Foreign Relations of the United States, 1949, Western Europe, Volume IV

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

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

secret
priority

Paris, August 3, 1949—1 p. m.

Toeca 1119. Counterpart Series No. 52. Reference Ecato 794¹ and Toeca 1124.² Request your approval letter quoted Toeca 1104³ and following reply:

Begin text. I have received your letter of August (blank) 1949 in which you request the agreement of the United States Government to the immediate withdrawal of 30 billion francs from the special account of the Credit National to finance investment and reconstruction expenditures during August, September and October. You indicate that such a release will make it possible to use resources normally allocated to such expenditures to cover other charges which the French Treasury will have to meet during this period.

I have taken note of your statement concerning the special difficulties with which it is expected the French Treasury will have to cope in the next few months by reason of the seasonal disequilibrium between receipts and expenditures and by reason of certain developments in French public finances tending to reduce unduly the working balances available to the French Treasury. I have also taken note of your statements concerning the economic and financial program which the French Government is planning to put into effect during the coming months in order to continue its efforts towards internal stabilization and to promote liberalization of external trade and payments.

I am authorized to inform you that the United States Government agrees to the immediate withdrawal of 30 billion francs from the special account to finance investment and reconstruction expenditures under the arrangements proposed in your letter. As has been made clear in the discussions between representatives of our two governments concerning your proposal, the United States Government agrees to this withdrawal on the specific understanding that there will be no modification in the announced policy of the French Government to cover all public expenditures in 1949 from non-inflation resources [non-inflationary sources?]. In addition, it is understood that the French Government remains firm in the decision set forth in your letter of April 26, 1949⁴ to Mr. Bruce, to take the necessary measures to sterilize any resources arising in 1949 from a net increase of outstanding public expenditure drafts or Treasury bills held by the Bank of France, the banks, or other establishments maintaining current accounts in such short-term bills. It is further understood that the proposed withdrawal would be in the nature of an advance against the balance of the grant counterpart which the French Government has indicated it will request be allocated to reconstruction and investments expenditures in 1949 and that the status of this advance would be regularized in the latter part of November of this year.

Please accept, Dear Mr. Minister, the assurance of my high consideration. End Text.

Bingham

1. Telegram Ecato 794 to Paris, July 29, 9 p. m., not printed; it transmitted authorization “to indicate ECA’s agreement to an additional release of 30 billion francs” (ECA Telegram Files, FRC Acc. No. 53A278, Paris Ecato).
2. Not printed.
3. Telegram Toeca 1104, July 29, 6 p. m., quoted the text of a proposed letter from Petsche to Bingham (ECA Telegram Files, FRC Acc. No. 53A278, Paris Ecato).
4. Not printed.