" Worker con- trol in the factory, they said, would only be followed, as Lenin showed in 1917 when he "started the revolution," by "complete
expropriation
of industry for the profit of the state.
Brady - Business as a System of Power
VICHY'S "NEW ORDER" 133
shall use its best efforts to promote agreement, and may, if requested by the parties concerned, act as conciliator.
In 1926 the Union had about 7,000 members, employing 800,000 workers (6,000 with less than 100 workers, 1,000 with less than 2,000, 54 with more than 2,000).
Various social institutions have been founded under its auspices, such as the regional compensation funds for family allowances, the Building Credit Fund, the Cheap Housing Office, and the Anti-Tuber- culosis Association. Few employers' federations in France have reached such a high degree of organization. ^^
Since the ILO Report was written, a considerable number of associations have approximated or exceeded the level of organiza- tion described in the above.
All these various associations were then brought together in the CGPF system of Groups. Membership in the groups, consequently, was made up entirely of associations, and not of firms or individ- uals. As constituted at the time of the Matignon agreement (1936), "each group is administered by a Committee of Direction, elected each year by the General Assembly of the Groups. . . . The Com- mittee of Direction of each Group names each year its Bureau, composed, at the minimum, of a president, two vice-presidents, a treasurer and a secretary. " ^^ Except for the rule that each Group must have the appropriate machinery of the General Assembly meeting at least once a year, as well as a Committee of Direction charged with full authority to make decisions between Assembly dates, and a Central Office or Bureau, vested with duties of execu- tion, the governing Statutes of the CGPF considered each Group as an entirely autonomous, self-sufficient, and self-governing body.
It was free to admit any organization to membership it chose (pro- vided it fell into the right category), study and deliberate on any subject or line of policy, and take any action it wished, which re- lated to its own industry and trade and which did not contravene stated policies of the CGPF as a whole.
Each Committee of Direction elected its own officers. The presi- dents of the several committees (28 in number at the time of the Matignon agreement) then made up the Central Council of the Confederation generale de la Production Fran^aise. This Central
31 Ibid.
32 "Statuts Primitifs de la Confederation Generale de la Production Fran^aise," re- produced as an Appendix by Duchemin, Organization syndicate, pp. 279-84.
? 134
VICHY'S ''NEW ORDER"
Council, the supreme governing and policy-forming body of the CGPF, in turn elected its own officers, consisting of a president, five vice-presidents, a treasurer and two secretaries. It is interesting to note that this election took place after the annual General As- sembly of the CGPF, and that the resulting Bureau or Central Administration was then enabled to speak on behalf of the CGPF as a whole. When to this fact is added the additional rule that the General Assembly of the CGPF was made up of (i) four delegates (each with an alternate), elected by each Group one month prior to the General Assembly meeting, plus (2) the members of the existing Central Council--a total, for 28 Groups, of 140 persons, or, including "alternates," of 252 persons at the most--it can be seen how easily power could drift into the hands of a relatively small, compact group of determined men.
For all practical purposes, it appears that the Central Admin- istration really w^as the CGPF. It drew up all the agendas, framed the subject matter for discussion and debate, managed its system of subcommittees, acted as go-between for all the various Groups, contracted agreements and alliances with other central associations and federations of employers with which the CGPF had mutual interests,^^ represented the CGPF before governmental committees either as lobbyists or appointed members, managed all CGPF finances, and submitted all proposals for change and reorganiza- tion. The composition of the Group representatives, and of the governing officers lends further support to this view. For the most part a single leading individual, his deputy, or a small coterie of closely related individuals with closely related corporate affiliations dominated the several Groups. ^* Such continuity of control in the
33 E. g. , Union des interets ^conomiques and the Confederation des groupes com- merciaux et industrials de France.
34 Almost continuously from the beginning of the CGPF, M. Duchemin has repre- sented the Chemical Industries, Group VIII, F. de Wendel, Group X, and Baron Petiet, Group XVI. Interests represented by Duchemin centered in the Etablisse- ments Kuhlmann (capital stock of Fr. 316,500,000; assets, end of 1937, of Fr. 886,534,- 853), which is the chemical trust (synthetic nitrates and other artificial fertilizers, sulphuric and nitric acids, artificial silk, coal-tar dyes, and pharmaceutical and photo- graphic supplies), and the Compagnie des Mines d'Anzin (capital stock of Fr. 222,- 500,000; assets, end of 1937, of Fr. 1,129,819,559), a coal and coke by-products firm. Assets of the Kuhlmann concern included Fr. 139 million in participations in more
than twenty chemical and related firms. Duchemin held an official position in at least eight of these as well as in the Chemin de Fer du Nord, the Banque de Com- merce Ext^rieur, Credit Algerien, and the Union Industrielle de Credit. De Wendel
? VICHY'S "NEW ORDER"
Groups promoted similar continuity in the control of the Central Administration. Prior to 1936 the CGPF had but two presidents, M. Darcy from 1919 to 1925 and M. Duchemin from 1925 to 1936.
How much real power, however, did the pre-Matignon CGPF actually have? Opinions vary. The International Labor Office closes its sketch of the organization with the somewhat equivocal generalization, "In practice . . . the General Confederation of Production is, beyond doubt, only a permanent meeting place for the heads of different federations; its power is ephemeral, inasmuch as it depends on their consent, and yet considerable, if, by the ex- change of views, it brings about unanimity between them. " ^^
The latter object has dominated the CGPF from its beginning, as is well shown by that remarkable series of addresses given by M. Duchemin before its annual meetings from 1925 on. On the one hand, it was to bring about unity of points of view, unity of interests, unity of pressure, and unity of purposes amongst em- ployer and business groups in the country in general. And on the other, it was to collaborate with the government in all things touching upon the vast medley of interests which its organizational dragnet covered.
How effectively the CGPF accomplished these objectives is ex- tremely difficult to say. Its initial ejfforts in the promotion of em- ployer unity led to the establishment of a series of more or less purely study and discussion groups such as the Economic Com- mission for the study of general economic questions, the Commis- sion on Social Questions for the study of labor-employer relations, and the Commission for the Scientific Organization of Labor (pri- marily "scientific management").
interests spread out from the two iron and steel producing firms of Les Petits-Fils de F. de Wendel (capital stock of Fr. 117,180,000) and De Wendel et Cie (capital stock of Fr. 80,000,000). In 1938, Francois, Humbert and Maurice de Wendel held official positions in sixteen other companies, including the Banque de Union Parisienne, Suez, Peiiarroya, the Union des Mines, several coal-mining companies, two tin com- panies, other iron and steel manufacturing companies, insurance companies, etc. Baron Petiet was president of the Union des Consummateurs de Produits M^tallur- giques et Industriels (capital stock of Fr. 105,000,000) and of Equipment Electrique des Vehicules (capital stock of Fr. 13,000,000) and was vice-president of Soci^t^ M^tallurgique de la Bonneville (capital stock of Fr. 10,000,000). In each case the companies mentioned, or companies associated with them, dominate the more pow- erful trade associations, syndicats, comptoirs, federations, and confederations in the industry which, in turn, dominate the CGPF Group of which they are members.
35 Wolfe, "Employers' Organisations in France. "
135
--
? 136 VICHY'S "NEW ORDER"
Alongside these Commissions, it founded autonomous organizations with which it continued to work in intimate contact such as:
The Central Interprofessional Committee on Apprenticeship The Industrial Hygiene Association
The Central Committee on Family Allowances
The Central Committee on Social Insurance
The Central Committee for Fiscal Study and Protection. ^(R)
The CGPF has sought to work with all special-interest or special- function business associations whose purposes dovetail at some point or other with its own objects. Thus it has cooperated with the National Association for Economic Expansion, "which gives as its object the increase of French export," and with the Associa- tion of Industry and Agriculture, which is especially interested "in problems of national tariff protection for industry and agricul- ture. " It has established a special body called the Committee for Conciliation and Arbitration, charged with eliminating, wherever possible, conflicts between business interests, and with a view to forestalling intervention by public authorities. ^^
As for relations with the government, the CGPF from the outset followed a two-fold policy. On the one hand it asked for complete self-government, meaning by this a clear-cut circumscription of governmental and private business spheres of authority, with the government giving business any aid it might need, but, so far as control was concerned, following a policy of complete and un- equivocal hands off. On the other hand, it wanted the right to participate directly in all governmental action affecting the in- terests of its members at any point, and freely importuned demanded is perhaps the better word--governmental aid and as- sistance whenever such support could be turned to good business account.
A writer in the widely circulated Revue des Deux Mondes ^^ speaks *of "the participation of the professional groups [meaning trade and employers' associations] in the management of the state" in these words:
A remarkable characteristic of the professional groups is their tendency to intervene in the management of public affairs wherever social and
36 Duchemin, op. cit. , p. 8. a? idem.
ssAntoine de Tarle, "L'Organisation professionelle patronale en France," Revue des Deux Mondes, March, 1925, pp. 177-96.
? VICHY'S "NEW ORDER'*
economic questions are concerned. The employer justifies his social role: does not the responsibility of insuring the means of existence of the nation rest upon him? We have told in these pages [Revue des Deux Mondes, February 15, 1924] in what manner the great German associations insisted on terms which would bring about the decay of the State in Germany. It is not the same in France; the industrial groups are not looking for a substitute for public authority; they demand the right to collaborate on questions which are in their sphere. The prin- ciple has been granted. The constitutional bill on the Chambers of Commerce provides that they be consulted and that they give their advice on these questions. By a circular dated February 1, 1923, the Minister of Commerce confirmed the appeal which he had addressed to them in 1919, and invited them to get together with the Minister in order to facilitate the consultations which the Minister counted on hav- ing with them on economic questions. ^^
Thus organized, business was prepared to "intervene," in the words of M. Duchemin, in the affairs of government on a compre- hensive scale.
Wherever a matter has come up dealing with legislation on social insur- ance, accidents in work or occupational diseases . . . of protection or the conservation of water resources . . . of proposed legislation dealing with patents and trade marks, of consular elections, the protection of savings, or the reform of the Law of 1867 dealing with Corporations, upon all these questions the Confederation of Employers has taken a position and has intervened with the proper public authorities and Ministerial Departments, or with Commissions of the two Chambers. *"
Examples were offered of "intervention" dealing with tariff questions. It participated in all discussions of tariff truces, includ- ing, on one occasion the drafting of a "Memorandum to the French Government at the Second Conference for Concerted Economic Action. " On another occasion it participated in the World Eco- nomic Conference at London. It collaborated with the govern- ment in negotiations dealing with and the organization of the Franco-German Economic Commission. Similarly the CGPF took active part in various committees, conventions, and negotiations
39 Such "collaboration between the Government and industrialists and merchants," De Tarle continues, "is nothing new. . . . Louis XIV created the Conseil du com- merce at the instigation of Colbert . . . in 1882, this Council having disappeared for almost a century, was re-established under the name of Conseil superieur de I'indus- trie et du commerce. "
40 Duchemin, op. cit. , p. 6.
137
? 138 VICHY'S "NEW ORDER"
with the government dealing with import licensing, control of foreign exchange, fiscal and taxation problems, and the like.
On nearly all matters where the government has sought author- itative employer representation on governmental committees, the CGPF was designated as the proper agency. Examples are found in its participation in the work of such governmentally sponsored bodies as the following:
The National Economic Council
The National Council of Handicrafts
The Higher Council on Educational Methods
The Higher Commission on Occupational Diseases The Industrial Hygienic Commission
The Commission on Engineering Awards.
In addition to these and other direct participation in govern- mental activities, the CGPF was the French employer representa- tive at the International Labor Office, and it was spokesman for French industry at the International Economic Conference in
1927, the International Committee of Economic Experts in 1931, and the Lausanne Conference in 1932, and on other similar occa- sions. At all the meetings of the various national and regional Chambers of Commerce, the meetings of the International Cham- ber of Commerce, and meetings or conferences held by other col- lusively organized business groups the CGPF, its special delegates, or leading figures in its various Groups have actively participated.
Leading industrial personages, accustomed to thinking in terms of the power and achievements of the vast industrial properties at their immediate command, have spoken in glowing terms of these activities and of achievements wrought through them. Thus M. Duchemin, summarizing the evolution of the CGPF to its com- manding position in 1936, quotes, in eulogy to his organization, the authoritative writer on French business and industrial life, M. de Lavergne:
In the strength of its 4000 syndicates, brought together in 27 Groups,*^ and spread over the whole of France, it coordinates and multiplies their efforts and can undertake, whenever it raises its voice, to formulate the viewpoint of the whole of the economic forces of the country. Confident
41 Since 1929 one Group had, apparently, either been dropped or merged with some other Group.
? VICHY'S "NEW ORDER'*
in the energy of which the employers have always given proof and in the good sense of the workers of all classes and ranks, it throws its power, efficaciously, behind the individual efforts of all who are concerned to see France maintain the eminent place in the commercial and industrial activities which assures its position in the markets of the world. To the extent that it expands its efforts, in the measure that it promotes the material unity essential to its aims, it will render the greatest service to the industry and commerce of France and at the same time to the entire nation. *^
But in the same year in which these expansive words were spoken, there occurred the threat of a general strike sweeping over the entire country, and the Popular Front, temporarily com- manded by the poetic Premier Blum,^^ was enabled to inflict on the Confederation Generale de la Production Fran^aise its first serious setback, the famous Matignon Agreement--a setback so serious that it brought about the downfall of M. Duchemin, forced a complete reorganization of the Confederation, and realigned the configuration of inner command as it was to remain until inter- nally disunited, republican France collapsed under the thunderous assault of the Nazi legions in the spring of 1940.
THE MATIGNON AGREEMENT AND ITS AFTERMATH
The Matignon Agreement was signed on June 7, 1936, between representatives of the Confederation Generale de la Production Fran^aise and the Confederation Generale du Travail (General Confederation of Labor--CGT). ** Premier Leon Blum, as spokes- man for the government and prime mover in the accord, added his signature to those affixed by the two parties to the compact.
There was nothing particularly striking in the specific provisions of the new agreement. These underwrote for "some millions of French workers the 40-hour working week, increases in pay ranging from 7 to 15 percent, the recognition of the trade unions, collec- tive agreements, holidays with pay, and other social advantages. " *^ While such gains were important, the principles underlying them
42 Duchemin, op. cit. , p. ii.
43 Of course we do not mean to say that Blum's economic, political, and legal out- put are of no consequence.
44 The CGT occupied in that year a position roughly analogous to the A. F. of L. in the United States, the General Federation of British Trade Unions in England, and the ADGB (Allgemeine Deutsche Gewerkschafts-Bund) in pre-Nazi Germany.
45 International Labour Office, Yearbook, 1936-37, p. 11.
139
? 140 VICHY'S "NEW ORDER"
had long been accepted in many countries abroad, and in several French industries the specific changes involved but relatively slight departures from previous practices.
Of much greater importance is the fact that it was among the first ^^ compacts signed in any major capitalistic (non-Fascist) coun- try between representatives of employers and labor empowered to speak for their respective interests on a nation-wide basis. In con- cluding the agreement M. Duchemin and his associates *^ acted on behalf of French employers as a whole, and M. Jouhaux and his co-signers ^^ served as de facto representatives of practically all French organized labor. No better demonstration than this could be given of the extent to which the CGPF had come to serve as supreme coordinator, synthesizer, and organizer of French business interests--a level fully equal to that of the Confederation Generale du Travail in the labor field.
But of principal importance in the present connection, is the fact that the Agreement, coming as it did in the heyday of the Popular Front movement and in the face of an unusually critical situation abroad, brought as an aftermath a complete shake-up in the CGPF. Forces, apparently led by the De Wendel *^ and Roth- schild ^? interests, and long opposed to the policies of M. Duchemin in the labor relations fields, definitely gained the upper hand. ^^ At an Extraordinary General Assembly, called on an emergency basis to meet in August, 1936, the association's name was changed from Confederation Generale de la Production Fran^aise to Con- federation Generale du Patronat Fran^ais (General Confederation
46 It was preceded in Germany by the Stinnes-Legier agreement (Zentralarbeitsge- meinschaft) of Nov. 15, 1918. The Confederation of Catholic Labor Unions endorsed the agreement enthusiastically.
47 See pp. 145-49-
48 While Jouhaux signed for the CGT, his signature was held by the Blum gov- ernment generally valid for all French employees.
49 See note 34 above.
50 Railroads, insurance, and mining constituted the principal Rothschild holdings. Seven members of the family were on the board of directors of the Chemin de Fer du Nord (capital stock of Fr. 231,875,000; assets of Fr. 18,230,692,000) in 1937. Di- rectorships in five other railroads, four insurance companies, and two mining con- cerns (one of the latter being the famous Spanish Peiiarroya Company, in which the De Wendel, the CrMit Lyonnais, and the Kuhlmann interests were likewise repre- sented) were also held within the family.
51 It has been said that the shake-up in the CGPF was the consequence of the organization's failure to exert pressure on the Blum government in order to prevent the Matignon agreement and to achieve prosecution of the sit-down strikers.
? VICHY'S "NEW ORDER" 141
of French Employers). A new constitution was drawn up, a new president elected, and a greatly increased range of influence made possible through extension of membership to include all fields of employer interests in trade, commerce, finance, and transport, as well as those of industry and manufacturing.
Various articles, discussions, resolutions, memorials, and books have fully set forth the position taken by the De Wendel-led groups. The demands of the CGT, they held, were clearly revolu- tionary and communistic. The concessions granted under the agreement were only taken by labor as evidence of employer weak- ness, and would necessarily give rise to even greater and more "exaggerated demands" on the part of the CGT. A militant em- ployer body, the Committee of Foresight and Social Action (Comite de Pr^voyance et d'Action Sociale), cited CGT sources of informa- tion as proof that the real objectives had not been stated in the Matignon Agreement at all. ^^
Marcel Roy was quoted from an article in Syndicats, the weekly publication of the CGT (edited by M. Belin, Secretary of the CGT and one of the CGT signers of the Matignon pact and subsequently Vichy minister of labor), as saying that since employer interests called for preservation of "the most despotic management of pro- duction" then "our interest demands that more and more the worker be called to take his place, which consists in guiding, and organizing production. . . . All good militant reasons favor worker control. " ^^ From the CGT "Guide for the Shop Dele- gate," ^* it was found that the delegate had been advised "more and more to know the conditions of work and output so that work- ers' control in production might be really effective. " Another
52 Le Role exact des dileguds, published by the Comity de Pr^voyance et d'Action Sociale, Paris, 1937. In accounting for the evolution of French monopoly controls, and the attitude in social and political matters of organized French employer groups, 1 have purposely eliminated the Social Catholic Program, which has been briefly summarized in Chapter II. At certain stages this movement played a very important, perhaps even decisive role (as, e. g. , in restraining French aid to the Spanish Loyal- ists--one of the most significant turning points in modern European history). But to go far into these antecedents would lead too far afield. See, however. Moon, The Labor Problem and the Social Catholic Movement in France.
53 Quoted from Syndicats, April 15, 1937.
54 Shop delegates function more or less as shop stewards in American trade unions --they are elected by and represent the men in the shop. But whether or not they were also representatives of the union has been a point of bitter dispute.
? 142 VICHY'S "NEW ORDER"
source was cited as saying that "worker control is the central point in the coming struggle. "
This, the Comite found, came out to "bolshevism.
" Worker con- trol in the factory, they said, would only be followed, as Lenin showed in 1917 when he "started the revolution," by "complete expropriation of industry for the profit of the state. " The CGT was "becoming totalitarian under the influence of Communist ele- ments. " ^^ Every single gain made by the CGT would serve only to add fuel to its revolutionary fires. ^^
The CGT, in short, was encroaching upon "liberty" and "free- dom," and a situation had arisen in which "the employer, the ranks of authority, and the independent trade unions " must unite and fight against dictatorship, violence, attacks on the liberty of labor and thought, and injuries to the principle of ownership. " And the first step towards a real "drawing together of employers and work- ers" was the "development and completion of employer organiza- tion. " ^^ The battle cry became, in the words of the new president, M. Gignoux, first, "employers be employers," and then "rally around your professional syndicate . . . there must be no more isolation. " Consider, he argued, the crucial significance of the stakes: "Employers, you are not only responsible for your own concerns but for those of your colleagues and to those to whom you delegate a part of your authority. . . . You are the leaders: you have charge not only of men but of souls. " ^(R)
The new point of departure, in other words, was to emphasize the totalitarian angle of social and economic issues. Fundamental interests were now clearly at stake. The object had now become fully to coordinate the whole of the French business system into a coherent, cohesive, and neatly integrated mechanism which might be centrally directed in defense of the underlying tenets and in protection of the institutional fabric of capitalism per se.
The first step was to expand the membership base so as to include
55 Syndicats, April 15, 1937.
58 La Journ^e Industrielle, April 2, 1937, complained that "Whereas when on June 7, increases of salary from 7 to 15 per cent had been considered, the new sched- ules of minimum salaries entered in the agreements have aggravated costs passing 25 per cent and even in certain cases reaching 50 per cent. "
57 "Independent trade unions" mean both non-CGT and company unions.
58 C. J. Gignoux, Patrons, soyez des patrons! (Paris, 1937).
59 Ibid. The situation, many felt, was practically identical with that which Italian
industry faced in the early twenties at the time of Mussolini's march on Rome.
? VICHY'S "NEW ORDER" 143
all branches and phases of French business, large or small, national or local, domestic or foreign. The new arrangement called for an enlarged series of thirty-five Groups, each in turn subdivided into a series of special industrial and trade categories. The grouping in the main follows vertical lines, that is, each group brings together all stages of production and distribution from raw materials and on through to the ultimate consumer.
Four types of organizations may belong to the Groups: (1) Pro- fessional (Branche professionelle),(R)*^ (2) Interprofessional regional (Branche interprofessionelle regionale), (3) Technical (Organ- ismes techniques), and (4) Miscellaneous (Associations adherentes). The Professional organizations might include (a) "National pro- fessional Confederations which bring together by virtue of their close affinities Federations, Syndicates or Associations," (b) "Na- tional professional Federations which group together Associations or Syndicates, national or local, of a like professional nature," and (c) "National professional or regional syndicates. " The Interpro- fessional regional type may be made up of Interregional Associa- tions or Federations of such associations. It may also include any type of business organization found in any locality or region, and may even include isolated individual firms. The Technical bodies are those which are especially set up for purposes of stud--y or pro- motion of any important topic of special group interest "fiscal, social, economic, tariffs, foreign trade, and other questions. " The Miscellaneous category is a catchall for every conceivable type of employer or business association not falling under any of the previous classifications. ^^
The CGPF was thus to determine the eligibility of each associa- tion to each group, reserving the right on the grant of admission to demand the submission of information, business, economic, or of any other kind, relevant to the purposes of the CGPF, and re- quiring of every single association that it agree "to pursue its activi- ties according to directives laid down by the CGPF. " ^^
60 As previously indicated, the term "professional" means business grouping by industrial, trade, or occupational lines. It does not mean the "professions" in the English and American sense of the term.
61 Duchemin, op. cit. , p. 297, "Statuts de la Confederation Cen^rale du Patronat Fran^ais," adopted by the General Assembly, at meetings held on March 18 and April 26, 1938.
62 Idem.
? VICHY'S "NEW ORDER"
This latter clause appears only in the 1938 Statuts, and is in sharp contrast with the Statuts of the Confederation Generale de la Pro- duction Fran^aise. While heavy emphasis had been laid on the autonomous nature of each Group's activities, the new Statuts only at one place makes incidental reference to the old principle. With that minor concession,(R)^ the right and power of the central admin- istration over member groups and their subsidiary bodies is em- phasized at every turn and point.
The change represents a definite authoritarian trend, further reinforced by adjustments which must make possible a much greater centralization of power in the hands of organized business associations. Each Group now (prior to Nazi occupation) has its own permanent headquarters in Paris. Some of the Groups are equipped with large and efficient staffs. In a few cases headquarters appear to be identified with the offices of more powerful trade as- sociations--a practice similar to that which became so widespread in America under the NRA Code procedure.
The Central Council under the new arrangement is made up primarily of delegates from the constituent associations,(R)* not of the Groups as previously. The number of delegates each constitu- ent body may designate is, in turn, determined by the Central Council. The Annual Assembly is chosen in the same way, the number of delegates sent by each association being four times the number allowed as members of the Council.
The Annual Assembly appears to be mainly a general forum for discussion, by Group delegates, for the giving of announcements by the CGPF administration, and for the ratification of budgets, policies, and plans laid down in the agenda. Real power resides in the hands of the Central Administration {Bureau) of the CGPF. This body is chosen from the members of the Council shortly after the adjournment of the Annual Assembly, and is made up of the president, one or more vice-presidents, a treasurer, two secretaries, honorary president, and delegates sent by the constituent associa- tions of the several Groups. (R)^
63 "Article 12. Syndical Discipline: The maximum autonomy is to be permitted to each constitutive organization. " Ibid. , p. 302.
6* "Article 11, paragraph 2; Each group of the professional divisions sends to the Central Administration two delegates; whenever the branch of industry or commerce permits, one of the two delegates should be chosen from amongst the small or me- dium sized industrialists or traders. " Ibid. , p. 300.
66 Ibid. , p. 302.
144
.
? VICHY'S "NEW ORDER" 145
While this is a much larger body than under the previous ar-
rangement, an unusual amount of power is vested in the president
and the various special committees which he is authorized to ap-
point at will. In addition he has sole power to act in the name of
the CGPF (except in money matters, where he shares the power
with the treasurer). Upon joining the CGPF, all organizations must
agree "to submit to the President of the CGPF, prior to the making
of any definite decision, all questions which involve a fundamental
principle relating to the economy as a whole. " ^^ The President and
Council are granted authority to determine the terms and condi-
tions under which such disputes or problems should be submitted,
and are authorized to command at any time of any constituent asso-
ciation, or of any company or enterprise belonging to any member
association, "all statistical information of a general nature, and,
more particularly, so far as possible all round figures on invested
capital, the volume of business turnover, and the number of paid
^^
THE LOCATION OF POWER
Like most central organizations of its genre, the CGPF is a tissue of compromises yielded by conflicting groups. It will not do, how- ever, to dismiss its activities as unimportant on that account. For despite the somewhat shadowy character of its substance, and the doubtful quality of its authority, there is clear evidence of growth in power and influence along lines similar to those outlined for like organizations in other major industrial countries.
1 At the bottom there has been steady and cumulative pressure to expand the organizational network so as to include all business interests in the whole of France, regardless of the scale on which the individual enterprise might operate, and irrespective of such things as legal status, trade or occupational lines, nature and loca- tion of markets, and so on. The 1936 reorganization of the CGPF and the outbreak of the Second World War lent increasing em- phasis to this tendency towards universal, all-inclusive organization of French business enterprise.
2. Similarly, French business organization has shown a growing tendency to federate, coordinate, unify, simplify, eliminate dupli- cation and overlapping, and to centralize direction in the determi-
66 Idem. ^"f Ibid. , p. 300.
employees. "
? 146 VICHY'S "NEW ORDER"
nation of leading policies in "roof" or "peak" associations or "confederations" of associations. The CGPF represents the most complete expression of this tendency to date. Its evolution has been paralleled by four complementary trends: (a) all local and regional trade or occupational ("professional") associations are brought into national federations; (b) in each locality, municipality, or other regional area, all local associations are brought together into local federations or confederations; (c) national associations or federa- tions are brought together in technologically or organizationally interrelated "Groups"; and (d) each association, or federation, or "Group," or confederation tends to become vertical, that is, to include all associations from the production through the financing and distribution phases.
3. The policies upon which agreement is sought relate increas- ingly to issues having to do with the maintenance and defense of capitalistic institutions per se. In particular this means (a) a com- mon front against organized labor, (b) promotion of a policy of "self-government in industry" ^^ and (c) demands for the right ac- tively to capture the power, to formally manipulate, and to inter- fere directly in the shaping up of governmental policy relating to every single phase of the economic, social, and political interests of organized business.
4. The looser and more "shadowy" associations shade imper- ceptibly into the more powerful, and these in turn into cartel, cartel-like, and quasi-cartel monopoly-oriented groupings. Prac- tically all of the leading French Associations and Federations exer- cise to some extent or other one or all of the usual type of cartel functions. ^^
5. The guiding hands in this proliferating and power-congealing meshwork of French business organization seem to reach out from the heavy industries and finance. In the heavy industries the Comite des forges has played a dominating role, and in finance the giant banking house. Credit Lyonnais. The policies which have in the end won out, and the position which has been finally taken on
68 The spokesmen for the CGPF and similar groups constantly use this expres- sion. See, e. g. , the annual speeches of M. Duchemin, in his Organisation syndicate.
69 See Jacques Lapergue, Les Syndicats de producteurs en France (Paris, 1925), and, especially, Pierre Bezard-Falgas, Les Syndicats patronaux de I'industrie metallurgique en France (Paris, 1922), particularly pp. 176-224 and 386-403.
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? VICHY'S "NEW ORDER"
the leading issues that have come to the fore with and following the Matigon Agreement, are those which these two groups--after many compromises--have favored.
Beyond this point it is extremely difficult to go, especially in the confused state of affairs one finds in contemporary France. It is, however, perhaps worth pointing out that behind the scenes in the evolution of the CGPF has gone on several long, and at times bitter, struggles, the two most important of which appear at present to have been resolved as follows:
Attitude toward labor. --As pointed out above, M. Duchemin represented interests which had long taken a more or less concilia- tory attitude toward union labor. He appears, in this report, to have followed in the steps of M. Clementel, Minister of Commerce, who called the CGPF into being in 1919. In this attitude he repre- sented a policy for France quite similar to that adopted by Hugo Stinnes and Walther Rathenau in postwar Germany. Behind him one finds a vast and wide-ranging series of industrial, financial, transport, commercial, and miscellaneous enterprises. Most im- portant of these were the Credit Lyonnais,^^ the heavy chemicals Kuhlmann group,^^ the Gillet group,^^ t^g Lyon group,^^ and the Schneider group. ^*
Opposed to this vast assembly of gigantic business interests sometimes referred to collectively as the "Gallican" group--^were arrayed particularly the sprawling economic empires of the De Wendel ^^ and Rothschild groups. ^^ These had long been bitterly antiunion on all labor matters, and had consistently opposed Du- chemin in his policy of reconciliation. Following Matignon, this
70 Paid-in capital, Fr. 400 million; assets (1938) of Fr. 14,480 million; dividends, 1928-38 inclusive, 20 percent per annum.
71 See footnote 34, above.
72 Gillet-Thaon (laundry, dye\yorks, rayon, mechanical construction, etc. ). A hold- ing company of Fr. 250 million capital stock.
73 The Lyon group seems to have been a group of industrialists very closely re- lated to and accepting the leadership of the Credit Lyonnais.
74 Schneider (Creusot), capital stock of Fr. 100 million; produces iron, steel and armaments.
75 The De Wendel group, dominated by one of the oldest families in French in- dustrial history (see Louis Launay, De Wendel, Vaucresson, 1938), is (was? ) probably the most powerful single industrial aggregation in contemporary France. Control has been exercised mostly through two closely held holding companies. The Comite des Forges has been pretty much the mouthpiece of the De Wendel interests since its beginning.
76 See footnote 47.
147
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? 148 VICHY'S "NEW ORDER"
group definitely gained the upper hand, and down to the outbreak of the war appear to have won over the bulk of organized French business to their point of view.
Attitude toward rapprochement with Germany. --Conversely, the interests centered around Duchemin were in favor of close cooperation with Germany. The ramifications of the Credit Lyon- nais were scattered over the entire European continent. " But its most important tie with Germany was through the Kuhlmann and Gillet groups, which were, in turn, closely tied up with the huge German chemical trust, I. G. Farbenindustrie A. G. The Credit Lyonnais was itself closely tied up with Swiss enterprises in turn largely dependent on, if not controlled by, the Deutsche Bank, and A. E. G. (Allgemeine Electrizitats Gesellschaft--German General Electric Co. ). Duchemin himself was a member of the Franco- German Committee--which seems to trace back to Hugo Stinnes and in this capacity worked in close cooperation with Herr von Stauss of the Deutsche Bank. Schneider-Creusot was heavily inter- ested in the Skoda works until shortly before the Munich affair, and as a heavy armament producer, seems to have worked in close cooperation with the Krupp interests.
The De Wendel and Rothschild interests, contrariwise, seem to have been closely tied up with British finance and heavy industry notably Vickers (armaments). With Matignon and the outbreak of war, the De Wendel position seems to have gained ground. But it seems equally clear that with the recent military collapse, De Wen- del interests have gone over wholesale to the Duchemin position. The Rothschild interests, on the other hand, being primarily Jew- ish controlled, have been largely liquidated.
The net result is that the De Wendel position on labor and the Duchemin-Credit lyonnais position on cooperation with Germany have been fused. The final result, still in process of being worked out in detail, appears to be the equivalent of a transformation of the setup of the CGPF into the economic machinery for the French version of the corporate state. ^^ But under the conditions of Ger-
77 See Liefmann, Beteiligunge und Finanzierungs Gesellschaften.
78 With the outbreak of the war M. Gignoux, who appears to have been valuable to De Wendel and the Comit^ des forges primarily as a journalist and promoter, was displaced, de facto, by Baron Petiet, an active member of the CGPF since its formation in 1919. Baron Petiet's principal private connection was with the Union
? VICHY'S "NEW ORDER"
man conquest this means first that German industrial and business interests are to dictate (if not directly to control through stock own- ership) ^^ the terms of economic collaboration to their former French allies, and second, that France as a whole is to become a tributary (primarily agricultural) province in the German-con- trolled "New order in Europe. "
On this showing French employers have cast off French political and French labor controls only to accept the much more rigorous and exacting German imperial domination.
des consommateurs de produits m^tallurgiques, a sort of half-cartel, half holding- company agglomeration of concerns producing airplanes, automobiles, trucks, and other types of machinery. There is some reason for believing that Baron Petiet was acceptable to both groups.
79 It was been rumored that the daily occupation assessment of Fr. 400,000,000 (recently reported to have been reduced to Fr. 300,000,000) is in excess of German occupation requirements by somewhere between Fr. 275,000,000 and Fr. 300,000,000 (presumably reduced by the change referred to above), and that the balance is being invested by German authorities in the purchase of controlling shares in major French industrial, commercial, shipping, railroad and financial enterprises. These are then, apparently, being disposed of through sale to German concerns.
149
? Part II
MANUFACTURING PEAK ASSOCIA TIONS WITHIN THE LIBERAL- CAPITALIST SCHEME
? Chapter V
BRITAIN'S "FEUDALISTIC SYSTEM OF CARTEL CONTROLS"
EVEN IN England the first world war signalized a definite retreat from the theory and practice of classical norms. The peaceful interlude which followed consolidated the changed position. And the Second World War has turned retreat into rout. It is difficult to see in contemporary schemes of British war control--even after making due allowance for emergency factors--more than faint re- semblance to the "simple and obvious system" of past times. But, more significant by far, one will scarcely find anything in develop- ments leading up to the new controls which offer the slightest con- solation to those who might hope for some future return to com- petitive and laissez faire "normalcy. " For Britain, regardless of the outcome of the current struggle, the old order is doomed. As clearly as elsewhere, centralized policy controlling power in business is in
the cards!
It may well be, as a writer in a recent issue of the London Econo-
mist gloomily suggests, that England is "slipping . . . into a feu- dalistic system of cartel control," but it can scarcely be claimed that she is or has been doing so "through inadvertence. " ^ For, as Keynes, Lucas, Levy, the Liberal and Balfour Reports, and mount- ing data from other sources have shown, the controls set up under the cloak of wartime emergencies are built on foundations the genesis of which reaches back over many years. Moreover, from Left to Right, and regardless of the configuration of the issues at stake, there remains only a nostalgic hope for a return to the econ-
1 "The Economic Front," Economist, Dec. 9, 1939. See also "The Cartelisadon of England," Economist, March 18, 1939.
? 154
BRITAIN'S "FEUDALISTIC SYSTEM'*
omy which so warmed the heart of John Stuart Mill. ^ Come what may, the old ideal as well as the actuality is "sick unto death. " ^
At the center of the multifarious control networks through which British economy has muddled so close to the brink of dis- aster, and closely interlinked with a confused jumble of govern- mental and quasi-governmental control boards, stands the Feder- ation of British Industries. Its history is symptomatic of the forces making over the face of this schoolmistress of "free competition" and preceptress of laissez faire.
genesis: the ebbtide of economic orthodoxy
The antecedents of the Federation of British Industries are found in concern over the rising power of the trade unions and over the decline of British dominance in overseas trade. The first of these two stimulants was uppermost when, following an infor- mal meeting in London at the Westminster Palace Hotel, Novem- ber 15, 1898, it was decided to set up the Employers' (or British) Parliamentary Council. The stated objectives were:
To take action with respect to any bills introduced in either house of Parliament, affecting the interests of trade, of free contract and of labor, or with respect to the action of imperial or local authorities affecting in any way the said interests. *
The immediate objectives soon became to defeat at all costs the Mines [eight-hour] Bill, which, it was feared, once passed would establish a precedent for extension of the eight-hour heresy to other trades and industries. Typical of the position of the Parlia- mentary Council for many years was the argument it brought to bear in this crucial struggle. It is noteworthy for its statement of underlying principles:
1.
shall use its best efforts to promote agreement, and may, if requested by the parties concerned, act as conciliator.
In 1926 the Union had about 7,000 members, employing 800,000 workers (6,000 with less than 100 workers, 1,000 with less than 2,000, 54 with more than 2,000).
Various social institutions have been founded under its auspices, such as the regional compensation funds for family allowances, the Building Credit Fund, the Cheap Housing Office, and the Anti-Tuber- culosis Association. Few employers' federations in France have reached such a high degree of organization. ^^
Since the ILO Report was written, a considerable number of associations have approximated or exceeded the level of organiza- tion described in the above.
All these various associations were then brought together in the CGPF system of Groups. Membership in the groups, consequently, was made up entirely of associations, and not of firms or individ- uals. As constituted at the time of the Matignon agreement (1936), "each group is administered by a Committee of Direction, elected each year by the General Assembly of the Groups. . . . The Com- mittee of Direction of each Group names each year its Bureau, composed, at the minimum, of a president, two vice-presidents, a treasurer and a secretary. " ^^ Except for the rule that each Group must have the appropriate machinery of the General Assembly meeting at least once a year, as well as a Committee of Direction charged with full authority to make decisions between Assembly dates, and a Central Office or Bureau, vested with duties of execu- tion, the governing Statutes of the CGPF considered each Group as an entirely autonomous, self-sufficient, and self-governing body.
It was free to admit any organization to membership it chose (pro- vided it fell into the right category), study and deliberate on any subject or line of policy, and take any action it wished, which re- lated to its own industry and trade and which did not contravene stated policies of the CGPF as a whole.
Each Committee of Direction elected its own officers. The presi- dents of the several committees (28 in number at the time of the Matignon agreement) then made up the Central Council of the Confederation generale de la Production Fran^aise. This Central
31 Ibid.
32 "Statuts Primitifs de la Confederation Generale de la Production Fran^aise," re- produced as an Appendix by Duchemin, Organization syndicate, pp. 279-84.
? 134
VICHY'S ''NEW ORDER"
Council, the supreme governing and policy-forming body of the CGPF, in turn elected its own officers, consisting of a president, five vice-presidents, a treasurer and two secretaries. It is interesting to note that this election took place after the annual General As- sembly of the CGPF, and that the resulting Bureau or Central Administration was then enabled to speak on behalf of the CGPF as a whole. When to this fact is added the additional rule that the General Assembly of the CGPF was made up of (i) four delegates (each with an alternate), elected by each Group one month prior to the General Assembly meeting, plus (2) the members of the existing Central Council--a total, for 28 Groups, of 140 persons, or, including "alternates," of 252 persons at the most--it can be seen how easily power could drift into the hands of a relatively small, compact group of determined men.
For all practical purposes, it appears that the Central Admin- istration really w^as the CGPF. It drew up all the agendas, framed the subject matter for discussion and debate, managed its system of subcommittees, acted as go-between for all the various Groups, contracted agreements and alliances with other central associations and federations of employers with which the CGPF had mutual interests,^^ represented the CGPF before governmental committees either as lobbyists or appointed members, managed all CGPF finances, and submitted all proposals for change and reorganiza- tion. The composition of the Group representatives, and of the governing officers lends further support to this view. For the most part a single leading individual, his deputy, or a small coterie of closely related individuals with closely related corporate affiliations dominated the several Groups. ^* Such continuity of control in the
33 E. g. , Union des interets ^conomiques and the Confederation des groupes com- merciaux et industrials de France.
34 Almost continuously from the beginning of the CGPF, M. Duchemin has repre- sented the Chemical Industries, Group VIII, F. de Wendel, Group X, and Baron Petiet, Group XVI. Interests represented by Duchemin centered in the Etablisse- ments Kuhlmann (capital stock of Fr. 316,500,000; assets, end of 1937, of Fr. 886,534,- 853), which is the chemical trust (synthetic nitrates and other artificial fertilizers, sulphuric and nitric acids, artificial silk, coal-tar dyes, and pharmaceutical and photo- graphic supplies), and the Compagnie des Mines d'Anzin (capital stock of Fr. 222,- 500,000; assets, end of 1937, of Fr. 1,129,819,559), a coal and coke by-products firm. Assets of the Kuhlmann concern included Fr. 139 million in participations in more
than twenty chemical and related firms. Duchemin held an official position in at least eight of these as well as in the Chemin de Fer du Nord, the Banque de Com- merce Ext^rieur, Credit Algerien, and the Union Industrielle de Credit. De Wendel
? VICHY'S "NEW ORDER"
Groups promoted similar continuity in the control of the Central Administration. Prior to 1936 the CGPF had but two presidents, M. Darcy from 1919 to 1925 and M. Duchemin from 1925 to 1936.
How much real power, however, did the pre-Matignon CGPF actually have? Opinions vary. The International Labor Office closes its sketch of the organization with the somewhat equivocal generalization, "In practice . . . the General Confederation of Production is, beyond doubt, only a permanent meeting place for the heads of different federations; its power is ephemeral, inasmuch as it depends on their consent, and yet considerable, if, by the ex- change of views, it brings about unanimity between them. " ^^
The latter object has dominated the CGPF from its beginning, as is well shown by that remarkable series of addresses given by M. Duchemin before its annual meetings from 1925 on. On the one hand, it was to bring about unity of points of view, unity of interests, unity of pressure, and unity of purposes amongst em- ployer and business groups in the country in general. And on the other, it was to collaborate with the government in all things touching upon the vast medley of interests which its organizational dragnet covered.
How effectively the CGPF accomplished these objectives is ex- tremely difficult to say. Its initial ejfforts in the promotion of em- ployer unity led to the establishment of a series of more or less purely study and discussion groups such as the Economic Com- mission for the study of general economic questions, the Commis- sion on Social Questions for the study of labor-employer relations, and the Commission for the Scientific Organization of Labor (pri- marily "scientific management").
interests spread out from the two iron and steel producing firms of Les Petits-Fils de F. de Wendel (capital stock of Fr. 117,180,000) and De Wendel et Cie (capital stock of Fr. 80,000,000). In 1938, Francois, Humbert and Maurice de Wendel held official positions in sixteen other companies, including the Banque de Union Parisienne, Suez, Peiiarroya, the Union des Mines, several coal-mining companies, two tin com- panies, other iron and steel manufacturing companies, insurance companies, etc. Baron Petiet was president of the Union des Consummateurs de Produits M^tallur- giques et Industriels (capital stock of Fr. 105,000,000) and of Equipment Electrique des Vehicules (capital stock of Fr. 13,000,000) and was vice-president of Soci^t^ M^tallurgique de la Bonneville (capital stock of Fr. 10,000,000). In each case the companies mentioned, or companies associated with them, dominate the more pow- erful trade associations, syndicats, comptoirs, federations, and confederations in the industry which, in turn, dominate the CGPF Group of which they are members.
35 Wolfe, "Employers' Organisations in France. "
135
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? 136 VICHY'S "NEW ORDER"
Alongside these Commissions, it founded autonomous organizations with which it continued to work in intimate contact such as:
The Central Interprofessional Committee on Apprenticeship The Industrial Hygiene Association
The Central Committee on Family Allowances
The Central Committee on Social Insurance
The Central Committee for Fiscal Study and Protection. ^(R)
The CGPF has sought to work with all special-interest or special- function business associations whose purposes dovetail at some point or other with its own objects. Thus it has cooperated with the National Association for Economic Expansion, "which gives as its object the increase of French export," and with the Associa- tion of Industry and Agriculture, which is especially interested "in problems of national tariff protection for industry and agricul- ture. " It has established a special body called the Committee for Conciliation and Arbitration, charged with eliminating, wherever possible, conflicts between business interests, and with a view to forestalling intervention by public authorities. ^^
As for relations with the government, the CGPF from the outset followed a two-fold policy. On the one hand it asked for complete self-government, meaning by this a clear-cut circumscription of governmental and private business spheres of authority, with the government giving business any aid it might need, but, so far as control was concerned, following a policy of complete and un- equivocal hands off. On the other hand, it wanted the right to participate directly in all governmental action affecting the in- terests of its members at any point, and freely importuned demanded is perhaps the better word--governmental aid and as- sistance whenever such support could be turned to good business account.
A writer in the widely circulated Revue des Deux Mondes ^^ speaks *of "the participation of the professional groups [meaning trade and employers' associations] in the management of the state" in these words:
A remarkable characteristic of the professional groups is their tendency to intervene in the management of public affairs wherever social and
36 Duchemin, op. cit. , p. 8. a? idem.
ssAntoine de Tarle, "L'Organisation professionelle patronale en France," Revue des Deux Mondes, March, 1925, pp. 177-96.
? VICHY'S "NEW ORDER'*
economic questions are concerned. The employer justifies his social role: does not the responsibility of insuring the means of existence of the nation rest upon him? We have told in these pages [Revue des Deux Mondes, February 15, 1924] in what manner the great German associations insisted on terms which would bring about the decay of the State in Germany. It is not the same in France; the industrial groups are not looking for a substitute for public authority; they demand the right to collaborate on questions which are in their sphere. The prin- ciple has been granted. The constitutional bill on the Chambers of Commerce provides that they be consulted and that they give their advice on these questions. By a circular dated February 1, 1923, the Minister of Commerce confirmed the appeal which he had addressed to them in 1919, and invited them to get together with the Minister in order to facilitate the consultations which the Minister counted on hav- ing with them on economic questions. ^^
Thus organized, business was prepared to "intervene," in the words of M. Duchemin, in the affairs of government on a compre- hensive scale.
Wherever a matter has come up dealing with legislation on social insur- ance, accidents in work or occupational diseases . . . of protection or the conservation of water resources . . . of proposed legislation dealing with patents and trade marks, of consular elections, the protection of savings, or the reform of the Law of 1867 dealing with Corporations, upon all these questions the Confederation of Employers has taken a position and has intervened with the proper public authorities and Ministerial Departments, or with Commissions of the two Chambers. *"
Examples were offered of "intervention" dealing with tariff questions. It participated in all discussions of tariff truces, includ- ing, on one occasion the drafting of a "Memorandum to the French Government at the Second Conference for Concerted Economic Action. " On another occasion it participated in the World Eco- nomic Conference at London. It collaborated with the govern- ment in negotiations dealing with and the organization of the Franco-German Economic Commission. Similarly the CGPF took active part in various committees, conventions, and negotiations
39 Such "collaboration between the Government and industrialists and merchants," De Tarle continues, "is nothing new. . . . Louis XIV created the Conseil du com- merce at the instigation of Colbert . . . in 1882, this Council having disappeared for almost a century, was re-established under the name of Conseil superieur de I'indus- trie et du commerce. "
40 Duchemin, op. cit. , p. 6.
137
? 138 VICHY'S "NEW ORDER"
with the government dealing with import licensing, control of foreign exchange, fiscal and taxation problems, and the like.
On nearly all matters where the government has sought author- itative employer representation on governmental committees, the CGPF was designated as the proper agency. Examples are found in its participation in the work of such governmentally sponsored bodies as the following:
The National Economic Council
The National Council of Handicrafts
The Higher Council on Educational Methods
The Higher Commission on Occupational Diseases The Industrial Hygienic Commission
The Commission on Engineering Awards.
In addition to these and other direct participation in govern- mental activities, the CGPF was the French employer representa- tive at the International Labor Office, and it was spokesman for French industry at the International Economic Conference in
1927, the International Committee of Economic Experts in 1931, and the Lausanne Conference in 1932, and on other similar occa- sions. At all the meetings of the various national and regional Chambers of Commerce, the meetings of the International Cham- ber of Commerce, and meetings or conferences held by other col- lusively organized business groups the CGPF, its special delegates, or leading figures in its various Groups have actively participated.
Leading industrial personages, accustomed to thinking in terms of the power and achievements of the vast industrial properties at their immediate command, have spoken in glowing terms of these activities and of achievements wrought through them. Thus M. Duchemin, summarizing the evolution of the CGPF to its com- manding position in 1936, quotes, in eulogy to his organization, the authoritative writer on French business and industrial life, M. de Lavergne:
In the strength of its 4000 syndicates, brought together in 27 Groups,*^ and spread over the whole of France, it coordinates and multiplies their efforts and can undertake, whenever it raises its voice, to formulate the viewpoint of the whole of the economic forces of the country. Confident
41 Since 1929 one Group had, apparently, either been dropped or merged with some other Group.
? VICHY'S "NEW ORDER'*
in the energy of which the employers have always given proof and in the good sense of the workers of all classes and ranks, it throws its power, efficaciously, behind the individual efforts of all who are concerned to see France maintain the eminent place in the commercial and industrial activities which assures its position in the markets of the world. To the extent that it expands its efforts, in the measure that it promotes the material unity essential to its aims, it will render the greatest service to the industry and commerce of France and at the same time to the entire nation. *^
But in the same year in which these expansive words were spoken, there occurred the threat of a general strike sweeping over the entire country, and the Popular Front, temporarily com- manded by the poetic Premier Blum,^^ was enabled to inflict on the Confederation Generale de la Production Fran^aise its first serious setback, the famous Matignon Agreement--a setback so serious that it brought about the downfall of M. Duchemin, forced a complete reorganization of the Confederation, and realigned the configuration of inner command as it was to remain until inter- nally disunited, republican France collapsed under the thunderous assault of the Nazi legions in the spring of 1940.
THE MATIGNON AGREEMENT AND ITS AFTERMATH
The Matignon Agreement was signed on June 7, 1936, between representatives of the Confederation Generale de la Production Fran^aise and the Confederation Generale du Travail (General Confederation of Labor--CGT). ** Premier Leon Blum, as spokes- man for the government and prime mover in the accord, added his signature to those affixed by the two parties to the compact.
There was nothing particularly striking in the specific provisions of the new agreement. These underwrote for "some millions of French workers the 40-hour working week, increases in pay ranging from 7 to 15 percent, the recognition of the trade unions, collec- tive agreements, holidays with pay, and other social advantages. " *^ While such gains were important, the principles underlying them
42 Duchemin, op. cit. , p. ii.
43 Of course we do not mean to say that Blum's economic, political, and legal out- put are of no consequence.
44 The CGT occupied in that year a position roughly analogous to the A. F. of L. in the United States, the General Federation of British Trade Unions in England, and the ADGB (Allgemeine Deutsche Gewerkschafts-Bund) in pre-Nazi Germany.
45 International Labour Office, Yearbook, 1936-37, p. 11.
139
? 140 VICHY'S "NEW ORDER"
had long been accepted in many countries abroad, and in several French industries the specific changes involved but relatively slight departures from previous practices.
Of much greater importance is the fact that it was among the first ^^ compacts signed in any major capitalistic (non-Fascist) coun- try between representatives of employers and labor empowered to speak for their respective interests on a nation-wide basis. In con- cluding the agreement M. Duchemin and his associates *^ acted on behalf of French employers as a whole, and M. Jouhaux and his co-signers ^^ served as de facto representatives of practically all French organized labor. No better demonstration than this could be given of the extent to which the CGPF had come to serve as supreme coordinator, synthesizer, and organizer of French business interests--a level fully equal to that of the Confederation Generale du Travail in the labor field.
But of principal importance in the present connection, is the fact that the Agreement, coming as it did in the heyday of the Popular Front movement and in the face of an unusually critical situation abroad, brought as an aftermath a complete shake-up in the CGPF. Forces, apparently led by the De Wendel *^ and Roth- schild ^? interests, and long opposed to the policies of M. Duchemin in the labor relations fields, definitely gained the upper hand. ^^ At an Extraordinary General Assembly, called on an emergency basis to meet in August, 1936, the association's name was changed from Confederation Generale de la Production Fran^aise to Con- federation Generale du Patronat Fran^ais (General Confederation
46 It was preceded in Germany by the Stinnes-Legier agreement (Zentralarbeitsge- meinschaft) of Nov. 15, 1918. The Confederation of Catholic Labor Unions endorsed the agreement enthusiastically.
47 See pp. 145-49-
48 While Jouhaux signed for the CGT, his signature was held by the Blum gov- ernment generally valid for all French employees.
49 See note 34 above.
50 Railroads, insurance, and mining constituted the principal Rothschild holdings. Seven members of the family were on the board of directors of the Chemin de Fer du Nord (capital stock of Fr. 231,875,000; assets of Fr. 18,230,692,000) in 1937. Di- rectorships in five other railroads, four insurance companies, and two mining con- cerns (one of the latter being the famous Spanish Peiiarroya Company, in which the De Wendel, the CrMit Lyonnais, and the Kuhlmann interests were likewise repre- sented) were also held within the family.
51 It has been said that the shake-up in the CGPF was the consequence of the organization's failure to exert pressure on the Blum government in order to prevent the Matignon agreement and to achieve prosecution of the sit-down strikers.
? VICHY'S "NEW ORDER" 141
of French Employers). A new constitution was drawn up, a new president elected, and a greatly increased range of influence made possible through extension of membership to include all fields of employer interests in trade, commerce, finance, and transport, as well as those of industry and manufacturing.
Various articles, discussions, resolutions, memorials, and books have fully set forth the position taken by the De Wendel-led groups. The demands of the CGT, they held, were clearly revolu- tionary and communistic. The concessions granted under the agreement were only taken by labor as evidence of employer weak- ness, and would necessarily give rise to even greater and more "exaggerated demands" on the part of the CGT. A militant em- ployer body, the Committee of Foresight and Social Action (Comite de Pr^voyance et d'Action Sociale), cited CGT sources of informa- tion as proof that the real objectives had not been stated in the Matignon Agreement at all. ^^
Marcel Roy was quoted from an article in Syndicats, the weekly publication of the CGT (edited by M. Belin, Secretary of the CGT and one of the CGT signers of the Matignon pact and subsequently Vichy minister of labor), as saying that since employer interests called for preservation of "the most despotic management of pro- duction" then "our interest demands that more and more the worker be called to take his place, which consists in guiding, and organizing production. . . . All good militant reasons favor worker control. " ^^ From the CGT "Guide for the Shop Dele- gate," ^* it was found that the delegate had been advised "more and more to know the conditions of work and output so that work- ers' control in production might be really effective. " Another
52 Le Role exact des dileguds, published by the Comity de Pr^voyance et d'Action Sociale, Paris, 1937. In accounting for the evolution of French monopoly controls, and the attitude in social and political matters of organized French employer groups, 1 have purposely eliminated the Social Catholic Program, which has been briefly summarized in Chapter II. At certain stages this movement played a very important, perhaps even decisive role (as, e. g. , in restraining French aid to the Spanish Loyal- ists--one of the most significant turning points in modern European history). But to go far into these antecedents would lead too far afield. See, however. Moon, The Labor Problem and the Social Catholic Movement in France.
53 Quoted from Syndicats, April 15, 1937.
54 Shop delegates function more or less as shop stewards in American trade unions --they are elected by and represent the men in the shop. But whether or not they were also representatives of the union has been a point of bitter dispute.
? 142 VICHY'S "NEW ORDER"
source was cited as saying that "worker control is the central point in the coming struggle. "
This, the Comite found, came out to "bolshevism.
" Worker con- trol in the factory, they said, would only be followed, as Lenin showed in 1917 when he "started the revolution," by "complete expropriation of industry for the profit of the state. " The CGT was "becoming totalitarian under the influence of Communist ele- ments. " ^^ Every single gain made by the CGT would serve only to add fuel to its revolutionary fires. ^^
The CGT, in short, was encroaching upon "liberty" and "free- dom," and a situation had arisen in which "the employer, the ranks of authority, and the independent trade unions " must unite and fight against dictatorship, violence, attacks on the liberty of labor and thought, and injuries to the principle of ownership. " And the first step towards a real "drawing together of employers and work- ers" was the "development and completion of employer organiza- tion. " ^^ The battle cry became, in the words of the new president, M. Gignoux, first, "employers be employers," and then "rally around your professional syndicate . . . there must be no more isolation. " Consider, he argued, the crucial significance of the stakes: "Employers, you are not only responsible for your own concerns but for those of your colleagues and to those to whom you delegate a part of your authority. . . . You are the leaders: you have charge not only of men but of souls. " ^(R)
The new point of departure, in other words, was to emphasize the totalitarian angle of social and economic issues. Fundamental interests were now clearly at stake. The object had now become fully to coordinate the whole of the French business system into a coherent, cohesive, and neatly integrated mechanism which might be centrally directed in defense of the underlying tenets and in protection of the institutional fabric of capitalism per se.
The first step was to expand the membership base so as to include
55 Syndicats, April 15, 1937.
58 La Journ^e Industrielle, April 2, 1937, complained that "Whereas when on June 7, increases of salary from 7 to 15 per cent had been considered, the new sched- ules of minimum salaries entered in the agreements have aggravated costs passing 25 per cent and even in certain cases reaching 50 per cent. "
57 "Independent trade unions" mean both non-CGT and company unions.
58 C. J. Gignoux, Patrons, soyez des patrons! (Paris, 1937).
59 Ibid. The situation, many felt, was practically identical with that which Italian
industry faced in the early twenties at the time of Mussolini's march on Rome.
? VICHY'S "NEW ORDER" 143
all branches and phases of French business, large or small, national or local, domestic or foreign. The new arrangement called for an enlarged series of thirty-five Groups, each in turn subdivided into a series of special industrial and trade categories. The grouping in the main follows vertical lines, that is, each group brings together all stages of production and distribution from raw materials and on through to the ultimate consumer.
Four types of organizations may belong to the Groups: (1) Pro- fessional (Branche professionelle),(R)*^ (2) Interprofessional regional (Branche interprofessionelle regionale), (3) Technical (Organ- ismes techniques), and (4) Miscellaneous (Associations adherentes). The Professional organizations might include (a) "National pro- fessional Confederations which bring together by virtue of their close affinities Federations, Syndicates or Associations," (b) "Na- tional professional Federations which group together Associations or Syndicates, national or local, of a like professional nature," and (c) "National professional or regional syndicates. " The Interpro- fessional regional type may be made up of Interregional Associa- tions or Federations of such associations. It may also include any type of business organization found in any locality or region, and may even include isolated individual firms. The Technical bodies are those which are especially set up for purposes of stud--y or pro- motion of any important topic of special group interest "fiscal, social, economic, tariffs, foreign trade, and other questions. " The Miscellaneous category is a catchall for every conceivable type of employer or business association not falling under any of the previous classifications. ^^
The CGPF was thus to determine the eligibility of each associa- tion to each group, reserving the right on the grant of admission to demand the submission of information, business, economic, or of any other kind, relevant to the purposes of the CGPF, and re- quiring of every single association that it agree "to pursue its activi- ties according to directives laid down by the CGPF. " ^^
60 As previously indicated, the term "professional" means business grouping by industrial, trade, or occupational lines. It does not mean the "professions" in the English and American sense of the term.
61 Duchemin, op. cit. , p. 297, "Statuts de la Confederation Cen^rale du Patronat Fran^ais," adopted by the General Assembly, at meetings held on March 18 and April 26, 1938.
62 Idem.
? VICHY'S "NEW ORDER"
This latter clause appears only in the 1938 Statuts, and is in sharp contrast with the Statuts of the Confederation Generale de la Pro- duction Fran^aise. While heavy emphasis had been laid on the autonomous nature of each Group's activities, the new Statuts only at one place makes incidental reference to the old principle. With that minor concession,(R)^ the right and power of the central admin- istration over member groups and their subsidiary bodies is em- phasized at every turn and point.
The change represents a definite authoritarian trend, further reinforced by adjustments which must make possible a much greater centralization of power in the hands of organized business associations. Each Group now (prior to Nazi occupation) has its own permanent headquarters in Paris. Some of the Groups are equipped with large and efficient staffs. In a few cases headquarters appear to be identified with the offices of more powerful trade as- sociations--a practice similar to that which became so widespread in America under the NRA Code procedure.
The Central Council under the new arrangement is made up primarily of delegates from the constituent associations,(R)* not of the Groups as previously. The number of delegates each constitu- ent body may designate is, in turn, determined by the Central Council. The Annual Assembly is chosen in the same way, the number of delegates sent by each association being four times the number allowed as members of the Council.
The Annual Assembly appears to be mainly a general forum for discussion, by Group delegates, for the giving of announcements by the CGPF administration, and for the ratification of budgets, policies, and plans laid down in the agenda. Real power resides in the hands of the Central Administration {Bureau) of the CGPF. This body is chosen from the members of the Council shortly after the adjournment of the Annual Assembly, and is made up of the president, one or more vice-presidents, a treasurer, two secretaries, honorary president, and delegates sent by the constituent associa- tions of the several Groups. (R)^
63 "Article 12. Syndical Discipline: The maximum autonomy is to be permitted to each constitutive organization. " Ibid. , p. 302.
6* "Article 11, paragraph 2; Each group of the professional divisions sends to the Central Administration two delegates; whenever the branch of industry or commerce permits, one of the two delegates should be chosen from amongst the small or me- dium sized industrialists or traders. " Ibid. , p. 300.
66 Ibid. , p. 302.
144
.
? VICHY'S "NEW ORDER" 145
While this is a much larger body than under the previous ar-
rangement, an unusual amount of power is vested in the president
and the various special committees which he is authorized to ap-
point at will. In addition he has sole power to act in the name of
the CGPF (except in money matters, where he shares the power
with the treasurer). Upon joining the CGPF, all organizations must
agree "to submit to the President of the CGPF, prior to the making
of any definite decision, all questions which involve a fundamental
principle relating to the economy as a whole. " ^^ The President and
Council are granted authority to determine the terms and condi-
tions under which such disputes or problems should be submitted,
and are authorized to command at any time of any constituent asso-
ciation, or of any company or enterprise belonging to any member
association, "all statistical information of a general nature, and,
more particularly, so far as possible all round figures on invested
capital, the volume of business turnover, and the number of paid
^^
THE LOCATION OF POWER
Like most central organizations of its genre, the CGPF is a tissue of compromises yielded by conflicting groups. It will not do, how- ever, to dismiss its activities as unimportant on that account. For despite the somewhat shadowy character of its substance, and the doubtful quality of its authority, there is clear evidence of growth in power and influence along lines similar to those outlined for like organizations in other major industrial countries.
1 At the bottom there has been steady and cumulative pressure to expand the organizational network so as to include all business interests in the whole of France, regardless of the scale on which the individual enterprise might operate, and irrespective of such things as legal status, trade or occupational lines, nature and loca- tion of markets, and so on. The 1936 reorganization of the CGPF and the outbreak of the Second World War lent increasing em- phasis to this tendency towards universal, all-inclusive organization of French business enterprise.
2. Similarly, French business organization has shown a growing tendency to federate, coordinate, unify, simplify, eliminate dupli- cation and overlapping, and to centralize direction in the determi-
66 Idem. ^"f Ibid. , p. 300.
employees. "
? 146 VICHY'S "NEW ORDER"
nation of leading policies in "roof" or "peak" associations or "confederations" of associations. The CGPF represents the most complete expression of this tendency to date. Its evolution has been paralleled by four complementary trends: (a) all local and regional trade or occupational ("professional") associations are brought into national federations; (b) in each locality, municipality, or other regional area, all local associations are brought together into local federations or confederations; (c) national associations or federa- tions are brought together in technologically or organizationally interrelated "Groups"; and (d) each association, or federation, or "Group," or confederation tends to become vertical, that is, to include all associations from the production through the financing and distribution phases.
3. The policies upon which agreement is sought relate increas- ingly to issues having to do with the maintenance and defense of capitalistic institutions per se. In particular this means (a) a com- mon front against organized labor, (b) promotion of a policy of "self-government in industry" ^^ and (c) demands for the right ac- tively to capture the power, to formally manipulate, and to inter- fere directly in the shaping up of governmental policy relating to every single phase of the economic, social, and political interests of organized business.
4. The looser and more "shadowy" associations shade imper- ceptibly into the more powerful, and these in turn into cartel, cartel-like, and quasi-cartel monopoly-oriented groupings. Prac- tically all of the leading French Associations and Federations exer- cise to some extent or other one or all of the usual type of cartel functions. ^^
5. The guiding hands in this proliferating and power-congealing meshwork of French business organization seem to reach out from the heavy industries and finance. In the heavy industries the Comite des forges has played a dominating role, and in finance the giant banking house. Credit Lyonnais. The policies which have in the end won out, and the position which has been finally taken on
68 The spokesmen for the CGPF and similar groups constantly use this expres- sion. See, e. g. , the annual speeches of M. Duchemin, in his Organisation syndicate.
69 See Jacques Lapergue, Les Syndicats de producteurs en France (Paris, 1925), and, especially, Pierre Bezard-Falgas, Les Syndicats patronaux de I'industrie metallurgique en France (Paris, 1922), particularly pp. 176-224 and 386-403.
--
? VICHY'S "NEW ORDER"
the leading issues that have come to the fore with and following the Matigon Agreement, are those which these two groups--after many compromises--have favored.
Beyond this point it is extremely difficult to go, especially in the confused state of affairs one finds in contemporary France. It is, however, perhaps worth pointing out that behind the scenes in the evolution of the CGPF has gone on several long, and at times bitter, struggles, the two most important of which appear at present to have been resolved as follows:
Attitude toward labor. --As pointed out above, M. Duchemin represented interests which had long taken a more or less concilia- tory attitude toward union labor. He appears, in this report, to have followed in the steps of M. Clementel, Minister of Commerce, who called the CGPF into being in 1919. In this attitude he repre- sented a policy for France quite similar to that adopted by Hugo Stinnes and Walther Rathenau in postwar Germany. Behind him one finds a vast and wide-ranging series of industrial, financial, transport, commercial, and miscellaneous enterprises. Most im- portant of these were the Credit Lyonnais,^^ the heavy chemicals Kuhlmann group,^^ the Gillet group,^^ t^g Lyon group,^^ and the Schneider group. ^*
Opposed to this vast assembly of gigantic business interests sometimes referred to collectively as the "Gallican" group--^were arrayed particularly the sprawling economic empires of the De Wendel ^^ and Rothschild groups. ^^ These had long been bitterly antiunion on all labor matters, and had consistently opposed Du- chemin in his policy of reconciliation. Following Matignon, this
70 Paid-in capital, Fr. 400 million; assets (1938) of Fr. 14,480 million; dividends, 1928-38 inclusive, 20 percent per annum.
71 See footnote 34, above.
72 Gillet-Thaon (laundry, dye\yorks, rayon, mechanical construction, etc. ). A hold- ing company of Fr. 250 million capital stock.
73 The Lyon group seems to have been a group of industrialists very closely re- lated to and accepting the leadership of the Credit Lyonnais.
74 Schneider (Creusot), capital stock of Fr. 100 million; produces iron, steel and armaments.
75 The De Wendel group, dominated by one of the oldest families in French in- dustrial history (see Louis Launay, De Wendel, Vaucresson, 1938), is (was? ) probably the most powerful single industrial aggregation in contemporary France. Control has been exercised mostly through two closely held holding companies. The Comite des Forges has been pretty much the mouthpiece of the De Wendel interests since its beginning.
76 See footnote 47.
147
--
? 148 VICHY'S "NEW ORDER"
group definitely gained the upper hand, and down to the outbreak of the war appear to have won over the bulk of organized French business to their point of view.
Attitude toward rapprochement with Germany. --Conversely, the interests centered around Duchemin were in favor of close cooperation with Germany. The ramifications of the Credit Lyon- nais were scattered over the entire European continent. " But its most important tie with Germany was through the Kuhlmann and Gillet groups, which were, in turn, closely tied up with the huge German chemical trust, I. G. Farbenindustrie A. G. The Credit Lyonnais was itself closely tied up with Swiss enterprises in turn largely dependent on, if not controlled by, the Deutsche Bank, and A. E. G. (Allgemeine Electrizitats Gesellschaft--German General Electric Co. ). Duchemin himself was a member of the Franco- German Committee--which seems to trace back to Hugo Stinnes and in this capacity worked in close cooperation with Herr von Stauss of the Deutsche Bank. Schneider-Creusot was heavily inter- ested in the Skoda works until shortly before the Munich affair, and as a heavy armament producer, seems to have worked in close cooperation with the Krupp interests.
The De Wendel and Rothschild interests, contrariwise, seem to have been closely tied up with British finance and heavy industry notably Vickers (armaments). With Matignon and the outbreak of war, the De Wendel position seems to have gained ground. But it seems equally clear that with the recent military collapse, De Wen- del interests have gone over wholesale to the Duchemin position. The Rothschild interests, on the other hand, being primarily Jew- ish controlled, have been largely liquidated.
The net result is that the De Wendel position on labor and the Duchemin-Credit lyonnais position on cooperation with Germany have been fused. The final result, still in process of being worked out in detail, appears to be the equivalent of a transformation of the setup of the CGPF into the economic machinery for the French version of the corporate state. ^^ But under the conditions of Ger-
77 See Liefmann, Beteiligunge und Finanzierungs Gesellschaften.
78 With the outbreak of the war M. Gignoux, who appears to have been valuable to De Wendel and the Comit^ des forges primarily as a journalist and promoter, was displaced, de facto, by Baron Petiet, an active member of the CGPF since its formation in 1919. Baron Petiet's principal private connection was with the Union
? VICHY'S "NEW ORDER"
man conquest this means first that German industrial and business interests are to dictate (if not directly to control through stock own- ership) ^^ the terms of economic collaboration to their former French allies, and second, that France as a whole is to become a tributary (primarily agricultural) province in the German-con- trolled "New order in Europe. "
On this showing French employers have cast off French political and French labor controls only to accept the much more rigorous and exacting German imperial domination.
des consommateurs de produits m^tallurgiques, a sort of half-cartel, half holding- company agglomeration of concerns producing airplanes, automobiles, trucks, and other types of machinery. There is some reason for believing that Baron Petiet was acceptable to both groups.
79 It was been rumored that the daily occupation assessment of Fr. 400,000,000 (recently reported to have been reduced to Fr. 300,000,000) is in excess of German occupation requirements by somewhere between Fr. 275,000,000 and Fr. 300,000,000 (presumably reduced by the change referred to above), and that the balance is being invested by German authorities in the purchase of controlling shares in major French industrial, commercial, shipping, railroad and financial enterprises. These are then, apparently, being disposed of through sale to German concerns.
149
? Part II
MANUFACTURING PEAK ASSOCIA TIONS WITHIN THE LIBERAL- CAPITALIST SCHEME
? Chapter V
BRITAIN'S "FEUDALISTIC SYSTEM OF CARTEL CONTROLS"
EVEN IN England the first world war signalized a definite retreat from the theory and practice of classical norms. The peaceful interlude which followed consolidated the changed position. And the Second World War has turned retreat into rout. It is difficult to see in contemporary schemes of British war control--even after making due allowance for emergency factors--more than faint re- semblance to the "simple and obvious system" of past times. But, more significant by far, one will scarcely find anything in develop- ments leading up to the new controls which offer the slightest con- solation to those who might hope for some future return to com- petitive and laissez faire "normalcy. " For Britain, regardless of the outcome of the current struggle, the old order is doomed. As clearly as elsewhere, centralized policy controlling power in business is in
the cards!
It may well be, as a writer in a recent issue of the London Econo-
mist gloomily suggests, that England is "slipping . . . into a feu- dalistic system of cartel control," but it can scarcely be claimed that she is or has been doing so "through inadvertence. " ^ For, as Keynes, Lucas, Levy, the Liberal and Balfour Reports, and mount- ing data from other sources have shown, the controls set up under the cloak of wartime emergencies are built on foundations the genesis of which reaches back over many years. Moreover, from Left to Right, and regardless of the configuration of the issues at stake, there remains only a nostalgic hope for a return to the econ-
1 "The Economic Front," Economist, Dec. 9, 1939. See also "The Cartelisadon of England," Economist, March 18, 1939.
? 154
BRITAIN'S "FEUDALISTIC SYSTEM'*
omy which so warmed the heart of John Stuart Mill. ^ Come what may, the old ideal as well as the actuality is "sick unto death. " ^
At the center of the multifarious control networks through which British economy has muddled so close to the brink of dis- aster, and closely interlinked with a confused jumble of govern- mental and quasi-governmental control boards, stands the Feder- ation of British Industries. Its history is symptomatic of the forces making over the face of this schoolmistress of "free competition" and preceptress of laissez faire.
genesis: the ebbtide of economic orthodoxy
The antecedents of the Federation of British Industries are found in concern over the rising power of the trade unions and over the decline of British dominance in overseas trade. The first of these two stimulants was uppermost when, following an infor- mal meeting in London at the Westminster Palace Hotel, Novem- ber 15, 1898, it was decided to set up the Employers' (or British) Parliamentary Council. The stated objectives were:
To take action with respect to any bills introduced in either house of Parliament, affecting the interests of trade, of free contract and of labor, or with respect to the action of imperial or local authorities affecting in any way the said interests. *
The immediate objectives soon became to defeat at all costs the Mines [eight-hour] Bill, which, it was feared, once passed would establish a precedent for extension of the eight-hour heresy to other trades and industries. Typical of the position of the Parlia- mentary Council for many years was the argument it brought to bear in this crucial struggle. It is noteworthy for its statement of underlying principles:
1.
