The Foundation of the NCDB

The articles of association for the NCDB had been approved by royal decree on the 22nd of February 1863. Apart from trading and investment in mortgage bonds, shares and debentures of companies established on sound financial fundamentals , the purpose of the new bank was also to cooperate in raising capital and credit for companies of public interest, for large public works and for the expansion of national industry, where this can be done on a secured basis . The inclusion of mortgage bonds in the first phrase of the bank s articles of association might be an indication that Sarphati had a close cooperation with his mortgage bank in mind. The Nationale Hypotheekbank faced some problems placing its bonds and looked for new distribution networks. The reference to the expansion of the national industry reverts to Sarphati s earlier failed initiative, the Maatschappij voor Nederlandsche Volksvlijt.

The new issue prospectus, dated the 31st March 1863, stated that the problem of how to find the capital for the bank had been solved as M. Louis-Raphaël Bischoffsheim s personal involvement had been secured . The bank was capitalised at NLG 10,000,000, represented by 40,000 shares with a par value of NLG 250 each on which 60 percent had to be paid initially. 8,000 shares were offered in the Dutch market. The other statement in the prospectus, that the other shares had already been placed certainly helped a lot to make the new issue a great success. Only 2 percent of subscriptions were allotted21. Obviously, this was mainly due to the foreign parties that belonged to Louis-Raphaël Bischoffsheim s syndicate.

Shortly after the issue, the NCDB was officially founded by the notarial deed of 14 April 186322. Bischoffsheim, Goldschmidt & Cie Paris, Bischoffsheim & Goldschmidt London, Louis-Raphaël Bischoffsheim in Paris, his brother Jonathan-Raphaël in Brussels and Hayum Benedict Goldschmidt in Frankfort held 17,600 out of the 40,000 shares. Then came A.L. Pinard in Paris, Levy Cremieux Frères & Cie, Hentsch Lutscher & Cie, M. Königswärter, Trivulzi Hollander & Cie, all established in Paris. Over 10,000 shares were in the hands of smaller shareholders who were not directly involved with the foundation of the bank and included the people who had subscribed to the new issue in Amsterdam. In fact, the French based banks and individuals held just over 50 percent of the capital. Apart from Sarphati, who owned 1,000 shares, the managers and the members of the supervisory board were obliged to hold between 50 and 100 shares, as was prescribed by the articles of association.

The NCDB bank opened for business on the 1st May 1863. The principle of a two tier board had been installed. The responsibility for the bank s affairs was entrusted to a

21. At that moment, the Amsterdam Stock Exchange was buoyant. At the introduction of the Rotterdamsche Bank, only 1.7 % of the subscriptions were alloted. (P.A. Geljon, Geschiedenis, volume III, pp. 230 et 337).

22. Publication in the Amsterdamsch Effectenblad, 20 May 1863.

48 T H E H I S T O R Y O F B N P PA R I B A S I N T H E N E T H E R L A N D S