September 1950
REVALUATION OF THE FRENCH GOLD RESERVE
A convention of August 2, 1950 between the equivalent of 393,396.50 francs per \ilogram of Governor of the Ban\ of France and the Minister fine gold. This is the basis for the present revalu- of Finance concerning the revaluation of the gold ation of the gold reserve. reserve of the Ban\ of France was approved by The French Government is planning to use the law on August 4, 1950. A translation of the con- revaluation profit of 126 billion francs to reduce vention is given below. its internal indebtedness and to facilitate the repay- The gold reserve, including the portion pledged ment of a dollar loan. About 77 billion francs is for a loan from a group of New Yor\ ban\s, has allocated to repayment of debts to the Ban\ of been carried on the boo\s of the Ban\ of France since December 26, 1945, at the rate of 134,027.90 France and about 23 billion to redemption of Treas- francs per \ilogram of fine gold, equivalent to ury bills and other obligations held by a number of the exchange rate of 119JO francs per dollar. European central ban\s. The remainder, 26 bil- Since that date the exchange rate has been suc- lion francs, will be used to purchase 75 million cessively depreciated and for a time a system dollars from the French Exchange Stabilization of multiple and variable exchange rates was Fund in order to repay before maturity a 75 mil- in effect. Since September 20, 1949, however, a lion dollar loan on gold made in October 1949 by single and virtually constant exchange rate based a group of commercial ban\s in New Yor\. The on the "free mar\et'f rate for the dollar has pre- Stabilization Fund has been accumulating dollars vailed in France. During the past six months this in recent months as a result of the improvement rate has averaged 349.6 francs per dollar or the in the French balance of payments.
CONVENTION Between the undersigned: from this operation the amounts necessary: M. Maurice-Petsche, Minister of Finance and 1. To cover the Exchange Stabilization Fund for Economic Affairs, the equivalent in francs of the foreign exchange And M. Wilfrid Baumgartner, Governor of the reserved for the repayment of loans contracted Bank of France, duly authorized by decision of abroad and secured, under the terms of the con- the General Council under date of August 2, 1950, vention of November 17, 1947, by the gold of the It has been agreed as follows: Bank of France; Art. 1. On August 16, 1950, the Bank of France 2. To redeem the negotiable Treasury bonds shall proceed to the revaluation, on the basis of delivered to the Bank of France under the terms of 393,396.50 francs per kilogram of fine gold: the conventions of April 11, 1946,2 February 20, Of its gold reserves: 1947, June 24, 1947, and August 28, 1947. Of the gold earmarked as security under the The balance of the increment arising from the terms of the convention of November 17, 1947; revaluation shall be put into a special account Of the gold received from the State in repayment opened on the books of the Bank of France, in of the Treasury bond delivered to the Bank of the name of the Caisse Autonome d'Amortissement, France on May 23, 1949, in accordance with article to enable the latter to ensure the successive redemp- 4 of the convention of November 17, 1947. tion of holdings invested in Treasury bonds or Art. 2. Notwithstanding the provisions of article placed in a current account with the Treasury for 12 of the convention of February 29, 1940/ of account of the central banks of those countries article 4 of the convention of June 9, 1940, and with which France has bilateral payments agree- of article 4 of the convention of June 8, 1944, there ments and especially the member countries of the shall be deducted from the increment resulting Organization for European Economic Cooperation. Art. 3. The present convention shall be exempt ['See Federal Reserve BULLETIN, May 1940, pp. 406-07.] [2 See Federal Reserve BULLETIN, August 1946, p. 872.] from stamp and registration taxes.
1132 FEDERAL RESERVE BULLETIN
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