World: A CHEAPER FRANC FOR A SMALLER FRANCE

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BIT by bit, the successor to Charles de Gaulle has altered the grand designs of the Fifth Republic. In contrast to the general's no to British entry into the Common Market, Georges Pompidou seemed prepared to say yes under the right conditions. In place of De Gaulle's insistence on grandeur, Pompidou sought to give the impression that he was only an average Frenchman. The style at the Elysée reflected the change.

Last week Georges Pompidou made his most decisive break so far with the traditions of De Gaulle. In a surprise move, his government cut the value of the French franc by 12½%, from 20.255¢ to 18.004¢. For years, De Gaulle had equated the stability of the franc with French honor and his own infallibility; a stable franc had given him the power to play the role of a loner in international politics. Last November, against the weight of global financial opinion and the advice of most of his own ministers, he stunned the world by refusing to devalue the franc, which was already weak and unsteady. Pompidou, a former Rothschild banker, could not bring himself to defy reality. "Common sense advises us to align the franc on a rate recognized in foreign markets," he explained to the French in a special statement. "We content ourselves with taking note of a fact and acting on it."

Wide Effects. The immediate effect of devaluation is to make French goods cheaper in world trade and visits to France less costly for foreign tourists. Both developments will bolster the French economy. The effects will be felt beyond France's borders, however. When the international money markets reopen this week, there are bound to be repercussions. The U.S. dollar should feel no strain because it still ranks as one of the world's strongest currencies, but the convalescent British pound seems certain to come under renewed speculative attack. Although London affirmed its determination to maintain the price of sterling at its present $2.40 level, financiers are divided over whether Britain has the resources to make that decision stick. At the unlikely worst, a forced devaluation of sterling could start a chain reaction of other devaluations, throwing the international monetary apparatus into chaos.

The French devaluation represents a considerable political victory for West Germany. A lower-priced franc reduces the pressures on the Bonn government to raise the 25¢ value of the robust Deutsche Mark. The mark is overvalued in comparison with the dollar and pound as well as with the franc, and that disparity has become a major source of international speculative troubles. But Germany has resisted any change on the ground that it would only touch off domestic inflation.

Pompidou and Finance Minister Valéry Giscard D'Estaing decided on July 16 to devalue the franc. Only nine people in all of France knew of the impending devaluation. As far as France and the rest of the world were concerned, Pompidou was about to leave Paris on holiday at week's end. So artful was the camouflage that only a single French newsman remained behind, lounging in the press department of Pompidou's Elysée Palace and flicking through the President's itinerary for a visit to Corsica. Then a stream of Citroën limousines began to disgorge Cabinet ministers for a hastily called meeting late Friday afternoon.