologne: Emons Verlag. ISBN 9783897055070. OCLC 682116597.

Notes

References

External links

• Literature by and about Adele Spitzeder in the German National Library catalogue