Citi Turns 200: National City Bank puts down new European roots
May 18, 2012 02:00 PM
In celebration of Citigroup's 200th Anniversary, we are sharing stories from our rich history here on this blog. The ninth installation below covers how National City Bank built a presence in Europe during World War I. Read the eighth installment on how the opening of National City Bank's first foreign branch in Buenos Aires lead to an expansion throughout Latin America here.
National City Bank puts down new European roots
With the purchase of a controlling interest in International Banking Corporation (IBC) in 1915, National City Bank gained a European foothold through the IBC London branch, established in 1902. Although much of Europe was at war, National City Bank opened a branch in the Italian port city of Genoa in 1916.
Before the United States entered World War I in 1917, U.S. representatives of the bank could still visit the territories of the "central powers" - the German, Austro-Hungarian, and Ottoman empires, along with Bulgaria. The main motivation behind such trips was to assess likely postwar trade conditions, notably in Greece and Turkey, where companies such as Standard Oil and the American Tobacco Co. were active. With strong wartime demand from Germany, Turkey was also becoming an important producer of cotton. About 10 percent of the cotton crop was grown from American seed.
Bland Calder, secretary to the bank's vice president Charles Rich, visited the Turkish capital Constantinople (present-day Istanbul) as part of the War Relief Commission set up by the Rockefeller Foundation to help Turkish civilians. "We expected to find a dirty, poorly managed, disorganized city," Calder wrote later in the staff magazine. "We were agreeably surprised, however, to remark an air of good order throughout the city. In fact, if some of New York's streets were as clean as those in Constantinople, we could not complain."
After war ended in 1918, the European network expanded with new branches in Brussels in 1919 and Antwerp, Madrid, and Barcelona in 1920 (the year in which National City Bank established a short-lived presence in the South African city of Cape Town). IBC, meanwhile, set up its own branch in Lyon in 1919. Two years later, National City Bank acquired the Paris branch of the Farmers' Loan and Trust Co., which had been set up in 1906. The bank's presence in northern Italy was expanded in 1925 with the opening of a branch in Milan.
The European network was badly affected by World War II. It was not until Europe's recovery in the 1950s that it regained a more prominent role in the bank's overall operations.