851.5151/1758: Telegram

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

395. From Cochran. I called at the Bank of France at 11:30 this forenoon. The franc-sterling rate had opened at around 157. There had been such a demand for sterling that the French control was obliged at once to let the rate slip or face the possibility of exhausting its 2 billion francs of gold and foreign exchange. By the time the rate moved to 162 there began to appear some hesitancy among the operators and the control then stepped in and pushed the rate back to 161.50. The slight interventions made at various points to feel out the market and the intervention above described had cost the control 400,000 pounds at the hour I was in the bank.

Before starting operations the bank tried to get instructions from the new Government. Prime Minister Blum24 who is also holding the Treasury portfolio replied that he was not interested in rates. No instructions could be received from Spinasse, the Minister in charge of the budget. The telephone in the office of the Minister of Finance [Page 270]was answered by a newspaper man who is close to Blum and has presumably been given a confidential post in that Ministry. [Cochran.]

  1. The second Cabinet of Léon Blum was formed on March 13 and resigned on April 8, 1938.