Office of the Historian

EUR files, lot 59 D 233, EUR subject files

No. 611
The Director of the Foreign Operations Administration Mission in France (Labouisse) to the Acting Secretary of State1

top secret
Paris, August 13, 1953.

Dear General: In Ambassador Dillon’s absence, I am writing with reference to his letter to you of August 4, 1953, in which he enclosed a memorandum of his conversations with Prime Minister Laniel2 concerning the economic and financial program which the Prime Minister hoped to undertake.

You will recall that one of the measures under consideration was the possibility of devaluing the French franc around the middle of this month. I have now been advised that the interested French Ministers and their advisers met earlier in the week to examine this proposal in greater detail. At that meeting it was decided that in the face of the strikes spreading throughout France it would not be possible to proceed with the devaluation as planned. Those who had already been hesitant because of the possible effects of a rate adjustment on the wage-price structure met with no opposition when they argued that it would be far too risky to add the possible inflationary pressures of such an operation to the internal pressures for wage increases arising out of the present labor difficulties. Accordingly, it seems that all plans for a devaluation have been shelved for the time being.

It is possible that, if the labor picture improves sufficiently, something might be done in the latter part of September, or that even if a general wage increase does have to be granted, the Government [Page 1376] might find it propitious to devalue later in the year—in the latter case, undoubtedly by a greater percentage than previously contemplated. However, it seems to me quite likely that the postponement means that it will not be politically possible for the present Government to devalue.

As Ambassador Dillon suggested in his letter, I believe it would be useful if you would arrange for Secretary Humphrey, Secretary Wilson and Mr. Stassen to receive copies of this letter.

Sincerely yours,

Henry R. Labouisse
  1. According to a note attached to this letter, copies of Labouisse’s letter were sent to Secretary of the Treasury Humphrey, Secretary of Defense Wilson, and Director for Foreign Operations Stassen.↩
  2. Document 609.↩