Etatisme

The Government of shambling, whiskery Leon Blum had more than Bastille Day speeches for the French voters last week. In rapid succession it pushed through the Chamber of Deputies two bills destined to change drastically the face of French politics.

BankA chief plank in the Popular Front's platform was reform of the Bank of France and suppression of the oligarchy of 200 families who own that institution's voting stock (TIME, May 18). After months of guessing as to what sort of reform bill would be introduced, pudgy Finance Minister Vincent Auriol brought forward last week a measure so stern and thoroughgoing as to leave French wiseacres blinking in astonishment.

The rule of the present Board of Regents, top-heavy with de Wendels and de Rothschilds, is to be definitely ended. The Board will be supplanted by a governing committee of 26 men which will consist of:

One governor, chosen by the State.

Two vice governors, chosen by the State.

Three censors, elected by the 40,000 individual stockholders of the

Bank in open meeting, to look out for their interests in committee.

One councilor, elected by secret vote of the bank's personnel.

Eight councilors, chosen from the directors of the great municipal pawnshops.

Eleven more councilors nominated by the Ministers of Finance, Commerce and Agriculture.

None of the 26 committeemen may serve more than three successive years. Baron Edouard de Rothschild for example, a Bank of France regent for a generation, may be re-elected after his next three years are up only by taking a year's holiday. Debate in the Chamber was remarkably brief. Opponents of the reform bill held up their hands in holy horror at what they called the growth of "Etatisme"--government-in-business, State Socialism, etc. etc. Cried a conservative Deputy:

"The change from possible omnipotence on the part of certain magnates to pressure from political parties and trade unions is not progress!"

Snapped Finance Minister Auriol:

"The situation as it stands is worse than State Socialism. It is a hereditary oligarchy that seems to believe that it has a divine ight to govern."

The bank bill passed, 413-to-117, went to the Senate.

Munitions: Next day the docile Chamber, wound up to do great deeds, tackled the nationalization of France's gigantic munitions' trust.

"Let us end 30 years of debate," cried Defense Minister Edouard Daladier. "It is the unanimous wish that if war breaks out again it should not be, as in the past, a source of huge profits for some while others are making sacrifices of their lives. We hope that our example will be followed by other nations and thus lead to the reduction of armaments. . . . War must not be a source of scandalous profit. We want peace, but the peace we desire is the peace of free men and not of slaves. . . ."

Enormous still is the influence of France's munitions tycoons, but in open debate they dare not raise their voices. The Daladier bill was passed by the largest majority the Blum Government has yet received--484-to-85.

ID its provisions the munitions bill differentiates sharply between factories which produce war materials and nothing else and those which may be converted from automobile or machine-tool production to munitions manufacture or which make munitions now only as a sideline. The latter will be fully nationalized only in wartime, while the most potent cannoneers--about ten large factories--will be taken over at once. To protect stockholders, a fair price for each will be determined by a committee of three for each plant: one appointed by the Government, one by the plant and a third chosen jointly or appointed by the Courts of Appeal. The principal factors in arriving at a fair price will be the price of stock for the past seven years only and the dividend return. If the Government lacks cash to purchase the stock outright, a special bond issue will be floated.

Very sensitive is Minister Daladier to the frequent charge that private French munitions factories have fomented foreign wars to increase their export business. For this reason even the part-time munitions factories will be subject to rigid government inspection to prevent cheating. Exports from the Government's munitions factories will be by license only, approved by the Cabinet. "And from this decision," cried Minister of Defense Daladier, "there will be no recourse and no appeal."

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