851.5151/1727: Telegram

The Ambassador in France (Bullitt) to the Secretary of State

268. From Cochran. Monick, French Financial Attaché in London called on me at 5 p.m., February 17. He said that he had that day come from London. Earlier in the week he said he and Ambassador Corbin had talked with Sir John Simon20 in the presence of Phillips and Waley21 and that they had interested the British in the idea of opening tripartite conversations. Since his arrival in Paris he said that he had talked with the Minister of Finance but that no other official in the Ministry and no one in the Bank of France was informed concerning his visit. Monick stated that the Minister of Finance wanted me to come to the Ministry at 5:00 o’clock today.

When I called at the Ministry this evening at the fixed hour I was received by Marchandeau with Monick present. The Minister referred to our recent conversations in regard to collaboration between the tripartite countries. He reaffirmed his intention to remain faithful to the Tripartite Agreement and to maintain monetary freedom in France. He said we must realize that the task is a difficult one for France and that precautionary steps should be taken to prevent France being drawn into the danger of exchange control if conditions should become more critical.

At the Minister’s request Monick summarized to me an account of his visit with Simon while he glanced at a memorandum of the conversation which he had prepared for the Minister of Finance. According to Monick he had told the British that certain circles in France were becoming disappointed over the failure of the tripartite arrangement to hold the franc steady and that the idea of exchange control for France was gaining adherents. Furthermore, the belief was advanced by Monick that the best countermove against this would be some international action by the tripartite countries in unison. Monick said [Page 264]that the British had accepted the idea of opening tripartite conversations.

The Minister asked that I submit the proposition to Secretary Morgenthau stressing the desire of both the British and French Treasuries that the matter be handled most intimately and be considered strictly confidential. I told him that I would promptly send a cablegram but that they had not been specific as to what they envisaged accomplishing in the conversations. I asked if they had any definite plan in mind insofar as France was concerned. The Minister insisted that the field should be left open for wide discussion and that France would enter it without any preconceived plan. He said it was the spirit of the Tripartite Agreement that the 3 countries should consult together when any serious situation with respect to the currency of anyone of them threatened. When I still insisted that I be provided with something more concrete upon which to base a message to the Secretary of the Treasury the Minister of Finance gave me a memorandum of which the following is a translation.

“Is the American Treasury disposed to open with France and England conversations which would have the following object: (a) to study the concrete possibilities of developing and extending the cooperation inaugurated by the Tripartite Agreement; (b) to examine particularly the possibility of establishing a new stage in the direction of more definite stability, while maintaining the necessary comparisons between their treasuries and institutions of issue.”

  1. British Chancellor of the Exchequer.
  2. Sigismund D. Waley, Principal Assistant Secretary of the British Treasury.