the world of private banking

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THE WORLD OF PRIVAtE BANKING
Sometimes it happened to families with no descendants, but these disappearances
mainly affected the Catholic Haute Banque and the firms least involved in the
international scene, such as the Pillet-Wills, or, at the start of the twentieth century,
the Périers.
At this time the Haute Banque therefore consisted of no more than twelve to
fifteen banks belonging essentially to Jewish or Protestant families. These were
very prudent and wealthy, with directors who had acquired a remarkable ability in
the field of exchanges, had a diversified international base endowed with foreign
networks which they had built up over a long period, and had solid assets with
which to resist the offensive from the new banks. They were also capable of
adapting to the new competition and of reacting with dynamism.
It appears to be true that these banks maintained a predominant place in the
negotiation of bills of exchange and in all the exchange operations with foreign
countries, this incontestably remaining one of their specialities. The everyday
operations in this field rarely leave much trace in the archives, but each time an
exceptionally large foreign transfer of funds had to be carried out, it appears that
it was necessary to call on the Haute Banque. Thus, in July 1872, when it was
necessary to settle the indemnity that Germany had demanded from France after
the war of 1870–71, the treasury had to reach agreement with a syndicate made
up of the banks, just as the major European banking houses did, to guarantee them
the supply of 700 million francs of foreign exchange. Similarly in 1890, it was one
of the ‘traditional’ bankers, Jean de Neuflize, who was delegated by a syndicate of
French bankers to negotiate, at the request of the Bank of England, an advance of
75 million francs to be made to them with the agreement of the Bank of France.
This was at a time when the lowering of Argentinian credit threatened a number of
loans issued by Argentina in England.
These banks succeeded to a certain extent in retaining a presence in the
major financial deals of the time (launch of State loans, financing large railway
companies, etc.). Without a doubt they did not have the necessary resources to
guarantee the subscriptions to the largest loans, and they could not from this
point of view compete with the new ‘public’ establishments (in other words those
formed by share issues) which could mobilize their multiple branches for such
operations. Nevertheless, they continued to place with their small but very rich
investment clientele significant packets of new securities, therefore guaranteeing
the closing of an issue, and this is one of the methods by which they guaranteed
their personal fortune. They also knew how to unite in syndicates which allowed
them to carry more weight, and were able to gain support from the new commercial
banks that they had largely contributed to the creation of. Thus, with the Imperial
Ottoman Bank (1863), one finds represented on the Committee of Paris, at the
side of the English bankers of the Committee of London, the Mallets, Hottinguers,
Foulds, Pillet-Wills, and André (from the house of Neuflize). The same position
was shown when the Banque de Paris et des Pays-Bas was born in 1872, from an
De Neuflize, Schlumberger et Cie, 1800–1950 (Paris, 1950).