GIFT OF 
 
"n 28 1017 
 
 France and America 
 
 Their Mutual Interests 
 and Obligations 
 
 ' , \^ R A /, . 
 
 N 1 V ii I- -^^ I ' ' 
 OF 
 
 Guaranty Trust Company 
 of New York 
 
France and America 
 
 Their Mutual Interests 
 and Obligations 
 
 Guaranty Trust Company of New York 
 
 140 Broadway 
 
 PARIS OFFICE FIFTH AVENUE OFFICE LONDON OFFICE 
 
 Rue des Italiens, 1 & 3 Fifth Avenue and 43d Street 32 Lombard Street, E. C. 
 

 COPYRIGHT, 1917 
 GUARANTY TRUST COMPANY OF NEW YORK 
 
 >' 
 
France and America 
 
 A nnouncement 
 
 For over twenty years the Guaranty Trust 
 Company of New York has maintained an 
 office in London, at 32 Lombard St., E. C. 
 To the foreign trade of the United States 
 this office has been of value. The progress 
 it has made and the magnitude of its opera- 
 tions are but a reflection of the rapid develop- 
 ment of the parent company in New York. 
 The Company has now opened a similar office 
 in Paris at Nos. 1 & 3 Rue des Italiens. This 
 location is very close to the Grand Boule- 
 vards and about midway between the Bourse 
 and the Place de TOpera, the two centres of 
 business activity in Paris. The Paris offices 
 of the Trust Company will have, as close 
 neighbors, the Credit Lyonnais, the Banque 
 de rUnion Parisienne, the Banque Nationale 
 de Credit, the Credit Mobilier, and the 
 Banque Union de Moscou. 
 
 3G6320 
 
The offices of the American Consul General 
 are located in the same building, which adds 
 an important convenience. Adjoining is the 
 office building of "Le Temps " one of the lead- 
 ing and well-known newspapers of Paris. 
 
 With a frontage of 81 feet and a propor- 
 tionate depth, the Paris quarters are spacious 
 and convenient. Their equipment is thor- 
 oughly modern and includes a safe deposit 
 and safe custody department. 
 
 Alexander Phillips, who has served as the 
 Paris representative of the Trust Company 
 heretofore, and who has a broad grasp of 
 foreign business conditions and of French 
 banking laws and Customs, is in charge of 
 the new office. G. Hebmann, who has been 
 manager of the leading French branches 
 of the Comptoir National d'Escompte de 
 Paris serves as Sub-Manager. William G. 
 Wendell, formerly in charge of the New 
 England bond business of the Trust Com- 
 pany, serves as Secretary, with Richard 
 P. Staigg as his assistant. Robert Bienz and 
 B. Avegno, from the London office, have 
 charge of departments in Paris, and Olaf 
 
 [4] 
 
Giese is the Chief Accountant. The system 
 of accounting and auditing followed in the 
 Paris office will conform to that used in the 
 main office and all its branches. B. G. Smith, 
 the Auditor of the Trust Company, went to 
 Paris and perfected plans to this end. 
 
 Through the establishment of this branch, 
 it is believed that another important link has 
 been forged in the chain of friendly and mutu- 
 ally profitable relations between French and 
 American banks and business houses. It will 
 enable the Guaranty Trust Company to 
 handle a large volume of business with 
 France, and, after the war has come to an 
 end, to develop the existing commercial re- 
 lations between the two republics. Ameri- 
 can business concerns and individuals having 
 interests abroad will find it to their advant- 
 age to establish banking relations with the 
 Paris office of the Guaranty Trust Company, 
 as will American citizens traveling abroad or 
 serving with the armies in France. 
 
 Conscious of America's debt to France, and 
 of the friendly ties enduring between the 
 nations for more than one hundred years — 
 
 [5] 
 
ties which time only strengthens — we deem 
 the occasion fitting to mention a few of the 
 many services we owe to France, and to 
 sketch briefly some of her achievements in 
 industry, commerce, and finance. 
 
 Guaranty Trust Company of New York 
 
France and America 
 
 Between America and France, separated by 
 an ocean but united by their common love 
 of liberty, justice, and humanity — ever the 
 ideals of peoples of real strength — the friend- 
 liest, the most fraternal relationship has been 
 maintained for nearly a century and a half. 
 
 The liberty that America has enjoyed for 
 one hundred and forty years, France helped 
 her to achieve. The swords of Lafayette and 
 Rochambeau, aided by the guns of De Grasse 
 upon the high seas, assisted in cutting the 
 foreign ties that bound the American colonies 
 prior to the War for Independence; and from 
 the private purse of King Louis himself came 
 the first loan to America — unsecured and un- 
 conditional — to finance that historic under- 
 taking. It w^as with entire justice that 
 Washington wrote to Rochambeau; "To the 
 generous aid of your nation and to the 
 bravery of its sons is to be ascribed in a very 
 great degree that independence for which we 
 have fought." 
 
 [7] 
 
France Was Our Sponsor 
 
 Following the decisive victory at Yorktown — 
 impossible without the assistance and co- 
 operation of Washington's French allies on 
 land and sea — which virtually ended the War 
 for Independence, came the treaty of Ver- 
 sailles in 1783. It was this treaty which 
 organized and created the United States of 
 America; and it was a French sloop which 
 brought to Boston the first announcement of 
 its execution. Thus, France, having helped 
 us to win our independence, gave us a friendly 
 asylum in which to conclude our terms of 
 peace. She did more: she stood sponsor for 
 us upon our entry into the sisterhood of 
 nations; was the first European state to re- 
 ceive a diplomatic representative from our 
 shores; and similarly, was the first to recog- 
 nize our national dignity by sending to us a 
 representative from her Court. 
 
 Always Americans Friend 
 
 When in 1803 the United States desired to 
 purchase from France the city of New Or- 
 leans, Napoleon the Great ceded us the whole 
 
 [8] 
 
Louisiana Territory with its enormous re- 
 sources, thus giving us access to the Carib- 
 bean Sea and to the Pacific Ocean, and mak- 
 ing ours the lands that now form the vast and 
 fertile plain west of the Mississippi. The 
 acquisition of this territory was of inestimable 
 significance in the development of the nation; 
 after the Revolution itself and the Civil War 
 perhaps the most significant event in our 
 history. Again, in 1812, though not directly 
 allied with us, France indirectly aided us. 
 And in 1898, following the close of the Span- 
 ish-American War, from France came the 
 overtures for peace, and Paris was again the 
 scene of the treaty which concluded matters. 
 Thus, in 1783, 1803, 1812, and 1898, France 
 participated in the most momentous acts of 
 our national existence. This continuity of 
 goodwill and service emphasizes the close, 
 intimate, and deep sympathy which unites 
 the two peoples. 
 
 The Nation's Capitol of French Design 
 
 It was a French engineer. Major L'Enfant, 
 who had fought and bled for us during the 
 
 [9] 
 
War for Independence, who was commis- 
 sioned by President Washington to prepare 
 a plan for the building of our Federal city, 
 after that undertaking had been decreed by 
 Congress on July 16, 1790. Major L'Enfant 
 did this work with conspicuous ability and his 
 plans were closely followed though he did not 
 live to see realized the city of his dreams. 
 However, on April 28, 1909, his remains were 
 removed from their previous resting place and 
 reinterred in the Arlington National Ceme- 
 tery with fitting ceremonies, in which the 
 President of the United States, Representa- 
 tives of Congress, the Supreme Court, the 
 Society of the Cincinnati, and other patriotic 
 organizations, participated. 
 
 Reciprocal Courtesies 
 Thirty years ago the people of France gave 
 to the people of the United States the colossal 
 figure of Liberty which stands on Bedloe's 
 Island in New York harbor. There, raised 
 high above the waters of the harbor and 
 looking out toward the open sea, flaming 
 torch in hand, the great statue welcomes 
 the traveller visiting our shores and the im- 
 [10] 
 
migrant seeking refuge in free America. 
 Later, moved to an expression of our undying 
 appreciation of a French gentleman and a 
 hero, the people of the United States gave 
 to the people of France a monument to the 
 memory of Lafayette, which was unveiled in 
 Paris on July 4, 1900. The ceremonies upon 
 this occasion were imposing and dignified, 
 and the event united yet more closely the 
 sister republics of America and France. 
 
 The deeply rooted sense of attachment 
 existing between the peoples of France and 
 America was again manifested when the 
 United States welcomed Marshal Joffre, 
 former Premier Viviani, and the French 
 Commission on their memorable visit to 
 this country shortly after our entrance into 
 the European War. Everywhere they were 
 acclaimed with the wildest enthusiasm. To 
 the American public they typified the soul 
 of heroic France, and the great, generous 
 heart of Columbia beat with affection for 
 them. This visit, in the unity of feehng it 
 expressed, was one of the most significant 
 events in the history of two peoples. 
 
 fill 
 
The emotions awakened here by Joffre 
 and Viviani were equalled only by those 
 aroused by General Pershing and his staff 
 when they arrived in France as the vanguard 
 of the United States Army — the harbingers 
 of America's might come to the rescue of 
 France and Democracy. 
 
 Liberty and Democracy Unite Us Today 
 
 The points of sympathy between France and 
 America are too many to enumerate, but 
 the spirit of liberty and its resultant democ- 
 racy are, today as always, the major ideals 
 of both nations. Seeking no victories but 
 those of peace, no territory except their own, 
 no sovereignty except sovereignty over 
 themselves, — the independence and equal 
 rights of the weakest member of the family 
 of nations are to the people of the United 
 States and of France entitled to as much re- 
 spect as those of the mightiest empire. In 
 defense of these principles, France is engaged 
 in a death struggle with militant autocracy 
 and ruthless aggression and it is not surpris- 
 ing to learn that she has loaned to her allies 
 
 [12] 
 
and to other friendly states 7,000,000,000 
 francs with which to further the cause of 
 democracy. It is in keeping with America's 
 traditions that since the date on which we 
 formerly aligned ourselves with France and 
 her allies in the great struggle, our Govern- 
 ment has loaned to France $370,000,000. 
 
 Genius, Industry, and Thrift 
 
 Until the outbreak of the war in 1914, France 
 was busy and prosperous. Then followed an 
 upheaval. Any study of her past, however, 
 particularly since 1871, shows her ability to 
 recuperate rapidly from losses inflicted by 
 war, and reveals clearly her industrial 
 strength, and her financial elasticity. Suffer- 
 ing the loss of Alsace and Lorraine in 1870- 
 1871, with 1,600,000 inhabitants, she was 
 deprived of two fertile provinces of great eco- 
 nomic importance and value. This loss was 
 valiantly sustained, and the financial and in- 
 dustrial dislocations attendant upon the 
 Franco-Prussian campaign were speedily com- 
 posed. Her creative genius, the great re- 
 sources of her soil, her application to industry, 
 [131 
 
and her thrift explain her rapid recuperation 
 and progress. 
 
 Wealth, Gold, and Savings 
 
 These things make for the remarkable sta- 
 bility of the wealth of France. In 1869 it was 
 estimated at about 185 milliards of francs; in 
 1871 at 175 milliards of francs; in 1878 at 216 
 milliards of francs and in 1914, before the 
 outbreak of the war, at 287 milliards of francs. 
 The valuation of her income, according to 
 competent authorities, rose successively from 
 12 milliards of francs in 1853, to 22 milliards 
 of francs in 1878, to 28 milliards of francs in 
 1903, and to 32 milhards of francs in 1914. 
 
 Immediately prior to the war, France had 
 a gold stock equalling $1,200,000,000 and a 
 stock of silver aggregating $411,100,000. Of 
 gold, silver, and paper, her per capita allot- 
 ment amounted to $48.63, which was more 
 than 25% in excess of the per capita of gold, 
 silver, and paper for the United States in the 
 corresponding period; more than twice that 
 of the United Kingdom of Great Britain and 
 Ireland; approximately two and one-half 
 [14 1 
 
times that of Germany; and more than four 
 times that of Austria Hungary. 
 
 With a population of 39,600,000 at the 
 beginning of 1913, France had in postal and 
 private savings banks accounts of 14,578,897 
 depositors, with aggregate deposits equivalent 
 to $1,091,303,658. On June 30, 1915, the 
 United States had only 11,811,169 depositors 
 out of a population of 101,740,000. Thus, 
 almost 40% of the people of France work for 
 the future and accumulate for posterity, 
 against only 11% for this country. 
 
 Basis of Nation's Strength 
 
 The financial solidarity of the French republic 
 is to be ascribed to three influences: first, a 
 thoroughly sound banking system, central- 
 ized in one of the greatest banking institu- 
 tions of the world, the Bank of France; sec- 
 ond, the ingrained thrift and frugality of the 
 French people as a whole, together with a 
 national economic vigor not elsewhere sur- 
 passed; third, wise supervision, and pa- 
 triotic cooperation by the government with 
 banking and business interests. The Franco- 
 [15] 
 
Prussian war of 1870-1871 taught the French 
 people the meaning of thrift and economy. 
 So well did they learn this lesson, that the 
 whole sum of the indemnity demanded by 
 Germany, aggregating $1,000,000,000, was 
 raised within the republic's confines by its 
 own inhabitants and paid off more than one 
 year before the time stipulated by the 
 Germans. 
 
 French Loans Popular 
 
 The habit thus acquired has never been for- 
 gotten by the French, and today the aggre- 
 gate number of investors purchasing the 
 French war loans has reached the amazing 
 total of 4,500,000 individual subscribers. 
 Perhaps no other country, in proportion to its 
 population, can make so good a showing. 
 France is particularly fortunate in that her 
 small investors prefer "safe" investments 
 rather than offerings which promise high 
 returns. Government Rentes or Consols in 
 France are perpetual, and this characteristic 
 seems to obtain for them increasing favor in 
 the eyes of the French people. 
 fl6l 
 
National Credit 
 
 One of the clearest evidences of the loyal way 
 in which the French people stand behind the 
 nation in its financing, is the heavy over- 
 subscription which has marked the issue of 
 many of its loans. As an illustration, the 
 loan of 1872, for 3,500,000,000 francs at 5%, 
 brought in subscriptions for 43,816,096,551 
 francs; and the loan of 1891, for 939,480,000 
 francs at 3%, resulted in a total subscription 
 of 16,000,000,000 francs. The government 
 policy of issuing its loans in small denomina- 
 tions makes for their popularity and wide- 
 spread distribution. In the French ledger 
 of public debt for 1913, holders of 3% Rentes 
 totaled 4,443,904 and of these only 14,231 
 held allotments in excess of 1,000 francs. 
 Those who held income warrants for 3 francs 
 numbered 107,447; for 5 francs, 250,539; for 
 20 francs, 395,613; and for 30 francs, 663,747. 
 This unusual tendency of the French people 
 contributes largely to the stability of prices 
 of government securities and to the low rate of 
 interest on the public debt: from 1873 to 1901 
 the rate did not exceed 33^%. 
 
 fl7l 
 
Loan Price Recoveries 
 
 Moreover, the government does its part to 
 warrant and retain the confidence of the 
 holders of its securities. One of its wise 
 poHcies is to impose new taxes to defray the 
 interest charges on new security issues. It 
 began this practice after the Franco-Prussian 
 War, and is today following the same rule in 
 regard to securities issued to finance the pres- 
 ent conflict. This continuity of purpose, 
 doubtless, will prove reassuring to all holders 
 of French government securities. Under 
 this method of procedure the French liberat- 
 ing loans of 1870-1871, previously referred to, 
 issued at 82.5 and 84.5, respectively, showed 
 a high price of 93.4 and a low of 85 in 1873, 
 went to a high of 106.4 and a low of 99.6 in 
 1875, and reached a maximum of 120.8 in 
 1880 with a low of 115.3. Similarly, the 3% 
 Rentes which had dropped to 50.3 in March, 
 1871, reached par in 1892 and sold five years 
 later at 105.2. 
 
 All these facts and figures reveal in differ- 
 ent ways the soHdarity of French finance. 
 To sustain the credit of their nation is almost 
 fl8l 
 
a religion with the French people. It is, 
 therefore, with no sense of discouragement 
 that those who know France best look to her 
 future. 
 
 ^^ Industries de Luxe'' 
 
 There is another aspect of the genius of 
 France which justifies this optimism: her 
 splendid aptitude for industrial activities, and 
 her resulting position in the industrial 
 world. 
 
 Industrial development in France for more 
 than a century shows an amazing diversity. 
 This compels her to import large quantities 
 of raw material, which are converted into 
 manufactured products of great value. No 
 other country approaches France in the art- 
 istic perfection of many of her exports, and 
 for this reason France enjoys a practical 
 monopoly of the "industries de luxe." Ac- 
 cordingly, because of the artistic nature of 
 her products, the " quality rather than quan- 
 tity" element in her manufactures, a rela- 
 tively smaller export tonnage earns a greater 
 profit than is the case with her competitors 
 fl9l 
 
exporting coal, other raw materials, or ordin- 
 ary manufactured products. To France be- 
 longs the special and highly profitable privi- 
 lege of supplying to other countries "objets de 
 luxe" which cannot be produced elsewhere. 
 To America come many exports of this class, 
 and so long as the demand persists for French 
 fashions and French porcelains, for the 
 silks of Lyons and the delicate scientific in- 
 struments of Paris, the commercial relations 
 between the United States and France will 
 be a source of pleasure on the one side and 
 profit on the other. 
 
 Industrial Progress 
 
 In judging the industrial status of any na- 
 tion, its production and consumption of coal, 
 iron, and steel, and the growth of its trans- 
 portation systems are highly significant fac- 
 tors. 
 
 Coal 
 
 In 1869, French industries consumed 21 
 million tons of coal, of which 13.5 millions 
 were taken from home mines. In 1912, the 
 
 [201 
 
consumption was 61 million tons, of which 41 
 million tons were taken from home mines. 
 
 Iron and Steel 
 
 In 1869, the French output of cast iron was 
 1,380,000 tons, and of steel, 1,060,000 tons. 
 In 1914, France produced 5,311,000 tons of 
 cast iron and 4,635,000 tons of steel. 
 
 Railways 
 
 The increasing activity of her railway 
 system is similarly demonstrable. In 1869, 
 there were in France 10,743 miles of railroad 
 track; in 1912, there were 31,546 miles. 
 
 Navigation and Tonnage 
 
 Between 1869 and 1912, inland navigation 
 increased 150%; while the traffic of her mer- 
 cantile marine had amazingly expanded. 
 The tonnage entering French ports in 1869 is 
 set down as 11,000,000 tons. In 1912, this 
 had been increased to 53,000,000 tons. 
 
 Our Exports to France 
 Our official records show that, as early as 
 1790, the United States exported to France 
 merchandise valued at $1,384,246. By 1833 
 
 [21] 
 
this valuation had been increased to $13,705,- 
 915. In 1866, merchandise shipped to France 
 from the United States was valued at $51,- 
 312,103; and in 1880, when the hundred- 
 million dollar mark was crossed for the first 
 time, our shipments to our sister republic 
 were valued at $100,063,044. Since 1907, 
 our annual exports to France from this coun- 
 try have always exceeded $100,000,000, rising 
 in 1915 to the then unprecedented total of 
 $369,397,170 and in the following year mount- 
 ing still higher,— to $628,851,988. 
 
 Our Imports From France 
 
 The values of imports from various coun- 
 tries to the United States were not officially 
 recorded prior to 1820. For the year 1820- 
 1821, our imports from France were valued at 
 $4,125,292. By 1830, this valuation had 
 almost doubled, the total reaching $7,659,- 
 869. In 1860, French imports to America 
 were valued at $43,171,413, and in 1890 at 
 $77,622,311. For 1910, the figures record a 
 gain of approximately 84%, the total valua- 
 tion for that year's imports standing at 
 
$132,363,346. In 1914 (the year of the war's 
 outbreak), imports from France to this coun- 
 try totaled $141,446,252. In 1915, this total 
 was practically cut in half, the figures being 
 $77,158,740. But for 1916 a surprising 
 gain is recorded — French imports to America 
 rising to $102,077,060. A nation that can 
 achieve such a commercial recovery while her 
 territory is being ravished by the invader, 
 possesses recuperative powers which justify 
 the belief that she will emerge from the 
 present conflict prepared to meet and solve 
 triumphantly the problems which confront 
 her. 
 
 The commercial and industrial record of 
 France, following past wars, indicates that 
 she should recover quickly from the de- 
 struction inflicted in the present conflict. 
 The reconstruction of railroads, the erection 
 of factories to replace those destroyed, and 
 the replacement of the mechanism of indus- 
 trial activity that will be required, and that 
 is in part already planned, offer a peculiarly 
 inviting field to American capital and enter- 
 prise. Tentative steps have already been 
 [23 1 
 
taken by representatives of American engi- 
 neers and business men in this work. Aside 
 from its attractive business aspect, the en- 
 listment of American money and effort in the 
 great task of reconstruction that will remain 
 at the end of the war will tend to cement still 
 more closely the ties that bind the two great 
 Republics together, and will enable Americans 
 to discharge in part the debt they owe to 
 France for her friendly interest in the wel- 
 fare and progress of the United States from 
 the beginning of its life as a nation. 
 
 August 9, 1917 
 
 24 
 
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