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

A somewhat similar development is to be found in the French coal industry. This, perhaps, is not surprising, as the coal industry was largely dominated by the same groups as the steel industry. By 1938, 77 percent of French coal production came from 14 companies. Three of these companies were owned by Wendel, who thus controlled 15.3 percent of French coal output directly, and considerably more indirectly. Parallel to the Comité des Forges in steel, and controlled by the same group, was the Comité-centrale des Houilléres in coal. This was supported by taxes on collieries based on output. Voting power within the organization was based on this financial contribution, so that 13 companies controlled over three-fourths of the votes and Wendel over one-sixth. The French coal industry was controlled nearly as completely by the Union-Comité bloc as was the steel industry. Coal in France was found chiefly in two areas —the northwest around Lille and the southeast about Lyons. The latter was controlled almost completely by the Union-Comité bloc, but the Paribas influence was very great in the far richer northern area. It was these Paribas coal mines of the north which gradually drifted away and became one of the chief elements in the monopolistic Lille-Lyons Axis.

The preponderant influence of the Union-Comité bloc in such important fields as iron, steel, and coal was balanced to some extent by the skillful fashion in which the Paribas bloc had taken control of the strategic points in the fields of communications and publicity.

There were only 1,506 corporations registered on the stock exchange in Paris in 1936. Of this number only about 600 were important. If we add to these about 150 or 200 important corporations not registered in Paris, we have a total of about 800 firms. Of these 800, the Paribas bloc controlled, in 1936, almost 400 and the Union-Comité bloc about 300. The rest were controlled by neither bloc. The superior number of firms controlled by Paribas was counterbalanced by the much heavier capitalization of the Union-Comité firms. This in turn was counterbalanced by the fact that the Parisbas firms were in strategic positions.

The whole Paribas system in the twentieth century was headed by the Baron Edouard de Rothschild, but the active head was Rene Mayer, manager of the Rothschild bank and nephew by marriage of James Rothschild. The chief center of operations for the system was in the Banque de Paris et des Pays Bas, which was managed, until 1937, by Horace Finaly of a Hungarian-Jewish family brought to France by Rothschild in 1880. From this bank was ruled much of the section of the French economy controlled by this bloc. Included in this section were many foreign and colonial enterprises, utilities, ocean shipping, airlines, shipbuilding and, above all, communications. In this latter group were Cie. genérale transatlantique, Cie. genérale de télégraphie sans fils, Radio-France, Cie. française de cables télégraphiques, Cie. internationale des wagon-lits, Havas, and Hachette.

Havas was a great monopolistic news agency, as well as the most important advertising agency in France. It could, and did, suppress or spread both news and advertising. It usually supplied news reports gratis to those papers which would print the advertising copy it also provided. It received secret subsidies from the government for almost a century (a fact first revealed by Balzac), and by the late 1930’s these subsidies from the secret funds of the Popular Front had reached a fantastic size. Hachette had a monopoly on the distribution of periodicals and a sizable portion of the distribution of books. This monopoly could be used to kill papers which were regarded as objectionable. This was done in the 1930’s to François Coty’s reactionary L’Ami du peuple.

After 1934, the Union-Comité bloc was badly injured by the world depression, which fell on heavy industry more severely than on other segments of the economy. After 1937, the Paribas bloc was badly split by the rise of anti-Semitism, the controversy over orthodox and unorthodox financial methods for dealing with depression, and, above all, by the growing foreign crisis. The Rothschild desire to form an alliance with Russia and adopt a policy of resistance to Hitler while supporting Loyalist Spain, continuing orthodox financial policies, and building up the labor unions against the Comité des Forges, collapsed from its own internal contradictions, their own lack of faith in it, and the pressure of Great Britain.

As the two older blocs thus weakened, a new bloc rose rapidly to power between them. This was the Lille-Lyons Axis. It was constructed about two regional groups—one in the north about Lille and the other in the southeast and east about Lyons and in Alsace. The former had a branch running to Brussels in Belgium, while the latter had a branch running to Basle in Switzerland. The Lille end was originally under Rothschild influence ,while the Lyons end was originally under Mirabaud influence. The two ends were integrated into a single unit by the activities of several private banks and two deposit banks in Paris. The private banks included Odier, Sautter et Cie., S. Propper et Cie., and Worms et Cie. The credit banks included the Credit Commercial de France and the Banque fran9aise pour le commerce et I’industrie.

This Lille-Lyons Axis was built up about four economic activities: electrical utilities, chemicals, artificial textiles, and light metals. These four were monopolistic and interrelated, chiefly for technological reasons. They were monopolistic either by nature (public utilities) or because they were based on narrowly controlled natural resources (utilities and chemicals), or because they required large-scale operation utilizing by-products and affiliated activities for profitable operation (utilities, chemicals, artificial textiles, and light metals), or because they required use of closely held patents (chemicals, artificial textiles, and light metals).

These activities were interrelated for various reasons. The public utilities of the north were based on coal, while those of the southeast were based on waterpower. The manufacture of light metals concentrated in the southeast because of the available water power. These metals, chiefly aluminum, were made by electrolysis, which provided chemical by-products. Thus the two light-metals firms in France moved into the field of chemicals. The textile industry was already centered in the north (about Lille) and in the southeast (about Lyons). When this textile industry turned to artificial fibers, it had to ally with chemical firms. This was easy because the chemical firms of the southeast were already in close contact with the textile firms of Lyons (chiefly the Gillet family), while the chemical firms of the north were already in close contact with the textile firms of the area (chiefly the Motte family and its relatives). These textile firms of the north already controlled, in cooperation with Paribas, the richest coal mines of the area. These coal mines began to generate electric power at the mine, utilizing all by-products for chemicals and artificial textiles. Since the textile families of the north (like Motte) were already related to the textile families of the southeast (like Gillet) by marriage and by trade associations, it was easy for the Lille-Lyons Axis to grow up along these lines.

As a result of the stalemate between the two great blocs, between financial capitalists and monopoly capitalists, between supporters of the Russian alliance and supporters of appeasement, between orthodox and unorthodox financial measures, between Jews and anti-Semites, France was completely paralyzed and went down to defeat in 1940. This was quite acceptable to the Lille-Lyons Axis. It accepted the defeat with satisfaction, and, with German help, began to take over the whole economy of France. The Paribas bloc was destroyed by the anti-Semite laws, and many of its chief strong points taken over. The Union-Comité bloc was badly crippled by a series of severe blows, including the forced sale of all Schneider’s foreign holdings, and of most of Wendel’s domestic holdings to the Germans (chiefly to the Hermann Göring Werke), the seizure of the other Lorraine iron properties, and the abolition of the Comité des Forges itself.