851.5151/1828: Telegram

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

700. From Cochran. In accordance with instructions received at 10 p.m., last night from Secretary Morgenthau, I called at the Ministry of Finance at 11 p.m., and told Rueff that:

The United States monetary authorities would continue to do business with and in behalf of the French authorities on Wednesday;
Secretary Morgenthau was giving the whole matter his very serious consideration but would require at least one more day to reach a decision;
The French authorities should exercise caution to avoid official leaks particularly of such a nature as to reflect criticism on any party to the present negotiations it having been noted that an American news ticker carried an item yesterday afternoon to the effect that the [Page 278]French were delaying a monetary decision pending reply from Washington.
The Federal [Reserve Bank?] had purchased only 1¼ million francs in New York Tuesday.

Rueff made a memorandum of these points and took it to Marchandeau who was in conference with Rueff and Fournier.34 Rueff asked me to await any reaction from the Minister. At 11:30 Rueff said a telephone call was just coming in from the French Embassy in Washington to the Ministry for Foreign Affairs here and asked that I wait until Marchandeau knew the results thereof as there might be some news of common interest.

Fournier chatted with me while we were waiting. He said that telegraphic press reports had been received here last evening of conferences at the American Treasury on the French monetary situation. He feared that the growth of these reports and rumors would lead to increased pressure on the franc. He considered his exchange losses yesterday fairly severe. He fears that the control will have to give ground each day that uncertainty exists and that in the end 175 may be reached even despite attempt to resist depreciation, and through this gradual decline all opportunity for maneuvering by the control will be lost, an important sum of gold and foreign exchange will be sacrificed. Fournier departed very tired at 12:30 telling me that he could not run the Bank of France during the day and confer in the Treasury all night.

At 1:00 o’clock Rueff had a telephone conversation with the French Financial Attaché in Washington and gave him a reply to the message transmitted earlier in the night by St. Quentin to Bonnet35 which latter message was the same as that which I had delivered as above set forth. Rueff asked me to endeavor to get the French reply directly to Secretary Morgenthau during the night lest Leroy Beaulieu might not succeed.

The following is an English translation of the reply Rueff gave over the telephone to the Financial Attaché and which I took down for communication to Secretary Morgenthau:

“We had thought that the reply which had been asked in our communication of yesterday at 4:00 p.m. (through Cochran) would be given tonight during the appointment given to our Ambassador in Washington by Mr. Morgenthau. In consequence the Council of Ministers has been summoned for Wednesday morning at 8:30 to take a final decision before the opening of the Paris market. Taking account of the fact that Mr. Morgenthau’s communication (just given by Cochran) confirms the rumors which circulated in Paris this past evening with respect to a news item being published by the American tickers in New York on the exchange question it is feared that the [Page 279]pressure on the market will be stronger than preceding days. It appears essential that a reply be given before the meeting of the Council of Ministers.”

At 2:40 this morning I reached Mr. Lochhead of the Treasury by telephone from the Embassy and gave him the foregoing information and message. At 3:00 o’clock I telephoned Rueff reiterating that he should not expect a reply from Secretary Morgenthau before the Council meeting this morning. [Cochran.]

  1. Pierre Fournier, Governor of the Bank of France.
  2. Georges Bonnet, French Minister for Foreign Affairs.