Carroll Quigley - Tragedy and Hope - A History of the World in Our Time

The investment bank of the non-Jewish private banks and their industrial allies was the Union Parisienne. Among its sixteen directors were to be found such names as Mirabaud, Hottinguer, Neuflize, Vernes, Wendel, Lubersac, and Schneider in the period before 1934. The two largest stockholders in 1935-1937 were Lubersac and Mallet. The directors of this bank held 124 other directorships on 90 important corporations in 1933. At the same time it held stock in 338 corporations. The value of the stock held by the Union Parisienne in 1932 was 482.1 million francs and of that held by Paribas was 548.8 million francs, giving a total for both of 1,030.9 million francs.

In the fourth line of control were five chief commercial banks with 4,416 branches in 1932. At the beginning of the century these had all been within the “Paribas Consortium,” but after the founding of the Union Parisienne in 1904 they slowly drifted over to the new bloc, the Comptoir National d’Escompte going over almost at once, with the others following more slowly. As a result, the control of the two great blocs over the great deposit banks was rather mixed during the twentieth century, with the old Jewish group of private bankers losing ground rather steadily. The decline of this group was closely related to the decline of international financial capitalism, and received its worse blow in the losses in foreign bonds resulting from the First World War. Regional deposit banks were controlled in varying degrees by one or the other of the two blocs, the Paribas control being stronger in the north, west, and south, while the Union-Comité bloc was stronger in the northeast, east, and southeast. Control of savings banks and insurance companies was also shared, especially where they had been founded before the two blocs achieved their modern form. For example, the largest insurance company in France, with capital and reserves of 2,463 million francs in 1931, had as directors such names as Mallet, Rothschild, Neuflize, Hottinguer, and so on.

This cooperation between the two blocs in regard to the lower levels of the banking system (and the Bank of France itself) did not usually extend to industrial or commercial activity. There, competition outside the market was severe, and became a struggle to the death in 1932-1940. In some activities, spheres of interest were drawn between the two groups, and thus competition was reduced. Inside France, there was the basic division between east and west, the Jewish group emphasizing shipbuilding, transatlantic communications and transportation, and public utilities in the west, while the Protestant-Catholic group emphasized iron, steel, and armaments in the east. Outside France, the former group dominated the colonies, North Africa, and the eastern Mediterranean, while the latter group emphasized central and eastern Europe (chiefly through the Union européene industrielle et financiére, created in 1920 to be the economic counterpart of the Little Entente).

In some fields the rivalry of the two groups had worldwide ramifications. In petroleum products, for example, the Jewish bankers, through the Banque de Paris et des Pays Bas, controlled the Compagnie francaise des petroles, which was allied to Standard Oil and Rockefeller, while the Catholic-Protestant bankers, through the Union Parisienne, controlled Petrofina, which was allied to Royal Dutch Shell and Deterding. Jules Exbrayat, partner of Demachy et Cie. (in which Francois de Wendel was majority owner) was a director of Union Parisienne and of Petrofina, and Alexandre Bungener, partner of Lubersac et Cie., was also a director of Union Parisienne and of Petrofina. Charles Sergeant, once undersecretary of the Ministry of Finance and subgovernor of the Bank of France, was for years chairman of the Union Parisienne, and played a role in one bloc similar to that played by Horace Finaly in the other bloc. He was a director of Petrofina and of the Union européene industrielle et financiére. When he retired for reasons of health in 1938 he was replaced in several positions (including Petrofina and Union Parisienne) by Jean Tannery, honorary governor of the Bank of France. At the same time, Joseph Courcelle, former inspector of finances, was a director of seventeen companies including Petrofina and Union Parisienne. On the other side, Horace Finaly was general manager of Paribas and director of Standard Franco-Américaine, while his son, Boris, was a director of Cie. française des pétroles. Former ambassador Jules Cambon and Emile Oudot, both directors of Parisbas, were respectively directors of Standard Franco-Américaine and Standard française des petroles (before these merged in 1938).

Outside the banking system which we have sketched, the French economy was organized in a series of trade associations, industrial monopolies, and cartels. These were usually controlled by the Catholic-Protestant bloc of private bankers, since the Jewish group continued to use the older methods of financial capitalism while their rivals moved forward to the more obvious methods of monopoly capitalism. In such cases, individual companies controlled by the Jewish group frequently jointed the cartels and associations set up by the rival bloc.

At the center of the system of monopolistic industrial controls was the Confédération générale du patronat française, which after 1936 (Matignon agreements) did the collective bargaining for most French industry. The Confederation was divided into sections for different branches of industry. Around the Confederation was a series of general trade associations and cartels such as the Comité des Forges, Comité centrale des Houilléres, Union des industries métallurgiques et miniéres, Société de I’industrie minérale, and so on. Below these were a large number of regional associations and local cartels. These were integrated into a single whole by financial controls, family alliances, and interlocking positions.

In this system the Comité des Forges, trade association of the metallurgical industry, held a key position. In France the iron industry was originally widely scattered in small enterprises. Of these, the factories at Le Creusot, acquired by the Schneider family in 1838, were so favored by Napoleon III that they began to emerge as the chief metal company in France. As a result of the loss of governmental privileges by the shift from Second Empire to Third Republic and the blow to Schneider’s prestige from the victory of Krupp steel cannon over Le Creusot’s bronze cannon in 1870, the whole metal industry of France began to turn toward monopoly and to seek capital from private bankers. The turn toward monopoly appeared almost at once, especially in the typical French form of the comptoir (a joint selling agency).

In 1884, as we have said, the Comité des Forges was formed as an association of all the metallurgical industries of France, using a single comptoir to prevent price competition. By the twentieth century, the Comité des Forges consisted of representatives of over 200 companies with nominal capital of about 8 billion francs, but whose securities were worth almost 100 billion francs in 1939. Of the 200 corporations the chief perhaps were Établissements Schneider; Les Forges et Aciéries de la Marine et Homécourt; La Société des Petits-Fils de François de Wendel; Les Aciéries de Longwy, and so on. By the year 1939, 75 percent of French steel production was from six companies. The monopolistic influences, however, were much stronger than these figures would indicate. Of the 200 firms in the Comité des Forges, only 70 were of importance in iron and steel. These 70 had an aggregate capitalization of about 4 billion francs. Of these firms, 51 with 2,727,054,000 francs of capital in 1939 were in the Union-Comité bloc and were controlled by a Schneider-Mirabaud alliance. Eleven corporations with 506 million francs of capital were in the Paribas bloc. Eight firms with 749 million francs of capital were in neither bloc or doubtful.