851.5151/952: Telegram

The Secretary of State to the Chargé in France (Wilson)

342. For Cochran from the Secretary of the Treasury. Your 844 September 9th. The document which Minister of Finance Auriol gave you last night for transmission to this Government has received our most interested consideration.

Please give the Minister of Finance the following message verbatim:

I have studied with most interested attention the text of the communication which the French Government indicates it might send to the American and British Governments. I understand the circumstances which have brought the French Government to consider realignment of the franc and to seek to take this action in such a way as it might result in bringing added stability into the field of foreign exchanges and increasing the movement of international trade. Furthermore I foresee that the creation of such stability should correct and ultimately bring to an end the disturbing and unwelcome movement of funds from one monetary center to another, which in itself is so clearly an element of uncertainty in the exchange and monetary situations. It would bring it about that the movements of capital would be governed by economic considerations and not by panic fears [Page 546] which have so recently caused extensive and disturbing refuge movements.

The text as now drafted seems to me possibly to raise certain questions and to foreshadow certain immediate commitments which I do not believe to be essential to the achievement of this desirable purpose, and on which the American Government must necessarily express its views. I have in mind particularly the last sentence in the English translation of numbered section 2. I do not wish to suggest any specific revision of the text of this communication but rather merely to state what the position of this Government has been and would be in the contingency which his communication envisages:

It is and has long been the purpose and constant effort of this Government to maintain stability of the dollar in international exchanges, and thereby to contribute to continued exchange stability, and during the large part of this period substantial stability has been achieved.
This Government has not been unmindful of a like purpose and effort on the part of the British and the measure of success which has attended their efforts.
Should the French Government for reasons of domestic policy realign on mutually satisfactory basis the value of the franc in international exchange, this Government will continue to use appropriate available resources for maintaining stability in international exchange on such new basis in the confident expectation that the British authorities will continue their purpose and effort in the same direction.
The French Government will understand that in the continuous development of this Government’s policy and decisions in the exchange field our ultimate and final decisions will have to take into consideration internal prices and economic conditions.

This Government would anticipate that some statement of intention substantially similar to that which it has just made would be forthcoming as well from the French and British Governments and possibly given simultaneous publication by all three Governments. This Government is furthermore prepared to discuss the precise measures that the Treasuries of the three countries might contemplate in immediate fulfillment of this statement of intentions. [Morgenthau.]