851.5151/952: Telegram
The Chargé in France (Wilson) to the Secretary of State
844. From Cochran. Reference to my telegram 843, September 8, 8 p.m., when Minister of Finance Auriol handed me the document [Page 544] under reference yesterday evening he stressed its secret and unofficial character. He said that any equivocation in the present negotiations would lead to an attack on the franc which would necessitate immediate imposition of exchange control. He seeks Secretary Morgenthau’s reaction to this draft including any suggestions for modifications. In my 831, September 2 [4], 5 p.m., I gave the background for this draft. There follows an English translation of the constituent parts of the draft, which has been checked by Rueff.
“Proposed note to the American and British Governments.
1. The Government of the Republic, while it has always discarded the possibility of unilateral devaluation, a simple episode in the economic struggle among nations, susceptible in turn of giving rise to new devaluations, is, on the contrary, very desirous of a real economic and monetary peace. It sees in this the principal means of putting an end to the development of autarchic tendencies, thus lessening the restrictions and restraints of all sorts which paralyze trade and which create an atmosphere of general insecurity, involving the gravest dangers to peace.
2. To this end the Government of the Republic desires in the first place to remedy the economic disequilibrium occasioned in the world by the fall of prices and by resultant devaluation of certain currencies. It is ready in so far as it is concerned to participate in a prestabilization agreement fixing the new monetary relations with precision and clarity, taking into account the world level of prices. The stipulations of such an arrangement should be maintained through the practice of close collaboration among the contracting parties and could not be modified except by common accord or in case of exceptional and unforeseen circumstances, the final objective of the contracting parties being the general return to the international gold standard when the conditions necessary are found realized.
The text which constitutes an annex to the present note if it receives the approval of all the parties concerned would presumably be of a nature to lead to the desired result.
3. The Government of the Republic deems also that the conclusion of the aforementioned agreement by attenuating the disequilibrium which at present isolates certain national economies should make possible immediate and vigorous action with a view to reduction of obstacles to trade. It is ready to consult with the American and British Governments as to the conditions under which such action could be undertaken with a view to general resumption of trade and international transactions which it holds to be the necessary preface to political organization of peace.
(End of note.)
Proposed prestabilization agreement.
The high contracting parties are decided to devote all their efforts and to establish the closest collaboration among themselves towards maintaining the rates of their respective currencies within the limits fixed in the attached table. These limits shall not be modified except by common agreement or subject to notifying the contracting powers in case of exceptional and unforeseen circumstances, the final objective [Page 545] of the contracting parties being the general return to the international gold standard when the conditions necessary are found to be realized.
(Table, read down:)
-
Currencies:
- Dollar
- Pound
- Franc
-
Rate against:
- Pound, franc
- Dollar, franc
- Dollar, pound
- Lower limit:
- Upper limit:”
(The above headings in the final paragraph are for a table which the French prefer to leave blank for the present. The rates would be established once the text of the agreement is approved in principle.)
Rueff suggested to me privately the need for haste lest circumstances may yet force France to act unilaterally. [Cochran.]
- Telegram in three sections.↩