Memorandum of Conversation, by Mr. Paul J. Sturm of the Supply and Resources Division

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Participants: Mr. Monnet, Mr. Valensi and Mr. Leroy-Beaulieu of the Delegation of the French Committee of National Liberation;
Mr. Acheson, Mr. Culbertson, Mr. Rostow, Mr. Merchant and Mr. Sturm of the State Department;
Mr. Ferguson of the Foreign Economic Administration.

The French representatives called at Mr. Acheson’s request to receive and discuss a proposed Mutual Aid Agreement governing lend-lease relations between the United States and all territories under the authority of the French Committee of National Liberation.

The aide-mémoire99 accompanying the proposed agreement was read and discussed. Mr. Monnet pointed out that certain of the proposals made in the aide-mémoire and agreement raised difficult issues for the Committee, as to which he had grave doubts:

The aide-mémoire rejected the French request that supplies for French prisoners of war be made available on lend-lease terms, on the ground that such a procedure would be contrary to established lend-lease policy, and not within any of the existing exceptions to it. By utilizing certain resources available to the Committee, as outlined, the French would be able to pay for such supplies.
Mr. Monnet reiterated his previous contention that for political and psychological reasons it was most important for the Committee to be able to announce to the prisoners that they had been supplied on lend-lease terms. He added, moreover, that the French were unable to distinguish between supplies made available to soldiers while they were still fighting and after they had been captured. Mr. Monnet said also that while the yearly expenditures involved, estimated at approximately thirty million dollars, were considerable in view of the small dollar resources the Committee felt were at its disposal, the principle was of even greater concern. He ended by asking that the United States Government reconsider its position. Mr. Acheson replied that while we could and would review the matter, he could not be optimistic as to the result. Meanwhile, measures could be taken to facilitate the purchase of supplies for prisoners of war at the same time procedures were devised for meeting the cost of civilian supplies.
The size of the expected French dollar deficit, and of possible measures to reduce it, was then discussed.
Mr. Monnet pointed out that some of the difficulty stemmed from a failure on the part of lend-lease officials to enforce Articles I (a) and (c) of the Modus Vivendi of September 25, 1943, in that too little attention had been given to the distinction between military aid, which is available on lend-lease terms, and civilian supplies, for which Article I (b) provides that payment shall be made in dollars. Mr. Acheson agreed that steps must be taken to rectify the past failure and insure against its repetition.
Mr. Monnet went on to say that further difficulties lay in the way of the Committee’s paying dollars in that most of the exports from North and West Africa were sold to the British for sterling. Under the arrangements with the British, the French Committee cannot dispose of its sterling without the consent of the British Government. Mr. Acheson agreed that the United States Government should explore the possibility of taking over British contracts, or of utilizing the current sterling balance, estimated at a minimum of fifteen million pounds, to pay for American civilian supplies.
As to United States purchases of French supplies, other than those reserved for stockpiles, we had indicated our willingness to purchase needed materials and commodities, but were awaiting a report from the French experts as to what was available. Mr. Monnet replied that such a list had not yet been provided from Algiers, although he had urgently requested it.
Concerning the proposal made in the aide-mémoire that the French Committee use the gold assets of the Bank of France within North and West Africa, Mr. Monnet stated that he felt sure the Committee would be most reluctant to take such a step. Its conception of its status, worked out in large part with this Government, would make the use of such assets extremely difficult for it.

  1. Infra.