The vanes are indeed responsible for maintining prop pitch. They do not generate electricity, they do work mechanically/hydraulic.
I do remember that from a certain airspeed on, they induced a rotation of the spinner relative to prop hub movement, induced by dynamic airflow. This movement is driving the pitch control mechanism. I'm not shure at the moment if it's by mechanical or hydraulic means. I scanned my tiny library but unfortunately I didn't find any illustrations yet

I'm sure someone will soon dig up some details, if not I'll try to have alook at my university's library in the next few days.
BTW, the lead developer for variable pitch propeller mechanisms for Argus from 1935-1938 was Hans Jacob Reissner, who emigrated to the States and was working at the Illinois Institue of Technology.