THE ROYAL DUTCH IN THE DANCING HALLS.
However, these purchases of foreign securities aggravated the already serious position of our exchange. The law forbids the exportation of capital, and the Commission upon the Exchanges—a little absent-mindedly—watches over its administration.
But, where shares are concerned, smuggling is simple. A sheaf of documents is easily disguised. They were imported by aeroplane. It is asserted that even the diplomatic bag was employed. Young attaches at the embassies—whom one would like to believe foreigners— introduced by this channel shares of the Royal Dutch and Mexican Eagle, and made pleasant and profitable connec tions for themselves in banks and in drawing rooms.
The depreciation of the franc continued ; the pound, the dollar, and the florin rose to giddy heights. Conse quently, securities quoted in foreign currency rose in Paris even when their prices remained stationary in London. The more the franc depreciated, the richer became all French holders of these securities. The game was easy. It was sufficient to deposit with a banker French Govern ment securities or other sound securities as " cover," and to buy Royal Dutch, Shell Transport or Mexican Eagle, then tranquilly to await the rise in the exchange. It was bound to come, for the purchases of Shell, involving the export of capital, caused the pound to rise ; the rise in the pound brought in its train the rise in shares, which led in turn to further purchases . . . and so ad infinitum.
Soon this game extended beyond the circle of professional speculators. By mysterious channels, the flood of Dutch and British securities found its way throughout society, respectable and otherwise. In the Faubourg St. Germain, as in Montmartre, in drawing rooms and dancing halls, courtesans and great ladies began to pledge their jewels in order to speculate in Royal Dutch ; the man who brought the precious documents instantly eclipsed the most skilful fox-trotter. A comic paper, beneath a picture representing a flirtation between a young fop and a lady of fashion decolletde to the hips, printed this scarcely exaggerated dialogue : "When will you come and see me at my studio ? " " I am a respectable woman." " Every day at three o'clock you will get the latest quotations of Royal Petroleum." " Be quiet, tempter." It was a mania, such as only the frivolous are capable of, and such as had not been seen since Law's 1 famous scheme. Shares in the Royal Dutch of a nominal value of i,000 florins (2,10o francs) were sold as high as 72,00o francs.
With this gambling the pound rose to 64 francs, the dollar to 17 francs ; all imported products and manufactured goods followed the movement, clothing, shoes, etc. . . . and the price of food rose, even on the coster's barrows. The cost to housewives amounted to hundreds of millions.
However, speculators, prostitutes, and society people, daily rejoicing in the fall of the franc, smiled to see their fortunes increase in proportion as that of their country diminished.
These people, said M. Francois Marsal, Minister of Finance, speculated with their country's fate.
But their patriotism was in no way troubled. They
have always believed that the duty of the country was to defend their capital, but that their capital was under no obligations to the country.
Let us add at once, for the satisfaction of poetic justice, that morality has had its revenge. A day came—after the professional speculators had sold out their securities at top prices—when the banks suddenly warned their esteemed clients that they could not continue their advances, and requested them to take delivery of their shares. Incap able of paying such sums, the greater number sold out : prices fell.
As London bought back, the pound in turn depreciated, bringing in train a further collapse, crash succeeding crash. Royal Dutch fell from 72,000 to 25,000 francs. To meet their obligations the amateur speculators had to sell their French Government securities and their sound industrials. The fall extended gradually to all sections of the market ; many millions were lost in the crash, and for weeks after wards the Bourse was in a state of complete collapse. A distinct fall was noticed even in period furniture, pictures and pearls. Meanwhile, the professional operators bought back for 25,00o francs what they had sold to their fair friends for 72,00o.
From their offices in London, Sir Marcus Samuel and his colleagues of the Anglo-Dutch trust watched the changing fortunes of this highly modern tourney with an amused interest. They saw with satisfaction that the aim which they had set themselves had been attained. Thanks to this frenzied speculation, thousands of shares in the Shell Transport, Royal Dutch, and Mexican Eagle—it was surely by a providential chance upon these three that the gamble was mainly concentrated—crossed the Channel. A con siderable portion of the shares of the trust is now in French hands. Of course, the headquarters and the big holdings which assure a majority in the meetings of shareholders remain in London. But the friendly and allied nation is now interested in the prosperity of the undertaking.
How could we dare to treat as a foreign company a concern the bulk of whose capital is in the hands of our compatriots ?il And if by chance the French Government decides to entrust to it the exploitation of our colonial oil, who would dare to protest ? Is it not clear that the profits would return in the form of dividends to our small investors ? As for our bankers, it was not necessary to prove to them that the placing of shares in French oil companies without past, without experience, and for some years without profits, would be an extremely painful operation, whereas the issues in companies affiliated to a famous British trust with its capital counted in millions and its dividends at 35 per cent. would sell like hot cakes.
Instead of organising from beginning to end risky enter prises giving no immediate returns, they were offered rapid and numerous issues of shares, with a minimum of risk and effort. Could they hesitate ? And this is how financiers, stockbrokers, speculators and refiners came to agree on the acceptance of the British trust's domination.