From the beginning: a history of entrepreneurial bankers
"Societe Generale... to support the development of trade and industry in France". One hundred and fifty years ago, Napoleon III signed Societe Generale's founding decree. In order to serve the economy, its founders made entrepreneurial spirit the bank's raison d'être. Let's take a look back at the Group's beginnings.
Friday, 4 May 1864. Sitting at his desk in Tuileries Palace, Napoleon III carefully reviewed the document that had just been submitted to him by Armand Béhic, his minister of Agriculture, Commerce and Public Works. It was a decree authorising the founding of a bank with a note attached describing its by-laws. Without hesitating, he put his signature at the foot of the manuscript. In truth, the monarch had every reason to welcome such an initiative. By then the project's proponents, united in the face of adversity, had been lobbying public authorities for a year, fighting their competitors' manoeuvring every step of the way. Driven by ideals of progress, they reaffirmed their will to found a major credit institution that would help modernise the national economy by backing the launch of commercial and industrial firms. This was a welcome decision at a time when new free-trade treaties signed as early as 1860 created a favourable environment for developing a capital market and a new world of entrepreneurship. The emperor made no mistake in approving the new bank's name: "Société Générale pour favoriser le développement du commerce et de l'industrie en France" (General company to support the development of trade and industry in France).
There were other reasons why Napoleon III was pleased. These had to do with the founders' personalities and the resources put to work. With 120 million French francs of capital, Societe Generale had enough of its own resources to go into business. Above all, it took the form of a universal bank. Its promoters successfully obtained authorisation to carry out "all transactions ordinarily within the domain of credit institutions, but also to facilitate the completion of major public or private works through its support, to negotiate all loans and to participate, in short, in any financial transactions that aim to increase the nation's productive forces and to expand international business relations."
The management team was a perfect example of the convergence of finance and industry. Close associates of the Rothschild family, they included the leading entrepreneurs of the Second Empire. Joseph-Eugène Schneider, who built his fortune on iron and steel at the helm of the forges in Le Creusot, was Societe Generale's first Chairman (1864-1867). Paulin Talabot, for his part, was one of the most dynamic captains of industry in the late 19th century. A graduate of the École Polytechnique and former member of the French Bridge and Highway Corps, he established his reputation by developing France's rail network, particularly by operating the Paris-Lyon-Méditerranée (PLM) railway, a forerunner of the SNCF, which did so much to boost the French economy. As a director of Societe Generale from 1865 to 1885, he provided the initiative to establish the company's place at the epicentre of the Industrial Revolution and develop its international activities. Alphonse Pinard, who chaired the Comptoir National d'Escompte de Paris (CNEP), also played a pivotal role in the bank's creation. To steer the institution more towards stimulating the financial market, he assembled a banking division capable of operating at the European level. In addition, behind these three leaders were bankers of widely varied backgrounds. Edward Blount, a British citizen, was a renowned banker at the centre of Parisian business networks who also had close ties to the City. With his entrepreneurial spirit and openness to innovation, he served first as a director (1864-1886), then as Chairman of Societe Generale (1886-1902). Known for founding industrial companies, Genevans Édouard Hentsch and Jean-François Bartholony also contributed their elite banking experience to the new institution as it took its first steps.
Coincidentally, on 4 May 1864 the founding members of Societe Generale held a Board of Directors meeting in the Saint-Julien hotel at 17 rue Laffitte in Paris' 19th arrondissement. The location could not have been better chosen. Once owned by Queen Hortense, the mansion was the birthplace of Napoleon III, who, by authorising the bank's establishment, sponsored its creation. To mark the occasion, the Rothschild family, who owned the building, made it available to the directors. During the meeting, the Board decided to set up offices just a few blocks away. Societe Generale established its first head office at 54-56 rue de Provence. Above the entrance, a marble plaque inscribed with the bank's full name summed up the entrepreneurial spirit that accompanied its beginnings. Its story had already begun.