Societe Generale and the Eiffel Tower
Many people are unaware that Societe Generale helped finance the Eiffel Tower. At the end of the 19th century, the bank was already a modern and ambitious company eager to support the great projects of its time.
Friday, 31 March 1889. In the heart of Paris, the Champ de Mars was abuzz with festivities. Gustave Eiffel was walking on air. He glowed with pride over the majestic iron tower he had built, and which would bear his name for posterity. The 324 metre-high structure was unveiled before the astounded eyes of the tens of thousands of people assembled at its feet. Two years, two months and five days: that is how long construction lasted under the masterful eye of the engineer from Burgundy. One of the distinguished group of journalists, politicians and notables granted the privilege of ascending the tower was Octave Homberg, CEO of Societe Generale. His presence was no surprise. As a leading partner in major industrial projects and with its openness to technological innovation, the bank became involved with the project and helped successfully complete the tower in time for the opening of the World's Fair in Paris. It was very much a race against time during a year of celebrations for the hundredth anniversary of the French Revolution - and they won.
Contrary to popular belief, the project was not just a technical achievement. It was also a major feat in terms of financing. It began back in June 1886 when a committee of experts chose Eiffel's project to take on a sizeable challenge: building the world's tallest tower. The mythical "thousand-foot tower" had haunted the dreams of architects and engineers for centuries. In the minds of the organisers of the coming World's Fair, it was an opportunity to showcase French industrial expertise by erecting a monument to the glory of the City of Light. Known for his previous achievements, such as the Maria Pia Bridge over the river Douro (Portugal) and the Garabit Viaduct in Cantal, France, Eiffel dived into the herculean task using plans designed by engineer Kœchlin. On 8 January 1887, the French government and the City of Paris backed the project by granting rights to build and operate the tower on the Champs de Mars. They also provided a subsidy of 1.5 million French francs. As a business owner, Eiffel quickly realised that this sum would not cover the total cost of construction. He spent three months hunting for financing. Although work continued to progress, he worried that he would not be able to meet his commitments and that the project would not be finished on time due to a lack of resources.
In the end, he reaped the rewards of his efforts. A savvy entrepreneur, Eiffel soon established the Société de la Tour Eiffel to both operate the future tower and support its financing. Time was running short as construction had already entered its second stage. The engineer steered his company into a partnership with a consortium of three banks: Societe Generale, the Franco-Egyptian Bank and Crédit Industriel et Commercial. They invested up to 2.5 million French francs, amounting to half of the capital, with each contributing a third of the investment. Although Eiffel alone bore the risk of the construction, the financing for it was highly innovative in that the package envisioned debt repayment through ticket sales. It was a complete success. During the World's Fair, the Eiffel Tower welcomed 2 million visitors and proved its profitability. It would remain the highest monument on the planet for forty-one years.
Societe Generale can only be proud of this partnership. This was not just because its profit equalled nearly a third of its investment - shares bought at 500 French francs were sold at 770 French francs once the World's Fair opened. By tying its name to the completion of such an ambitious project, Societe Generale lived up to its company name and once again demonstrated its openness to progress and modernity (construction techniques, railways, electricity, telephones, then automobiles, etc.). Afterwards, it continued to work with Eiffel through successful investments in the Compagnie des Établissements Eiffel. At the 1900 Paris World's Fair, Societe Generale was even granted a pavilion at the foot of the tower. But above all, the bank can boast that it helped erect an extraordinary monument and a symbol universally recognised around the world. The Eiffel Tower still dominates the Paris skyline and continues to inspire, both in France and abroad.