Roosevelt Papers: Telegram

The President to the Secretary of State 1

Newburg 35. To Hammond from McCrea for Secretary Hull from Alex.

There is an urgent question of adjusting the dollar-pound-franc exchange rate which temporarily is now 75 francs for the dollar and 300 francs for the pound as a result of our provisional agreement of November 14, 1942, with the French North African authorities. The francs involved are notes issued by the Bank of Algeria, the Bank of Morocco and the Bank of French West Africa. Notes issued by the Bank of France are not in question as they do not circulate in North and West Africa.
Apart from economic and financial aspects of the problem, urgent military and political considerations demand our immediate attention. In other French territories under de Gaulle the rates of 43 for the dollar and 176 for the pound have been permitted to continue. Our French Allies in North Africa and West Africa, on whose military support we rely, resent this discriminatory treatment. They, of course, advance economic and financial reasons in support of and they recommend an adjustment of the rate to 50 francs for the dollar and 200 for the pound. Am informed by the Prime Minister that he will urge on the French National Committee an adjustment in other French territories to the rate of 50 francs for the dollar and 200 for the pound.
General Eisenhower considers it necessary for military and political reasons to authorize our French Allies at this time to announce an adjustment of the rate to the basis recommended by them. The Prime Minister agrees with this point of view and I have given my approval.2 This is most secret for Morgenthau.
  1. The source text was transmitted via military channels. The White House staff sent a copy in paraphrase to Hull on January 22, 1943 (851R.5151/10).
  2. For Roosevelt’s anecdotal explanation to the Cabinet meeting on February 5, 1943, of the conference decision on the dollar-pound-franc exchange rate, see John Morton Blum, From The Morgenthau Diaries: Years of War 1941–1945 (Boston: Houghton Mifflin Company, 1967), p. 155.