1318 "Continental France." "Net losses." Statement of policy. INTERNATIONAL AGREEMENTS OTHER THAN TREATIES [59 STAT. benefits provided by the Comite National, the Haut Commande- ment en Chef, and the C.F .L.N. and that in the conversations referred to in Article VII full cognizance will be taken of all such benefits as well as of all aid extended under the various operating agreements and the Master Agreement. B. 3(c) Agreement I. ARTICLE I. We understand that the phrase "Continental France" includes Corsica. 2. ARTICLE V. We understand that the phrase "net losses" refers to out-of-pocket expenses, such as contract cancellation, transporta- tion and storage expenses, incurred with respect to articles covered by a requisition or other formal request filed by the French Gov- ernment. C. Reciprocal Aid Agreement The franc account provision appears unnecessarily broad. We understand that you are prepared to substitute for it a provision which will be consistent with mutually agreeable working ar- rangements now in effect in France. II. The purchase price clauses set forth in Section B of Schedule I of the 3 (c) agreement are complex. There is some doubt in our minds that their precise operative effect can be accurately predicted now. On the other hand, we recognize that they have been drafted with the purpose of establishing a pricing method that will be fair to both parties. Accordingly we ask for no revision at the present time. If the pricing operations under these formulae appear unsatisfactory in practice, we will feel free to propose an alternative method. The adoption of such an alternative by mutal agreement would not, of course, be retroactive, unless the propriety of such retroactive action were also mutually agreed. III. I wish also to direct your attention to certain policies we shall follow in the execution of these various arrangements. I. In relation to reciprocal aid, it is our intention to put forth our maximum effort. The extent of reciprocal aid which it will be possible to render will, however, necessarily depend in large measure on such factors as the availability of labor, power, and the flow of imported supplies. 2. In relation to the 3(c) agreement, it is our general intention to request and receive the articles and services in Schedules I and 2 up to the full amount of the financial limits provided for therein. However, we note our reserved right to have the programs or con- tracts cancelled upon paying the United States its out-of-pocket expenses; and it is our intention to review the articles and services
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