851.51/9–1247: Telegram

The Ambassador in France (Caffery) to the Secretary of State
top secret

3725. I have been given the following memorandum by the Minister of Foreign Affairs:

“The Ministry of Foreign Affairs believes it useful to furnish to the Embassy of the United States the following precisions on the dollar situation of France and on its perspectives:

In the same way as it follows from the attached technical note, (summarized in Embassy’s 3661, September 91) the reserves in gold or in dollars of the French Treasury will be probably exhausted between the fifteenth and thirty-first of October next. With regard to the gold reserves of the Bank of France, at present reduced to $445,000,000 it is impossible to deduct again a portion of these reserves for the benefit of the Treasury, because these reserves have fallen to a level very much below the security minimum, and they are besides necessary to cover a certain number of short-term engagements in foreign exchange or abroad. [If?] the French Government could not procure between now and October 15 new resources, it would be obligated to stop the dollar purchases which it has maintained up to the present; namely, purchases of cereals, coal, and fats.
On the supposition that France obtains, within the framework of a European program, external assistance permitting it to assure its imports beginning April 1, 1948, the external assistance of which it would have need until that date in order to maintain its current purchases in the American continent would be in the neighborhood of $600,000,000.

In default of assistance of this magnitude, it would be necessary for France to sacrifice a part of its essential imports in raw materials and foodstuffs in the American continent which are indispensable to the functioning of its economy.”

  1. Not printed.