Securities theft

In 1884, the branch fell victim to a theft of securities, an incident which is mentioned in the minutes of the Board meeting of 17 June.

The Amsterdam branch has reported the theft by an employee of coupons worth around 18,000 guilders. The Manager has provided us with all the details of this regrettable incident and has informed us that the perpetrator was immediately arrested.

fact it came to light that the securities being used to guarantee the loans were basically US stocks, whose quoted price and intrinsic value are highly debatable and which might therefore prove difficult to sell, the Board of Directors pointed out.65 The Board set a limit of 150,000 guilders on the amount the branch could lend to any one client and in addition decided that the 10% cover margin must be fixed in cash rather than securities.

Discussions were no doubt taking place between Paris and the branch around this time because the subject was brought up once again at a meeting of the Board of Directors in January 1873. The Board however was even firmer and more precise in its instructions. It demanded that two members of the Advisory Council be consulted on every decision regarding use of funds, and reiterated that the branch must maintain sufficient liquidity to be able to carry out such transactions as bill discounting. As a result the Board imposed a ceiling of one million guilders i.e. half the branch s total capital on total advances made against securities. The per-client limit, which had initially been set at 150,000 guilders, was raised to 300,000 guilders, but the Board stressed that preferably that limit should not reached. In addition, the 10% cover margin was raised to 25% in cases where US stocks were pledged.

Paris headquarters was now monitoring the situation very closely and in May 1873 it once again called the branch to order, asking it to bring down the total amount advanced against paper securities from the current 1.4 million guilders to the imposed maximum of one million. On several occasions, headquarters sent an inspector to check the branch s accounts.

In September 1874, Paris headquarters decided66 to hire Hugo Finaly on a probationary basis and send him to the Amsterdam branch, so that, without being formally appointed as a manager, but with set tasks and a proper salary, he can find out what is happening at the branch, which will also enable the Board to assess Mr Finaly s abilities. This decision clearly shows that Paris was having doubts about the management of the Amsterdam branch. Hugo Finaly was later appointed to the Board of the Banque de Paris et des Pays-Bas and was also the father of Horace Finaly, who joined the bank in 1900 and became General Manager Director in 1919. In early December 1874, Hugo Finaly sent a report to the bank s general management, following which the Board of Directors decided to reduce the branch s capital from two million to one million guilders. The Board spoke of an impending internal reorganisation of the branch and decided to abolish one of the two manager posts the one held by Mijnhart J. Boissevain and reduce staff costs from 25,000 to 15,000 guilders.

In 1896, Maurits van Hall suffered serious health problems and the Board of Directors appointed Gideon Maria Boissevain, a member of the Advisory Council, to replace him during his convalescence. That same year Joseph Henri Thors, who had been General

65. At a meeting on 19 December 1872

66. At a meeting of the Board of Directors on 7 September 1874

70 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