851.24/101: Telegram

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

2867. For the President and the Secretary. I had a most serious conversation with Paul Reynaud last night on the subject of the financial resources of France and England and purchases in the United States. He said that he had now received exact statements from the different French Ministries with regard to their needs for imported materials of all sorts during the coming 12 months.

It was his considered opinion that French resources abroad would just about cover these needs without any additional payments whatsoever for additional airplanes in the United States (incidentally, Reynaud stated that he did not contemplate any liquidation of French holdings in the United States in the immediate future).

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Monnet informed me last night that Daladier had given orders that all other purchases abroad should be cut down in order to provide a sufficiently large fund for new airplane purchases in the United States and I believe that these purchases will be made (see my telegram No. 2813, November 23, 7 p.m.).

I feel, however, that we should realize now that, in approximately 12 months, France and England will have exhausted to such an extent their resources of foreign exchange—including not only those which are now in liquid form but also those which it will be possible to liquidate—that the financial problem will become serious in the [extreme?].

As you know there is an important body of opinion in the German Government which argues that Germany will not need to attack on the western front but that France and England will collapse financially and will be unable to find funds for purchases abroad before a German collapse—since it will be impossible for the French and British to pay for purchases in the United States except by cash.

It is impossible to state at the present time that this German calculation is wrong.