US POST-WAR AID TO FRANCE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00472A000700020022-6
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 7
• Document Creation Date: December 16, 2016
• Document Release Date: September 16, 2004
• Sequence Number: 22
• Publication Date: April 1, 1965
• Content Type: MEMO

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Aid to Prance
The total figure
6 billies dollars
mo OS aid since World War II than
yr 10 billion dollars
id, over 4 billion is
This aid was gives on exceptionally generous term. Sone
our-fifths of It was disbersed as great only one-fifth ex-
tended as loans.
A
France's economy vas badly shattered
investmeats te.g.? sew rolling stockS
heavy imports, particularly place bad
valve of the ear; the balasce-of-payments
Melon reached stsu.rfti?roportions
Is 1944 and again is 1947
the US fisanced more than half of t
iod before the Marshall Plan vas is-
billion was provided through emergency
t, two Bxport-Import loans and loam
from
The French
Terrible Tear. A
third of all the merchant-ship
its provided abroad by the OS
mid-1947 to .144 94$
ranavay inflation a
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succession of Coaist-4n.tigatd strikes nil contributed to
sense of mounting catastrophe. Conscripts were called up
an the strikes: grew more and more violent, The Minister of
the Interior was actually mapping plass for the defense of
Paris against a Communist attack from the south when the
Marshall Plan agreement was signed.
Clearly what stemmed the tide was the prospect of Marshall
Plan assistance. Its first effect was to encourage the uon-
Communist workers that there was a salvation beyond revolution.
They left the Communist-controlled labor movement. The second
major effect was on the government itself. With renewed
assurance, it decided to stick with the Monnet Plan for ia
dastrial investment, confident that OS help in financing was
forthcoming.
By mid-194$ stability was returning to Franc.. The
(oamunista tried one more massive assault of strikes in the
significantly the Marshall Plan was a principal propa
gaud* target. The government held firm; tranquility ems re-
stored; the economy began to move forward. Never again was
the Republic threatened from the loft.
The point is clear. A weak and impoverished France came
close to a Communist takeover. But the psychological lift
provided by the beginnings of a new VS assistance program
strengthened the government's resolve to hold its ground, tit
annex is a view of what night have happened a vampish picture
f a "Soviet France.")
MAI LW
1847, before Marshall Plea could be org*nined the US
in with an interim.aid program. trance got ainost
earths of the assistance we furnished lerope under this
Marshall Plan aid arrived just in time to back up the 'v-
ery effort that was beginning to show progress under the
et Plan. Today goverment funds finance only about a
of investment in France, but in those days the
e was closer to half, and the government tot its money in
ergo part from the counterpart funds generated by Americas aid.
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Th. aid gives to France during this critical arsbali
period vas virtually all in grants 3 bilUon dollars
f a total figure of 3.6 billion).
American aid--along with American ailitary axpenditurae
aace--vas crucial for the restoration of France's gold
vas. In 1952, far *sample, direct US aid plaited *bout
birds of France's halames-of-payment deficit. In addition,
vas considerable indirect aid (credits mortandod to Franca
Xuropean Payments Won vhich the VS in effect financed).
In 1953, our aid sad military expenditures far exceeded
the 'reach balance-of-Payments deficit. Frames vas ebb, to
acquire 9162 million in geld and tondos eachaage as a result,
and vas on its say to becoming the large bolder of gold that
it is today.
in
basis
ti-
his
Lint ican help pew to such groat
percent of the cost of
Conforsace. America gave
guns, aad warships. VS Air Yucca ground cream
b planes in Indochiaa. American civilian pilots
paratroopers mod supplies within Indochina. in
Air Pores vas assigned to fly French Union troops
lad North Africa to Indochina.
Tteite
der
program.
fr American aid diebureameats mace has
benefit from the PATO infrastructure
vas adopted by NATO in 1951 the program
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has budgeted about 3 billion dollars os the constrct1.os of
over 140 jet spable airfields; a conications neterk of
thousands of miles of cable, radio links and 1 ?
and almost 5,400 elleg of pipelise and mammoth fuel s
facilities.
be 02 committed itself y over 1.3 billion
to help finance the MATO tructure in &mope -
he 2.3 billion it baa *peat for lafrostructure
04 forces stationed there. This seams that
poet thirteen years has financed about 39
cost of the MATO infrastructure program, al
ly 19 to 20 percent of the facilitiee coastruct
A
d of the NATO infrastructure prograa's
been is France. The current French share
program' is 12 percent.
noted further that some of these eapeaditures
littlee used by Preach naval forces Chick
am from' commItmeat to MATO. lives after
has cottoned to seek MATO financing
tittles.
additioaal
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AIMS
a Bolshevik France
t difficult to envisage the conditions Frenchmen
to accept in a Bolshevik France. Premier
would have had no qualms about eliminating all
itiom leaders (on the Czech model), including
personnel. Francs 'would have quickly achieved
the political stability on which the Fifth Republic prides
itself t the bickering which distinguished the Fourth
Republic, the country would have been able to address itself
directly to the problems at hand--a relatively limited number
of problems, since the major decisions would have been taken
In Moscow, and sine* the seams available to Paris would have
been extresely restricted.
On the *cowrie side, for ezasple, the ft vista would
bebly have undertaken a sen ruthless exploitation of a
Waite France than that which actually occurred in Eastern
pe. The fear of outside objections would have been reduces
to zero. Mot only would the Soviets have had little to give
France, but they would have been hungry for what fee assets
France did possess. Mimeo would have been incorporated into
the bloc with a severely restricted economic role, its export
industries limited perhaps to suck activities as vine amd per-
fume production. The market for such items in France itself
would probably be extremely small, because the general standard
of liviag would probably be little better than that of Poland.
'teach scientists would have had a much earlier opportunity
on nuclear weapons, missiles and satellites, but
in a national capacity. Frances direct knowledge of
ctivities would have been limited to the missile sites
on 'French soil.
France would also have been spared the bloody Indochina
and Algerian cempaigns. Premier Thorax would have shielded
his competriots from the painful dissolution of French ties
with all former French "Mien territories. A simple decree
would have opened the way for Moscow to supplant Paris, and
the use of French as a lingua franca in Africa, would be only
a memory.
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OTHER ECONOMIC POINTS TIE FIRECE MAY RAI=
LS investments in lurop.
The Fritsch argument: The US is engaging in "economic
coleaination" by Waft over European industries. French
affiliates of WS companion produce SO percent of the auto
tiros in Franco, TO percent of the sowing machismo 00 percon
of the ball bearings.
Response: Investment Is a two-way street. Rost Europeans
havo invested mere (30 billion dollars) in the VI than Mori-
ns hay* in Western Morey, (21 billion dollar.).
It is true that West European* go is more for
hol lugs of American secaritios, whereas Americans
direct invostments..establimbing or buying up branches,
subsidiarion, and other affiliates. However, West **repeal'
duvet investments in the VS are still siseablo. They cans
to Si billion dollars as of the mid of 1043 (compared with
10 billion of American direct investments in Europe). Such
European giants as $hell, Unilever, Olivetti, Sestio control
or have minsablo interests in American affiliates.
international Neeetery Refers
/be French argument: We have got to get back to a geld
standard or some close variant thereof, *odor width payments
balsam's kowtow's major financial pismire would be mottled
holely or saisly in gold. Se don't want to go on taking
your dollars instead of gold. It Is our generosity In taking
your dollar* that has enabled you to keep buying up lump***
compaales, *ince you could do so without loss of your gold
reserves.
Response: Americas., along with Europeans, are gIving
a Lot of thought to international monetary riders. Eut we
have got to guard against the deflationary impact of a sharp
decline In monetary reserves. Such a domains will occur If
central basks start holding only geld (rather than gold and
donors) in their reserves. Jacqoom Ruoff (close monetary
adviser of De Gaulle) admits that going back fully to geld
would requisite a general devaluation of currencies to counter-
act the deflationary impact. Opinion in this country, and I
think in most of Europe, is opposed to as latornational
monetary system that weld require occasional devaluations
to avoid deflation.
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0472A000700020022-6
STAT
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