851.51/12–1647: Airgram
The Ambassador in France (Caffery) to the Secretary of State
A–1742. For State and Treasury. Certain comments by Mr. de Margerie, Assistant Director, Division of Foreign Finance, Ministry of Finance, in a conversation on December 13 may be of interest:
Mr. de Margerie said that he had just surveyed the immediate requirements of the French Treasury for dollars and the balance available in the Stabilization Fund. On the basis of this survey his previous estimate that a payments crisis would be faced soon after December 20, if interim aid did not become available before that date, was not changed. De Margerie said he was encouraged by the reported decision of the House and Senate permitting RFC funds to be used immediately to furnish $150 million of interim aid requirements and the decision making the interim aid program retroactive to December 1. Because of the retroactive aspect it would be possible to release funds earmarked for certain imports as soon as interim aid funds were received. After the interim aid bill is passed De Margerie said they would draw up their requirements for the next few months. At that time he would be glad to review with us the dollar payments picture.
De Margerie stated that he was not in a position to comment on the press reports that Minister Mayer1 planned to seek agreements with the United States, Canada, Argentina and other western hemisphere countries to bring about an immediate increase of food imports in France. In his opinion, however, all possibilities to achieve the goal would certainly be explored. Many of the officials in the French Government were very concerned over the necessity of increasing availability essential consumption items, particularly food. The necessity of an upward adjustment in wages was acknowledged but it was also recognized that unless there was an accompanying increase in food availabilities the wage increases would soon be merely nominal. The success of any stabilization program obviously hinges on bringing about an increase in the “real income” of the working classes. This can only be done by the maintenance of agricultural prices which in turn depends upon food availabilities.
De Margerie continued that it was a general view that the recent success of the Government in meeting the social crisis has brought [Page 817] about an unusually favorable political situation to lay the groundwork for a solution to the economic and financial difficulties that had long evaded the French Government. The Government, however, must take an immediate advantage of this opportunity. Without doubt, unless there is improvement in economic and financial conditions, it will soon disappear and when it does, conditions may deteriorate very rapidly. For this reason it could be expected that the Government will make every effort to find the resources to take advantage of its opportunity. De Margerie was not certain what form efforts to obtain food imports would take but suggested shifting interim aid funds to obtain a greater proportion of food imports, trade agreements, or perhaps additional credits.
(On the other hand, a high official of the Monnet Plan states that the French Government is under no illusions regarding the possibility of finding additional food imports, in view of world short supply, but he confirmed that everything possible would be done to maximize food availabilities and suggested that something might be done to increase supplies of meat.)
De Margerie was quite alarmed over the newspaper reports that the Senate–House Committee had agreed on amendments providing that not more than ten per cent of the interim aid funds could be used for purchases outside of the United States and that none of the funds could be used for purchases at prices above prevailing U.S. prices for similar commodities. He noted another proposed House amendment which provided that petroleum products should be purchased outside of the U.S. if at all possible.
When asked for a breakdown of sources of imports to demonstrate the difficulties that may arise, de Margerie submitted later the followg:
| Wheat | —85 percent from US; |
| 15 percent from Argentina; | |
| Fats and Oils | —50 percent from US; |
| 50 percent from Philippines; | |
| Coal | —88 percent from US; |
| 12 percent from Ruhr; | |
| Petroleum | —35 percent from US: |
| 40 percent from Venezuela; | |
| 25 percent from Middle East; | |
| Fertilizer | —60 percent from US; |
| 40 percent from Chile. |
- René Mayer, French Minister of Finances and Economic Affairs.↩