800.515/588

The Secretary of State to the Secretary of the Treasury (Morgenthau)

My Dear Mr. Secretary: The Adviser on International Economic Affairs has informed me of the meeting held this morning, March 31, on the subject of occupation currencies.

I am in general accord with the line of policy indicated in the Treasury memorandum.12 I wish however to suggest to you and to the War Department that in the case of the European governments who are now our Allies, every effort consistent with military requirements should be made to work out, by agreement with them, any plans for the use of local currency—whether it be local currency of the special type suggested in the memorandum or any other type. I realize that the need for military secrecy might make it inadvisable in some or all instances to discuss this question with them until military action has begun.

As regards numbered section five of the memorandum, I presume it will be our policy to give the fullest and most careful consideration to the views of the governments of the Allied Nations in regard to appropriate exchange rates that might be adopted in the event of the entry of our troops into their respective countries. Again, I should think it would prove advisable to make our action in this field tentative [Page 1037] until time and circumstances are afforded to reach full agreement with them.13

Sincerely yours,

Cordell Hull
  1. Supra.
  2. In his reply of April 15, 1943, Secretary Morgenthau informed the Secretary of State that he was requesting the Finance Ministers of various Allied Governments to provide the Treasury with material and information regarding fiscal and monetary problems in their country, including a memorandum concerning their views on the provisional exchange rates that might be set for their particular local currency (800.515/615).