Eric Bussière60 tells the story: In 1872, the Amsterdam branch of Paribas, which had inherited the original Bischoffsheim business, had absorbed a private banking business specializing in American securities. This move turned out badly. The bank took a firm option on shares in Lake Erie and Louisville Company in association with a New York bank. It failed to raise sufficient public interest and the branch was forced to grant its American associate a substantial advance. The operation was not fully resolved till 1879 and left considerable losses on the books. In May 1879, the branch was still carrying a commitment totalling $1,140,000, which represented the nominal value of the share issue, and we can assume that a large proportion of this amount simply became a loss.

The Amsterdam branch was a major player in the issuance of foreign securities in the Netherlands. Figures61 for the years 1895, 1905 and 1913 show how its market share progressed over the years. In fact in 1895, the branch found itself down in tenth place, having managed just one issue that year, but in 1905 it topped the list together with Gebroeders Teixeira de Mattos with 5 issues, and stood in third position in 1913 with 4 issues, behind Lippman, Rosenthal & Co. and Hope & Co.

Trade with the Dutch East Indies

In 1884, a trade crisis struck Amsterdam and consequently the banks which were trading with the Dutch East Indies got into difficulty. The branch participated in the amount of 50,000 guilders in a bond issued by the Nederlandsch Indische Landbouw-Maatschappij (Dutch Indies Agrarian Company), which was hived off that year from the Nederlandsch- Indische Handelsbank in order to run the plantations and manage the sugar refineries. The Amsterdam branch took part in the general drive to support trade with the Dutch Indies. The manager read out a letter from Mr Van Hall listing the various measures taken to assist financial institutions in difficulty as a result of the crisis which had struck the Dutch Indies. All the various 5 and 6% bond issues that had been made totalled not less than 22.5 million guilders. 62

In 1891, the branch manager informed the bank s Board of Directors of the difficulties facing the Sumatra Tobacco company. The price of tobacco had plummeted following the general withdrawal of US buyers. At the time the bank s direct financial involvement consisted of shares in Herrings & Co. to the value of 200,000 guilders. Two years later, this figure had been reduced to 100,000 guilders but the share price had lost 75% of its value.

In 1894, the branch participated in a syndicate purchasing shares in the Cheribon Semarang Stoomtram Maatschappij (Cheribon Semarang Steam Tramway Company). These shares

60. In Eric Bussière, Paribas, Europe and the World 1872-1992, Fonds Mercator, Antwerp, 1992, p.40

61. In Dr. P.A. Geljon, Geschiedenis van de Algemene Banken in Nederland 1860-1914, Nederlands Instituut voor het Bank-, Verzekerings- en Effectenbedrijf, Amsterdam 2005.

62. Minutes of the Banque de Paris et des Pays-Bas Board of Directors meeting of 16 December 1884.

66 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