FEW men cherish the sanctity of the spoken word as does Charles de Gaulle, especially when he has spoken it himself. Three weeks ago, when an exodus of francs began to threaten the stability of France's currency, De Gaulle loftily dismissed the possibility of the franc's devaluation as "the worst absurdity." Almost no one believed him. Speculation against the franc continued to mount until it neared crisis proportions, threatening to unbalance the entire, delicate mobile of the Western monetary system. The money managers and bankers of Europe and the U.S. assembled in Bonn in an emergency session, and solemnly rendered collective judgment that the franc must be devalued. The French braced for the worst, and the money men in capitals around the world prepared for the myriad adjustments in trade and currency flows that a cheaper franc would require. De Gaulle's critics could scarcely contain their glee that, at last, the oracle of the Elysée would be found fallible and forced to retract an utterance.
It all counted for nought with the President of France. Last week, on the day after his 78th birthday, he brought off the greatest surprise in a long lifetime dedicated to the practice of the unexpected. In a stunning act of defiance against the world's financial experts and the seeming necessity of events, he refused to devalue the franc by one centime. Compared with De Gaulle's other famous nons—his withdrawal from NATO and his vetoes of British admission to the Common Market—the refusal to devalue was, perhaps, not of equal importance but certainly even more surprising. It was also perhaps his greatest gamble. At stake was not only the pride and economic power of France but also the stability of the free world's monetary system, on whose smooth, uninterrupted functioning depends the economic health of nations.
For three weeks the crisis in world money markets had been gathering, set off by rumors that West Germany's healthy Deutsche Mark would be revalued. Speculators hastened to sell their francs for marks, and during that period a total of some $1.7 billion in francs was sold, forcing France to use its gold reserves to support the parity of its currency. The run stopped only when the world's currency markets were closed down for three days to give the West's industrial nations, the so-called Group of Ten, a chance to solve the crisis. After three days of almost nonstop sessions in Bonn, the financial experts emerged confident that they had found the solution. In a showdown, the West Germans refused to revalue the mark.
As a result, most of the delegates then concluded that the franc would be devalued. The French delegates gave the grim impression of men accepting the inevitable.
A Shift of Power