the world of private banking

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THE WORLD OF PRIVAtE BANKING
thus formed a multinational group for mining extraction and refining of precious
metals, including notably the Société minière et métallurgique de Penarroya
(created in 1881), the Société Le Nickel and the Compagnie du Boléo (1885), and
at a very early date it started to prospect for petroleum in Spain and Russia.
The Mirabauds, who were head of a lesser bank (their capital was 6 million
francs from 1897), had closely collaborated with them in many of these industrial
companies (in particular in Penarroya and the Compagnie du Boléo). They then
created a company specifically for prospecting new mining business, the Société
Française d’Etudes et d’Entreprises. It was this that allowed them to start to
independently exploit a Serbian copper mine by forming the Compagnie Française
des Mines de Bor with a startup capital of 5.5 million in 1904. Meanwhile, keeping
sufficient shares to guarantee their control of this business (it was sufficient for
them to retain 6.8 per cent), and to retain a commission of 1 per cent on the value
of copper sold, they succeeded in placing the rest of the securities with friends
and clients whose fortunes they managed (they had close to 3,000, forming what
they called their gens 14 in the Latin sense of the term). In the same way, in 1908
they were able to achieve an increase in capital of 1.5 million, then through other
large deals between the two wars they arrived at a nominal capital of 60 million.
They therefore found themselves at the head of a business which had proved
exceptionally profitable from before the Great War and throughout the 1920s.
These very profitable investments created a goldmine for the Mirabauds, allowing
them to take part in numerous other industrial businesses, as much in France as in
foreign countries, up until the eve of the Second World War.
The Haute Banque is a group of houses which is more diverse than is often
thought. The factor which unifies them is their relationship with foreign countries
and their participation from the start in all forms of international operations. They
therefore precociously acquired an international culture which they used to acquire
a remarkable ability in this field.
This international base, the network of relationships extending to numerous
countries, helped them to adapt themselves to developments in international
monetary and financial relations, and to profit from them. It is this that, for a
long time, allowed them to successfully resist the rising power of the new credit
establishments, which for a long time did not have the same resources available.
While in the national market the old banks were unable to preserve their marketshare
when faced with the new competitors, on the international market they
succeeded in maintaining themselves and appeared to be indispensable, forcing
even the directors of the new banks to use their services.
This continued over a long period: at least up until the Great War, which changed
forever the operation of the money markets, and marked the end of a golden age
for these houses, during which they succeeded in preserving the essence of their
positions in the world scene.
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