the world of private banking

138
THE WORLD OF PRIVAtE BANKING
In comparison with the early 1860s, the balance sheet total rose from 19 to
45 million francs (and even 47 million in 1912) and the profits, although very
irregular, translate into a strong upwards trend; considering that they were zero
in 1913, over 900,000F in 1910 and 1911, and 742,000F in 1912, this gives an
average over the four years of more than 600,000F compared to 150,000F in 1860.
This progress was achieved with a capital of 5 million francs, which had changed
little (it was 4.5 million in 1865).
In France the house no longer resembled its original form: with a certain
amount held in the new businesses, overall it satisfied itself by maintaining its
position in the sectors where it had operated for a long time, such as insurance.
It was the development of its international operations which undoubtedly
allowed this house, which had been involved with the exchange markets since
its origin, to find a new dynamism. The number of its foreign agents increased
by more than 50 per cent. The acceptances, which from now on served almost
exclusively to finance the international trade, had a value ten times higher than in
the 1860s, by themselves representing 33 to 40 per cent of the assets instead of 9
per cent.
The three liability entries which we have already analysed also point towards a
strong move to foreign business. Amongst the debtors’ accounts, which rose from
5 to 22 million francs, foreign accounts represented 2/3 of the total instead of a
third. Amongst these one can pick out Goldman Sachs and Co. of New York, with
900,000F, Portalis & Co., of Buenos Aires, with 700,000F, Pouliloff with 400,000F,
Coutts & Co., with 195,000F, Union de Banques Suisses, with 110,000F, etc. In the
portfolio of bills of exchange, it is difficult to make a comparison, since up until
around 1880 the foreign bills were mixed in with the provincial bills, but the fact
that from this point they are differentiated (and represent 20 per cent of the total and
often close to a third) is a sign of their new importance. Finally, under the heading
‘public funds and industrial securities’, the foreign securities are not far off the
majority, and they represent 80 per cent of this heading, instead of a third. All these
signs point in the same direction: the Mallet bank worked more and more with
foreigners, and its position in the international market was considerably stronger.
In some regards, one could therefore compare this private bank in Paris to certain
merchant banks or accepting houses in the City during the Edwardian era. 11
One may assume that it was the same for the other houses of the Haute Banque,
and in particular, but at a completely different level, for the Parisian branch of
Rothschild. One again finds the names of these houses of the Haute Banque on
the majority of security issues at this time, which shows that they were successful
in maintaining their activity in this type of operation in spite of the competition
from the major credit establishments. Thus, when in 1901 the Russian government
intended to place a 4 per cent loan of 424 million francs on the Paris market, it was
Rothschild which became the ‘the director of the syndicate’ for the guarantee, and
11
Cf. Y. Cassis, Les banquiers de la City à l’époque Edouardienne (Geneva, 1984);
and Y. Cassis, La City de Londres, 1870–1914 (Paris, 1987).