The Crédit Lyonnais
INTERVIEWS WITH BARON BRINCARD, ADMINISTRATEUR DÉLÉGUÉ, AND OTHER OFFICIALS OF THE CRÉDIT LYONNAIS[178]
Q. What is the date of the organisation of the Crédit Lyonnais?
A. July 6, 1863.
Q. Under what law was it organised?
A. We are under the general law, a general companies law.
Q. What is the minimum amount of capital required?
A. There is no minimum, but at least one-fourth of the capital is required by law to be actually paid in.
Q. How many shareholders have you?
A. Our capital is divided into 500,000 shares, but as many of these shares are issued to "bearer" we do not know how many shareholders we have.
Q. The cash in hand is merely carried for the necessities of business?
A. Yes. Any bank, if it has need for additional cash, may present for rediscount at the Bank of France the bills and other commercial paper which it has in its vaults.
Q. What per cent. of your deposits do you intend to carry in cash either in your own vaults or in other banks?
A. Eight to 10 per cent. on the average.
Q. Does the Bank of France ever loan below its published rate?
A. No. It never does.
Q. It is not, I believe, the policy of your bank to buy public securities in large amounts?
A. No. Our idea is to buy all the commercial paper that we can get. That is our business. At present it is almost impossible to get any commercial paper because business is so slack; therefore, we are obliged to go outside and buy treasury bills.
Q. To what kinds of banks do you lend on collateral?
A. Mostly foreign banks; for instance, banks in New Orleans during the cotton season. It is not to our interest to lend to French banks. We lend money to foreign banks and to French merchants, but never to foreign merchants or to French banks. We never lend on real estate. That is the business of the Crédit Foncier.
Q. Do you own all of the securities you sell, or do you take orders and buy and sell them on commission?
A. The greater part of our transactions are made on commission.
Q. In your statement of liabilities you show deposits about $132,000,000, and current accounts about $168,000,000. Will you kindly explain the difference between these two accounts?
A. Deposits are sums of money deposited, especially by private people. Accounts current represent the balances to the credit of business people.
Q. If I come here and open an account with you and make a deposit and say I want to transact business with you, borrowing money from time to time, and depositing and drawing daily, would you put that account in your "accounts current"?
A. If you were not a merchant, you would have a deposit account opened for your daily deposits and drawings. Your account could never show a debit balance and the amounts which you might borrow would have to be secured by deposit of securities and would be placed under the item "loans on securities." If you were a merchant, an account current would be opened for the requirements of your business, and this account could become debtor.
Q. Deposits and current accounts are payable on demand?
A. Yes; on demand. Deposits are made up of sums deposited by customers whose accounts are not active; they are more in the nature of reserve deposits, whereas current accounts represent deposits made by customers mostly in active business.
Q. Do you pay interest on practically all of your deposits and current accounts?
A. Yes.
Q. Do you find that the Bank of France competes with you in any way?
A. In no way.
Q. They receive accounts from individuals and small tradesmen in the branches, do they not?
A. Yes; but they do not grant uncovered credits. There is no competition between the Bank of France and the other banks, because they do not do the same kind of business. The Bank of France receives deposits, but does not allow interest upon them; it only discounts bills with three signatures; it is the bankers' bank; it acts as the regulator of the money market.
Q. Do its branches receive deposits?
A. Yes; they receive deposits, without allowing any interest. In times when money is cheap the rate of discount of the Bank of France is rarely below 3 per cent., and in the Crédit Lyonnais and other banks the rate may be sensibly below that of the Bank of France.
Q. Can you state the number of employés in the Crédit Lyonnais?
A. About 14,000. It varies according to the time of year.
Q. Are all of the important banks in the City of Paris members of the clearing house?
A. Yes; about 13 of the most important.
Q. How frequently are the clearings made?
A. Three times a day. As a matter of fact, our clearing house is not so important as yours in America.
Q. The clearing houses in the cities of France are in no sense a factor; they are merely the machinery through which the cheques are cleared, are they not?
A. To our knowledge there is but one clearing house; it is in Paris and is merely a mechanism for settling balances.
Q. Are you examined at any time and in any way by the Government?
A. No. The control of the Government is limited to the supervision for taxes, to which every company is subject.
Q. Your relations with the Bank of France are very intimate and cordial, are they not?
A. Yes.
Q. Is that true with all the banks in France?
A. The Bank of France is quite impartial; it gives no preference to any one; there is no favoritism.
Q. I understand none of the farmers or peasants will use cheques.
A. The use is extremely rare.
Q. How about your tradesmen all through the small towns, and the doctor and lawyer and professional man; would they draw the money out and pay their bills in cash?
A. Certainly; most of them.
Q. When you establish a branch in a small town, you generally find a local independent bank there. Can this local bank compete with you?
A. There are certain places where the private banks have kept on, but the tendency is for the private banker to disappear. We take small sums and have numerous branches. One great distinction is that the private bank is always in the hands of a family. A man who originally starts a private bank may be a good banker, financier, and business man, but it does not always follow that his son, who in all likelihood will inherit the business, will be capable of running it. Our joint-stock banks do not go from father to son, but are always under efficient management.
Q. What proportion of your own payments are made in gold?
A. A very small proportion. The people prefer notes.
Q. Do the French people hoard money as much as formerly?
A. No; it is becoming more the custom to put money in the banks. Thirty years ago they kept the money at home.