Foreign Relations of the United States, 1946, The British Commonwealth, Western and Central Europe, Volume V

Lot 60 D 137 Box 1 (18358)

Minutes of the Thirtieth Meeting of the National Advisory Council on International Monetary and Financial Problems, Washington, May 28, 1946⁶⁹

Washington, May 28, 1946

Present:	Secretary Fred M. Vinson (Chairman), Treasury Department
	Mr. W. L. Clayton, State Department
	Mr. Henry R. Labouisse, State Department
	Mr. Marriner S. Eccles, Board of Governors, Federal Reserve System
	Mr. Herbert E. Gaston, Export-Import Bank
	Mr. E. M. Bernstein, Treasury Department
	Mr. Frank Coe (Secretary), Treasury Department

French Financial Negotiations

1. Memorandum for the President

A draft Memorandum for the President from the U.S. Top Committee was discussed. The principal change made in the draft was the insertion of a paragraph to make it clear that no one of the various settlements would be valid or in effect if circumstances should make it impossible for any of the other settlements to be finalized. The reason for the inclusion of this paragraph (No. 6 in the attached memorandum) was the information that the French Assembly might have to ratify the credit obligations attendant upon surplus property agreement and the lend-lease settlement. It was the intent of the U.S. group to make sure that the Export-Import Bank credit would not be effective, in the event that this ratification, or any other necessary steps were not taken by the French on other agreements.

The Committee agreed unanimously upon the “Memorandum for the President from the U.S. Top Committee on French Negotiations” (attachment A). A number of minor changes were agreed in the proposed statement to be made by the President of France and the President of the United States.

2. Declaration by the President

Attachment B entitled “Declaration made in Paris by the President of the Provisional Government of the French Republic and in Washington by the President of the United States on May 28, 1946” was agreed upon unanimously.^69a

3. Memorandum of Agreements.

A draft “Memorandum of Agreements” to be signed by Secretary Vinson and Assistant Secretary Clayton for the United States and Messers. Bonnet, Blum and Monnet for France, was considered. The principal change made was the same as in No. 1 above, namely, the insertion of a paragraph to make it clear that all the agreements were interdependent. Attachment C entitled “Memorandum of Agreements” is a copy of the document which was approved by the Committee.

4. Memorandum of Understanding.

The Committee considered and agreed upon a draft of this document to be initialled by Secretary Byrnes for the United States and Mr. Bonnet for France. The document, as agreed, is attached as D entitled “Memorandum of Understanding between the Government of the United States of America and the Provisional Government of the French Republic regarding settlement for lend-lease, reciprocal aid, surplus war property, and claims.”^69b

Action by the National Advisory Council

Secretary Vinson pointed out that these French financial negotiations had been conducted on the American side by a special committee, designated by the National Advisory Council. The members of the Committee were all members or alternates of the Council. The Committee was proposing to make a report to the President and the undertakings would be entered into after the President had approved. Secretary Vinson thought that even though the top committee and the Council had similar members, it might be desirable for the Council to take formal action approving the arrangements which were being recommended to the President.

Mr. Clayton agreed and so moved and the motion was unanimously approved.

Action:

The following action was taken:

The National Advisory Council approves the proposed financial arrangements between the Government of the United States and the Provisional Government of France which are outlined in a document entitled “Memorandum to the President from the U.S. Top Committee on French Negotiations”. (Attachment A)

Attachment A

Memorandum for the President From the U.S. Top Committee on French Negotiations

Subject: U.S.-French Economic and Financial Negotiations

The U. S. Top Committee submits for your approval the following points of agreement reached in the economic and financial negotiations with the representative of the French Government:

(1) A credit of $650 million to the French Government through the Export-Import Bank to facilitate the restoration of the French economy and the reconstruction and modernization of French industry. This is in addition to the credit of $550 million granted to France by the Export-Import Bank in 1945.

(2) The payment of $720 million on agreed credit terms by the French Government to the United States Government, subject to determination by agreed accounting procedures, in final settlement of lend-lease and reciprocal aid, including all indebtedness arising from provisions of the lend-lease and reciprocal aid agreements of February 28, 1945, surplus property, and the other financial claims of each government arising out of the conduct of the war. The Military Supply Program (Plan A) has been waived.

(3) Procedures for the settlement of military procurement and troop pay.

(4) The purchase by the French Government on terms to be discussed of approximately 750,000 tons of merchant shipping owned by the United States Government, under the Merchant Ship Sales Act of 1946.

(5) A statement of the French Government expressing its full agreement with the principles of the United States’ proposals on world trade and employment, and an expression of intention to work together with the United States Government in securing general international support for these proposals at the forthcoming conference of the United Nations. The two Governments have also reached understandings on other important related matters of a commercial policy nature.

(6) The effectiveness of each of the agreements set forth above, except no. 4, is dependent upon the acceptance of all, including such acts of ratification by the French Government as may be necessary.

If you approve, we will close the negotiations by executing the agreements.

There is also attached for your approval a joint declaration by the President of the United States and the President of the Provisional Government of the French Republic which it is proposed be issued by you here simultaneously with issuance in Paris.

/s/

Fred M. Vinson,

Chairman

M S Eccles
W L Clayton
Arthur Paul⁷⁰
Herbert E Gaston

May 28, 1946
Approved 5/28/46
/s/ Harry S Truman

Attachment C

Memorandum of Agreements

The representatives of the Provisional Government of the French Republic and the Government of the United States of America, having concluded their discussions of the economic and financial problems of interest to their countries, record the results of their negotiations, as follows:

1. The United States Government has approved a credit of $650 million to the French Government through the Export-Import Bank to facilitate the restoration of the French economy and the reconstruction and modernization of French economy. The utilization of the credit will be upon such terms and conditions as may be mutually agreed upon.

2. The French Government and the United States Government have settled the lend-lease and reciprocal aid account, and the financial claims of each Government against the other arising out of the conduct of the war. The United States Government has sold to the French Government certain United States Army and Navy surplus property, including installations, located in France and certain French overseas territories. The final amount on two items of the settlement are subject to determination by agreed accounting procedures. The sum due to the United States Government on settlements and surplus property is $720 million. Payment is to be made under credit terms provided in the Memorandum of Understanding.

3. Discussions are taking place for an additional credit, subject to the provisions of the Merchant Ship Sales Act of 1946, whereby the French Government will acquire approximately 750,000 tons of merchant shipping owned by the United States Government.

4. By a declaration concerning commercial policy, the United States Government and the French Government have expressed their full agreement on the steps to be taken towards the liberation and expansion of world trade. The two Governments have also reached understandings on other important related matters of a commercial policy nature.

5. The effectiveness of each one of the agreements set forth above, with the exception of No. 3, is dependent upon the acceptance of all, including such acts of ratification as may be required.

A Joint Declaration by the President of the Provisional Government of the French Republic and the President of the United States, announcing the above agreements, is being issued simultaneously in Paris and Washington.

For the Provisional Government of the French Republic

/s/ Léon Blum
/s/ H. Bonnet
/s/ Jean Monnet

For the Government of the United States of America

/s/ Fred M. Vinson
/s/ W. L. Clayton

Washington, May 28, 1946

69. Also designated as meeting No. 12 of the U.S. Top Committee on French Financial Negotiations.
70. For text of the Declaration, as issued, see Department of State, Treaties and Other International Acts Series No. 1928, or 61 Stat. (pt. 4) 4216.
71. For text of the Memorandum of Understanding, as signed, see Department of State, Treaties and Other International Acts Series No. 1928, or 61 Stat. (pt. 4) 4175.
70. Assistant to the Secretary of Commerce and Director of the Office of International Trade.