ECA Telegram Files, FRC Acc. No. 53A278, Paris Toeca: Telegram

The Chief of the ECA Mission in France (Bruce) to the Administrator for Economic Cooperation (Hoffman)


us urgent

Toeca 794. Counterpart Series No. 1. Reference Toeca 776 and Toeca 536.1

[Here follows a review by Bruce of the “critical problem” of French public finances, a description of proposed measures by the French Government for dealing with it, and a suggestion that the Economic Cooperation Administration (ECA) and the National Advisory Council on International Monetary and Financial Problems (NAC) might consider approving in principle, in advance, monthly releases to France of 25 billion francs (about $70 million) of counterpart funds.]

18. I have hesitated before asking you and NAC to give this Mission discretionary powder about such releases since it is not agreeable [Page 638] to us or to you to operate in a crisis atmosphere. However, I feel that as in the past a certain flexibility of decision on our part is essential. French situation is in delicate balance. There has been a marked improvement in fact but a still greater one psychologically. Present government is as concerned as we are over making possible a successful issue from its financial tribulations. Although we are not fully satisfied with efforts which have been enacted into law, we remain convinced that we must, under adequate restrictions, continue to support a policy which within limitations of political necessities is soundest; that this country has adopted in a decade. As long as Queuille administration is willing to tackle difficult problems, it deserves any assistance we can properly give. Refusal counterpart would create government crisis. Aside from economic deterioration that would ensue, I do not believe at this time that any successor government could do better and seriously doubt whether it would have the courage to attempt as much. Parliament is in a restive mood and can be tactfully led but not driven.

19. Ambassador Caffery fully concurs this message.

20. OSR has participated and supports recommendation.…

Pass to State and Treasury.

  1. Neither printed.