Especially after the fall of the Chinese Empire in 1912 several European
powers began struggling for a financial foothold in the new republic. The
Chinese government, encouraging competition to the powerful British
Hongkong and Shanghai Bank and the foreign financial consortium, subscribed one third of the share capital
of Banque Industrielle de Chine (BIC) and granted it important concessions.
They did not get participations in other foreign banks. The rest of the 45 million Francs
was put up by French investors, and so the bank could be founded on 15 March 1913.
However, the Chinese participation consisted of funds lent by BIC itself, making it
inherently weak to some extent.
The big Banque d'Indochine and other major French banks had declined
this involvment. But the French government was very eager to expand its own
political interests and the director of the Asian department of the
Foreign Office, Philippe Berthelot, was actually a little too involved as
initiator. He was assisted by his brother André. A. J. Pernotte became
Chief Director of the bank. The headquarters were in Paris at 74 rue
Saint-Lazare (building preserved) with branches
in Peking, Shanghai, Tientsin, Hong Kong, Saïgon, Haïphong, Yunnan Fou (Kunming),
Canton and Foochow. It also had offices in Japan, Singapore, Siberia, United
States, France, Belgium and England. All in all they were 25. Part of the
members of a local executive committee in Peking were appointed by the Chinese
government. The bank raised 600 million Francs
intended for the Canton–Chungking railway (not built then), and issued its
own bank notes, etc. A 1918 loan
Starting in 1920, the Boxer indemnations and the problematic government of the Republic of China
resulted in failures to honour its international debt. In order to
promote France's influence BIC had, willingly, made advances to the State in excess of its share
capital, in addition to its commercial long term loans. By the end of 1921
losses had reduced the real assets to 500 MFr. The small BIC
had lacked expert management and links to the French industrial groups with
business in China. On 3 October 1922 the bank was placed under
administration and management (Société Française de Gérance de la B.I.C.)
under control of the French state.
Because of the bank scandal Berthelot was dismissed and
Pernotte was jailed for three years.
The creditors received bons
de répartition for the distribution of the proceeds from the sales of the
bank's assets. BIC agreed to pay all of its liabilities within 25 years. The branch offices in China were allowed to operate for the time being. In
1925 three French High Street banks and the the Chinese government founded
Banque Franco-Chinoise pour le Commerce et l'Industrie (Banque
Franco-Chinoise), which took over the remnants of BIC's operations. BIC
securities continued to be traded on the Paris stock exchange until 1934 in
the hope of some compensation for shareholders too (reportedly something was paid in 1935).
Legally the company was liquidated only in 1950.
The Franco-Chinese Bank was allowed to continue limited operation even in the
People's Republic and became in 1960 (at that time owned by the Banque
d'Indochine) the present Banque Française Commerciale Océan Indien, part
of the Société Générale. There is a lot of literature published about the
big financial adventure, the BIC.
THE SHARE CERTIFICATE
The Banque Industrielle de Chine's very decorative and exotic-looking share
certificate is printed by Creté, Paris. It is a masterpiece of design and nowadays the most common of the old Chinese-related papers on the
scripophily market. The price is
therefore easily affordable and the item is continuously available from many
sellers worldwide. In the centre Beijing's Temple of Heaven (Tian Tan) is
depicted. Guardian lions (Fu) are common in China. Behind their backs are
circular symbols of longevity (Shou). The dragons (Lóng) symbolize
The ordinary shares, illustrated above, are dated in 1913 #1–87 000
tot. 45 MFr, in 1919 #87 001–147 000 tot. now 75
1920 #147 001–297 000 tot. now 150 MFr. Most
of them are bearer (au porteur) shares. 60 000 new ordinary shares were
offered on 15 May 1919 at 515 Francs each and 150 000 new ordinary shares 28
November 1919 to 7 May 1920 at 665 Francs each (not fully paid). The
Chinese government on both occasions subscribed to its one third portion of the new issue. It
also held one third of the founder's shares, of which another one third was
owned by the British Peking Syndicate.
In addition there were 3 000
founder's shares 1913
#1–3 000, and they are not cheap today. There are also nominative
(non-bearer) certificates (those of the founder's shares numbered 1–1 000 and those
of the ordinary ones numbered 1–29 000, included in the previous figures); those
certificates are more expensive. The face value is 500 Francs each. The founder's shares
carried 6 votes
each and were entitled to 20 p.c. of the total annual dividend sum, while the
others only had 1 vote per 10 shares. Eg. in 1913 the latter had a total of only 8 700
votes against the founders' 18 000. The 500 Francs bon de
répartition (distribution note for creditor) of 1923 is also frequently seen on the
© G. Kock research 2010–2011.
Facebook Page. Web address of this page: