Chapter CX: Une Entente Commerciale?
For all the grand talk by politicians on both side of the channel the Entente Cordiale never brought about a substantial change in Anglo-French relations. While it is technically correct to say the original Entente never broke down, that only points out quite how limited it’s original form was. The Entente Cordiale was never actually a formal alliance or pact; instead it was an ‘entente’ (understanding) on a handful of colonial issues in the Orient, Africa and North America. As those issues were considered long settled one could truthfully say that the original agreement had not been broken and indeed remains unbroken to this day. What certainly did ‘break’ in the mid 1930s was the illusion held by much of the political class that there was a meaningful alliance between France and the British Empire.
The political differences that broke up the diplomatic Entente have been discussed previously, our concern in this chapter are the Franco-British ‘Understandings’ that existed outside of diplomacy and grand strategy, and how they fared as diplomatic relations deteriorated. We will begin in the economic sphere where the most striking feature is how weak the trade links were, Empire exports to France totalled just under £23 million while imports from France came to less than £20 million. While these are certainly large sums, when one remembers that in a previous chapter we saw that imports of beef alone totalled well over £35 million a year they are not that impressive. There is of course the issue of invisible exports and imports, that portion of trade that does not involve tangible goods or physical objects, for Britain that has always meant insurance, banking, shipping and above all income from over-seas investments. These figures were both notoriously hard to calculate, save well in arrears when accounts were settled, and a vital matter for the Treasury, transforming staggering visible trade deficits into healthy overall surpluses; invisible annual trade surpluses of £300 million or more were not uncommon throughout the 1930s. Francophiles were often tempted to suggest that some of this tidal wave of invisible earnings came from France, when in fact it was instead the nations of South America, China and the United States that provided the bulk of these earnings. The example of the Southern Railway and the Chemin de Fer du Nord will serve to illustrate why France was just as tough for Britain’s invisible traders as their visible brethren.
The Chemin de Fer du Nord (The Northern Railway, generally called the CF Nord) was, as the name suggests, the railway company covering the north of France. As in Britain the railway companies of France had amalgamated into several large groupings, though the groupings had occurred over a far longer period and, contrary to the typical national pattern, the French groupings had occurred with far less government intervention. They key difference between the two nations railways was financial, where the Big Four in Britain were all making a healthy profit, even the debt laden London & North Eastern Railway, in France the situation was not so bright. As a whole the French railway companies were running at a very considerable loss, a combined loss of almost 5 billion Francs (some £60 million) in 1936 alone. However this headline figure hid a wide variation; the unwieldy named Chemins de fer de Paris à Lyon et à la Méditerranée (Paris to Lyon and the Mediterranean Railway, unsurprisingly this was typically shortened to the PLM) had an excellent year as Spanish bound trade in and out of the Mediterranean ports skyrocketed, while at the other extreme lay the unfortunate CF Nord which racked up yet another staggering loss. The simple problem for the CF Nord, and the Rothschild family that owned it, was that while their routes were strategically valuable (not least the rail links from Paris to the Channel ports and western Belgium), they weren’t actually very busy. The exception was the cross-channel routes, the jewel in the crown of the CF Nord, indeed to believe its critics the only jewel the company possessed. It is at this point that the Southern Railway enters the scene.
A 231 C Nord at the head of a 'Flèche d’Or'/'Golden Arrow' service just outside Calais. The Golden Arrow was the first cross channel luxury train to actually be co-ordinated properly, a feat previously confined to trans-continental trains such as the Orient Express or the Rheingold. The service ran from London Victoria to Paris Gare du Nord via a purpose built luxury ferry between Dover and Calais, though of course the CF Nord maintained it was actually a Paris-London service that happened to carry people on the way back. The Golden Arrow had been one of the benchmark luxury services of the 1920s, being an all Pullman car service on the British side and all CIW (Compagnie Internationale des Wagons-Lits, the makers of carriages for the Orient Express) service when in France. However between the depression and the rise of air travel the service had fallen on relatively hard times, being forced to include merely first class, and even second class, carriages on the trains to make up the numbers. It is interesting to note that the new class of locomotive the Southern Railway developed for the service were christened the Lord Nelsons and all named after famous British admirals, the majority of which had made their name sinking the French. There was no counter by the CF Nord however, the 231 C Nords on the French side of the route were given neither individual names nor even a class name, to the owners and operators of French railways their engines were mere machines, nothing more.
CF Nord’s British partner for the cross channel routes was, naturally enough, Southern Railway. The advent of the train ferry, which allowed a sleeping carriage to be loaded onto a ferry and transported across the channel without waking the occupants, had made the night train from London to Paris a lucrative route for both parties. Financial problems in the 1920s had seen the CF Nord sell its ferry and shipping operations to raise money and had left it dependent on the Southern to provide the ferries. This precedent was taken one step further in early 1937 when CF Nord proposed selling its part of the cross channel route to the Southern. In exchange for a large up front payment the CF Nord would give the Southern a concession to run the entire route, keeping all receipts and without paying for track access. The board of the Southern never got a chance to reply; the French government got to hear of the plan and immediately vetoed it. At the end of the resulting round of argument, claim and counter-claim the Southern’s management were left bemused and the CF Nord’s mostly unemployed; CF Nord was forcibly ‘merged’ with Chemins de fer de l'État (State Railways, CF l'État the largest railway group in France and, as the name suggests, it was owned by the state). It has been suggested this was the aim of the Rothchild family all along, as part of the merger they received compensation, shares in the public corporation that owned CF de l'État and seats on the board. Certainly they got a far better deal than the other struggling rail companies that were 'rescued' by merger with CF de l'État both before and after. In any event the CF Nord Affair was just the latest in a series of incidents that convinced the majority of British bankers and financiers to look elsewhere for their invisible trade opportunities.
The French chamber of commerce naturally declared this an irrational and foolish decision; France was open for business and investment, just not in areas she considered strategic. The counter argument was that the shifting French definition of ‘strategic industries’ was itself a major headache for those trying to do business in France. Many an importer had privately decided that ‘strategic’ meant ‘something a non Frenchman is doing well at’ and given up. Such discussion generally boiled down to insults, each side accusing the other of being at fault and for being too parochial. The British believed French industry would do all it could to involve dealing with foreign firms, even to the extent of paying a higher cost for lower quality, while the French diagnosed the problem as ‘Parochial Albion’ and blamed British companies for not even looking for opportunities in France. The protectionist tendencies of French industries are a matter for another book, but the parochialism, or otherwise, of Britain's captains of industry is very much our concern. As with so much in Anglo-French relations however, the answer does rather depend on how you define the terms; British companies were indeed parochial, for a given value of parochial.
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Notes:
You lucky people, not even the top of the page and you get an update. I do hope Davout is around to discipline his fellow Antipodean tanker for a breach of top of page etiquette. Now to the update, first off I must confess I'm not completely happy with this one, mainly as I'm not at all sure what the 'point' of all that text. But I’ve written it now so it seems a shame to delete it, hopefully it will be at least interesting. A part two on Franco-British relations to follow explaining the differing values of parochial.
Trade numbers are all historic, which I found somewhat surprising I must say. After some checking Britain did run a huge visible trade deficit even before the Depression but was always bailed out by invisible trade which ran an even bigger surplus. Trade with France genuinely was that small and more interestingly only imports had been hit by the depression; France was buying the same amount of British goods but selling far less to Britain. But then the French were only buying British because there was literally no French option, so it’s not surprising their imports didn’t change.
French rail deficits are not OTL; actually they were worse at around 6 billion Francs for 1936. I’m giving the south coast railways a big boost due to all that Spanish trade, but the northern railways will still struggle. Of course they could make money, they did after nationalisation, but that required vastly raising ticket prices which rail companies weren't allowed to do by French law. For some reason the Popular Front thought it evil if private companies raised ticket prices but a vital necessity when the state owned company did it a few weeks after nationalisation. Funny that. CF Nord was owned by the Rothschilds and they did play many financial games to keep control even as losses spiralled. OTL the Popular Front nationalised the whole lot and gave the existing owners shares in the new public company (a funny definition of nationalisation, but then this is France). TTL of course the government has dodged the issue and is only forced into it when they see the evil Brits about to get involved in a French railway.
The Southern Railway was generally the most profitable railway in Britain as it had less freight and more passengers (so common carrier and lorry competition didn't hurt so much). They were very keen on their south coast ferry runs and went to a string of ports across France, Belgium and the Netherlands with varying levels of luxury and always on their own ships. Even OTL they had the cash to buy out CF Nord so it's not unreasonable, certainly there were a lot of talks between the Rothschilds and Southern prior to nationalisation but that was apparently just about cross-channel ferries and the like. Without the get out of jail free of the Popular Front buying them out I figure the Rothschilds might take drastic measures, they weren't above being bold when thy were desperate.