Memorandum by Mr. Jean Monnet of the French Supply Council at Washington to the Assistant Secretary of State ( Acheson )
I. –The modus vivendi on Reciprocal Aid in French North and West Africa signed at Algiers on September 25, 1943,96 provides that military supplies delivered to the French Committee will come under Lend Lease, whereas civilian supplies will be paid for in dollars by the French Committee of National Liberation. Article V expressly stipulates that “provisions which call for payments in dollars have been decided upon in view of the special situation arising from accumulated dollar balances and availabilities of dollar funds due to the presence of United States troops in French North and West Africa. Revision of the payment provisions of this modus vivendi will be made should the situation require.”
When the modus vivendi was signed, the United States and French authorities agreed that discussions should be held in the near future on the possibilities of concluding a general agreement on reciprocal aid which would apply to all French territories.
II. –During the discussions previous to the signing of the modus vivendi, the French Delegates expressed doubts as to the possibility for the French Committee to continue in the future to pay for civilian supplies. They pointed out that due to the decrease in the number of United States troops in North Africa, and to the functioning of reciprocal aid, the returns in dollars from the purchases of francs by the United States Army would be reduced whereas the total of imports would tend to increase.
On November 30, 1943 the dollar balances of the Treasury in Algiers amounted to twenty five million dollars whereas the total due for [Page 749] civilian goods, which had yet to be paid for, amounts to fifty million dollars. Even if the holdings from the “Caisse centrale” in London and from the various colonial foreign exchange offices of the former “Free French” territories are added to the resources of the Treasury, the total of the resources available to the Committee is not in excess of fifty million dollars. (A detailed statement of all dollar balances is attached.)97
III. –Therefore the dollar balances of the French Committee are hardly sufficient to settle the total of the outstanding payments due for the civilian goods which have been imported in North Africa up to the present time. Moreover the imports of civilian goods are only a fraction of the Committee’s dollar expenditures. In addition, its various Missions in the United States and in the Western hemisphere have to be paid in dollars. The Committee must also provide in dollars for the expenses incurred in the distribution of prisoner of war packages, and must also buy with dollars the pesetas needed for the upkeep and care of French refugees in Spain. A detailed statement of the amounts needed for this is also attached.98
IV. –Under these conditions, the French Committee is led to request application of Article V of the modus vivendi, which contains provisions for the revision of conditions of payment. It is not their object to make any profit out of the presence of American Troops in French North Africa. They are willing to keep only a minimum reserve for the special expenses referred to under paragraph III above, and ask that the portion of civilian supplies which they can no longer pay owing to their lack of dollar exchange should come under lend lease.
V. –The present situation illustrates the need for a general lend lease agreement which would cover all French territories on a uniform basis. The dollar balances of the French Committee should be pooled and checked against the dollar requirements of all the territories under the jurisdiction of the Committee and the financial provisions of the new agreement should be drafted with due consideration to this problem.