EVALUATION OF THE PSYCHOLOGICAL IMPACT OF UNITED STATES FOREIGN ECONOMIC POLICIES AND PROGRAMS IN FRANCE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-01065A000400090004-1
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 44
• Document Creation Date: November 17, 2016
• Document Release Date: June 18, 1999
• Sequence Number: 4
• Publication Date: February 9, 1953
• Content Type: REPORT

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DOC. NO. D-37
DATE February 9,1953
COPY NO. 40
'PSYCHOLOGICAL STRATEGY BOARD
Washington
EVALUATION OF THE PSYCHOLOGICAL IMPACT
OF UNITED STATES FOREIGN ECONOMIC POLICIES
AND PROGRAMS IN FRANCE
WARNING
Anfn Ws information affecting the national defense of the
United States, within a laws, Title 18,.Sec-
tions 793 and 794, U.S.C., the transmission or reve
any manner to an unauthorized person is prohibited by law.
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p 1#14
PSB D-37
`ebruay 9, 1953
PSYCIWLoGICAL STRATEGY BOARD
WASHINGTON, D. C.
EVALUATION OF TI PSYCHOLOGICAL IMPACT OF UNITED STATES
FOREIGN ECONOMIC POLICIES AND PROGRAMS
xis FRANCE
ME, $, ,ATI?G I CTOR
This paper was noted with interest by the Board at its
Seventeenth Meeting on January 15, 1953, and, subject to further
staff work, accepted as a reference document to be transmitted
to the member agencies and to the Director of Mutual Security..
This text represents the results of such additional staff work,
PSB D-37 is an experimental paper which the Psychological
Strategy Board may wish to keep up to date and to reissue from
timeto t~e, Comments on thip evaluation and suggestions of sub-
stantive material deserving consideration for future revisions will
be gratefully acknowledged by this office,
Aeting Direc
". AL
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PSYC:jOLOGICAL STRATEGY BOARD
WASHINGTON, D. C.
,February 9
1953
Memorandum of January 14, 1953
I~EI~OA UPJi
TO; The Honorable David X. E. Bruce, Under Secretary of State
SUBJECT; Draft '114valnation of the Psychological Impact of United
States Foreign Economic Policies and Programs
in France.' (PSB D-37)
I attach a draft of Mn D-37, bearing the above-quoted title,
for consideration and appropriate action by the Board at its
meeting on January 15, 1953.
,This paper was developed by the FSB staff as an outgrowth
of the parallel project 25X18
You will recall that, following Board authorization of the U.K.
evaluation on August 14, 1952, some thought was given to
broadening that project to embrace Western Europe. Although that
alternative was not adopted, I have had in mind the importance
of U.S, economic policies and programs in this wider area, and I
have therefore directed that this paper on France be developed in
the staff, it was written 25X18
in frequent consultation with the Department of State and has
benefitted by the Department's comments.
I present this document to the Board for its consideration
and request permission to distribute it to interested agencies
for their information.
Director
Enclosure:
PSB D-37, dated January 14, 1953
(Identical metros. sent to: The ion. William C. Foster, Deputy Sec-
retary of De.fonsc and General Walter B. Smith, Director of CIA)
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PSB D-37
February 9, 1953
PSYCHOLOGICAL STRATEGY BOARD
WASHINGTON, D. C.
EVALUATION OF TH.L PSYCHOLOGICAL IMPACT OF UNITED STATES FOREIGN
ECOFNOuiIC POLICI :S AND PROGRA HS IN FRA} CE
I. Statement of the Problem.
.?S.-- -.... - ..-.-
To evaluate.the psychological impact of the United States
foreign economic policies and programs in France aL'ainst the
background of the attitudes assumed by France since World War II
towards its international responsibilities.,
Security Information
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l~t~ EN Kh PSB D-37
February 9, 1953
II . 5...ma...#Y
1. The United States is for the French the symbol of the
modern economic world.. This world disturbs them, as manifesta-
tions of anti-Americanism indicate, but they must adjust to it
and know that they must.
2. The example of the United States in economic affairs has
a greater psychological effect in France than bargain or persuasion,
both in raising the ability of the French to make the best use of
their means and in bringing about a realistic adjustment of France's
commitments to its politico-economic capabilities.
3. In the rearmament field the shift of emphasis from economic
to military aid achieved little psychological gain, since their
will to rearm was already aroused by imperatives of power of
which the French were aware..
4, For the purpose of fostering economic progress,. United
States example holds more psychological promise than American
insistence on specific reforms which encounter deeply-ingrained
economic behavior patterns and some apathy in economic affairs,
5. Although this particular psychological impact was not
deliberately sought for, U.S. aid, by strengthening France,
enabled it to accept a limited German competition and co-
operation in the Coal and Steel Community.
6. United States example in the field of trade liberaliza-
tion might well be the most effective means of encouraging the
French to expose themselves to the incentives of world competi-
tion, and thus to adjust Francets economy to the requirements of
the modern world and to the needs of the present struggle.
kec1 rit nfo a on
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February 9, 1953
III. Al2DrQach to the Problem,
1. Power in international life is control over the will of foreign
nations, Warfare aims at curbing the will of a nation's opponents, at
substituting one national will for another. In contrast, the main objet-.
tive of our exercise of power through foreign economic policies and
programs in the framework of the Western Alliance is directed towards
influenc+ng the will and the ability of our partners to realize common
interests and responsibilities in a form and to an extent consonant
with U.S. interests
In this instance the psychological impact of economic policies
is the extent to which policies succeed in increasing that will and in
improving the psychological conditions of that ability. Our actions,
attitudes, and programs elicit reactions of like or dislike, create
an atmosphere favorable or unfavorable to our airs, determine changes
in the behavior of our partners which serve or not the goals jointly
agreed upon. An evaluation of the psychological impact of economic
policies includes a judgment of these effects and of the methods used
to call them forth, such as bargain, reason, or example.
In the case of France, the consensus of qualified observers
is that the French assume today as a nation responsibilities beyond
the means which their individual behavior - both political and economic -
permits them to realize, Assuming that this disparity is the main
problem of France, the present study describes the psychological factors
responsible for the gap between intentions and capabilities and evaluates
,the role of U.S. economic policies in extenuating these factors.
4. The approach selected here aims at stimulating thought and
not at formulating an over-all judgment on either France or our policies.
The purpose is to outline pi
.L119- in French-Amerjgt4, relations and not
to draw a balanced picture either of French morale or of the t
impact of our policies. Some positive aspects of the French situation
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February 9, 1953
are deliberately neglected since they do not play a part in the forma-
tion of the basic gap which is the concern of this paper$ and since
the paper describes only the psychological and not the physical,,economic,
or strategic impact of our policies. Within these limited terms of
reference, an emphasis on the negative is probably unavoidable..
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PSB D-37
February 9, 1953
IV. Introduction. ftifeslations of Anti-Americanism.
1, Even minor quarrels among partners are embittered by a feeling
of betrayal, and the stronger the friendship the more violent the
pent-up emotions released by the quarrel. America and France share
a love for freedom, a cultural inheritance, and a long history of
friendship and mutual support, For many generations the partnership
between France and America has been successful as a whole. Since the
American Revolution crises have arisen at times, but they have never
lastingly impaired the relation. At times some attitudes of one part-
ner have been bitterly resented by the other. The GI's of the first
World War already spent too much money for the thrifty taste of the
French. Duhamel'..s diatribe against the "futurist" aspect of American
civilization preceded by many years the indictment of "coca-coloniza-
tion" by Mauriac, and this did not prevent French writers from borrow-
ing the techniques of Steinbeck and Hemingway,
2. Today the French peasant may issue complaints, as all peasants
would, when his land is condemned for the construction of air bases.
The French tenant may resent the competition of American officials
and soldiers, the French liberal may accept gullibly the communist
version of the Rosenberg trial, and the French politician may make
capital out of his protest that "he is not subservient to America".
Although some of the U.S. actions and some of the French protests
elicited by them create delicate problems of international relations,
none of these problems appears insoluble on its own merits. It is
equally dangerous to exaggerate the importance of these manifestations
as it would be to neglect them. As long as there is no absolute evi-
dence that they reveal a pattern of deep antagonism against America,
it is preferable not to assume the existence of this antagonism.
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.PSB D-37
February 9, 1953
creating a threat which does not exist,
The danger is that of
f
and, at the very least, of accepting alluring theories of little
practical use. Since the manifestations of anti-Americanism occur at
a time when France continues to receive a large subsidy from the United
States, it is current to explain French irritation as a manifestation
of the resentment of poor recipients toward rich donors, Gratitude is
a heavy burden to bear, and good deeds are hard. to forgive; But such
an explanation does not lead to any practical course of action and, more-
over, it distorts the true objective of our aid, which is not to elicit
gratitude but positive results required by our own national interest.
4. Although the question of French friendship or antaa ' m towards
America should be raised at this point, it is only incidental to a much
broader question; which is whether our policies in the present case
our economi.d policies - have contributed psychologically or not, and to
what extent; to the achievement of these positive results which we have
in mind sometimes concretely, sometimes less clearly, and which are our
international galls. An attitude of friendliness on the part of the
French may sometimes help the achievement of our goals, but some antago-
nism does not necessarily need to offend us, for one can lean only on
what resists.
5; The French attitude in the cold war -
is determined primaries by psychological characters,VtAc .,__o Ave-, cry
afferent from those of Americans. The self-assumed responsibility of
the French and their capabilities in the cold war are determined
primarily by these characteristics. It is in the light of these rela-
tions of cause and effect that we can more clearly see what our policy
goals towards France are, or tend to be, and that we can evaluate the
measure to which our economic policies psychologically help France in
adapting its conduct to the challenge which faces us both.
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V. rchoolo and the Cold War.
1. American policies rest on a pragmatic a roach and economic
measures are the chosen instrument of these policies. The French mind
rebels at pragmatism and subordinates economic considerations to political
2. Thought is for the Americans a guide to action, and the proof
is preeminently to be tested by the practical consequences of the belief.
The Frenchman disassociates his thoughts from the facts, French "reali.scn"
is more reverence for logic than care for reality. Masters at handling
Ideas, able to grasp situations, and capable of producing very admirable
plans, the French do not act consistently with their concepts nor are
they diligent in carrying out their plans. The anti-clerical bourgeois
used to send his wife to church and to let his daughter be educated in
a convent; the landoTaner may vote communist without batting an eye;
worker and employer may drink together and still be class enemies; engi-
neers - hate to "freeze plans`' and to start production, since their main
joy is to reach on the drafting board the perfect theoretical solution
or, as they say, the "elegant" solution.
3. The French taste for "intellectual liberation", a schism
between theory and practice - results in some of
France's greatest
spiritual achievements and also in some of its most conspicuous material
failures. It explains France's skepticism and its suspicions of leaders p
and collective action, Proud of his concepts and capable of admiration
for those of his neighbor, the Frenchman knows by bitter experience that
these concepts rarely stand the test of practical application. French-
men of all classes are intellectual rather than active individualists.
For them freed m to criticize is the touchstone of liberty,
4. Intellectual games are more enjoyable in the realm of "quality"
than in the arena of quantitative measurements. The French in general
are more at ease when they deal with political principles and dogma than
with economic affairs. Whenever faced by economic issues they are wont
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trans`er t e debate to the political plane and thus avoid the dire
In economic affairs the individual Frenchman is limited in his
tnbitlon, little conversant with the national interest} but, barring
YygllllM!
political affairs.
ece,~jity of{ making practical decisions. In sharp contrast to American
.tt.tudea, the French adopt as their basic credo that of the primacy of
flight of imagination, a careful manager of his patrimony. The French-
an is a strop believer in private property and watches his narrow
interests ceref'vlly. It is often said that ,the heart of the *Frenchman
is on ihe left, but his pocketbook is on the right",
6 In large economic affairs American pragmatism succeeds when the
lnte..eotural realism of the French?fail, because it relies on trial and
rror, xa.ther than logic, But when experimentation is not available for a
$uccesafu_l prosecution of a pragmatic approach, we become more idealistic
for wetter or for worse - than the skeptical French. Skepticism is alien
to us, and in the absence of that quality there is little restraining
nf1tezce on the development of our concepts. Frenchmen, are impatient
'moralistic" and "legalistic" aspects of our policies. Their
legal tradition is different from that of the common la.w, and their
ethics do not derive from a Puritan experience. We still hold that
LCOI :Ss is closely linked with goodness, tithereas the French consider
an attitude as a f4rm_c2f hypocrisy. They separate sharply mundane
erects and spiritual goals, and are shocked when other people do not
take the dirt unction They are prompt to accuse us of sa4.imoniousness
td '!preaching', They are wont to imagine dark stratagems behind atti-
ie mbich they cannot explain.
9Q i~ .c ,goal in mina . WYule we expect the French to cenave as Ameri-
al the Frenchmen expect Americans to behave simultaneously as Amer -
And - FTPPQbMg,
.
o&& ..s w thpolitical proposals'we think thatyou'must have some
"
As a Frenchman said, "When you approach us with economic proposals
, and when you
a s that you have political ulterior motives
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' he iuteUectc ag .nOividlaalism of the French precl,ud.es definite
class attitudes =one the French population, or national ~rench attitudes
t.vers.ay endorsed. There exists, however, average national attitudes
toward the problems of power, of the cold war, and of economic progress
aerivQ from the traits of French character previously analyzed.
Fr _ once..t of Power, and the Cold War.
The French concept of power is deeply rooted in history; drawn
mate from past experience, it is comprehensive but somewhat rigid,
primarily in terms of historical development, strategic position
The role of econ-
c resQuroes comes last, and for that reason the claims of France tQ
of a large number of Frenchmen. The French rationale this paradox
wish great ease. They emphasize their spiritual achievements and con-
be still a great power is not a pretense, but the undisputed conviction
Ier them as more important than their material losses. They rely
,Leaaers up 1n Europe, Nat?onalism is, , if an king increas
-. ?.....~..~...~reri~.e...re..n.~.~a~ii .er?n~~i~s e ewes
for having been early in the front line against totalitarianism. They
implicitly on what they consider the debt owed them by the free world
pr?gent world, and of an American preference for French rather than Ger-
acre QXtrerriely conscious of the value of their strategic position in the
today's France. The fee)4ng of being a "poor relation" of the United
t, tes is. .S s scuts fin ance th n, the United ingdom. Persuaded
L_. Y
1J:, Prance feels strong enough to be a "coordinate" rather th
that the U.S,s as dependent on France as France is dependent on the
subordinate" member the western complex of nations.
low"
9, This h storical concept of power clarifies France's attitude
hag.reveaed.a. The tt mories of many German invasions are still tie
o dp. the 2d J119,
main threat remains t1 at. which past experience
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February 9, 1953
determining factor.. There is a general tendency to rationalize the
Russian threat in terms of reoccupation with Germany. The French point
out the possibility of a dread renewal of the Rapallo Agreement and of
the Russian-German alliance of 1939. They feel that a close understanding
with Germany might entangle them in a German struggle with Russia over
the.lost, &a t German rovinces or, conversely, that Russia might start
a war to prevent German rearmament. Since the Versailles Peace Confer-
ence, the French have continuously warned the other Allies against the
danger of Germany's revival, and they are loath to recognize their part
in past revivals of German aggressiveness.
10. If Germany is for the French the main threat to their power,
the French Union and the protectorates remain the main psychological
buttress of their world position, The French Empire is at present ,a drain
on French resources, but nationalism grows when French power ebbs and
attachment to the overseas dependencies is not in proportion to the yield
but in proportion to the cost, The French al aired their Em ire more or
less against the wishes of the majority, by the efforts of a few strong-
willed military men like Gallieni and Lyautey, whose motivation, conscious
or not, was to secure a reservoir of manpower to bolster France in a
European war. The present concept of the Empire derives from this narrow
military preoccupation, but it transcends it, It is not so much the
potential benefit of overseas territories, but the liability itself which
becomes an integral part of the French concept of power, of a patrimony
of prestige which France cannot re thout sin its self-res ct.
11, These preoccupations with Germany qnd with the Empire deter-
mine the French position towards the externa ) threat of communism. Franca
fights the Viet Minh not only to contain communism but to maintain the
integrity of the French Union, France rearm in Europe not only to deter
a Soviet aggression but to keep a power edge over Germany. However, the
versatility of French attitudes toward communism should not mislead us.
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la=ista ais makes common pause with Moscow, but many
ve dangerously, but it is not certain that greater consciousness of
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U.S. New a World Report, November 28, 1952
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dhexents begin to vacillate when the PCF a1ks for a pledge of non-
resf stance to the Red .Army. Some intellect9al neutralists hope to ward
"alance between the United States and Ruesi , but few are convinced.
f the collet by incantations, but they exert little influence on
public opinion, Others still dream of a third force able to strike a
freedom with intellectual concepts. They an not guides for action.
t the end of the political spectrum, deGa lle sometimes accuses the
united States of appeasing Russia. These o nions illustrate the French
12, he French view", according to Ni. Pleven,' the view of
people who live on the Continent of Europe, s that when a big country
s blg armaments you need at least a shield' whatever you may think
about the likelihood of an attack, our duty is to build. that shield,"
The necessity of "precautions" is recognized
d.ffe ee to Russia. The French Government do
thieve its political goals outside of the W
French de stag n and feels s of the imm
my degrees below our own, and there is con
'tsome America,;' miscalculation" might bring t
but also that of not giving
not feel t1iat France can
diate Russian danger are
iderable anxiety lest
them the Russian attack
1 ht paralyze-the French in their exposed p~sition. The French have to
V 0A ch we try to deter, A more acute realiza
pair. one iac'c t'xat we :nave not Impreae t1e French nth a stronger
i
the danger would scare them into action, It
might throw them into des-
z4a
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February 9, 1953
their own relation to power the French show the same skepti-
i.sm as in international affairs, The Anglo-Saxon concept of the State
00M.We4 th Is alien to them, They cannot conceive pragmatic com-
jromises between freedom and authority. "Their two-fold revolt against
jg~gjg -ime absolutism, that of the Church and that of the Throne, has
left them witlout an intellectual concept of an authority which could be
1..beral, or of a freedom which could be constructive," V As a result
the French. have continued to live a'ter the Revolution in opposition to
the tat , Opposition finds its justification in a multi.lliicit of doctrin,
d theories su orted by as many powerless political parties. The politi-
struggles center always on ideologies, and ideologies can be skill-
fully manipulated by vested interests. As Robert de Jouvenel wrote: in
France "politics are the hobby of men, they are not the condition of their
lives". Principles, political discussions, motions and resolutions are
more real things than laws and practical issues. Politics are part of
the free-for-all of intellectualism; the straggle of opposed doctrines
not incompatible with a certain amount of political stability, but
it contributes to economi.o decadence.
14. In spite of Cabinet changes,, French 1itics are shows as rest
Continuity under the Republics as in the past. Today as yesterday they
have their center of gravity in the Radical-Socialist Party, and Radical-
Socialist policies remain those of the Capetian Kings: o ~ositi,the
c:Gntral European power in external affairs. efforts to curb large com-
sting the psychological impact of our economic policies, it is necessary
to give credit to the French political forces and attitudes no less than
A. Siegfried: L ee des PPeeu,~les, pp. 64 and 65.
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t the eQQflQ C i~provemsnt resulting from U.S. economic aid fora decline
the internal communist threat.
The communists; who after the second World War had monopolized
e prestige of the Flesistance, were expelled from the Government before
.rsha l aid was 9ctended t4 `rrace. When the communist t#~reat reached
its 4,440, counterforces arose under the leadership of deGaulle and the.
i 4 st strike call of December 1947 was thwarted by the energetic action
the Interior mister. J ,es Moch, Although communist propaganda is
cleverly twisted to adjust to the taste of the French for intellectual
brace the party line or vote communist out of social protest. The
such acrobatics make it difficult to tell whether frenchrnen really em-
freedom, to their patriotism, and to their attachment to private property,
1 'Tench ,s association of theory and practice subjects communist
will call forth a cos i.tion of counter orcas, which barring the presence
imperatives to a severe test, Each revival of a direct internal threat
the Red Amy on the Rhine, is likely to prevent a communist c~ouZ
Communism remains, however, the part) of the working class,
ehd retains its capabilities for sabots a and subversion. These capa-
bilities will, be the greatest in case of a war in Europe? At the very
Least 'co mux sm absorbs ,in France energies which should be mobilized for
the national Interest instead of being mobilized against it, even if in-
P$ D-37
9, 1953
4e_ tlvely so, as they are at present.
1 raising serous obstacles against such an improvement.
7, The mostr significant effects of a French lack of community
the products of
The influence
of the PCP might
04QQp90004-1
e of internal
and demoralization. Peguy already noted at the beginning
be further uDdermined by an improvement in the distribution of/labor,
but the French attitude; toward the State and the French economic behavior
C, France's E o r Sterna tiot nand Between Commitments and Canabilitie
fipeUng and of the French t
inequalities
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ambition of
OUector, The hatred of the "agents du fisc"' dates back to the :Monarchy
d tw reasea during the German occupation. It appeared patriotic then
not tQ pay taxes. Taxes represent now a high proportion of the national
incot4e, but the tax burden continues to bear unevenly on the various
4asses. Taxes continue to be evaded, not necessarily by the rich, but
by those groups who are possessed of political power: the peasants, the
bhopkeepers, and some professional men. An attitude which might be
11ed ''apartheid from the State" explains the conspicuous failure of
physical control on prices, rents, and food rationing, as
O ern s of every citizen to forsake the common good and
'ntages from the common patrimony. Behind the conflicts
the French State is the prey of all classes of society.
the P xitu.y that the
cki.ng a
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1ebritay ,3
well as the
to secure ad-
of ideologies
ed ittgres,ts often not lar a interests but the most narai zin
fQr the ecQnQmy since they are small, numerous? and unprogressive. Faced
with the necessity of reforms under the impact of the modern world, the
trench $tate is constitutionally incapable of carrying out these re-
xade unions obtain peacefully desirable improvements in the workers'
rung enough to face the unpopularity of major changes. Nor can the
lot ?nce their trend is, tQ secure changes through political action
ilther than through the painstaking effort of collective bargaining.
l3, The economic s~ertcon s of the F'rench_should not hide their
act ,bees $110 co ngs are the result of an e#mbaarrr 4 Ls s e, of
,y acquired too soon, and of a lack of incentives. France during
n XIACenth, century was not fully dependent on foreign supplies as
kited Kingdom was, nor did it have an internal frontier to develop
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ime craftsmen. The comparative success of France in avoiding
gtAremonts for foreign supplies, the French neglected foreign outlets.
t: the ,S, had, Economic pressures from the outside could always be
s3sted by protectionist measures, Internal competition could always
be limited by arrangements among neighbors. Lacking lar a for eign '
did not develop a specific sense of national economic interest as the
ck ng foreign competition, and feeling little need to compete, they
8 'it h did, They bogged down in a form of economicconservat
they confused with capitalism.
enoy, and the confidence in protective measures, Petain's RRev, -
with its corporative philosophy, put the final touch
France's economic growth was frustrated
after the 3,ndustrial revolution by the individualistic qualities of
the worst effects of the great depression confirmed the,illus.ion of self-
to a restrictive economiLc system more kindred to the medieval uilds of
1.l productive units than to the international combines or cartels to
vbich.it is often compared.
Q, Up to the first World W
we1U as politically, France's industry vias not
lagging conspicuously
behind that of its rivals. French savings and French military
`e the buttress of its strength.
limited by an attachment to superannuated methods, a fear of the future
spent its substance and its credit while the new countries wera expand-
14 and getting richer. Today France is r..arw noti wr boor, but its expansion is
. France ..rrrr,us~ir r.rr.. it
But since then the world developed
an American rather than a French scale, During the World Wars France
above a. the lack of incentives, France's riches cannot be fully
teed roar production. Private say .)gs are hoarded rather than iveg
ation but it tends certainly to favor and exaggerate any inflationary
trend, whether of foreign or domestic origin. Since Private initiative
s behind times, the State must have recourse t
public investments,
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11 France's pattern of production and distribution is perhaps a bar to de-
 04QpLi90004-1
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February 9, 1953
etuats~n of France, public investments are a primary cause
In ation, and thus increase the social inequities, the fear of the
future, and the demoralization. France is not without economic virtue,
but the virtues are dorr.ant,
21, Starting with a common inheritance, America and France have
ot, r"t. America is now for prance the symbol of the future, a
and recent but to which they know that the must
__ us To the extent that manifestations of antagonism against America
conform to a pattern, they express uneasiness toward the modern economic
- sometimes positively and sometimes negatively. The difficulty
of meeting the challenge 2E &Lis world in economic terms is articular)
piling to the French, who want to remain a great power at a time at
ghich political standing is .redicated almost exclusives, on econ
potential. Superficial manifestations of Francets irritation, ohou,d not
be of great concern to us. We do not require subservience nor love,
but the cooperation of partners, and the French need from time to time
verUl test of their "coordinate" rather than "subor .uate" position
the Western alliance,, To a certain extent manifestations of French
petulance are a proof of improving morale; But the serious situs~ ion
eb quarrels between France and America reveal is the persistence of
a gap between French capabilities
limited by an anachronistic economic
t ,onist imperatives of Mower. and for this reason much in excess of FrenehE
e psbili.ties, While this situation was assumed to be a temporary one at
Room
tLe time at which the P shall Plan was put in effect, it appears now to
hove permanent characteristics and is l.il:ely to remain for a long period
armn~.~re.~ru~
o#' time a matter of concern for America,
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Ps$ D-37
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The Qb ectIve of U
the ZaD
betwe n
France's commitments and France's ca bilities, Through loans or grants,
France receives the civilian and military commodities which it needs and
'Which it could. not acquire on its limited resources. But no amount of
subsidy can replace the efforts and be substituted for the wi],l of the
,recipient. The conditions attached to the American subsidy and the
methods used for its administration are intended to drive the beneficiar-
ies to greater production and greater productivity, as well as to foster
stronger will to survive as a nation, To what extent did our aid policy
change the French econatnic behavior and support the French intent to
rearm?
Aid and French Recover.
2. A view Is held in some French left-wing non-Communist circles
that U.S. assistance extended since the Liberation did not strengthen
but rather weakened France. If dollars had not been made available,
France, according to that theory, would have been forced into the reforms
and the social changes which are still overdue. As a result France would
have now a healthier political and social climate. Perhaps a French
government able to apply rigid controls, to captivate the imagination
of its people, to cut back overseas commitments, and to renounce military
power, might have dispensed with U.S, assistance. But the proponents of
tis theory held a false view of France's morale and capabilities after
e Liberation, Vlore misery would not have made war-weary Frenchmen more
productive,
The socialistic remedies applied in England - a much more
disciplined country - did not make England independent of U,S. assistance,
The abandonment of France's overseas commitments and French disarmament
wore not in the interest of France, After an early refusal to accept
UNRRA aid, no responsible French government raised any doubt about the
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February 9, 1951
need for an Ameri cen subsidy.
3. Other non-communist objections against the Marshall Plan come
from specific Interests. The farmers complain that industry is favored
at their expense, labor claims that management gets all the profits,
and the smaller industrialists pretend that too large a portion of
assistance goes to large steel companies or nationalized enterprises.
Little cons c ous of the over-all national interest, the French are bound
to make such complaints, which are addressed more to the French govern-
tont primarily responsible for the internal allocation of assistance,
than to U.S, authorities. These complaints do not impair the psycho-
logical impact of economic assistance, The French public is too little
economic minded to pay much attention to the contrasts noted by some
French writers, between the American advocacy of a free market economy
and the,high degree of bureaucratic planning involved in the ERP. On
the other hand there is no strong French interest hurt by the various
provisions of the Marshall Plan aiming at the protection of the American
economy, such as the 50' percent portion of bulk commodities to be carried
in U.S. ships. The restrictions on East-West trade imposed by the Kern
and Battle Amendments do not elicit significantly unfavorable reaction
.outside of communist circles, and officials did not make an issue of
these policies nor of the form in which they were presented by the U.S.
4, In fact the direct psychological impact of assistance is del
ber-
ately limited by U.S. law. The individual Frenchmanays for U.S. commo_-
d3ttes and services in his own money, in his own "local cur enc " and
n the case of r,Bi? grants
(counterpart) in agreement with the United States. As a result only those
Awl 10104 awm
fw Frenchmen who understand the intricacies of the aid mact4nery can
roognize the extent of their national obligation. The individual French-
" does not have the Immediate experience of owing anything to the
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February 9, 1953
Vnited,States. This is as it should be, since we do not expect grati-
tude but an uplift of morale resulting from economic improvement. Such
improvement, due in part to the amount of the aid, in part to the careful
progratming of the aid, and in part to the efforts of the French them-
elvee, has increased the nation's self-reliance. It has contributed t2
4 decline of communist in#l,uence and it has made ream
5, But besides the effect of the aid itself, an impact is expected
from au4liary policies, the objective of which is to influence French
sconotnic behavior. United States economic assistance is extended under
the condition that financial stability vdi.ll be maintained and investment
conducted on a sound economic basis,
as applied by our representatives
of our psychological influence.
The success of these conditions,
illustrates the scope and the limit
In'1947 open moneta inflation was the major French problem.
The United States subsidies were in themselves anti-inflationary since
they increased the French commodity supply. But this was insufficient
to meet the pent-up demand for consumption and for the ambitious invest-
meat program known as the Monnet plan. Since investment was necessary
to raise French production, and since physical controls on consumption
are ineffective in France, financial. controls had to be resorted to.
Current expenditures of the
had to be placed under more strip ent controls than in the past. The
counterpart provision of the Marshall Plan afforded to the United States
goverment a means of conquering widespread resistance to the most
urgent reforms. Our representatives agreed that the counterpart would
be-transferred to the investment Funds only if anti-i.nfla.tionery measure
even unpopular ones, were taken. As a consequence a ceiling on the Bank
of France advances to the State, and "quantitative"
credit controls were
establishe,. Although our representatives urged the government for more
fundamental reforms, such as that of the nationalized enterprises and
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that of the tax system, they met with little success in these fields.
7. None of the measures which our representatives proposed were
news" to the tench Treasury officials. These officials had lacked
previously a sufficient backing on the part of their government to sur-
mount the opposition of the interests dependent on budgetary liberalities
and the free extension of bank credit. The ri.1d pressure placed on the
French government supplied this backing with little risk of increasing
U,$, unpopularity since the French public lacked interest in these com-
plicated matters, But the counterpart leverage was not sufficient to
put into effect reforms which the French government did not want, nor
vas it possible, in order to do so, to discontinue the dollar assistance.
8. The limits of our influence on French
om1Q behavior were
not generally recognized. The importance of the counterpart levers e
as exaggerated, and the many specialists who had a say in French affairs
tried to use it for a variety of ends. By applying counterpart funds
to'rea :'"things and productive projects instead of manipulating them for
financial objectives, some experts hoped to hasten the process of
French development, and to promote reforms in the social structure,
Agricultural specialists had in view the financing of an extension ser-
Vice, and, labor specialists wanted to build workers' homes, Other econ-
ists claimed that we had too easily accepted. the Nonnet Plan,, that the
industrial development envisaged therein duplicated in some cases
facilities already existing in France or abroad and could be operated
in the future oriy at the price of internal and external restrictive
practices. They thought that counterpart negotiations should involve an
over-a11 review and "coordination" of investment plans. There was some
merit in all these clair4s, but it was not possible to listen to all of
them without dispersing our efforts, minimizing the impact of our aid,
arid. incurring the reproach of "meddling" into French affairs.
9. In the short period of time imparted it was not possible to do
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trench policies. We could not expect to discover and succeed in promot-
~ore'thaan to accept the French plans and to support the most reasonable
ing revolutionary remedies for all French failt~re,s, In fact a, tendency
to seek final solutions for the French problems in a variety of fields
led us to keep on the job a large body of experts often unfamiliar with
French conditions and French personalities. These experts tried to
attack the problem of French recovery from many angles with little co-
ardins.tion among their dispersed efforts. As a result the United Mates
eoverriment failed to speak with one voice in Paris, and the French
effi.cials, at first bewildered, learned quickly how to take advantage of
PSB D-,37
February 9, 1953
S3 li usi02'x..
10, Our present productivit campaign is a more subtle method of
influencing French behavior, It rests on an accurate estimate of France's
main eoonomi c weaknesses, the backwardness of its industrial methods in
tiny fields, the lack of teamwork between labor and management, the
inobi.ty of capital and labor, and the absence of competitive spirit.
The FCA productivit campp n was launched in 1 1 Shen It appeared that
rearmament goals and social improvements required something more than
plain assistance to be carried out simultaneously, The aim of the cam-
paign is two-fold. It is in the first place to bolster production and
duo through a reform of industrial methods, and, in the second
place, to enlist the workers' interest in the fight against communism b
letting them share in the benefits of oductivity,
There is t'ortt~ately no group of government officials ready
tQ endorse the campaign, Many French businessmen are hostile to the
adoption of productivity, methods and feel that their present processes,_
at least in the short run, allows them a degree of independence from
interference and a profit margin which American businessmen no longer
have,. Labor .remai.s dislllusioned by several attempts to imitate U,S,
productivity methods in the past. It remains attached to time-honored
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ways of doing things, it fears too fast a work cadence, overwork,
technical unemployment, and suspects that in the present social context
a fair sharing of the fruits of productivity cannot be expected.
12, Trade Organizations and Labor Unions ought to sponsor produc-
tivity methods and to bargain for the sharing of benefits within Labor-
nagetnent Councils. But Trade Organizations are generally the most
ze `ractory to change of all French organizations, and non-communist tabor
Unions are either weak or little prepared to bargain for specific economic
goals. French labor is more anxious to obtain the recognition of broad
political principles regarding the sharing of benefits than to take
pacticaj steps to increase productivity.
13, -The great interest shown in France for the productivity idea,
the number of newspaper articles and monographs written on the subject,
and. the debates which it raised, contrast with the sporadic improvements
realized, Many workers and entrepreneurs come back from the United States
with great enthusiasm for the work and labor-relation methods which they
w. Many intelligent comments are made, and some industrialists go
ahead'on their own, improving with striking success methods of production,
working conditions, wages, and labor relations. Increased emphasis'is
now given to U.S. and French information activities promoting the U.S.
v ample especially in the technical field - a desirable departure from
the previous information policy which appeared directed more at the U.S.
public and Congress than at the French. But these efforts of the French
ahd of the U.S. have remained isolated, and up to now the productivity
O.mpa&gn, while appealing to the "realism1? in the French mind, has made
oily limited inroads in accepted French economic attitudes, for education
cannot replace incentive.
B. T a i on o e iZut ram,
It was apparent to French observers during the purely economic
chases of the Marshall Flan that Europe could. not remain a power
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February 9', 1953
ata that seeps would become necessary sooner or later to build up again
Tench armaments. It was obvious that even before the Marshall Plan came
its terminat ova in 1952, and although France could hardly expect full
dollar viability and a level of production sufficient to fill its civil-
ian needs by that time, an additional burden would have to be added to
the al-reasy heavy burden of investments necessary for recovery. While
the 'iarsha , Flan was concerned solely with increasing economic produc-
tion and deliberately abstained from supporting military production,
trance and four other countries signed the Brussels Treaty of March 17,
194g.
15, The United States also wap concerned at an early date with the
*essity of European defense. The North Atlantic Treaty was signed on
April 4, 1949, and a mutual Defense Aspistance Program (4 )AP) was launched,
before the Korean aggression. This aggression, however, started the
European defense effort in earnest. With 1954 as a target date, a new
MCAP program including "end items" and economic assistance for additional '#'
military production (AMP) came into effect during the fall of 1950 and
a.$w policies tended progressively to reconcile the objectives of re-
`el* and those of rearmament. In February 1951 the remainder of the
1g51 IMP program was lumped together with the AMP allocation. Although
the cost of rearmament was at that time underestimated, there was no
doubt that production and productivity needed. to be considerably stepped
up in order to achieve at the same time both civilian and military goals,
iliereover, it was obvious that these goals could not be separated since
4feguarding economic and. social gains as necessary to advance basic
defence objectives. In addition, there was the problem for the United
States Qf intensifying the developaent and the production of raw materials.
The 144den complications o the problem of'is Lance were bound to have
psychological r percussions.
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As far as France is concerned, the U.S. scramble for strategic
i tee;iris had a limited impact, and the problems involved in the develop-
ment and sharing of materials did not greatly influence French opinion,
OA4oh ip only dimly interested in these economic matters. The psycho-
logical effect of the rearmament pro ram itself is more difficult to
400000. The test of a military effort is a battle, and statistics,
he only substitute in tiTue of peace, are unsatisfactory to measure even
the physical results of such an effort. However two criteria may be
ed. (a) does a given military program lead to an increment in the will
to fight, (b) does it improve the psychological factors which condition
e orderly build-up of a defense force?
:' T he psychological conditions of a rearmament effort
are entirely
dfferent if the program is conducted in time of war, in the face of an
J..Tumecijate and present danger, or if it is undertaken in time of peace
a long-range measure of precaution against a potential danger. In
ode oast' it is possible to make every factor of production serve the
,Oar n tegs.rdless of the impact on the living standards, and in the
Sher case the program can be popular only if the additional burden does
nbt.reduce the economic and social gains previously achieved. In the
fulfillxaent of the iiIutu41 Security Program, there was an effort to resort
to bo.th types of approach at once, to give alternative priorities to
tary requirements and civilian objectives. As time passed, the sense
t
of urgency was reduced,
and concern for continued economic well-being
LAcreased in most participating countries. In certain countries like
tto.Uted Kingdom, the change in emphasis appears in full clarity.
The French scene is more confused, but one thing is obvious. The high
spe led.
pas that a sense of common danger would simplif, the problem of re-
Matt and.. Military assistance1_., as it generally does in wartime, were
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I$. A first hope was that the military assistance would: heighten
the rench.wi.I to make sacrifices, that a supply of "end-items11 -
military commodities ,. would bring home to the French the urgency of the
$i uat4.Qn, that the words "military aid" had a certain magic of their own,
that they would orient French efforts towards rearmament. This was over-
imating the power of words and the power of commodities. The fact
thg't t Lary commodities are supplied instead of general imports to a
ltry which suffers from a balance of payments deficit does not deter-
tie apportionment of its efforts between general economic purposes
armaments, The will to rearm - as differentiated from rearmament
It especially in the case of the French, is determined by mpera-
In fact the trench will to rearm was high in 1950, but narrowly circum,_
tires of power, and can hardly be improved by economic or verbal devices.
'bed by the French outlook toward the cold war and French economic
Capab&l.tles. The inspiration and motivation for the'French rearmament
came riot from the fact or form of assistance but from `example - the
e e of the t. and the im ending example of German . It was felt
that it Fl'snce did not deliver the military contribution expected for
the d fence of Euro e the United States would, reluctantly peria ps,
twrp tp CermanY, France, according to the French view, had a great power's
responsibility and could not stay behind the other great powers at that
tame of crisis. The French mind is capable of explaining away the sense
f economic dependence upon the United States, but the evidence of an
,a military lag would have revealed the loss of France" inter-
; c pa,
o l- position, and this the French mind could not accept. the risk
vAs not that France would at that time propose too low a contribution,
but, on the contrary, that they would propose too high a contribution.
al should not' have been to boost the French will bust t ep
t ie re ch plans at a teas v , of .perfora~ance. The United States,
its own eagerness for European rearmament, may nave consiaerea Loo
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'blazzd.y the Jules Mach proposal in,1950-51 to equip some 29 French
diui5io; a proposal which was obviqusly beyond French capabilities,
'syohQ?.Q ically, it would have been more desirable at that stage to
damp French enthusiasm than to encourage it,
s .ri~l.r re~.eiJre ^.~ ~ ~.~.~.rrl~.~rrrw~ ...~
,9, There were other reasons besides military and American domestic
ors for .shifting the emphasis from economic to military aid in 1951,
e ides the hope of creating a sense of urgency abroad, there was also
the .recognition that economic assistance, if not in its concept, at least
n tact,
smacks more of charity than a contribution to a joint military
ort,, and that such a military contribution would have a more favor-
able psychological effect than straie.ht economic aid, True i,n the case
of a participant country which actually does not need economic aid, this
cept is at variance with the facts of psychology in a country like
Prance which remains i.D an unfavorable balance of payments position,
t leads to a false situation where military assistance becomes a means
Pf granting balance of payment assistance, Since in France inflation
$till rampant, military assistance became also a means, of creating
.ocal currency in non-inflationary ways. The pretense of a, partnership
'Which disguises charity is unhealthy: the guarantees which surrounded
the extension of straight economic aid were abandoned under the false
impression that military aid produced a ",A4 fro quo automatically:
tamely an increment of the defense effort.
2O s situation is illustrated by the counterpart provisions
e,Qld Economic Cooperation Act which, as indicated previously, were
Ita t to prevent the J P from becoming a charity program and gave to
e tAited $tates some leverage over French behavior, Confusion on the
atuxe of military assistance as distinct from economic assistance led
the belief in Congress that we would increase the French mLUtary
Effort by us.n?.. the counterpart for military purposes. In fact this
4ew voVIsi deprives the United States Qover e t Qf.
i s leverage
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February 9, 1953
vitbout corresponding gains. The provision is now satisfied whenever
the French spend the counterpart for military production, whereas under
the old system U.S, officials could alternatively withhold or release
the counterpart after scrutinizing the purpose of its use. This of course
does not change the psychological impact of the aid on the French public,
tince recipients of comnodities coming from the U.S, still pay the French
ovornment for these commodities, but it damages the morale of French
officials who expect under the cover of military aid a free supply of
y~C, rer_c, and are encouraged to reach further for the balance of
nt assistance which they need.
It was thought also that a system of offshore purchases per-
nitting the United States government to acquire military commodities
4broad at the lowest cost would be favorably received by the suppliers
and by all participants. True, it would be possible within narrow limits
to place military procurement on an international economic basis, But
in peacetime the preoccupation of each country is to retain its mobili-
ration base at home, and vested interests are powerful enough to hamper
the placing of orders abroad. Under these conditions the scope of off-
French government officials
shore procurement is limited,/lack incentives to publicize the impact
of this type of procurement on the sup :lying communities, and are
encouraged to consider it as little more than a means of obtaining some
added balance of payments support.
22, In 1950 it was of course impossible to foresee that the Soviet
pressure in Zurope would not suddenly increase, and plans had to be
made mainly in consideration of an itm ediate emergency. But regardless
real Russian intentions and capabilities, it has_becote slow v the
nvict on of the buropean countries, including France, that this pressure
ws relenting. Under those conditions the European rearmament program
c011tin s to develop in a situation in which emphasis must be placed on
.-kw
ra ge
anni
f
a
o vu
j
.. . n
Ly, thee military program,
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 t'.-on to plan for more than six months in advance. Not only aid appropria-
tiQn,must be approved by Congress on a yearly basis, but the non-
ezincidence of the U3S, and French fiscal years, and delays in the de-
Uve y of military commodities interfere or appear to interfere with
Tre c .. t.ry plans. Delays in the firm allotment of economic aid and
p ythol.ogicaI consequences detrimental to the accomplishment of our common
Beals.
In order to plan, the French need sortie forewarning of the amount
nee which they can rect. In fact they are never in a posi-
e delivery of civilian commodities do not affect governments since
type of transactions is undertaken by individual importers. But when
....rrwsr~
aid is given in kind' a lack of coordination between the schedule
4r'y and the plans of -thee recipient may Provide eni less ro
int. The advantage resulting from good cooperation on the spot
Ewen French and 4mer can Army officers familiar with each otherts
t:!A.;J dig, and sometimes personally acquainted, has prevented a further
d.sintegration of the joint planning.
24 As a result of our anxiety to obtain commitments from the French,
to negotiate as early as we can each year the total amount of their
defers,5e expenditure corresponding to the total amount of assistance we
'C~i give them. This has two unfortunate resu ts. In the first place
the PrenQh '.lita. effort becomes subordinated to U.S. assistance. The
enh tee that they are rearming not so much'in their own interest as
in order to get a larger share of our subsidy. In the second place,
ite4 $tatea representatives do not know at the time ofthe negotiations
4~t 'f Ina 'Ti~q
-1, AMP _
000/08/0
urgencys does not at the present
The french consider the u
Limit- of our f~ cures as a firm commitment; and are disappointed when
ngress decides to cut the aid. French opinion, which cannot be familiar
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lath the intricacies of military aid negotiations, is sensitive to the
kind of incidents resulting from outs, apparent or real, in the level of
4id, and the French government is prompt to take advantage of these
incidents in order to justify a stretching out of its co tments.
At the same time the Calculations undertaken to apportion the
burden of rearmament among the NATO countries add to French preoccupation
't comparisons - in which then can rate the own contribution favor
? Their military budget may be smaller than the U.S. budget even in
terms of national income, but applying the principle of progressive ta.xa-
t .on they can argue that their share is In fact greater than ours since
their national income is smaller, i4oreover, comparing the pay of their
e101diers to that of American soldiers, the French ca.rnrmot a cape the con-
e J.usion that their real. contribution to defense is much larger than
their monetary contribution, At the same time th icture is distorte
ih the 'renckh mind 'by the i norance i which the are left
rear n theme
aAwunts of militar aid su lied b the U.S. Then economic calculations
give reason to the French to ar ue themselves into a ositlon of self-
s#`s,ction with their present effort at the time at which they are
finding fault with our methods of aid allotment. The Combination of both
CircuaaataAces dot acts f l o r a the s crolo ical impetus present at the
beginning of the French rearmament program.
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The gap between trance's commitments and France's
is sttill wide an be increasin . Especially in the psychological
`zed, our deliberate policies to raise French means to the level of its
self-assumed goals were not overly successful. The conclusion reached
heretofore is that bargain or persuasion succeed rarely unless we find
n the French scene proponents of the reforms or the changes which we
4ewire or unless we are capable of setting, up an example of conduct which
ur position in the free world Taal es irresistible.
If we cannot help to raise French capabilities in the present
po.itical and economic conditions of France, we might reexamine the
nature of these capabilities in relation with the commitments. which con-
front ttem, The reason, why French commitments are excessively costly
and =y 'appear unattainable may be that they are undertaken under the
peculiar imperatives of the trench concept of power and not under the
deal .iuperatives of the present situation. France makes its security
goals more onerous than necessary when, taking- the "necessary precautions"
cainst a Soviet aggressor in Europe, it wants also to keep a power edge
ovTer s. ro ving Germany, when pursuing an exhausting struggle in Indo-
na a ;a.nst communism, it fails to enlist the full support of native
nationalities in 'overseas France", when trying to revive economically,
to curb internal cozmnun~sm and to rearm, it is loath to change its in-
4eterate political and economic habits. To guide France toward a more
realistic evaluat qn of its alms is
delicate problem for U.S. diplo-
It is hardly consistent with rigid concepts of nonintervention in
Other people's affairs, but in the present circumstances it may be un-
,v'oiable, Since no Ar"ierican strategy has been formulated to that effect,
47 describe'the psychological background in which it would
Op and try to discern the trends upon which American policies
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F'ebrar 9, 153
1xe4dy appear to embark in relation to France's position in Europe and
aVcr s, carrying with them the same methods of bargain, persuasion or
e cmmple already witnessed,
? , llean Integration
Tian e fea - both German militarism and G man ;QM etit on
IB fact France needs both,; one to make Europe defensible and the other
bestir itself out of Its econott4c complacency. To resolve this con-
4n _problem of European integration
'..'he oaf of Euro
reauble
of the
Organization for European Economic Cooperation, Under American prodding,
tie O O played some part in various attempts to foster European co-
Opltion and unity of purpose through apportioning ERE aid, providing
for= for discussing financial stability, devising methods for intra-
European payments, and prompting participating countries to lift quanti-
te.tive trade restrictions. None of these p.easurws removed the str.ctu_ral
d~sequilibrium which is the result and the justification of protection-
In fact the uneven recovery of the European countries, the very
fast progress of Germany after the currency reform of 1941, and the amend-
mont of the occupation statutes, weakened the trade liberalization effort.
France removed 756 of its quota restrictions, but at the same time re-
tablished or adjusted customs duties suspended during the pre-war
period or no longer protective by raason of the depreciation of the
oclz rey, Later the French government, faced by deficits in its
balance of payments, reestablished some of the quotas previously lifted.
The next step toward European unification was the establish-
mOh ofsupranaYional organizations aiming at "functional. integration":
tie 094 and $teea Co uj ity of the Schuman plan and the pending European
;tense 0Qmmur.ty. The Schuman plan mobilizes the fear of German
;rat' n t
of the Zconodc . It inspired the founding
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t -litary power against the fear of German economic power. Although the
idea is Vrench - an element of its success - it could not have seen the
light if U.S. assistance had not provided the capital needed for the
triode? ization and devel9pment of France's coal and steel facilities,
thus permitting France to face with more equanimity Germany's competition.
The idea would not have survived without II.S, su rt. England
did not want to Join and was reluctant to see the project succeed
independently. Steps had to be taken to prevent the Coal and Steel Com-
t :ty from being a continuation of the old steel cartel with its
jeatrictive trade features, It was necessary to obtain from the partners
of the So1wan Plan countries in the General Agreement on Tariffs and
Trade the permission to remove tariffs among the six participants. All
these steps involved complex negotiations in which the U.S: had to play
part in order to maintain the original momentum of the idea, and in
order to prevent deviations. Recognition of the Community by the U0S.
led to Its acceptance by the Europeans. Sometimes the action of the
united States can to the lost effective when it supports discreetl and
firmly specific policies proposed b~ the eo le directl interested,
7. ,But the establishment of supranational institutions to deal
with International problems doesn't solve these problems automatically.
In this particular instance the Franco--German conflict, which should
ave lost a great deal of its meaning as a result of the ratification
of the coal and steel agreements, remains the ceitral factor of European
disw4ty, as recently shown by the dispute over the Saar. The S
functions] rote ration raise olitcal issues. The Communit will either
plan was a first ste toward econ is union i f first step toward
Mo,
political union. The pitfall is that even the limited problems of
paralyzed by these issues or will have to take the leadershi
js being made now in the latter direction. Subcommittees of the Schuman
edi cges in the structure of European sovereignties, attempt
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1953
Luropean constitution. This
app6ars to be the most effective step already taken for solving polli.t-
JDal issues inherent ir,'the Schuman Plan, for achieving the military
goals of Europe and for overcoming France's and West Germany's hesita-
t.on to ratify the European Army Treaty.
Ltv is the basis of the military build-up in Euro
The NATO QQu trees Started their military drive mainly on a national
0, Rearmament followed somewhat the pattern of economic integration,
many as a potential threat, but the military goals of NATO cannot be
omater'al efforts to an attempt at coordination. France considers
,41
pliehed without a German contribution. The European Defense Com-
munity is a compromise patterned after the Schuman Plan but too hastily
bought together under U.S. prompting to resolve psychological and
political conflicts deeper than those raised by economic integration.
.It satisfies neither some of the French military experts nor the French
political parties. The French Assembly will request amendments to
guarantee French freedom to withdraw from the European Army those troops
which might be needed for the defence of French overseas territories,
A1thQljgh steps taken towards European unity are more significant than is
;fierier .y felt in the U.S., EEC's full succes a , stall tg, a .
pressure of Empire needs and on a grass roots effort to secure further
Cooperation between France and Germany.
a. " rseas France"
The cnntanf.
the French over-
4 d.ependencies is exceptionally high. France's cd.ll to e its
0o o es transcends economic considerations and vested interests would
not suQeeed,n preserving colonial and monopolistic ties if the dependen-
pies were not the psychological buttress of French power. The attitude
0.f France's' subjects' is dominated by spiritual aspirations: a will for
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ependence which is tot iotivated by economic interest. The attitude
tit ,c e6 o e a b .vgler}tr, If official France shows bad grace in giving
&Adependence to its subjects, it is France itself which taught them and
of the t7ted tgtes Is riot based only on political judgments but also
the ssntimiental memories of its own emancipation. Many of these
ads know that their economic well-being and even their survival may
'i l Wiches them natiopalism in its schools, Moslem anad Viet Namese
be dependent upon France's maintaining law and order, The U.Si is divided
botween,t .strategic interests in Europe} North Africa, and Indochina
,Oieh x@st or3 cooperation with France, and its fear that too much support
tq 'rancels coloxi :alism might arouse Moslem and Asiatic resentment,
The er c t is not understood b the French who still believe
that +oqa uestions can be settled b the "mailed fist" and sus est.
of aspirations to an economic conquest of their dependencies.
ocono.c policy bearing on the dependent areas can ignore these psycho-
logical factors,
Fxene" have adjusted themselves to French psychological attitude
16., troadiy speaking} our economic policies with regard to "overseas
~~~~f.~.1.Y ~MIYMYII Y .YYIB41 Yi
Plan we extended assistance to French
as the beginning of the Marshall
s departments, territories; and protectorates, especially North
A rice, only -through thhee French Goverment itself. Public and private
V S, investments in the French dependencies were submitted to the French
Gpvernmert for approval, The Marshall Plan subsidy was calculated in
h Fashion that the French could cover the trade deficit of their
c 3..onies and carry out their investment programs overseas even if these
ptog?arit involved the export of French capital. the Marshall Plan con-
s6 idated, therefore, the fabricl?of the French Empire. Our economic
policies were psychologiacally correct. An attempt to bolster the econ-
01A# o Isla and Moroccq independently from France would have raised
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Q~ttcry of "economic imperialism" on the part of the French and
sibly also, on the part of the Moslems.
., On the other band,, the Associated States of Indochina receive
E ae ?o `` .te a .location of U.S. economic assistance administered, by a
,S, technical mission, The way n which the decision was made does
tot reveal any long-range plan on the part of the United States; funds
Verb a"ilable for the general area of China, and the French needed them
e1"l h not to suspect ulterior motives which in fact did not exist.
'canoe rec fives military end items for its forces in the Associated
atate In Indochina, and would welcome increased U.S. military support
in,ite campaign against the Vietminh.
In spite of its respect of French sensitivity in colonial
eTo end of its observance of the letter of diplomatic instruments,
eri cannot avoid ambivalence In its policies towards 'Overseas
Obviously it must welcome the "valiant and continued struggle
t dept en by France and the Associated States in Indochina" and the
military support of its bases in North Africa, since these French poli-
deg are "in the fullest harmony with the aims and the ideals of the
Atlantic Community". But America- rightly or wrongly - discerns an
NOW
i oreas .n nationalist trend among French sub acts, It wonders whether
an =stable equilibrium between French and native nationalism can be
tt int .red and how long the U. S. national interest will continue to be
served by French colonial policies. America's economic reasoning follows
a, parallel ath. Iiot only the French-led holding action in Indochina
d .Vas American lives but it is also less costly in terms of dollars than
vould be a d1rect American intervention against the Viet Aiinh. Further-
ore, we hate to envisage the cost of supporting tactically our own
African bases, On the other hand, the waste involved in the present
be.h colonel policies indirectly increases U.S. aid expenditures.
antes coj4pelled or chooses not only to fight its subjects in open
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but also to spend money, material, and manpower in order to keep
other subjects under'an archaic `orm of dominion. Furthermore, he
maintenance of acolonial monopoly is in direct contradiction with U.S,
not of ourselves. Some neglect of the native economy, a commercial
rc,opoly enforced by differential tariff and exchange arrangements, ham-
~Onom .c poI Gies and noi; to the advantage of the natives, nor of France.
etrings France's economic development as well as that of its dependencies
and leads to. patent abuses, for instance in the Vietnam's system of monetary
ebapge and transfers - a source of significant deficits for the French
Ta easury. Influenced by the desire of not giving offense to the French on
d ad thatf deliith thelitif the situatinn
ann oang w reaes oo o
k I e other, Amerioan policies and the attitudes of American officials and
erj,can public opinion towards overseas France could not be always
13. In this fluid situation the psychological im ct of our economic
pc'1iei.es on both the natives and the French is of a mixed nature. 9RP
did little for the masses of North, Western and Equatorial African
peoples, but these peoples profit indirectly from some ERP-financed de-
Qpments. Our quest for strategic materials was not accompanied by
5 , improvements, but the economic consciousness of rn.e naives :.s
sufficiently acute to foster resentment against a one-sided program.
-4r, ginal effort to obtain redress of infringements on. our treaty
ght.s in Morocco is consistent with our desire to spread. the doctrine
4d the fact ofgquality in economic opportunity. It did: not stir much
:,ion on the part of; the Moors, although it should benefit them in
he lan term. he signature of trilateral aid agreements by the
ea States of Indochina as sovereign powers, may have served to
firm Up trench policies of granting some self-dependence to these States,
d ik may have gained for America some gratitude on the part of the
ape, not to mention the Cambodians and the 'Laos. Conversely, and
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February 9, 1953
an effort to obtain a "quick impact at the village level",
espeetal.y through health measures and the free distribution ofSapanese
goods in Indochina sometimes disturbe'd''rench officials and traders,
there appears less reluctance today than 'a few years ago in French finan-
cial mie to accept contributions from American private capital for the
development of overseas areas.
If American attitudes in overseas France often irritate the
141
French, it is again because the French are. reluctant to recognize that
time marches on, Our interest in these areas is consistent with our
determination that French dependencies will remain part of the free world,
and i4.th our recognition of France's calling to carry out the free world
policies in these areas. But without presuming too much on American
kao,,,lelge of colonial problems, we doubt, with some appearance of reason,
that France can carry out these policies effectively if it does not give
serious' thought to and reconsider in many cases the place it grants to
its sub ects in the fulfilLuent of these policies. 14either French poli-
nor our a4!n,can remain immobile. Cur present esent aim is to avoid giving
o`fense to either the Nationalists or the French, The trend of events
may oblige us to take a more positive attitude, and we may have to figure
oft alternatives to help the French out of their present impasse. An
eZazation of our past economic policies may give us some guidance to
that effect, It is the inclination of both the French and that of the
overseas Nationalists to seek political solutions to their mutual problems,
but purely political solutions are doomed to failure in an atmosphere
passion. U.S. policies focussing the interest of the I`rench and
th .t of the natives on concrete economic issues, hold a promise of find-
g a plane where interests ea be ed and assions a
Mnd4 of the risk of assuming excessive commitments ourselves, we may
be able to encourage measures of economic association between the natives
abd the French, giving at the same time concrete satisfactions to the
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f`ormer and reducing the drain of overseas France on the economy of the
la Iurope and oversee?
extreme ratlola.t~a.c
N.tional State on the French scale, jealous to preserve all the features
or its sovereignty, cannot cope with the modern world, one soluti" a.
tbls 4( ?9,9 not ol. e the ,q ; Ld,4 , prvble and as a matter of fact obiec-
t fi,or s to France's renuncl.atl,on of l.ts sovereignty in Europe derive from
the rQq,uirement of its concept of relation between ietropole and
dependencjes. This means perhaps that the problem of France c4rnot be
Solved by a top-level approach and that grass roots changes of attitude
erae dad,. The strength of national feelings cannot be reduced by force,
France into a supra-national organization of Europe. But
Ro disappear by formal arrangements. It can be dealt with 9r3ly
by the slow mellowing of the feeling itself under the influence of deep
rd long-term economic and cultural trends.
The lira ha e of the pro onents of the institutional approach
atA Qr the. eXamala which the conduct of the Ti c .?A.,
oQ when it participates in international institutions, To the ex-
Tl~p
loa< therefore Is th t the U,S, example and not the appeal of supra
taloz~. tit~atiQns is the dynamic force of the free world, if thl.,s
st bllltyt stronger defense establishments, and trade liberalize.tj,on,
t that it permits other participants to scrutinize its finanpes, its
tt 'y plans, or its trade policies, the U.S. promotes jn n.ia1
the gase-, the U,S. sb uld not subject itself lightly to cumbersome
dunes and renounce the advantage of flexibility. When it knows
its. rtners, it might be to its advantage to proceed, uni
14-=4117, France, as we have seen in the course off' th ;~ d e s Q
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example than to bargaining or reason: it is
On the other
hand, trance shows a tendency to use international forums to obtain recog-
on of its prestige rather than to reconcile concrete economic issues,
aid it minimizes in that fashion the practical usefulness of these organi-
zti4s
17. trance w3.1j remain unat~ 9 contribute its true sh re to the
These in-
France i4ll accept tlils competition if the United vtates demonstrates b
cOttiveg can only be the competition of its neighbors. especially Germany.
s own , mp.e that the era of protectionism is closed.
The decision
to remove our trade restrictions, to simplify our customs procedures,
etd to. repeal the "Buy American" laws would involve less risk and leas
cast than our past policies. If some of our industries are h t the
.gip compensated and their facilities converted at a cost below that
oi` a: continued indirect subsidization of our exports, European indus-
o and political strength of the free world unless strgpg incen
5,, especially French industries with their high costs, are not. cor-
peti.tors which we should dread, and our trade liberalizati.Qn may start
44th these commodities - especially French corznodities - which compete
the
ksst wvi th our Own.
be considered in its narrow economic terms. American trade l.iberaliza-
ti,on will .not soave the problem of the French dollar gap. It is the
psZch?4,4gical imp. et of
ine a contradiction bet
'8DM1O65AOOO4OQQ OOO4-1
n v.rl',tion
ct.c_s arc? our decl
.
field of.international trade, we twill strengthen our m
By eradicat-
We wwri weaken tbp French position which finds its best arguments in
the maintenance of American protectionism. We will give greater force
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to the pressure of French consumers whose very direct interest is opposed
to the traditional French policy. We will encourage also France's Europ-
e&.n trade partners to join their pressure to our own. France cannot
remain the only protected country in Europe, and as soon as foreign com-
petition begins to be felt, the French economic behavior will be altered.
This competition will supply the incentives needed for changing uneconomic
mothode of production and distribution and for awakening the interest of
French businessmen in foreign markets, Since their experience is
O.rn^r.wurw ui runq~m--
kited, they will naturally turn towards their cometi.tors_for help and
the economic integration of France and Germany will be sealed in a joint
Qrt for the development of foreign outlets.
19. The Fre.-~ch roposed recentl a method fora roes v r
free ti,,Qrl When the technical merits
the proposals have been considered, it might afford us a new oppor-
we take advantage of such an approach there appears little chance for
tunity for backing French "realism" with American dynamism, conquer French
-resistance with a French idea, break the French "guild" system, and make
Fiance able to face the economic problems of the modern world. Unless
France to
reach the level
of economic progress wh 4-U
France may be willing to surrender some features of its nation a?1 sover-
eignty to international Institutions as it did In, the case of the Coal
ar;d Steel Community, but such surrender will continue to be hedged by
eZeeptions, qualifications, and, escape clauses. It is only the example
of the leader of the free world which car show France how to abandon of
ito free will these tariffs and quotas which are the most powerful weapons
of. national sovereignty, but which in the world of today, where co-
operation may be more necessary for survival than independence, defeat
the very purpose of sovereignty itself.,
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