The Story of Investment Companies by Hugh Bullock

1 
Our British Ancestors 
ONE IMPORTANT ANCESTOR was not British. 
In 1822 William I, first king of the Netherlands, established at 
Brussels the oldest Belgian banking corporation, the "Société 
Générale des Pays-Bas pour favoriser l'industrie nationale"—en-

titled to act as banker for the government, issue currency, and 
develop agriculture, commerce, and industry in the "Southern 
Provinces." 
As the century progressed and Belgium separated from Hol-

land the company was the major factor in the financing of Bel-

gium's basic industries. A financial crisis in 1848 divorced the 
company from its government banking functions; in 1904 its 
name was changed to the Société Générale de Belgique and, in 
1936, it further divested itself of commercial banking activities. 
While it always would have been viewed as a banking institu-

tion and, later, as a finance or holding company rather than an 
investment company, today it has several of the characteristics 
of a true investment company. Its interests are world-wide and 
embrace some eighty companies in a score of major industries. 
It was and is the major factor in the Belgian Congo. Net worth 
is difficult to determine, but on December 31, 1958, the com-

pany's assets appeared to approximate the equivalent at book 
value of $125 million, which is a figure undoubtedly far below 
their actual worth.

THE FOREIGN AND COLONIAL 
GOVERNMENT TRUST 
While the International Financial Society of London was or-

ganized in 1863 with the financial assistance of the Crédit 
Mobilier of Paris—itself performing some functions analogous 
to those of an investment company—the company, like the 
Société Générale, could not be compared with an investment 
trust until many years later. A similar reservation must be ap-

plied to the Continental Union—formerly the Continental 
Union Gas Co., registered in 1864. The London Financial As-

sociation, formed in 1863, could be said, by stretching the 
imagination, to have had some characteristics of an investment 
trust, but it was unsuccessful. 
Meanwhile, in 1868, the Foreign and Colonial Government 
Trust was founded in London. Since its purpose from the very 
start, according to its prospectus, was to provide "the investor 
of moderate means the same advantages as the large capitalist, 
in diminishing the risk of investing in Foreign and Colonial 
Government Stocks, by spreading the investment over a num-

ber of different stocks,"
 1 and since it engaged in no financing 
or banking operations, it can be said—in so far as research en-

ables us to tell—that this investment trust was the pioneer of 
them all. 
And this pioneer initially resembled in some respects what 
we would call today a fixed or unit trust, although there were 
certain elements of flexibility and discretion allowed.2
 Against 
the deposit with the private banking house of Glyn, Mills, Cur-

rie 8c Co. of eighteen different issues of bonds of fifteen foreign 
governments, there were issued a specified number of certifi-

1 The Times (London), March 20, 1868. 
2 For a description of this trust see Arthur Scratchley, On Average Investment 
Trusts (London, 1875), Part I, chapter I. See also Charles H. Walker's article in 
Economic History, a supplement of The Economic Journal of London, February, 
1940; also Investors' Chronicle, London, issue of April 21, 1954. 

The Story of Investment Companies by Hugh Bullock