Paribas in Central Europe in the inter-war period

At the end of the First World War, France was concerned about the continued hold of its enemies during the conflict, Germany and Austria, over the economy of Poland and the other new states of Central and Eastern Europe. The French government found a powerful ally in Banque de Paris et des Pays-Bas (Paribas). The bank’s Managing Director, Horace Finaly, launched an ambitious policy in Poland via a local representative, Major Jean Gallaud. The correspondence between Gallaud and the Paris management of Paribas between December 1919 and July 1924, conserved in the BNP Paribas archives, makes it possible to follow the implementation of this policy almost step by step.
France, Poland and Banque de Paris et des Pays-Bas
The French government encouraged French companies and banks to set up business in the region with a view to capturing the new markets and reinforcing France’s political and economic influence. Banque de Paris et des Pays-Bas was directly encouraged in its projects by Joseph Noulens, France’s first ambassador to Poland in 1919-1920. The Paribas representative was the very embodiment of this symbiosis between the French state and private interests. Major Gallaud, a navy captain and career soldier with several years of experience in Russia, left Prague on 30 December 1919 for Warsaw,


Major Gallaud, a navy captain and career soldier with several years of experience in Russia, left Prague on 30 December 1919 for Warsaw, where he would remain for many years. He arrived in Poland not only as Paribas’ representative but also as part of an official intelligence mission for the French Ministry of the Navy. He surrounded himself with officers and members of the French military mission, which advised and trained the Polish army. He was even authorised to send the bank’s mail via the military post – safer and faster in the chaos of post-war Poland.
Gallaud maintained an extensive correspondence with the CEO of Paribas, Horace Finaly, and his deputy director, Couture. Gallaud’s letters to Finaly illustrate his strong involvement in the project. Here, as elsewhere, the visionary and tireless CEO was making his mark. With the bank having come out of the First World War thoroughly drained, Finaly set about looking for new markets in Eastern Europe. The CEO’s strategy was thus entirely consistent with that of the French state.
From this standpoint, Paribas’ presence in Poland was crucial. These efforts were to bear fruit for the mutual benefit of both nations. Between the wars, Poland became a major destination for French capital abroad. France alone accounted for 10% of the total, making it the main source of foreign capital in Poland.
Chaos in Poland
However, Gallaud was up against a host of obstacles in developing Paribas’ business in Poland. In his letters, he writes of the chaos into which the country had plunged. Reunifying Poland, divided until the First World War between Russia, Austria and Germany, was an extremely difficult task. Paribas’ envoy unambiguously stated that, “until now, Polish unity has been an empty word”. The country was prey to major political fractures, resulting in frequent changes of government and a systematic slowness in decision-making.
The country was also in a state of total mobilisation as a result of the Polish-Soviet war. One and a half million men and women were called up for military service and the Polish economy was paralysed by requisitions. Major Gallaud was personally familiar with this state of affairs, his flat having been requisitioned and allocated to three Polish officers. The Paribas representative had great difficulty in getting them to leave. The country was also faced with a litany of strikes, called in reaction to galloping inflation. While one French franc was worth 197 Polish marks in August 1921, by September it was worth some 400 Polish marks.

Genuine but hampered economic potential
The general disorganisation of the Polish economy and society was also reflected in the banking and administrative sectors, hampering exports and Poland’s economic potential. Gallaud considered that Poland had significant potential in this regard. The country was rich in resources and business activities. Congress Poland, occupying the area around Warsaw, was one of the most industrialised regions of the Russian Empire. German Silesia was home to numerous collieries and a developed metal industry. The city of Lodz was a major centre of the textile industry, while Galicia, formerly an Austrian territory, produced oil, and Poland as a whole had some 100 sugar factories, making it one of Europe’s leading sugar producers.
But the country was worn out after years of war. Putting the Polish economy back on track called for substantial efforts. Navigating a difficult economic and military situation, Major Gallaud nevertheless managed to guide the bank through these troubled waters and laid the foundations for its large-scale operations in Poland.
An ambitious project
One initiative in particular occupied the time of the Paribas representative: a project to vertically concentrate paper production. From the port of Danzig, cut timber was transported by inland waterway, with wood pulp then being transported by sea to France. Gallaud was the linchpin in setting up this business, central to Paribas’ initial investment plans in Poland in the immediate post-war period.
Soon after arriving in Warsaw, Gallaud received a letter from Finaly in January 1920 stressing the importance of setting up a Franco-Polish shipping company, Compagnie Franco-Polonaise de Navigation. Finaly described it as “the starting point of a commercial movement between France and Poland”. Founded in association with shipping company Worms & Cie, the new company formed the final link in the chain forged by Paribas in Poland. Two further companies were involved in this ambitious project.


The project took off with the revival of the Polish economy following the signing on 18 March 1921 of the Treaty of Riga, putting an end to the conflict between Poland and the Bolsheviks. Between April and June alone, freight shipments to the port of Danzig doubled. The signing of the Franco-Polish Alliance in February 1921 further encouraged the development of economic relations between the two nations.
Leaving his post as Paribas’ representative in Poland in 1924, Gallaud was highly optimistic about the future of the company, and in particular that of La Fluviale (or “Żegluga”). In March 1921, he had purchased 40,000 m2 of land in Danzig for the construction of warehouses, as those already rented by the company no longer sufficed to cope with the increase in the company’s transport business.
However, this ambitious move came to an unfortunate end after Gallaud’s departure, as Société de Navigation went into liquidation in 1927-1928. But Gallaud played a pioneering role in helping Paribas to secure a foothold in Poland after the First World War. He paved the way for Paribas’ investments in the banking and finance sector. These investments included the creation of Banque Franco-Polonaise in 1919;rail transport and electricity distribution (a long-standing investment sector of Paribas) with the EKD line, Poland’s first electrified railway line inaugurated in 1927; and Galician oil.
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