851.5151/1937: Telegram
The Ambassador in France (Bullitt) to the Secretary of State
[Received August 18—3:48 p.m.]
1303. In the course of a conversation today I asked Bonnet to explain to me the meaning of Daladier’s statement of this morning, reported in my No. 1299 of August 18, 6 p.m.,41 in the course of which Daladier said that the Government was resolutely hostile both to exchange control and to a new devaluation of the franc. Bonnet said that this statement meant that neither measure would be adopted. When I asked what other alternative there was at a time when gold was leaving the equalization fund with such rapidity Bonnet replied that Daladier in the speech which he will make at the end of this week will suggest certain modifications in the application of the 40-hour law which he hopes will produce an increased confidence in the financial situation.
Bonnet added that no other measures were being contemplated and at some length described the reasons why the Government considers exchange control out of the question. I asked him how long he felt the equalization fund would last and he said that it still contained 13½ billion francs. I suggested that the figure was not quite so high as this; but he replied that he had had this figure officially from the Treasury this morning.
I asked Bonnet why the idea of a declaration of the French, British and American Governments denying the rumors of a joint devaluation of the franc, pound and dollar had been dropped. He replied that the British Government had refused to make any declaration of this sort. To the arguments of the French Government, the British Government had answered that any such declaration by the British Government [Page 296] at the present time would create anxiety in England and tend to cause further demands for gold. The French Government had not approached the American Government further with regard to this matter merely because of the British refusal to cooperate.
I suggested to Bonnet that a different interpretation was being put on Daladier’s words. It was being said that his statement with regard to the hostility of the Government both to exchange control and devaluation of the franc meant that he himself would not remain Prime Minister if a continued flight from the franc should drain the equalization fund but would resign and leave the ultimate decision to some one else. Bonnet asserted emphatically that there was no justification for this interpretation. Daladier had not the slightest thought of resigning.
Please repeat to Treasury.
- Not printed.↩