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rrance and America

Their Mutual Interests
and Obligations

Guaranty Trust Company
of New York

France and America

Their Mutual Interests
and Obligations

• «

Guaranty Trust Company of New York


140 Broadway


Rue des Italiens, 1 & 3 Fifth Avenue and 43d Street 32 Lombard Street, E. C.




AUG 27 i9!7


France and America


For over twenty years the Guaranty Trust
Company of New York has maintained an
office in London, at 32 Lombard St., E. C.
To the foreign trade of the United States
this office has been of value. The progress
it has made and the magnitude of its opera-
tions are but a reflection of the rapid develop-
ment of the parent company in New York.
The Company has now opened a similar office
in Paris at Nos. 1 & 3 Rue des Italiens. This
location is very close to the Grand Boule-
vards and about midway between the Bourse
and the Place de 1' Opera, the two centres of
business activity in Paris. The Paris offices
of the Trust Company will have, as close
neighbors, the Credit Lyonnais, the Banque
de r Union Parisienne, the Banque Nationale
de Credit, the Credit Mobilier, and the
Banque Union de Moscou.


The offices of the American Consul General
are located in the same building, which adds
an important convenience. Adjoining is the
office building of "Le Temps" one of the lead-
ing and well-known newspapers of Paris.

With a frontage of 81 feet and a propor-
tionate depth, the Paris quarters are spacious
and convenient. Their equipment is thor-
oughly modern and includes a safe deposit
and safe custody department.

Alexander Phillips, who has served as the
Paris representative of the Trust Company
heretofore, and who has a broad grasp of
foreign business conditions and of French
banking laws and Customs, is in charge of
the new office. G. Hebmann, who has been
manager of the leading French branches
of the Comptoir National d'Escompte de
Paris serves as Sub-Manager. William G.
Wendell, formerly in charge of the New
England bond business of the Trust Com-
pany, serves as Secretary, with Richard
P. Staigg as his assistant. Robert Bienz and
B. Avegno, from the London office, have
charge of departments in Paris, and Olaf


Giese is the Chief Accountant. The system
of accounting and auditing followed in the
Paris office will conform to that used in the
main office and all its branches. B. G. Smith,
the Auditor of the Trust Company, went to
. Paris and perfected plans to this end.

Through the establishment of this branch,
it is believed that another important link has
been forged in the chain of friendly and mutu-
ally profitable relations between French and
American banks and business houses. It will
enable the Guaranty Trust Company to
handle a large volume of business with
France, and, after the war has come to an
end, to develop the existing commercial re-
lations between the two republics. Ameri-
can business concerns and individuals having
interests abroad will find it to their advant-
age to estabhsh banking relations with the
Paris office of the Guaranty Trust Company,
as will American citizens traveling abroad or
serving with the armies in France.

Conscious of America's debt to France, and
of the friendly ties enduring between the
nations for more than one hundred years —


ties which time only strengthens — we deem
the occasion fitting to mention a few of the
many services we owe to France, and to
sketch briefly some of her achievements in
industry, commerce, and finance.

Guaranty Trust Company of New York


France and America

Between America and France, separated by
an ocean but united by their common love
of liberty, justice, and humanity— ever the
ideals of peoples of real strength— the friend-
liest, the most fraternal relationship has been
maintained for nearly a century and a half.

The liberty that America has enjoyed for
one hundred and forty years, France helped
her to achieve. The swords of Lafayette and
Rochambeau, aided by the guns of De Grasse
upon the high seas, assisted in cutting the
foreign ties that bound the American colonies
prior to the War for Independence; and from
the private purse of King Louis himself came
the first loan to America — unsecured and un-
conditional—to finance that historic under-
taking. It was with entire justice that
Washington wrote to Rochambeau; "To the
generous aid of your nation and to the
bravery of its sons is to be ascribed in a very
great degree that independence for which we
have fought."


France Was Our Sponsor

Following the decisive victory at Yorktown —
impossible without the assistance and co-
operation of Washington's French allies on
land and sea — which virtually ended the War
for Independence, came the treaty of Ver-
sailles in 1783. It was this treaty which
organized and created the United States of
America; and it was a French sloop which
brought to Boston the first announcement of
its execution. Thus, France, having helped
us to win our independence, gave us a friendly
asylum in which to conclude our terms of
peace. She did more: she stood sponsor for
us upon our entry into the sisterhood of
nations; was the first European state to re-
ceive a diplomatic representative from our
shores; and similarly, was the first to recog-
nize our national dignity by sending to us a
representative from her Court.

Always America's Friend

When in 1803 the United States desired to
purchase from France the city of New Or-
leans, Napoleon the Great ceded us the whole


Louisiana Territory with its enormous re-
sources, thus giving us access to the Carib-
bean Sea and to the Pacific Ocean, and mak-
ing ours the lands that now form the vast and
fertile plain west of the Mississippi. The
acquisition of this territory was of inestimable
significance in the development of the nation;
after the Revolution itself and the Civil War
perhaps the most significant event in our
history. Again, in 1812, though not directly
allied with us, France indirectly aided us.
And in 1898, following the close of the Span-
ish-American War, from France came the
overtures for peace, and Paris was again the
scene of the treaty which concluded matters.
Thus, in 1783, 1803, 1812, and 1898, France
participated in the most momentous acts of
our national existence. This continuity of
goodwill and service emphasizes the close,
intimate, and deep sympathy which unites
the two peoples.

The Nation's Capitol of French Design

It was a French engineer, Major L'Enfant,
who had fought and bled for us during the


War for Independence, who was commis-
sioned by President Washington to prepare
a plan for the building of our Federal city,
after that undertaking had been decreed by
Congress on July 16, 1790. Major L'Enfant
did this work with conspicuous ability and his
plans were closely followed though he did not
live to see realized the city of his dreams.
However, on April 28, 1909, his remains were
removed from their previous resting place and
reinterred in the Arlington National Ceme-
tery with fitting ceremonies, in which the
President of the United States, Representa-
tives of Congress, the Supreme Court, the
Society of the Cincinnati, and other patriotic
organizations, participated.

Reciprocal Courtesies
Thirty years ago the people of France gave
to the people of the United States the colossal
figure of Liberty which stands on Bedloe's
Island in New York harbor. There, raised
high above the waters of the harbor and
looking out toward the open sea, flaming
torch in hand, the great statue welcomes
the traveller visiting our shores and the im-


migrant seeking refuge in free America.
Later, moved to an expression of our undying
appreciation of a French gentleman and a
hero, the people of the United States gave
to the people of France a monument to the
memory of Lafayette, which was unveiled in
Paris on July 4, 1900. The ceremonies upon
this occasion were imposing and dignified,
and the event united yet more closely the
sister republics of America and France.

The deeply rooted sense of attachment
existing between the peoples of France and
America was again manifested when the
United States welcomed Marshal Joffre,
former Premier Viviani, and the French
Commission on their memorable visit to
this country shortly after our entrance into
the European War. Everywhere they were
acclaimed with the wildest enthusiasm. To
the American public they typified the soul
of heroic France, and the great, generous
heart of Columbia beat with affection for
them. This visit, in the unity of feeling it
expressed, was one of the most significant
events in the history of two peoples.


The emotions awakened here by Joffre
and Viviani were equalled only by those
aroused by General Pershing and his staff
when they arrived in France as the vanguard
of the United States Army — the harbingers
of America's might come to the rescue of
France and Democracy.

Liberty and Democracy Unite Us Today

The points of sympathy between France and
America are too many to enumerate, but
the spirit of liberty and its resultant democ-
racy are, today as always, the major ideals
of both nations. Seeking no victories but
those of peace, no territory except their own,
no sovereignty except sovereignty over
themselves, — the independence and equal
rights of the weakest member of the family
of nations are to the people of the United
States and of France entitled to as much re-
spect as those of the mightiest empire. In
defense of these principles, France is engaged
in a death struggle with militant autocracy
and ruthless aggression and it is not surpris-
ing to learn that she has loaned to her allies


and to other friendly states 7,000,000,000
francs with which to further the cause of
democracy. It is in keeping with America's
traditions that since the date on which we
formerly aligned ourselves with France and
her allies in the great struggle, our Govern-
ment has loaned to France $370,000,000.

Genius, Industry, and Thrift

Until the outbreak of the war in 1914, France
was busy and prosperous. Then followed an
upheaval. Any study of her past, however,
particularly since 1871, shows her ability to
recuperate rapidly from losses inflicted by
war, and reveals clearly her industrial
strength, and her financial elasticity. Suffer-
ing the loss of Alsace and Lorraine in 1870-
1871, with 1,600,000 inhabitants, she was
deprived of two fertile provinces of great eco-
nomic importance and value. This loss was
valiantly sustained, and the financial and in-
dustrial dislocations attendant upon the
Franco-Prussian campaign were speedily com-
posed. Her creative genius, the great re-
sources of her soil, her application to industry,

[ 13 ]

and her thrift explain her rapid recuperation
and progress.

Wealth, Gold, and Savings

These things make for the remarkable sta-
bility of the wealth of France. In 1869 it was
estimated at about 185 milliards of francs; in
1871 at 175 milliards of francs; in 1878 at 216
milliards of francs and in 1914, before the
outbreak of the war, at 287 milliards of francs.
The valuation of her income, according to
competent authorities, rose successively from
12 milliards of francs in 1853, to 22 milliards
of francs in 1878, to 28 milliards of francs in
1903, and to 32 miUiards of francs in 1914.

Immediately prior to the war, France had
a gold stock equalhng $1,200,000,000 and a
stock of silver aggregating $411,100,000. Of
gold, silver, and paper, her per capita allot-
ment amounted to $48.63, which was more
than 25% in excess of the per capita of gold,
silver, and paper for the United States in the
corresponding period; more than twice that
of the United Kingdom of Great Britain and
Ireland; approximately two and one-half


times that of Germany; and more than four
times that of Austria Hungary.

With a population of 39,600,000 at the
beginning of 1913, France had in postal and
private savings banks accounts of 14,578,897
depositors, with aggregate deposits equivalent
to $1,091,303,658. On June 30, 1915, the
United States had only 11,811,169 depositors
out of a population of 101,740,000. Thus,
almost 40% of the people of France work for
the future and accumulate for posterity,
against only 11% for this country.

Basis of Nation's Strength

The financial solidarity of the French republic
is to be ascribed to three influences: first, a
thoroughly sound banking system, central-
ized in one of the greatest banking institu-
tions of the world, the Bank of France; sec-
ond, the ingrained thrift and frugality of the
French people as a whole, together with a
national economic vigor not elsewhere sur-
passed; third, wise supervision, and pa-
triotic cooperation by the government with
banking and business interests. The Franco-


Prussian war of 1870-1871 taught the French
people the meaning of thrift and economy.
So well did they learn this lesson, that the
whole sum of the indemnity demanded by
Germany, aggregating $1,000,000,000, was
raised within the republic's confines by its
own inhabitants and paid off more than one
year before the time stipulated by the

French Loans Popular

The habit thus acquired has never been for-
gotten by the French, and today the aggre-
gate number of investors purchasing the
French war loans has reached the amazing
total of 4,500,000 individual subscribers.
Perhaps no other country, in proportion to its
population, can make so good a showing.
France is particularly fortunate in that her
small investors prefer "safe" investments
rather than offerings which promise high
returns. Government Rentes or Consols in
France are perpetual, and this characteristic
seems to obtain for them increasing favor in
the eyes of the French people.


National Credit

One of the clearest evidences of the loyal way
in which the French people stand behind the
nation in its financing, is the heavy over-
subscription which has marked the issue of
many of its loans. As an illustration, the
loan of 1872, for 3,500,000,000 francs at 5%,
brought in subscriptions for 43,816,096,551
francs; and the loan of 1891, for 939,480,000
francs at 3%, resulted in a total subscription
of 16,000,000,000 francs. The government
policy of issuing its loans in small denomina-
tions makes for their popularity and wide-
spread distribution. In the French ledger
of public debt for 1913, holders of 3% Rentes
totaled 4,443,904 and of these only 14,231
held allotments in excess of 1,000 francs.
Those who held income warrants for 3 francs
numbered 107,447; for 5 francs, 250,539; for
20 francs, 395,613; and for 30 francs, 663,747.
This unusual tendency of the French people
contributes largely to the stability of prices
of government securities and to the low rate of
interest on the public debt: from 1873 to 1901
the rate did not exceed 3 }/2%-

[ 17 ]

Loan Price Recoveries

Moreover, the government does its part to
warrant and retain the confidence of the
holders of its securities. One of its wise
poKcies is to impose new taxes to defray the
interest charges on new security issues. It
began this practice after the Franco-Prussian
War, and is today following the same rule in
regard to securities issued to finance the pres-
ent conflict. This continuity of purpose,
doubtless, will prove reassuring to all holders
of French government securities. Under
this method of procedure the French liberat-
ing loans of 1870-1871, previously referred to,
issued at 82.5 and 84.5, respectively, showed
a high price of 93.4 and a low of 85 in 1873,
went to a high of 106.4 and a low of 99.6 in
1875, and reached a maximum of 120.8 in
1880 with a low of 115.3. Similarly, the 3%
Rentes which had dropped to 50.3 in March,
1871, reached par in 1892 and sold five years
later at 105.2.

All these facts and figures reveal in differ-
ent ways the solidarity of French finance.
To sustain the credit of their nation is almost


a religion with the French people. It is,
therefore, with no sense of discouragement
that those who know France best look to her

^^ Industries de Luxe^'

There is another aspect of the genius of
France which justifies this optimism: her
splendid aptitude for industrial activities, and
her resulting position in the industrial

Industrial development in France for more
than a century shows an amazing diversity.
This compels her to import large quantities
of raw material, which are converted into
manufactured products of great value. No
other country approaches France in the art-
istic perfection of many of her exports, and
for this reason France enjoys a practical
monopoly of the "industries de luxe." Ac-
cordingly, because of the artistic nature of
her products, the "quality rather than quan-
tity" element in her manufactures, a rela-
tively smaller export tonnage earns a greater
profit than is the case with her competitors


exporting coal, other raw materials, or ordin-
ary manufactured products. To France be-
longs the special and highly profitable privi-
lege of supplying to other countries "objets de
luxe" which cannot be produced elsewhere.
To America come many exports of this class,
and so long as the demand persists for French
fashions and French porcelains, for the
silks of Lyons and the delicate scientific in-
struments of Paris, the commercial relations
between the United States and France will
be a source of pleasure on the one side and
profit on the other.

Industrial Progress

In judging the industrial status of any na-
tion, its production and consumption of coal,
iron, and steel, and the growth of its trans-
portation systems are highly significant fac-


In 1869, French industries consumed 21
million tons of coal, of which 13.5 millions
were taken from home mines. In 1912, the

[ 20 ]

consumption was 61 million tons, of which 41
million tons were taken from home mines.

Iron and Steel

In 1869, the French output of cast iron was
1,380,000 tons, and of steel, 1,060,000 tons.
In 1914, France produced 5,311,000 tons of
cast iron and 4,635,000 tons of steel.


The increasing activity of her railway
system is similarly demonstrable. In 1869,
there were in France 10,743 miles of railroad
track; in 1912, there were 31,546 miles.

Navigation and Tonnage

Between 1869 and 1912, inland navigation
increased 150%; while the traffic of her mer-
cantile marine had amazingly expanded.
The tonnage entering French ports in 1869 is
set down as 11,000,000 tons. In 1912, this
had been increased to 53,000,000 tons.

Our Exports to France
Our official records show that, as early as
1790, the United States exported to France
merchandise valued at $1,384,246. By 1833


this valuation had been increased to $13,705,-
915. In 1866, merchandise shipped to France
from the United States was valued at $51,-
312,103; and in 1880, when the hundred-
million dollar mark was crossed for the first
time, our shipments to our sister republic
were valued at $100,063,044. Since 1907,
our annual exports to France from this coun-
try have always exceeded $100,000,000, rising
in 1915 to the then unprecedented total of
$369,397,170 and in the following year mount-
ing still higher,— to $628,851,988.

Our Imports From France

The values of imports from various coun-
tries to the United States were not officially
recorded prior to 1820. For the year 1820-
1821, our imports from France were valued at
$4,125,292. By 1830, this valuation had
almost doubled, the total reaching $7,659,-
869. In 1860, French imports to America
were valued at $43,171,413, and in 1890 at
$77,622,311. For 1910, the figures record a
gain of approximately 84%, the total valua-
tion for that year's imports standing at


$132,363,346. In 1914 (the year of the war's
outbreak), imports from France to this coun-
try totaled $141,446,252. In 1915, this total
was practically cut in half, the figures being
$77,158,740. But for 1916 a surprising
gain is recorded — French imports to America
rising to $102,077,060. A nation that can
achieve such a commercial recovery while her
territory is being ravished by the invader,
possesses recuperative powers which justify
the belief that she will emerge from the
present conflict prepared to meet and solve
triumphantly the problems which confront

The commercial and industrial record of
France, following past wars, indicates that
she should recover quickly from the de-
struction inflicted in the present conflict.
The reconstruction of railroads, the erection
of factories to replace those destroyed, and
the replacement of the mechanism of indus-
trial activity that will be required, and that
is in part alread}^ planned, offer a peculiarly
inviting field to American capital and enter-
prise. Tentative steps have already been

[23 1

taken by representatives of American engi-
neers and business men in this work. Aside
from its attractive business aspect, the en-
listment of American money and effort in the
great task of reconstruction that will remain
at the end of the war will tend to cement still
more closely the ties that bind the two great
Republics together, and will enable Americans
to discharge in part the debt they owe to
France for her friendly interest in the wel-
fare and progress of the United States from
the beginning of its life as a nation.

August 9, 1917


©CT 19 1^^


030 268 115 6



Online LibraryGuaranty Trust Company of New YorkFrance and America, their mutual interests and obligations → online text (page 1 of 1)