Société Générale de Belgique

History

As part of the terms of the Treaty of Paris in 1814, the countries of Europe agreed to augment their armed forces from militias to standing armies. Although Belgium had been offered independence by the Prussians, Britain's Lord Castlereagh vetoed it on the grounds that the country was too small to be economically viable, and the question then arose of who should govern it, the Austrians having washed their hands of it as a historical accident of the breakup of the Habsburg Empire. Although William I of the Netherlands refused initially on the grounds of the added expense involved in maintaining his own army, Castlereagh persuaded him by asking him if he preferred to be Prince of Orange or King of the Netherlands, adding that from a practical point of view the Belgian Ducal Estates amounted to a third of the country.

William subsequently founded the Algemeene Nederlandsche Maatschappij in 1822 in part to administer these large estates, while proclaiming the goal of increasing the welfare of the country. Upon contributing 28,108 hectares of forst land, the king was the single largest shareholder of the Algemeene Nederlandsche Maatschappij at its founding, the rest being subscribed by public and charitable institutions, other companies, and individuals. During its early years it had a dual activity, as managers of its vast forest lands and as a bank, supplementing De Nederlandsche Bank (est. 1814) which was active in the northern part of the kingdom. Its first banknotes were issued on 3 March 1823. It also acted as fiscal agent of the royal government, for which it developed a network of branches throughout the Southern Netherlands (including Luxembourg and Diekirch). Its branch in Antwerp, established in 1823, was converted in 1827 into a fully-fledged subsidiary, the Banque d'Anvers. Because the bank's operations were dominated by the profit-making interests of its private shareholders, it fell short of the aims the king had set for it in terms of fostering economic development.

After the Belgian Revolution of 1830, the company took the French name Société Générale de Belgique. It sold off its land holdings at low prices to the immediate circle of the Board.

By 1914, the Société Générale was by far the largest bank in Belgium, operating in conjunction with 18 affiliated banks in the country which it practically controlled. Under the harsh German occupation of Belgium during World War I, as the National Bank of Belgium had moved its operations and reserves to London, the Société Générale became formally the central bank for the country by creating a monetary issue department within itself. It remained secretly in contact with the National Bank in exile, however, and effectively acted on behalf of the latter; so that when Belgium recovered its sovereignty, the National Bank took over all liabilities and assets of the Société Générale's issue department, which was subsequently closed.

In 1928, the Société Générale absorbed the Banque d'Outremer and thus became a major participant in the economy of the Belgian Congo. Throughout the 1920s, its affiliated banks took over many formerly independent local banks throughout Belgium. By end-1930, it represented 32.9 percent of the aggregate liabilities and 31.0 percent of the aggregate capital of the entire Belgian banking system, and was a similarly dominant investor in large mining, infrastructure, and industrial companies. In the 1930s, the Société Générale in turn absorbed all its local Belgian banking affiliates with the only exception of the Banque d'Anvers, then spun off the Générale de Banque as mandated by new Belgian legislation in 1935 while keeping controlling ownership of it. By end-1939, the Société Générale's share of the Belgian banking sector's total assets had further risen to 32.6 percent.