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

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

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

secret

Washington, November 11, 1949—6 p. m.

Ecato 980. Reference Toeca 1339.¹ Personal for Bingham from Hoffman.

1. Very much regret that arrangements for joint handling with French Govt of French West Africa situation have not been approved by French Govt. Fully appreciate difficult position in which this places you and rest of us in ECA. This cable outlines action we propose to take and includes suggestions for future action.

2. Problem breaks down into two parts: (a) What action ECA needs to take and (b) what arrangements should be made to minimize or offset effects of unfavorable premature publicity.

3. With respect to 2(a) considering seriousness of reports received from US Govt officials in Dakar, I believe I have no alternative but to take steps to hold up further use of US federal funds in connection with imports into French West Africa until full investigation confirms or corrects reports already received and until a system has been worked out for the administration of aid in French colonies which will insure effective use of ECA assistance hereafter. Paras 5, 6, 7 outline action we believe is immediately necessary, and para 8 discusses action to ascertain all relevant facts and develop remedies.

4. With respect to 2(b) believe every effort should be made to avoid premature publicity on this situation until we are sure of facts as a result your investigation. In accordance your suggestion, we will take these measures in as routine and confidential a manner as possible making no formal announcements. However I am sure you will agree that avoidance of premature publicity should not cause a modification in action which seems to me necessary in view of Dakar reports. Since possibility of premature public knowledge exists, it may eventually be necessary to issue some kind of public statement. It would be better to issue such statement in association with French Govt, to avoid reaction in US that, while ECA is attempting to protect Amer taxpayer, same cannot be said of French Govt. If joint handling not possible, believe we must be free if and when necessary to issue some public statement anyway. Note from your para 7 that you are drafting proposed release for eventual use if necessary.

5. Reports from Dakar indicate that main reason for waste and misuse of US aid is inefficiency of French Colonial Govt in handling of requirements planning and allocation of funds and follow-up on distribution and end-use of equipment and supplies. In absence of reports one way or the other, there exists possibility that similar problems exist in other French colonial areas and in French North Africa. Action taken and proposed to be taken by ECA must take this possibility into account.

6. I have instructed ECA/W staff for time being to limit to metropolitan France only issuance of any procurement authorizations or letters of commitment. Plan is to maintain this suspension until measures outlined below are taken. Total of up to $100 million 1949/50 allotment intended for DOT’s and North Africa will necessarily be immobilized.

7. In order prevent further Amer funds from being used to send supplies to French West Africa until all facts are known, we are planning to advise the Amer banks which have letters of commitment under outstanding PA’s for French DOT’s to stop issuing letters of credit for goods going to FWA except Togo. This suspension will apply to: Mauretania, French Sudan, French Niger, Dahomey, Ivory Coast, French Guinea, Senegal, and Upper Volta. You should advise the French to stop issuing sub-authorizations to same destinations. Where hardship cases are presented by Amer suppliers resulting from this action, we will refer them to the French; you should request French to use their own funds to complete payments on outstanding commitments where necessary.

8. Remedial action should be started at once. Believe it should consist of following elements:

a. Investigation in FWA by Mission and by French Govt, separately if necessary, which we realize is already in progress Scope of Mission’s investigation should include not only examination into any past abuses but recommendations on administrative measures to prevent abuses in future.

b. To extent you consider it necessary, some investigation in other areas, (particularly Morocco) where degree of economic development and system of colonial administration may indicate possibility of similar trouble.

c. In future, believe ECA aid for any underdeveloped area such as FWA should be on a basis which permits adequate review of proposed end-use of ECA-financed equipment and supplies prior to issuance of procurement authorization. Thus, resumption of aid on any particular items for any French colonial areas should I believe be the result of a positive finding that equipment or supplies requested are required for an adequately planned project or other use. This prior consideration will make PA’s issued for DOT’s more analogous to project procedure than to normal issuance of PA’s for regular commodity codes, although of course there is no thought of applying to them the present “industrial project procedure” as such.

d. I hope that Robert Blum² can return from Dakar with suggestions for manner of administration of aid in FWA and other DOT’s along lines of sub-para c. If you agree, I believe it would be well to instruct Blum to discuss with French colonial authorities ways of revising existing procedures to insure prior review.

e. We will consider resumption of issuance of PA’s for any territory upon submission to ECA (in first instance to French Mission) of adequate information on plans, programs, and intended use of requested items for import. Any such requests should include not only justification in terms of their contribution to economy in the area and French union as a whole, but to specific arrangements made for management, training, and other phases of adequate administration and use of requested items.

9. Please consult with Harriman and Bruce,³ and in whatever manner seems appropriate to all of you, please express directly to Bidault⁴ my concern about reports we have received and our desire to do everything possible with cooperation of French Govt to minimize impact of the publicity which is probably inevitable. I am concerned that, even if ECA position in eyes of public is safeguarded by actions described above, French Government will be subjected to damaging criticism here if it attempts merely to explain away practices which appear Dakar reports to be both widespread and well-documented. You may inform Bidault that while we will not of course come to any final judgment about situation in FWA until our own investigation is complete and we have the benefit of any facts brought out by investigation Initiated by French Govt, I cannot as administrator of US public funds be in position of hesitating to suspend any operation which there is reason to believe may result in waste or misuse of funds contributed by Amer people through their Govt to Marshall Plan.⁵ Pass to OSR personal for Harriman and Katz.⁶

[

Hoffman

]

1. Not printed.
2. Robert Blum, chief of the Overseas Territorial Development Division of the ECA Mission in France.
3. David K. E. Bruce, Ambassador in France.
4. Georges Bidault, President of the Council of Ministers of the French Republic.
5. In Toeca telegrams 1356, 1358, and 1369 from Paris, November 13–16, not printed, Bingham reported that conversations and an exchange of letters with Hervé Alphand, Director General for Economic, Financial, and Technical Affairs in the French Foreign Ministry, had led to substantial agreement on procurement procedures. (ECA Telegram Files, FRC Acc. No. 53A278, Paris Toeca)
6. Milton Katz, Deputy U.S. Special Representative in Europe.