Memorandum of Conversation, by Mr. Edgar J. Beigel of the Office of Western European Affairs

top secret

US-French Ministerial Talks

(Fourth meeting, October 17, 1950)

Department of State

Secretary Acheson

Ambassador Bruce

Mr. E. Martin

Mr. Beigel

Mr. Glenn (interpreter)

Treasury Department

Secretary Snyder

Mr. W. Martin

Department of Defense

General Lemnitzer


Mr. Foster

Mr. V. Cleveland

White House

Mr. Gordon

Ministry of Finance

Minister Petsche

M. B. de Margerie

M. Goetze

M. Filippi

Foreign Office

Ambassador Alphand

Ministry of Defense

General Vernoux

Colonel Lasalle

French Embassy

Ambassador Bonnet

M. Schweitzer

M. C. de Margerie

M. Baube

Secretary Acheson said that after the last ministerial talk, joint meetings were held by the financial and military technicians again to review the military and non-military French budget estimates. He said that the financial group clarified many of the matters discussed by the Ministers. He said further that the military group had arrived [Page 1425] at an understanding that the program of US assistance would allow the French military program to go forward in its essential principles, that some matters may go over to 1952, but that primary needs would be covered during 1951.

Secretary Acheson summarized the US position as presented at the last meeting: that if the US makes available $200 million from fiscal year 1951 appropriations, the French military program can go forward; and that there will be a NATO review to determine whether additional assistance to France will be necessary during 1951. He emphasized that the $200 million is an amount of immediate assistance and that any further assistance will depend upon a thorough multilateral review in the NATO machinery.

Minister Petsche said that he realizes that $200 million is being provided to enable France to begin its military production effort, and that it represents the maximum assistance possible within the framework of presently appropriated funds. He said that his concern relates to future appropriations, that is, to the US suggestion that $300–400 million represents the probable limit of such assistance for the calendar year 1951. He said that Secretary Acheson’s clarification above, indicating that there should be a NATO review of the French position, is reassuring in that it suggests that the total amount of assistance to France could in fact exceed $300–400 million in 1951.

M. Petsche raised two questions: (1) whether the US can put in writing the earlier explanation of the forms by which the $200 million may be utilized, in order to avoid any misunderstanding by the French military, who will use the funds; (2) with regard to the method of paying out the $200 million, can progress payments be arranged to offset the payments that the French will have to make to French manufacturers? US progress payments would be desirable in order to assist France to take measures to dampen the inflationary pressures that may arise from an increasing rate of franc expenditures. M. Petsche said that he considered this to be a technical matter, and would prefer that M. Schweitzer remain in contact with the US authorities to devise a system of payments.

Secretary Acheson replied that the US is preparing an aide-mémoire on general principles governing the use of the $200 million, and that the document should be ready by Wednesday morning. He said that we shall also try to indicate in the aide-mémoire certain principles relating to the NATO review of each country’s financial situation, which may be of help to M. Petsche in considering that matter. He said that our purpose yesterday was not to say that additional assistance would be unlimited, but that our estimate of a limit of $300–400 million contemplated that France would take measures to close the remaining budget gap. He said that if France is still in [Page 1426] difficulty after spending the $200 million, or if there are unexpected developments, we will then go forward through the NATO review.

Secretary Snyder said that we did not mean to suggest that our assistance is unlimited, since we must be careful in consulting the Congress with regard to any discussion of assistance to be provided subsequent to fiscal year 1951. With regard to the second question raised by M. Petsche, Secretary Acheson said that M. Schweitzer and Mr. Ohly can work out the procedure for payments.

Secretary Acheson then suggested that M. Petsche nominate a deputy (M. Alphand) to assist in the joint preparation of a final communiqué. Minister Petsche said that Premier Pleven had telephoned this morning that the French Government is in difficulty because of certain leaks of erroneous information into the French press, apparently from US sources. The press reports, which were circulated at the opening session of Parliament today, indicate that the US will provide total assistance amounting to only $200 million in 1951. He said that M. Pleven would like to defend himself against the French press and public opinion, as well as before Parliament, by issuing as soon as possible a communiqué on the extensive US aid to be given in the form of end-items for France and Indochina, as well as on the present negotiation for assistance toward French production during the first half of 1951. He said that such a communiqué, if available for Wednesday’s Paris newspapers, would have a strong effect on French public opinion, would strengthen M. Pleven’s hand in appearing before the Parliament, and would correct the erroneous information that is in circulation in Paris.

M. Petsche presented a French draft of such a communiqué, which would include a specific figure covering the overall amount of US end-item assistance for Metropolitan France and for Indochina, as well as mention the $200 million in assistance relating to the French military production program.

Secretary Acheson said that the US has never put into dollar figures the equivalent values for end-item assistance, and that it would be impossible for us to publish any precise figures on such aid to France. General Lemnitzer said further that the publication of any detailed figures would disclose many elements of NATO strategic planning, and would therefore be undesirable on security grounds. He said that we have also had considerable difficulty explaining the details of military pricing policies to the Congress, and that publication of information on this subject would probably be misunderstood by the press and the public.

M. Petsche said that the French Government has no intention of embarrassing the US in this matter, and that a communiqué on the main points, including a statement of assurances regarding Indochina, would probably be satisfactory to M. Pleven. The Ministers thereupon [Page 1427] adjourned until Wednesday morning, after agreeing that their deputies would proceed immediately to prepare a communiqué. The joint communiqué was released later in the day (as Department of State press release No. 1066, dated October 17, 1950).