The New House

"The Assembly must understand," said France's Finance Minister Rene Pleven, "that we cannot ask aid abroad without first putting our house in order ourselves." After a searching session, the Assembly understood. It approved: 1) a devaluation of the franc (119 to the dollar, instead of 50 to the dollar); 2) a $550,000,000 loan from the U.S. Export-Import Bank; 3) French participation in the Bretton Woods agreement.

Devaluation had been long overdue. The franc's official value had been far out of line with its actual purchasing power in foreign markets; French imports and exports had suffered. But Minister Pleven, fearful lest domestic prices soar, had held up the remedy until the last possible moment. Once a country entered Bretton Woods, it was pledged not to devalue.

In Cabinet meetings, the Communists argued strongly against devaluation--or any measure threatening a further rise in the cost of living. Minister Pleven contended that France could not have recovery without foreign trade and financial help, which, in turn, depended on a stabilized currency.

In his own ministry, Minister Pleven fought the powerful, conservative, old-line civil servants who speak for French business. They wanted a massive devaluation (150 francs to the dollar).

At week's end French prices (black market and legitimate) seemed stable. But the 150,000 U.S. troops still in France fluttered in a profit-taking frenzy. They held some 420,000,000 francs for which they could get 1,000,000,000. No one was sure who would pay for this windfall. The knowing bet that it would be Uncle Sam's Treasury rather than Minister Pleven's.

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