the world of private banking
the world of private banking
the world of private banking
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132<br />
THE WORLD OF PRIVAtE BANKING<br />
operations, bank and credit business and sale <strong>of</strong> public and <strong>private</strong> securities, and,<br />
very rarely, engaged in industrial business. This collection <strong>of</strong> diverse operations<br />
still mainly concerned <strong>the</strong> French economic and financial markets. The majority<br />
<strong>of</strong> <strong>the</strong> bank’s resources came from <strong>the</strong> investments <strong>of</strong> its associates, <strong>the</strong> sums that<br />
<strong>the</strong>y left in <strong>the</strong>ir current accounts, <strong>the</strong> current accounts <strong>of</strong> <strong>the</strong>ir relatives and those<br />
<strong>of</strong> <strong>the</strong> independently wealthy French clients whose fortunes <strong>the</strong>y managed.<br />
Their relations with foreigners can be seen through some entries in each<br />
inventory, which allow a little insight into <strong>the</strong>ir relative importance. This is how<br />
one <strong>of</strong> <strong>the</strong>m is presented.<br />
Table 7.1<br />
Inventory <strong>of</strong> Mallet and Co. on 31.12.1860 (in millions <strong>of</strong> francs)<br />
– Balance Sheet total: 17<br />
Liabilities; – Share capital: 3.6 + deposits from associates: 1.372<br />
– Net pr<strong>of</strong>it: 0.291<br />
– Creditors’ accounts: 9.9 for 775 named current accounts; 0.514 for 480<br />
named stockholders (see comment, fn. 4).<br />
– Acceptances (Notes payable): 1.503<br />
Assets; – Debtors’ current accounts: 5.467<br />
<strong>of</strong> which foreign accounts: 2<br />
– Commercial portfolio: 6.718<br />
<strong>of</strong> which 647 bills <strong>of</strong> exchange on Paris:<br />
849 bills <strong>of</strong> exchange on “<strong>the</strong> provinces and abroad”: 3.783<br />
– Public funds and industrial securities: 4<br />
<strong>of</strong> which foreign securities: 0.6<br />
We will attempt to isolate <strong>the</strong> entries which are able to explain <strong>the</strong> foreign<br />
operations, and to measure <strong>the</strong>ir relative importance. First <strong>of</strong> all, liabilities,<br />
under <strong>the</strong> heading acceptances in circulation (‘acceptances and dispositions on<br />
ourselves’), an entry which represents approximately 9 per cent <strong>of</strong> <strong>the</strong> total balance<br />
sheet at this point in time. An acceptance is a form <strong>of</strong> credit allowing <strong>the</strong> transfer <strong>of</strong><br />
a simple commercial document, a bill <strong>of</strong> exchange, as a method <strong>of</strong> payment. These<br />
are drafts that <strong>the</strong> bank is committed to pay on <strong>the</strong>ir client’s account, <strong>the</strong>refore<br />
giving <strong>the</strong> drawer <strong>the</strong> certainty that <strong>the</strong>y will be settled on <strong>the</strong>ir expiry; although<br />
favoured in <strong>the</strong> settlement <strong>of</strong> commercial and financial deals between France and<br />
foreign countries, part <strong>of</strong> <strong>the</strong>se acceptances would still be to finance commercial<br />
settlements within France.<br />
<br />
Translator’s Note: <strong>the</strong> French word ‘rentier’ translates ei<strong>the</strong>r as someone who is <strong>of</strong><br />
independent means, or as stockholder. In this period <strong>the</strong> first translation is usually more<br />
appropriate, but its appearance on <strong>the</strong> inventory suggests that <strong>the</strong>re stockholder is <strong>the</strong> right<br />
translation.