The Koenigs Collection as collateral for a bank loan (1931-1940)

On 9 September 1931 Koenigs transferred the vast majority of his drawings, some 2,500 sheets, in fiduciary ownership (a commercial form of surety between 1929 and 1992, alongside guarantee and mortgage) to the N.V. Bankierskantoor Lisser & Rosenkranz in Amsterdam, a bank with largely Jewish major shareholders in which he himself had a holding of around 2.4%. [E1.pdf] This was collateral for a loan of 1.5m guilders that he needed to boost the capitalisation of his company. The agreement was ratified in a document of 2 October 1931 in which the loan was stated to be only 1,150,000 guilders.

It is this group of drawings that is now known as the Koenigs Collection. He did not transfer the entire collection to the bank but held on to the paintings and an unknown number of drawings which formed the basis for a subsequent collection which he put together unobtrusively, known as ‘the second Koenigs Collection’ (see below).

Koenigs needed this substantial loan because the worldwide recession had damaged his business interests and his company had got into financial difficulties. The situation became acute in the summer of 1931 when the crisis worsened, affecting banks as well as commercial companies. On 1 September 1931 money transfers were frozen under the Standstill agreements between international and German banks, whereby German banks and industrial and commercial companies were granted extensions of payment for six months (which was repeatedly prolonged) on their short-term debts to foreign banks. One of those foreign banks was Koenigs’s company, which did most of its business with Germany, where it had most of its borrowers. At the same time, because he was a German national, Koenigs was himself protected by the Standstill agreement in his obligations to foreign banks (his bank borrowed from foreign banks in order to provide lines of credit to German companies). That ceased when he became a naturalised Dutchman in 1939 and received demands to pay his debts to English banks. The situation in which he found himself warrants further study by an economic historian as part of a wider examination of Koenigs’s business dealings and companies in the two decades between the world wars.

The conditions of Koenigs’s loan were tightened when the world economy failed to recover. The loan and the bond (the Koenigs Collection ) were reaffirmed and renewed for five years (unless the lender went into liquidation at an earlier date, as was stipulated in a special clause) in a registered document of 1 June 1935. The amount of the loan had increased to 1,375,000 guilders and £17,000 as a result of currency conversion and a transfer of debt. [E2.pdf] In addition to the collection of drawings Koenigs now transferred 47 paintings in fiduciary ownership to the Lisser & Rosenkranz bank.

This agreement was modified on 15 July 1935. [E-3.pdf] If the loan was repaid the bank would renounce its fiduciary ownership, which would then revert to Koenigs. So unless he repaid the loan within the stipulated period of five years he had no rights of ownership to the Koenigs Collection. One feature of fiduciary ownership is that the construction is not made known to outsiders, to whom it appeared that Koenigs was the owner. Since the collection could no longer be housed in the collector’s home, a new location had to be found for it, and the choice fell on Museum Boymans in Rotterdam (renamed Museum Boymans-van Beuningen in 1958 and Museum Boijmans Van Beuningen in 1996, referred to below as Museum Boijmans). While it was on loan to the museum it would be accessible to the public and scholars. That was the express wish of the collector, who had long been familiar with the museum and had made a financial contribution, together with D.G. van Beuningen and others, for the purchase of Hieronymus Bosch’s famous Prodigal Son in 1931, which has been one of the museum’s icons ever since.

Next: From Florapark in Haarlem to Museumpark in Rotterdam (1935)