Like most European financial institutions, French banks joined the war reluctantly. While bankers, insurers and finan- ciers could not predict the duration and exorbitant cost of the conflict, all knew with certainty that a European war would weaken the financial system and destroy many acquired po- sitions. Nobody, however, could have foreseen the sometimes far-reaching effects of the war on banking operations, the po- sition of banks within the financial system, and their internal organisation. In a way, bankers shared the assumption set forth by British journalist Norman Angell, presented in his best-selling book The Great Illusion, published in 1910. To put it simply, Angell, without precluding the possibility of war, believed that such an alternative would be rejected by rational decision-makers aware that the prosperity of all relied on international bonds of com- mercial and financial confidence, embodied by the City of Lon- don. But the greatest illusion of all was perhaps to believe that reason could triumph over nationalistic passion and political ambition.

Powerful banks: an evolving banking sector

France s major banks joined the war in the same manner as most of the French population: with resignation as well as de- termination, and with a justified sense of power. Yet the French banking system, skillfully analysed in 1914 by a German (!) au- thor, had two main flaws. First, since the crisis of 1882-1889, the major retail banks had initiated (but not completed) the transition from a mixed bank model to a specialist bank model, based on the expan- sion of the network of branches and on short-term transactions as well as the issuance and brokerage of shares and bonds.

Patrice Baubeau Université Paris Ouest Nanterre / Sciences Po / IDHES (UMR 8533)


Counter of Crédit du Nord by the Statue de Lille, Place de la Concorde, Paris, 1918.

Société Générale, Historical Archives Department, Crédit du Nord Collection