Foreign Relations of the United States, 1952–1954, Western Europe and Canada, Volume VI, Part 2

611.51/3–2853: Telegram

No. 587
The Secretary of State to the Embassy in France¹

restricted

Washington, March 28, 1953—11:02 a.m.

5011. Bilateral US–French economic talks yesterday morning with Mayer and Bourges-Maunoury, chaired by Humphrey. Dodge presented budget picture and Burgess outlined debt situation. Bourges-Maunoury indicated Butler statement OEEC had dissipated French concern re possible British actions, and that French consider UK presentation OEEC fully consistent Fourth Report. French believe question is now one procedure for future actions this field. Guindey agreed US view international economic conference would not be fruitful and welcomed US assurances we foresee further consultation via normal channels including OEEC. US indicated its intention study entire external picture which Douglas will participate and which will require some time complete.

French outlined their economic and budget situation. Mayer reiterated earlier views that French outlook not good and economic situation may become serious. He stressed seriousness April AR meeting for France in terms reconciling its global military obligations with its capabilities. Humphrey raised questions regarding ability France stabilize prices and progress toward freer trade and payments without balancing its budget and improving balance payments situation. French agreed need both steps but did not indicate how reach these objectives.

Afternoon meeting experts discussed French trade situation without developing new information except that both sides would consider possibility reopening FCN treaty negotiation. Guindey outlined French position on entry new investments into French Union, stressing general liberal policy.²

Minutes will be pouched.

Dulles

1. Drafted by Beigel and cleared with McBride, Moore, and Willis of the Department of the Treasury. Repeated to London. The minutes of this meeting, circulated as document FPT MIN–5 of Apr. 14, are in Conference files, lot 59 D 95, CF 141.

   In a memorandum for Stassen summarizing this meeting, Locker described the French financial situation as “really a financial stew—it is a little of everything: high taxes, inflation, unemployment, a large budgetary deficit, and relatively stable prices although at a high level.” (DMS files, lot W–1444, “France”)

2. Telegram 5012 to Paris, Mar. 28, briefly noted that Guindey said the French were unconvinced of the net economic advantage of a change in the piaster rate and that they believed that the Associated States of Indochina should expand their budgetary revenues by increasing customs duties on the present large volumes of imports. (851G.131/3–2853)