The Eiffel Tower: a 19th-century industrial feat partly financed by the banking forerunners of BNP Paribas

Eiffel: from Ecole Centrale apprentice to public construction company manager

Although Eiffel (1832-1923) failed to gain entry to the Ecole Polytechnique in 1852, he was nevertheless admitted to the Ecole centrale des arts et manufactures in Paris. He chose to study chemistry, expecting to succeed his uncle Jean-Baptiste Mollerat (1772-1855) in the management of his acetic acid factory in Pouilly-sur-Saône (France).
But when Mollerat died in 1855, family disputes deprived Gustave Eiffel of the management of this coveted company. This caused him to lose interest in chemistry.

In 1856, Eiffel trained in Paris with Charles Nepveu, an Ecole Centrale graduate who had already earned a reputation for his treatises on the organisation of labour, and a builder of steam engines, tools, forges, boilermaking and sheet metalwork (metallurgical industry). Thanks to his scientific skills and the old school network, Gustave Eiffel very quickly rose to become Nepveu’s right-hand man. In 1859, he took charge of the construction of the Bordeaux bridge and introduced the experimental use of compressed air caissons for the piles of the bridge in the Garonne under the watchful eye of Charles Nepveu and François Pauwels, the owner of the Nepveu company bought in 1856. Eiffel’s excellent reputation saw him appointed engineer of the Cie Pauwels for an annual salary of 9,000 francs, plus a bonus of 5% on all completed contracts, on 1st September 1860.

Six years later, Eiffel was honoured with further recognition in the form of an order placed by the organising committee of the Universal Exhibition: he was given the responsibility of building the metal part of the future Fine Arts and Archeology gallery (500 m long and 15 m wide) located on the Champ-de-Mars. It was also at this time that he bought the company from his employer – the Pauwels Company, which was in the process of being liquidated in 1866. From then on, he took part in the most prestigious international projects, including the metal structure of the Statue of Liberty in 1879, and the Garabit Viaduct (Cantal- France). Eiffel would carry out this series of remarkable projects by surrounding himself with a team of loyal and innovative engineers, such as Maurice Koechlin (1856-1946) and Emile Nouguier (1840-1897) who would play a key role in the construction of the tallest tower in the world.

Eiffel and his team of engineers take up the challenge of the Universal Exhibition competition

In anticipation of the Universal Exhibition of 1889, the competition program for the projects to develop the Champ-de-Mars and the Esplanade des Invalides was published in the Journal officiel on May 2, 1886. Article 9 states, “Competitors will be required to study the possibility of erecting an iron tower with a square base, 125 m per side at the base and 300 metres high, on the Champ-de-Mars.”

The project presented by Eiffel was in competition with the “Sun Tower” from engineer and architect Jules Bourdais, the co-creator (with Gabriel Davioud) of the Palais du Trocadéro for the Universal Exhibition of 1878. The stakes were high, and a violent press campaign was waged between the engineers and the architects.
But Eiffel and his associates had set the bar high. Nouguier and Koechlin were keen to surpass the technical prowess of the Statue of Liberty and the Garabit viaduct. They employed wind resistance calculations and the box girder principle produced at Garabit.

At the first presentation, G. Eiffel was dubious but, during the summer of 1884, he was finally won over by the proposal, which had by then become associated with Stephen Sauvestre (1846-1919), another Ecole Centrale graduate who had previously worked with Eiffel on the Universal Exhibition. On September 18, 1884, Eiffel, Koechlin and Nouguier filed a patent for a “new approach enabling the construction of metal piers and pylons with a height of over 300 m.”

Maurice Koechlin (1856-1946), an engineering graduate from the Polytechnic of Zurich and director of the Eiffel Company’s design office, produced the first drawing of the Tower in 1884. On December 12, 1884, a new contract was signed between the three protagonists, under the terms of which Eiffel would become the sole owner of the patent in exchange for citing their names on all projects relating to the tower, entitling them to 1% of the value of the estimate payable by the Universal Exhibition’s organising committee.

Behind the scenes, Eiffel received the support of Édouard Lockroy (1838-1913), Minister of Trade and Industry and Commissioner General of the Universal Exhibition, with Bourdais and his project unable to enter a bid in the call for tenders.

Despite the tight deadlines, 107 proposals were submitted and submitted to the 29-member committee. On June 12, 1886, Eiffel won the competition with a few reservations: improving the mechanism of the lifts and taking account of the electrical phenomena likely to occur (lightning). Eiffel turned to three new suppliers for these lifts: Roux-Combaluzier, Otis and Edoux. He was also required to finance this gigantic project.

Financing of the Eiffel Tower: the Franco-Egyptian Bank enters the scene

In 1888, the cost of building the Eiffel Tower was estimated at 6.5 million francs, with public authorities only being able to cover 1.5 million francs of this cost. Eiffel therefore approached banks to raise the additional 5 million francs. Faced with the initial reluctance of Société Générale to get involved in the project, Gustave Eiffel ultimately found a receptive partner in the person of Ernest May, director of the Banque Franco-Egyptienne, a forerunner of BNP Paribas.

The Bank committed to the project by signing a memorandum of understanding on July 26, 1888. In order to spread the risks of the operation, Ernest May then turned to other banking establishments: the Crédit industriel et commercial (CIC) and Société Générale. The 3 banking establishments then formed an association and signed the final contract with Eiffel on September 3, 1888. The Banque Franco-Egyptienne therefore assumed leadership of the operation. Gustave Eiffel pledged his operating rights to the Tower in the operation, receiving shares in the Société de la tour Eiffel in exchange, in proportion to progress on the construction work. These were the same three banks which took part on February 28, 1890 in the creation of the Compagnie des establishments Eiffel, Gustave Eiffel’s construction company.

The Eiffel Tower – an iconic monument of the City of Paris – is a testament to the major role played by banks in providing financial support for major urban landscape development projects.