550.S1/775: Telegram
The Chargé in France (Marriner) to the Secretary of State
[Received May 15—5:45 p.m.]
221. Reference my 218, May 15, 5 p.m.,18 Cochran19 this morning visited Rist20 who had conferred on Friday and Saturday with [Page 607] Daladier, Bonnet21 and Moret22 concerning the London Conference topics, particularly the customs truce. Rist explained that the French are agreeable to a customs truce provided there is also a monetary truce. He feels that the monetary question is more vital than that of tariffs and that it is useless to convene the Conference with any hope of success unless an agreement is reached before June 12 between the three powers: the United States, Great Britain and France, as to provisional stabilization of the dollar and of sterling at rates which must not differ importantly from those values at which de jure stabilization will subsequently be achieved. He suggested that triangular conversations toward this end should take place and recommended the creation of an American equalization fund.
Rist is as positive as ever that France will not depart from the gold standard. He referred, however, to the nervousness of French industrialists and agriculturists over the actual depreciation of the dollar and the threat of further depreciation. So long as the French authorities can cite to these elements that American commodity prices have risen as far as the dollar has depreciated and that this rise if [is?] registered in American export prices, Rist believes that French action towards fixing a compensating duty in the form of a surtax on American imports can be held off. Rist cannot state at this early date whether dollar depreciation has had any influence on import trade into France from the United States. French importers have brought to the attention of their officials catalogues of certain American exporters quoting lower prices since the departure of the dollar from the gold standard.
Rist again expressed to Cochran his conviction that France will not undertake open market operations, especially after the lack of favorable results was derived from American experiment. He adds that in spite of French expenditures of over 35 billion francs in recent years for public works, unemployment is increasing. It is interesting to note in this connection that while the index of employment has gone down the index of production has risen due to mechanization and rationalization of processes.