© G. Kock 2010 



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 poster.

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 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 positive power.

The ordinary shares, illustrated above, are dated in 1913 #1–87 000 tot. 45 MFr, in 1919 #87 001–147 000 tot. now 75 MFr or in 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 collectors' market.

© G. Kock research 2010.
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