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ARMS AND THE MEN

Reprinted from "Fortune" by special permission

NO WRITER ATTRIBUTED

But the Union Europeenne has an even more important function. Through it, Schneider-Creusot reaches out to control 230 armament and allied enterprises OUTSIDE France. The greatest of THESE concerns is that glittering jewel in the crown of principal Ideal State that came into being in 1919 as the reseult of the self-determination of oppressed peoples. The state is Czechoslovakia, and its jewel is Skoda.

Skoda, although its main works are in Brno (which was once on Austrian territory), has factories scattered not only over Czechoslovakia but over Poland and Rumania as well. Upon the board of Skoda, which the Union Europeenne controls through 56 per cent of its stock, M. Schneider sits with his friend Andre Vicaire, Director General of Schneider-Creusot; his brother-in-law, Arnold de Saint-Sauveur; Eduard Benes, who, as Czechoslovakia's Foreign Minister, takes second place to no one in the vocal support he lends to the League of Nations; teresting to note in view of later facts, very heavy financial contributors to Hitler's political success. Political France and political Germany may be at constant swords' points, the Polish corridor may inflame the Nazis, France may quiver at her lack of "security" from another northern invasion--but the lion and the lamb never lie down together with more good followship than these French, German, Czech, and Polish gentlemen when they come together to discuss, as follow directors, the problems of increasing Europe's consumption of armaments. Thanks to the activities of Skoda and its allics, arms form a full 10 per cent of all Czech exports--and 40 per cent of all Skoda's products are exported to the extent of $30,000,000 worth a year.

Back to Schneider

M. Schneider's nationality is capable of any supple manipulation that a political emergency may call for. The founder of his dynasty was his grandfather, also named Eugene, who, with a brother Adolph, left Bidestroff in the then Germna territory of the Saar and came to France in 1836. More particularly Brothers Eugene and Adolph came to Le Crcesot (literally "The Hollow" or "The Crucible") where to the south of the Burgundy wine district a small foundry had been making cannon from the days of Louis XVI. With perfect impartiality it had supplied first the monarchy, then the republic, and then Napoleon's Empire with its products, bought the foundry (La Societe Generale des Hauts Feurneaux) for 2,500,000 francs--and were then forced to wait for almost twenty years for their first major war. War-promotion methods in those days were not what they were to become later in the century, but that gap was neatly bridged by the demands that the new steambeats and the even newer railroads were making on the producers of iron and steel. Pheu, in 1854, the Crimean War broke out, and Eagene (alone now, following Adolph's death) converted l.e. Creusot almost exclusive to the manufacture of arms. The family fortune was founded; the family tradition was established.

It was from this vantage point that he was able to watch the sweep of events that led to the France-Prussian War. Alfred Krupp saw it coming, too. He like Schneider, was capable of an internationalism far above the confines of narrow patriotism and was anxious to equip Napoleon Ill's armies with his own cannon a suggestion not entirely without its legic or, even, its sportsmanship, for Krupp had borrowed in Paris (from the same banking house of Setlliere as had set Engene Schneider up in business) and the money with which he made the guns that late, humbled France at Mets and Scdan.

Nothing in the career of the Schneider dynasty is more remarkable than the fact that it was able to overcome this sheeking disgrace and actually to get the job of re-equipping the new armies of the Republic. This time Engene Schneider supplied France with cannon modeled upon the designs of the victorious

It was under Heuri's son--the present Eugene Schneider, now sixty-six years old, that the Schneider-Creusot company began to work upon a gigantic, world-wide scale. Its real expansion began with the turn of the contury. Eugene Schneider acquired iron mines in Lorraine and began a program of mill, foundry, and shipyard building at Bordeaux and Toulon. And then, opportunely, the Russo-Japanese War arrived.

Not until after the close of this war did the real genius of the living Eugene Schneider begin to manifest itself. Russia needed rearming. The Krupps rushed in. The English firm of vickers rushed in. Eugene Schneider rushed in. There ensued a brief jockeying for position among the three firms--and it was Schneider, perhaps, who captured the best. "Buy from us," he whispered gently into the proper ears, "and pay with FRENCH money." It was not hard to arrange. The French Ambassador to Imperial Russia was then Maurico Paleologue, who was likewise a director in the Schneider Banque of l'Union Parisienne. The Russians made a brief call on Paris and came back to St., Petersburg with money with which to pay for Schneider armaments. From that time until, in 1918, the Soviet government of Russia expressed its official uninterest in paying the debts of the Czarist regime, sixteen billion gold francs, drained slowly from the savings of the French people, were loaned to Russia, secured by bonds that have long since been tossed on the rubbish heap. Most of the profit in the sixteen billion found its way back to Schneider-Creusot and is today in their factories and their bank accounts.

Yet the Czar's government was not wholly credulous. It seemed to have some qualms that so much Russian armament should be manufactured on foreign soil. This offered no problem to the armament makers. Schneider installed engineers and managers at the Putilov works in St. Petersburg. The Krupps did likewise. French newspapers screamed that the Krupps were spying. German newspapers screamed that the French were spying. But in 1914 found Schneider and Krupp engineers side by side on terms of cordial friendship, overseeing ordnance manufacture on behalf of Nicholas H, Czar of all the Russias

It was under Heuri's son--the present Eugene Schneider, now sixty-six years old, that the Schneider-Creusot company began to work upon a gigantic, world-wide scale. Its real expansion began with the turn of the contury. Eugene Schneider acquired iron mines in Lorraine and began a program of mill, foundry, and shipyard building at Bordeaux and Toulon. And then, opportunely, the Russo-Japanese War arrived.

Not until after the close of this war did the real genius of the living Eugene Schneider begin to manifest itself. Russia needed rearming. The Krupps rushed in. The English firm of vickers rushed in. Eugene Schneider rushed in. There ensued a brief jockeying for position among the three firms--and it was Schneider, perhaps, who captured the best. "Buy from us," he whispered gently into the proper ears, "and pay with FRENCH money." It was not hard to arrange. The French Ambassador to Imperial Russia was then Maurico Paleologue, who was likewise a director in the Schneider Banque of l'Union Parisienne. The Russians made a brief call on Paris and came back to St., Petersburg with money with which to pay for Schneider armaments. From that time until, in 1918, the Soviet government of Russia expressed its official uninterest in paying the debts of the Czarist regime, sixteen billion gold francs, drained slowly from the savings of the French people, were loaned to Russia, secured by bonds that have long since been tossed on the rubbish heap. Most of the profit in the sixteen billion found its way back to Schneider-Creusot and is today in their factories and their bank accounts.

Yet the Czar's government was not wholly credulous. It seemed to have some qualms that so much Russian armament should be manufactured on foreign soil. This offered no problem to the armament makers. Schneider installed engineers and managers at the Putilov works in St. Petersburg. The Krupps did likewise. French newspapers screamed that the Krupps were spying. German newspapers screamed that the French were spying. But in 1914 found Schneider and Krupp engineers side by side on terms of cordial friendship, overseeing ordnance manufacture on behalf of Nicholas H, Czar of all the Russias

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