851.5151/971: Telegram

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

892. For Secretary of the Treasury from Cochran. After you telephoned me at 3 o’clock I saw Baumgartner at 4. The following is in confirmation of the message which I then telephoned to you at 5:30.

Baumgartner felt that most of the points which you had orally instructed me to raise with respect to the draft declaration communicated to you last night could be met by the French. He reminded me that the draft was purely French except for the use of a few phrases taken from the American and British replies and that my translation was strictly literal. He said that they would welcome suggestions as to rephrasing with the view to arriving at a common declaration which would be fitted for domestic consumption in each of the three countries.

Baumgartner said they were entirely willing to cut out such phrases as the one you cited about improving the standard of living of all social classes.

After talking with me Baumgartner consulted Minister of Finance Auriol and then telephoned me. He said that the Minister was not willing to concede entirely on the form of the declaration as introduced by the preamble. If they accept the idea of three simultaneous declarations but in the form which we suggested, that is “the Government of the United States, after consulting with the Governments of France and Great Britain declares et cetera” then Auriol essentially insists upon a common text. Toward that end they will continue to work and will be receptive to our ideas.

Baumgartner said that the Minister agreed with him that it might be to their own, the French, advantage to omit any reference to an [Page 552] eventual return to the international gold standard. I suggested that the British had only used the phrase defensively when pressed for a statement of monetary policy. Baumgartner said that the French would probably follow the Belgian system in devaluing. An embargo would be declared upon the export of gold and exchange operations would be put under temporary control at the time a call is issued for special assembly of Parliament. The declaration of policy might be made at that time. The Government would seek from Parliament authority to revalue the franc within certain limits, and legislation creating a stabilization fund. Baumgartner indicated to me the limits that would be recommended, that is in percentage of devaluation of present franc, and also translated such percentages into terms of francs to the pound. He said Leith-Ross thought the lower limit could be accepted by the British but said they might be nervous if the rate moved toward the upper limit. Baumgartner favors the Belgian system since they will want to watch developments in relationship between dollar and sterling before fixing final gold content of revalued franc.

Baumgartner said Chamberlain would not be in London for consultation with his assistants before Monday morning, so French expect no British reply before that day. Baumgartner said they, of course, had no objection to our consulting with the British if we wish. He hopes agreement on a common declaration may be reached early next week so that the complete monetary operation may be consummated before the end of the week. [Cochran.]

  1. Telegram in two sections.