FROM 1944 TO 2024, SHARING THE SPIRIT OF DEFENCE
In 1940, Free France was very poor. For the next five years, Charles de Gaulle and his colleagues tried to convince the Americans and the British to contribute to the war effort, but also to provide funding for the reconstruction of the country. These bitter negotiations, also led by Jean Monnet and Pierre Mendès France, culminated in the famous Bretton Woods conference.
The result was positive for France: while the Americans had set their sights on the resources of its colonial empire, it recovered its full sovereignty and gained a voice in the new global economic governance. This did not prevent the country from enduring the hard years of reconstruction. Eight decades later, this long-term effort on several fronts is part of the defence culture that the IHEDN is tasked with promoting.
FRANCE "TOO POOR TO GIVE IN", BUT DEPENDENT ON THE ALLIES
"I am too weak and too poor to give in". From this famous apostrophe by General de Gaulle to Winston Churchill, head of the British government, we can draw a lucid conclusion: Free France was initially poor, very poor. Before the Franco-British agreement of 7 August 1940, which guaranteed British funding for military expenditure (to be reimbursed at a later date), it was living on a shoestring.
Jacques Bauche, an officer in the Free French Naval Forces, recounted a telling anecdote on this subject. At the beginning of July 1940, Vice-Admiral Émile Muselier, the first general officer to rally to de Gaulle in London, had to pay for a modest stock of Cross of Lorraine badges ordered from a British company: his embarrassment was palpable when he realised that the resources were derisory.
Apart from a sum of 100,000 francs brought back by de Gaulle from the Matignon special funds in Bordeaux, the settlement of the French stock of heavy water arrived in Plymouth on 19 June and a shipment of bauxite, as well as a few individual donations (a Frenchman gave the General a gold nugget, which financial director Pierre Denis wasted no time in pledging), financial resources were at an all-time low.
One of the essential (and often neglected) aspects of the fight was of course financing it, procuring equipment and paying the soldiers' wages - a modest wage, given that the principle had been laid down in July 1940 that "no one will get rich fighting for Free France". With the rallying of French Equatorial Africa (AEF), then North Africa in November 1942, the question became more complex: what should be done with the Empire's production? How could it be used in the struggle?
In October 1940, General Edgard de Larminat, Governor General of these colonies, still had to print counterfeit money on butcher's paper to cover his expenses. The system was structured in 1941, initially with the creation of the Caisse Centrale de la France Libre, which centralised and organised financial flows between the various territories that had rallied.
In March, President Franklin D. Roosevelt allowed Free France to benefit from the lend-lease agreements on armaments signed with the British, before contracting directly with the territories held by Free France in November, and then signing a reciprocal aid agreement on 3 September 1942. In exchange for their massive arms deliveries, the United States remained interested in certain resources of the French colonial empire, such as the nickel in New Caledonia. In the end, however, the agreement left the proceeds of the colonies' exports to Free France as a "war chest".
At the same time, access to the millions of dollars in equipment purchase credits provided by the Americans became one of the aspects of the rivalry between de Gaulle and General Giraud: two competing purchase missions went to the United States in 1943. Jean Monnet, the point of contact between Free France and Washington, played an important role as commissioner in charge of purchases in the USA, while the rallying of the West Indies and the return of the Banque de France's gold stocks loosened the noose a little.
In February 1944, the currencies of Free France and the rest of the Empire were finally unified. But as the Liberation approached, the AMGOT project (the military government that the Allies wanted to install in France) strained Franco-Atlantic relations: the banknotes in circulation after the landings, whose composition, design and issue details were the subject of bitter debate, profoundly disrupted the negotiation of a leasing agreement aimed at the military effort and the reconstruction of the country. En route to France on 14 June 1944, de Gaulle railed against the American "counterfeit money".
FRANCE INTENDS TO PLAY A KEY ROLE IN THE NEW GLOBAL ECONOMIC SYSTEM
The war effort was financed as best it could, but money still had to be found for reconstruction. And, more generally, it was a question of anticipating the resumption of economic and financial exchanges that had been demobilised by the war, at a time when the needs for financing the war and reconstruction were gigantic. Another challenge is that a major economic and social crisis could serve as a breeding ground for the spread of communism.
It was against this backdrop that the Bretton Woods conference was held in the United States from 1 to 22 July 1944. With Washington holding ¾ of the world's gold, the American voice was obviously predominant. They wanted to avoid the mistakes of the aftermath of 1918, which had destabilised the global economic system. The presence of the British economist John Maynard Keynes, author of The Economic Consequences of Peace (1919), was a step in this direction. His views clashed with those of the American Harry White, which were similar but more orthodox.
The war effort was financed as best it could, but money still had to be found for reconstruction. And, more generally, it was a question of anticipating the resumption of economic and financial exchanges that had been demobilised by the war, at a time when the needs for financing the war and reconstruction were gigantic. Another challenge is that a major economic and social crisis could serve as a breeding ground for the spread of communism.
It was against this backdrop that the Bretton Woods conference was held in the United States from 1 to 22 July 1944. With Washington holding ¾ of the world's gold, the American voice was obviously predominant. They wanted to avoid the mistakes of the aftermath of 1918, which had destabilised the global economic system. The presence of the British economist John Maynard Keynes, author of The Economic Consequences of Peace (1919), was a step in this direction. His views clashed with those of the American Harry White, which were similar but more orthodox.
THE SLOW ROAD TO RECONSTRUCTION: EMERGING FROM THE WAR ECONOMY
As the economic historian Olivier Feiertag observes, it was not until early 1946 that the Commission on the Cost of the Occupation, chaired by Raoul Dautry, former Minister for Armaments in 1940, came up with an estimate of the economic cost of the war: 770 billion 1938 francs.
Of this sum, 470 billion related to destruction (bridges, factories, transport, 2/3 of this destruction having taken place during the fighting of the Liberation) and 300 billion to the predations of the occupying forces. Production was already mediocre in 1938, driven by an industrial system that had reached the end of its tether, and the index for 1944 was 38, compared with 100. The French economy therefore faced a twofold challenge: repair and modernise. While the conflict continued, living conditions remained rudimentary.
In a letter to his wife dated September 1944, quoted by the historian Éric Roussel, Pierre Mendès France described the "extraordinary" life of Parisians as follows: "No electricity, no gas, in some districts no water, no coal, no metro, no buses, no taxis, no petrol. No heating, no lifts anywhere, no cinema, no shows, no trains. It's really extraordinary, and people take it very well. There's no work (the mines have no coal, electricity or raw materials). The telephone works, that's all, so people use it a lot. The same goes for bicycles. There are thousands of them going up and down the streets all the time. Apart from the black market, which was impossible to quantify, inflation was 27 % in 1944 and 38 % in 1945.
Against this backdrop, with the military effort still absorbing most of the national wealth, the de Gaulle government launched its first initiatives. In October 1944, the CGT called for a "battle for production", and in December 1944 Houillères du Nord was nationalised for the first time (Renault followed in January 1945). The supply of energy, mainly coal, was placed at the heart of the national recovery.
Finally, following lengthy negotiations led by Jean Monnet and continued by General de Gaulle during his trip to the United States in July 1944, France first had to finance an emergency plan (Plan A) in autumn 1945: the number of locomotives in working order rose from 2,000 to 6,000 in just a few months. Then, it benefited from an American bail-out loan, signed on 28 February 1945, which for the first time provided credit for the country's industrial reconstruction and future investments. Thanks to this aid, and despite the difficulties, the vision espoused by de Gaulle and Jean Monnet, linking reconstruction and the modernisation of the industrial base, could begin to unfold, albeit with great difficulty.
The signing of the armistice on 2 September 1945 put an end to most of the payments. The years of reconstruction were hard on the population, particularly in 1947, which was marked by the Marshall Plan. The bread card, abolished in the euphoria of May 1945, was reintroduced in December of the same year, and lasted until December 1949.
Nevertheless, this period demonstrated the ability of the Provisional Government of the French Republic led by de Gaulle to think about the future at the heart of the struggle, and laid the foundations for the country's gradual economic recovery.
