Hostname: page-component-7c8c6479df-5xszh Total loading time: 0 Render date: 2024-03-27T05:34:43.229Z Has data issue: false hasContentIssue false

French Stock exchanges and regulation during World War II1

Published online by Cambridge University Press:  14 July 2010

Kim Oosterlinck
Affiliation:
Université libre de Bruxelleskoosterl@ulb.ac.be

Abstract

Based on archives of the French brokers, the French finance ministry and the occupying forces, this article analyses the motivations of the legal changes imposed on the French exchanges during the war. Most of the measures taken by the Vichy government were meant to stimulate the demand for French state bonds. Three main tools were used to render stocks as unattractive as possible: forced registration, imposition of a maximum threshold for stock prices and taxation. The article suggests that forced registration and the cap on maximum prices were the most efficient tools.

Type
Articles
Copyright
Copyright © European Association for Banking and Financial History e.V. 2010

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

2 Milward, A. S., The New Order and the French Economy (Oxford, 1970)Google Scholar.

3 Tooze, A., The Wages of Destruction: The Making and Breaking of the Nazi Economy (New York, 2006)Google Scholar.

4 Aly, G., Comment Hitler a acheté les Allemands (Paris, 2005)Google Scholar.

5 Occhino, F., Oosterlinck, K. and White, E., ‘How occupied France financed its own exploitation during WW2’, The American Economic Review, 97.2 (2007)Google Scholar and Occhino, F., Oosterlinck, K. and White, E., ‘How much can a victor force the vanquished to pay?’, Journal of Economic History, 68.1 (2008)CrossRefGoogle Scholar.

6 Aly, Comment Hitler.

7 Cathala, P., Face aux réalités. La direction des finances françaises sous l'Occupation (Paris, 1948)Google Scholar; Margairaz, M., ‘La Banque de France et l'Occupation’, in Margairaz, M. (ed.), Banques, Banque de France et Seconde Guerre Mondiale (Paris, 2002)Google Scholar.

8 Cathala, Face aux réalités; Bouthillier, Y., Le drame de Vichy: Face à l'ennemi, face à l'allié et Finances sous la contrainte (Paris, 1951)Google Scholar.

9 Margairaz, ‘La Banque de France’.

10 Margairaz, M., L'Etat, les finances et l’économie histoire d'une conversion 1932-1952 (Paris, 1991)Google Scholar.

11 Occhino, Oosterlinck and White, ‘How much’.

12 Andrieu, C., La banque sous l'Occupation: paradoxes de l'histoire d'une profession 1936-1946 (Paris, 1990)Google Scholar; Baubeau, P., ‘La Caisse des dépôts et le Crédit National: un essai comparatif’, in Aglan, A., Margairaz, M. and Verheyde, P. (eds.), La caisse des dépôts et consignation, la Seconde Guerre Mondiale et le XXe siècle (Paris, 2003)Google Scholar; De Rochebrune, R. and Hazera, J.-C., Les patrons sous l'Occupation (Paris, 1995)Google Scholar; Lacroix-Riz, A., ‘Les grandes banques françaises de la collaboration à l'épuration, 1940-1950: la collaboration bancaire’, Revue d'histoire de la seconde guerre mondiale, 141 (1986)Google Scholar, ‘Les grandes banques françaises de la collaboration à l'épuration, 1940-1950: la non-épuration bancaire 1944-1950’, Revue d'histoire de la seconde guerre mondiale, 142 (1986), and Industriels et banquiers sous l'Occupation: la collaboration économique avec le Reich et Vichy (Paris, 1999); Margairaz, ‘La Banque de France’; Plessis, A., ‘Les grandes banques de dépôts et l'Occupation’, in Margairaz, M. (ed.), Banques, Banque de France et Seconde Guerre Mondiale (Paris, 2002)Google Scholar.

13 Margairaz, ‘La Banque de France’.

14 Bouthillier, Le drame de Vichy, p. 408, See also his letter dated 7 Dec. 1941, Centre des Archives Economiques et Financières, Savigny-le-Temple [henceforth CAEF]; B65765.

15 Brown, W. and Burdekin, R., ‘German debt traded in London during World War II: a British perspective on Hitler’, Economica, 69 (2002)CrossRefGoogle Scholar; Frey, B. and Kücher, M., ‘History as reflected in capital markets: the case of World War II’, Journal of Economic History, 60, 2 (2000)CrossRefGoogle Scholar, and ‘Wars and markets: how bond values reflect the Second World War’, Economica, 68, (2001); Frey, B. and Waldenström, D., ‘Using financial maket to analyse history: the case of the Second World War’, Historical Social Research, 32, 4 (2008)Google Scholar; Waldenström, D. and Frey, B., ‘Markets work in war: World War II reflected in Zurich and Stockholm bond markets’, Financial History Review, 11.1 (2004)Google Scholar, and ‘Did Nordic countries recognize the gathering storm of World War II? Evidence from the bond markets’, Explorations in Economic History, 45.2 (2008).

16 Oosterlinck, K., ‘The bond market and the legitimacy of Vichy France’, Explorations in Economic History, 40.3 (2003)CrossRefGoogle Scholar.

17 Mitzakis, M., Principaux aspects de l’évolution financière de la France 1936-1944 (Paris, 1945)Google Scholar; Guillorit, R., La réglementation des bourses de valeurs en France depuis 1940: transition ou parenthèse (Paris, 1946)Google Scholar; Colling, A., La prodigieuse histoire de la Bourse (Paris, 1949)Google Scholar; Dessirier, J., ‘La Bourse des Valeurs’, Revue d'Economie Politique, 57 (1948)Google Scholar; Vigreux, P., ‘Le marché des changes’, Revue d'Economie Politique, 57 (1948)Google Scholar.

18 Dreyfus, J.-M., Pillages sur ordonnance. Aryanisation et restitution des banques en France 1940-1953 (Paris, 2003)Google Scholar.

19 Ronsin, F., La guerre et l'oseille: une lecture de la presse financière française (1938-1945) (Paris, 2003)Google Scholar.

20 Destrem, P. and Destrem, D., A la botte: la Bourse sous l'occupation (Lausanne, 2003)Google Scholar.

21 K. Oosterlinck and A. Riva, ‘Competition among the French Stock Exchanges during the Second World War’, in P. Baubeau and A. Ögren (eds.), Convergence and divergence of national financial systems during the gold standards, 1871-1971 (forthcoming).

22 D. Le Bris, ‘The French stock market in war’, paper presented at the International Conference on War, Money and Finance. Monetary and Financial Structures: The Impact of Political Unrests and Wars, Université Paris 10 Nanterre, 19-20 June 2008.

23 The author thanks M. Douezy and Ms Bodilsen for their help while collecting data, and David Le Bris for sharing his equity index data.

24 Erben, A., Die Börse im Dritten Reich, unpublished Diplomarbeit, Universität Mannheim, 2001Google Scholar.

25 Henning, F.-W., ‘Börsenkrisen und Börsengezetgebung von 1914 bis 1945 in Deutschland’, in Pohl, H. (ed.), Deutsche Börsengeschichte (Frankfurt am Main, 1992)Google Scholar.

26 Nathan, O., Nazi War Finance and Banking (New York, 1944)Google Scholar.

27 Wolfe, M., ‘The development of Nazi monetary policy’, Journal of Economic History, 15. 4 (1955)CrossRefGoogle Scholar.

28 Ferguson, T. and Voth, H.-J., ‘Betting on Hitler: the value of political connections in Nazi Germany’, Quarterly Journal of Economics, 123.1 (2008)CrossRefGoogle Scholar.

29 Erben, Die Börse im Dritten Reich.

30 Dauphin-Meunier, A., L’économie allemande contemporaine (Paris, 1942)Google Scholar; Nathan, Nazi War Finance; Wolfe, ‘The development of Nazi’.

31 Aly, Comment Hitler, p. 70.

32 See, for instance, Hartung, K., Usancen der Berliner Wertpapier-Börse, 1942 (Berlin, 1942)Google Scholar.

33 Aly, Comment Hitler, p. 68.

34 Wolfe, ‘The development of Nazi’.

35 Aly, Comment Hitler, p. 71.

36 See Sercu, P. et al. et al., ‘La guerre et la reconstruction’, in De Clercq, G. (ed.), A la Bourse. Histoire du marché des valeurs en Belgique (Paris, 1992)Google Scholar; Buelens, F. and Willems, H., ‘De Tweede wereldoorlog en de Belgische Beurzen’, in Thuisfront. Oorlog en economie in de twintigste eeuw (Zutphen, 2003), for BelgiumGoogle Scholar; Oosterlinck, ‘The bond market’, for France; De Vries, J., Een eeuw vol effecten. Historische schets van de Vereninging voor de Effectenhandel en de Amsterdamse Effectenbeurs 1876-1976 (Leiden, 1976), for the NetherlandsGoogle Scholar. This phenomenon is also documented on the Prague stock exchange (the author thanks Jaromir Balcar for sharing copies of these archives).

37 De Vries, Een eeuw vol effecten.

38 Buelens and Willems, ‘De Tweede wereldoorlog’.

41 Klemann, H. A. M., Nederland 1938-1948: economie en maatschappij in jaren van oorlog en bezetting (Amsterdam, 2002)Google Scholar.

42 De Vries, Een eeuw vol effecten.

43 Waldenström, D., ‘Why does sovereign risk differ for domestic and international investors? Evidence from Scandinavia’, IFN Working Paper, 677 (2006)Google Scholar.

44 Sobel, R., The Big Board: A History of the New York Stock Market (New York, 1965), p. 312Google Scholar.

45 Michie, R., The London Stock Exchange: A History (Oxford, 1999), p. 288Google Scholar.

46 Ibid., pp. 291–2.

47 Ibid., p. 294.

48 Geisst, C. R., Wall Street: A History (Oxford, 1997), pp. 264–5Google Scholar.

49 Ibid., p. 266.

50 Ibid., pp. 266–7.

51 Mémoire présenté par la chambre syndicale des banquiers en valeur près la bourse de Paris, 6 Sept. 1940, Archives Nationales, Paris [henceforth AN] AJ40/832. This assertion should, however, be taken with some caution as the above-mentioned report aimed at showing the importance of the Coulisse to get it reopened.

52 Oosterlinck and Riva, ‘Competition among’.

53 Colling, La prodigieuse histoire.

54 ‘Vortragsnotiz betreffend die Wiedereröffnung der Pariser Börse’, 18 Aug. 1940, AN AJ40/832.

56 Der Oberbefehlshaber des Heeres. Der Chef der Militärverwaltung in Frankreich, ‘Vortragsnotiz betr. Wiedereröffnung der Pariser Börse’, 10 Oct. 1940, AN AJ40/832.

57 Ministère des finances, ‘Note sur l'ouverture de la bourse’, 10 Aug. 1940, AN AJ40/832.

58 Cathala, Face aux réalités.

59 Lacroix-Riz, Industriels et banquiers.

60 ‘Vermerk’, 7 Oct. 1940, AN AJ40/832.

61 Letter dated 11 Sept. 1940 from the Reichswirtschaftsminister to the head of the German military forces in France, AN AJ40/832.

62 Archives Compagnie des Agents de Change, Euronext Paris [henceforth ACAC], minutes 7 Aug. 1940.

63 ‘Vermerk’, 7 Oct. 1940, AN AJ40/832.

64 Letter dated 11 Sept. 1940 from the Reichswirtschaftsminister to the head of the military forces in France, AN AJ40/832.

65 ‘Aktenwerk, 14 Oct. 1941, AN AJ40/832.

66 Tellier, R., La situation du marché financier depuis l'armistice (Paris, 1943)Google Scholar.

67 ACAC, minutes, 8 Oct. 1940.

68 Ministère des finances, ‘Note sur l'ouverture de la bourse’, 10 Aug. 1940, AN AJ40/832 4b.

69 Apparently, the CAC would nonetheless accept some trades if their counterpart was a good client or a large financial institution. ACAC, minutes, 16 Dec. 1940.

70 Ministère des finances, ‘Note sur l'ouverture de la bourse’, 10 Aug. 1940, AN AJ40/832 4b.

71 ACAC, minutes, 22 Dec. 1941. German observers had previously praised the brokers' discipline (‘Vermerk über die Wiedereröffnung des Aktienmarktes’, 19 Mar. 1941, AN AJ40/832).

72 See CAEF B0061860, B0061861, B65762, B65763 and B65765.

73 ACAC, minutes, 17 Sep. 1940.

74 ACAC, minutes, 22 Dec. 1941. Their presence is nonetheless still mentioned during the 1942 Annual meeting of the CAC. See also Dreyfus, Pillages sur ordonnance.

75 Guillorit, La réglementation des bourses.

76 ‘Vermerk’, 7 Oct. 1940, AN AJ40/832.

77 ACAC, minutes, 16 Dec. 1940.

78 ACAC, minutes, 22 Dec. 1941.

80 ‘Bericht über die heutige Konjunktur an der Pariser Börse’, 22 Sep. 1941, AN AJ40/832.

81 Andrieu, La banque sous l'Occupation.

82 ACAC, minutes, 22 Dec. 1941.

83 ACAC, minutes, 20 Dec. 1943.

84 Caisse Centrale des Dépôts et Virements de Titres (CCDVT), Le nouveau régime des actions au porteur et la caisse centrale des dépôts et virements de titres (Paris, 1943), pp. 3–4.

85 Journal Officiel de l'Etat Français, 5 Mar. 1941.

86 The Banque de France, the largest French financial institutions and the CAC subscribed its capital.

87 CCDVT, Le nouveau régime, p. 10.

88 Guillorit, La réglementation des bourses.

89 Report by Dr Müller, 18 Feb. 1944, AN AJ40/832.

90 CCDVT, Le nouveau régime, p. 5.

92 This is an estimation of all trades made by 31August 1943. Of course, these figures were given by the CCDVT and should therefore be taken with some caution. CCDVT, Le nouveau régime, p. 10.

93 ACAC, minutes, 20 Dec. 1943.

94 Report by Dr Müller, 18 Feb. 1944, AN AJ40/832. The CCDVT helped the occupying power control trades. The CCDVT system, based on a clearing house, was probably much more efficient than the physical transfer of securities which prevailed in France before World War II. In Germany, such a system was in existence since 1882. François-Marsal, F., Encyclopédie de Banque et de Bourse (Paris, 1931)Google Scholar.

95 Guillorit, La réglementation des bourses, p. 64.

96 Letter dated 7 Dec. 1941, CAEF B65765

97 Trade in foreign and Alsatian stocks remained banned.

98 Speech made by the Syndic de la compagnie des agents de change, M. Jacob, AN AJ40/832.

99 ‘Aktennotiz’, 19 Mar. 1941, AN AJ40/832.

100 ACAC, minutes, 22 Dec. 1941.

101 Speech quoted in Mitzakis, Principaux aspects, p. 88.

102 Laws from 25 Mar. and 26 Jul. 1941.

103 ACAC, minutes, 22 Dec. 1941.

104 Guillorit, La réglementation des bourses.

105 ‘Bericht über die heutige Konjunktur an der Pariser Börse’, 22 Sep. 1941, AN AJ40/832.

106 Dessirier, ‘La Bourse des Valeurs’.

107 ‘Aktenwerk’, 21 Oct 1940, AN AJ40/832.

108 Colling, La prodigieuse histoire.

109 ACAC, minutes, 21 Dec. 1942.

110 ACAC, minutes, 18 Dec. 1944.

111 The author thanks Professors Pedro Arbulu and Georges Gallais-Hamonno, who provided these data.

112 Arbulu, P. and Gallais-Hamonno, G., ‘La rentabilité réelle des actifs financiers boursiers de 1950 à 1992’, Revue Économie et Statistique, INSEE, n° 281, reproduced in: Problèmes Économiques, 2439 (1995)Google Scholar.

113 D. Le Bris and P.-C. Hautcoeur, ‘A challenge to triumphant optimists? A new index for the Paris stock exchange (1854–2007)’, Working Paper, Paris School of Economics, n°2008–21 (2008), http://www.pse.ens.fr/document/wp200821.pdf. The author thanks David Le Bris who provided these data.

114 Ministère de l’économie et des finances, Statistiques & études financières (Paris, 1949), p. 15.

115 ‘Frankreichs Börsenproblem: Drahtmeldung unseres Wirtschaftskorrespondenten’, Berliner Börse Zeitung, 7 Sep. 1941.

116 Oosterlinck and Riva, ‘Competition among’.

117 This overview is based on qualitative sources as well as CAC and German reports.

118 Margairaz, L'Etat, les finances.

119 ACAC, minutess, 21 Dec. 1942 and 20 Dec. 1943. For the details related to the conversions see CAEF B0061860 and B0061861.

120 ‘Bericht über die heutige Konjunktur an der Pariser Börse’, 22 Sep. 1941, AN AJ40/832.

121 Guillorit, La réglementation des bourses.

122 See Dreyfus, J.-M, ‘La spoliation des banques juives: trois études de cas’, in Margairaz, M. (ed.), Banques, Banque de France et Seconde Guerre Mondiale (Paris, 2002)Google Scholar; Dreyfus, Pillages sur ordonnance; Andrieu, C., ‘Les banques et la spoliation des déposants: acteurs ordinaires en régime autoritaire’, in Margairaz, M. (ed.), Banques, Banque de France et Seconde Guerre Mondiale (Paris, 2002)Google Scholar.

123 ACAC, minutes, 21 Dec. 1942.

124 Colling, La prodigieuse histoire, p. 397.

125 Ibid., p. 398.

126 ACAC, minutes, 21 Dec. 1942.

127 ACAC, minutes, 10 Feb. 1943.

128 De Rochebrune and Hazera, Les patrons sous l'Occupation.

129 ACAC, minutes, 14 Oct. and 20 Dec. 1943.

130 Koebe, J., ‘Das Französische Börsenwesen’, La revue économique Franco-Allemande, Organe du centre en France des organisations économiques allemandes, 39 (1944)Google Scholar.

131 Guillorit, La réglementation des bourses.

132 Colling, La prodigieuse histoire, p. 402.

133 ACAC, minutes, 18 Dec. 1944.

134 ACAC, minutes 20 Dec. 1943.

135 Guillorit, La réglementation des bourses, p. 65.

136 ‘Vermerk über die Wiedereröffnung des Aktienmarktes’, 19 Mar. 1941, AN AJ40/832.

137 ACAC, minutes, 22 Dec. 1941.

138 ‘Bericht über die heutige Konjunktur an der Pariser Börse’, 22 Sep. 1941, AN AJ40/832.

139 Bouthillier, Le drame de Vichy, p. 410.

140 R: laws related to compulsory registration and the CCDVT, T: tax changes, C: price caps.