In spite of the losses SGBP was facing, the idea of placing the bank in receivership was rejected, as this might lead to a run on deposits, which the bank would be unable to honour, despite the backing of the Central Bank which, underlines an internal memo at Société Générale de Belgique in Brussels, has never stinted to provide broad support. Moreover, receivership status would devalue the assets which would not do the cred- itor banks any good at all . SGBP therefore looked for a solution which would not require any new capital injection from the shareholder banks.

In August 1936, representatives of SGBP, BBE and Creditanstalt-Bankverein drew up a plan which requires the sponsoring banks, which are also the main creditor banks, to surrender their shareholdings and then reconstitute the capital by taking up blocks of shares in proportion to their loans and converting some of their loans into stock 15. This operation would severely reduce the stake held by Creditanstalt-Bankverein in SGBP. The Viennese bank had at that time a total of 1.7 million zlotys worth of credit out to SGBP, while SGBP s debts to Société Générale de Belgique amounted to 13.7 million zlotys. This stabilisation plan was not however put into effect immediately. The main share- holders insisted on linking SGBP s recovery operation to a reorganisation of the Warsaw Coal Company, to which the bank was deeply committed, holding stock valued at 1.2 mil- lion zlotys and with outstanding loans amounting to around 4.5 million zlotys. SGBP requested that the Polish government nationalise the coalmining business and Société Générale de Belgique and Creditanstalt-Bankverein made this nationalisation decision a condition of their participation in SGBP s recovery.

Finally in April 1937, a memorandum was signed to the effect that in return for a 10.4 mil- lion zloty depreciation of SGBP losses, the main shareholders would renounce all their credit claims against the Polish bank. At that point the Baseler Handelsbank simply opted to surrender its entire stockholding. When the operation had been completed, almost all SGBP s stock (76,448 out of a total of 80,000 issued shares) was in the hands of Société Générale de Belgique and Creditanstalt-Bankverein. Société Générale de Belgique, which had made the biggest financial sacrifice, now held 85% of SGBP.

Given its large majority stake, Société Générale de Belgique took on the entire technical reorganisation of the Polish bank, and assumed direct active control of the business 16. Guidelines were issued to the effect that, from then on, only strictly commercial loans would be granted, and that no loans to industry for capital investment purposes would be made.

In the final years before the Second World War broke out, SGBP s activities were sub- ject to the exchange controls put in place by the Polish government in 1936. At that time, Poland was one of only two European countries, alongside Germany, which had not

15. State Archives of the Kingdom of Belgium Vol II, BBE, n° 81-82, memo on the stabilisation of SGBP, September 1936.

16. State Archives of the Kingdom of Belgium Vol II, SGB 4, 247, Minutes of a meeting of the Management Board of Société Générale de Belgique, 20 April 1937.