THE FORMATION OF THE PARISIAN HAUTE BANQUE

The founding of the Parisian haute banque dates back to the closing years of the eighteenth century, with the increasing attraction exerted by Paris on provincial bankers, such as Claude Périer, and the return to business of Swiss bankers, such as Mallet, Perrégaux, Delessert, and Hottinguer. A second wave of foreign immigration, from Germany, started under the Restoration. James de Rothschild, arrived in Paris in 1812, founded his own bank, de Rothschild Frères, in 1817, and quickly emerged as the dominant force within the Parisian haute banque. Other bankers from Frankfurt came to settle in Paris too. The Protestant Bethmanns, who had played a leading role in placing foreign securities, especially Austrian, in Frankfurt’s financial centre during the second half of the eighteenth century, sent a representative, whilst the Gontards made longer-term commitments there from 1827, while maintaining the hub of their activities in Frankfurt. Others, often of Jewish origin, followed in their wake: the Oppenheims from Cologne, through their alliance with the Foulds, the de Habers from Karlsruhe, and the Seligmand’Eichthals from Munich.

Like their London counterparts, the members of the Parisian haute banque were primarily engaged in trade finance and, a little later, in foreign issues. Paris played a crucial role in the financing of France’s domestic and international trade. Not only was almost all international trade handled in the capital, but numerous foreign merchants, especially Swiss, regularly drew bills of exchange on Paris. Paris’s international role was further enhanced by France’s key position in the multilateral system of payments: in spite of its relatively modest foreign trade, it was the only country in continental Europe that had balanced trade with Latin America and a positive trade balance with the Anglo-Saxon countries. The franc was an international currency because, on the one hand, the British and Americans were trying to obtain bills of exchange on Paris to pay for some of their purchases and, on the other hand, the merchants of continental Europe used Paris’s centre to clear their debts with the Anglo-Saxon countries.

This new role offered the opportunity of creating a very active capital market. Capital accumulated in Paris. Deposits, which represented up to 80 per cent of the liabilities of certain banks, included, besides the accounts of members of the aristocracy and the bourgeoisie, as well as the funds of numerous French industrial and commercial firms, the proceeds from sales made in France by foreign merchants, who used them on the spot to make payments and to obtain new credits. This capital replenished itself. In particular, it lay at the root of the role that Paris would henceforth play in placing and then issuing foreign loans. Even though France, along with Britain, was the main capital-exporting country, the number of loans floated on the Paris market only progressed slowly during the first half of the nineteenth century. The three loans to the Kingdom of Naples between 1821 and 1824, managed by the Rothschilds, were mostly issued in Paris and the Spanish loan of 1823 was concluded under difficult conditions by the Parisian banker, Guebhart. In addition, four Belgian loans and two others on behalf of the city of Brussels were issued between 1831 and 1844, while papal loans were very easy to place in France between 1831 and 1839. The Parisian haute banque was also involved in early industrial financing. From the outbreak of war until the crisis of 1810, factory-based cotton manufacturing in Alsace, Normandy, Paris, and Picardy increased, especially finer muslins for revolutionary fashions. Expansion occurred despite a considerably higher price for raw material inputs than in Leipzig or Liverpool. Parisian bankers took direct stakes in this developing industry. Delessert opening a spinning mill in 1801 while other members of the haute banque became connected with cotton manufacturing by marriage. Their links were largely with the more technologically advanced concerns. These were mostly located in Alsace, established by co-religionists, and built up before 1789 on the basis of finishing, dyeing, and printing. The Mallet and Vernes families became connected with C. Oberkampf, the Périers with the Berckheims and Dietrichs, and the Neuflizes with the Dollfuses. Interests in the new forms of production, or filial connections with them, expanded these bankers’ business horizons, opening up new opportunities for financial exploitation.