The First Laval Government
Tardieu's government ultimately proved unable to weather the Oustric Affair. After the failure of the Oustric Bank, it appeared that members of the government had improper ties to it. The scandal involved Minister of Justice Raoul Péret, and Under-Secretaries Henri Falcoz and Eugène Lautier. Though Tardieu was not involved, on 4 December 1930, he lost his majority in the Senate. President Gaston Doumergue called on Louis Barthou to form a government, but Barthou failed. Doumergue turned to Laval, who fared no better. The following month the government formed by Théodore Steeg floundered. Doumergue renewed his offer to Laval. On 27 January 1931 he successfully formed his first government.
In the words of Léon Blum, the Socialist opposition was amazed and disappointed that the ghost of Tardieu's government reappeared within a few weeks of being defeated with Laval, "like a night bird surprised by the light" at its head. Laval's nomination as premier led to speculation that Tardieu, the new agriculture minister, held the real power in the Laval Government. Laval thought highly of Tardieu and Briand, and applied policies in line with theirs. Laval was not Tardieu's mouthpiece. Ministers who formed the Laval government were in great part those who had formed Tardieu governments but that was a function of the composite majority Laval could find at the National Assembly. Raymond Poincaré, Aristide Briand and Tardieu before him had offered ministerial posts to Herriot's Radicals, but to no avail.
Besides Briand, André Maginot, Pierre-Étienne Flandin, Paul Reynaud, Laval brought in as his advisors, friends such as Maurice Foulon from Aubervilliers, and Pierre Cathala, whom he knew from his days in Bayonne and who had worked in Laval's Labour ministry. Cathala began as Under-Secretary of the Interior and became Minister of the Interior in January 1932. Blaise Diagne of Senegal, the first African deputy, had joined the National Assembly at the same time as Laval in 1914. Laval invited Diagne to join his cabinet as under-secretary to the colonies, making him the first Black African in a French government. Laval called on financial experts such as Jacques Rueff, Charles Rist and Adéodat Boissard. André François-Poncet was brought in as under-secretary to the premier and then as ambassador to Germany. Laval's government included an economist, Claude-Joseph Gignoux, when economists in government service were rare.
France in 1931 was unaffected by the world economic crisis. Laval declared on embarking for America on 16 October 1931, "France remained healthy thanks to work and savings." Agriculture, small industry, and protectionism were the bases of France's economy. The conservative policy of contained wages and limited social services, allowed France the largest gold reserves in the world after the United States. France reaped the benefit of devaluation of the franc orchestrated by Poincaré, which made French products competitive on the world market. In the whole of France, there were 12,000 people unemployed.
Laval and his cabinet considered the economy and gold reserves as means to diplomatic ends. Laval left to visit London, Berlin and Washington. He attended conferences on the world crisis, war reparations and debt, disarmament, and the gold standard.
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