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The rise of the large banks (1860-1914)




If these traditional wheels of the credit are enough about for the usual requests to the State and the needs for the trade, in times of economic crisis the money becomes rare and expensive.



Thus in 1848, when a severe economic crisis worsens by the effect of a political revolution, certain bankers go bankrupt, others stop making credit. One thus needed that the State and the cities intervene to create counters of discount, in particular the Counter of discount of Paris.



Sometimes the contractors, who usually call upon the self-financing, complain to miss appropriations for exceptional needs. However of simple bankers, whatever their fortune, have limited means, not enabling them to abruptly face with calls of capital of a very new width.




This situation occurred for example for the construction of the broad outlines of railroads in the years 1850, or to stimulate the modernization of the industry exposed to English competition starting from the treaty of free trade of 1860. In such cases, the need for other organizations of credit is felt.





Since 1827 the banker Jacques Laffitte had tried to launch a company silent partner commercial and industry, then Saint-Simonians, among whom the young Pereire brothers, had formed the bold project of a new “system of the banks” having to allow the economy to profit largely from the miracles of the credit.




The achievements were limited to creation, under the monarchy of July, “cases” like the general Case of the trade and the industry founded by Laffitte in 1837.





These establishments, only Parisian, which make loans with the forging mills and the railroads, are joint-stock banks with the still limited means, which immobilize their funds dangerously. Also they were carried by the economic crisis and policy of 1847 1848.




It is only under the Second Empire that the role of the new banks continues, made up on broad bases in public limit companies by actions.




The year 1852 sees the birth of the Building and loan association, which will finance the transformation of the big cities, in particular of Paris, then to launch out in loans to Egypt, before confining itself in the credit with the municipalities and the loans with private individuals on mortgages, but is not the organization of credit to agriculture hoped by some.

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