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