The Rotterdam office
The idea of setting up an office in Rotterdam was voiced for the first time by the Board of Directors in December 1917. In 1919, at the suggestion of Horace Finaly, the Board discussed starting up a foreign exchange office. It was mentioned that the Ministry of Finance has promised that it will give the office responsibility for treasury operations which it needs to carry out on the Rotterdam market. In February 1920, the Board gave its approval for the renting of a building which will serve as a treasury office for transactions carried out in the city. It finally opened on 2 August 1920 at Gedempte Glashaven 20, with D. J. Tijssens as manager. But the office lasted for only a short time; the Bank decided to close it in 1926.
The French authorities in the Netherlands reacted strongly to the Bank s decision to close the Rotterdam office. A number of letters were exchanged between the French Embassy, the Ministry of Foreign Affairs and the Ministry of Finance. The reply from the Finance Ministry to the Foreign Ministry sets out the reasons for closing the office thus: I asked the Banque de Paris to explain the reasons for their decision. They have just advised me that their branch in Rotterdam, which in reality was only an office attached to the Amsterdam branch, was set up as a test after the Armistice with a view to assisting the development of trade with France, mainly the coal trade, via the port of Rotterdam. They told me that the endeavour had not achieved the results they had been hoping for and after several years of operations it was apparent that the office was unlikely to find enough business locally to justify keeping it open69.
Transactions carried out by the branch
During the First World War, the Banque de Paris et des Pays-Bas helped to mobilise private savings through the sale of War Loans and National Defence Bonds, and also to negotiate loans on behalf of the French Treasury with creditors in Spain, Switzerland, Sweden and the Netherlands.
In the Netherlands, this was achieved by arranging a loan from a group of Dutch banks70 to a group of French banks consisting of the Banque de Paris et des Pays-Bas, Comptoir National d Escompte de Paris and Crédit Lyonnais. This loan was taken out for the purpose of assisting the population in areas of France mainly in the North of the country which had been invaded, by supplying them with foodstuffs and other necessities.
69. Archives of the Ministry of Foreign Affairs.
70. The Dutch group comprised the Nederlandsche Handel-Maatschappij, Amsterdamsche Bank, Lippmann, Rosenthal & Co., Nederlandsche Indische Handelsbank, Rotterdamsche Bankvereeniging and Twentsche Bank.
The impact of the 1929 crash on the Netherlands
The reports sent back to Paris on a regular basis by the French Embassy to the Netherlands to give us a feel for how the economic situation was evolving.
10 March 1931 The cost of money in the Netherlands was rather high in 1929. This was clearly due to the exorbitant rates that were being paid in New York for On Calls and fixed deposits at that time of outrageous speculation. All the Dutch banks converted a smaller or larger proportion of their guilders into dollars in order to profit from the US rates. Then of course, all this capital flowing back into the Netherlands after the New York debacle gave rise to a substantial reduction in interest rates.
16 November 1931 The main reasons for this worsening situation are the financial difficulties faced by Germany and Britain. The fall in the value of sterling is the most serious event for the Netherlands for a long time. It has caused considerable losses for many businesses which were in the habit of drawing up their contracts in British currency. Above all it has severely reduced exports to Great Britain, which used to be the Netherlands best customer.
Credit inflation during the last few years has had dire consequences, leading to a general financial crisis which the fall in sterling and the Scandinavian currencies has now brought to a head. The financial situation of private individuals who have been sorely tested since the October 1929 stock exchange crisis has been further shaken this year by the incredible drop in value of the best securities. The overall losses from this across the Netherlands are estimated at several billion guilders, a catastrophe which has been exacerbated by the fact that most companies have not paid any dividends.
14 March 1932 The economic situation in the Netherlands continues to worsen. Shipbuilding at Rotterdam is going through a particularly bad time.
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