Truman Papers

No. 334
Memorandum by the Joint Civil Affairs Committee of the Joint Chiefs of Staff’ 1
top secret

What Will Be the Banking Arrangements in Germany? What Money Will Be Used, and What Exchange Arrangements Made?


British and American troops are using a military currency in Germany known as Allied Military Marks. Plates for the production of this currency have been furnished to the Soviet authorities, who are also using this currency in the area under their control. This currency is supplemental to the indigenous legal tender currencies. German Military and certain local emergency currencies are also circulating. A uniform currency system for Germany is basic to contractual relationships and the maintenance of any sound level of commerce and industry. Also, a definition of the purpose for which such currency will be used in the respective zones by the occupying forces, and others, is necessary in order to ensure uniform policy relative to occupation costs as well as for inflation reasons. In view of the several currencies now circulating in Germany, a redefinition of what comprises legal tender currency is necessary, in order to establish uniform standards. In order to maintain uniformity of currency, effective records and to control amount, character and flow of currency, a central bank of issue should be recognized or established.
Exchange rates and exchange controls should be uniformly effective in the respective zones of occupation as a necessary step to the restoration of German foreign financial relationships, including the financing of approved German imports and exports. A uniform system of public finance for the treatment of the problems of budget, taxation and public debt as well as for the reestablishment of German domestic and foreign credit and trade within the limitations of military government objectives is one of the factors necessary to support a general rate of exchange for the German mark. Valuables, including gold and currencies, have been uncovered in Germany by military forces and are now held by Allied, United States and other [Page 465] forces. Agreement should be reached for uniform disposition of such valuables.
The foregoing discussion is also applicable to similar problems in Austria.


Effort should be made to secure agreement of the Heads of State with respect to each of Germany and Austria:
To the establishment of a uniform currency system with provisions for a central bank of issue for the purpose of centralizing the production and issuance of currency; to a redefinition of what comprises legal tender currency; and to the necessity for an agreement by the Control Council to determine the amounts of such currency which will be made available to the zonal commanders and others.
To the establishment of a uniform system of exchange control and exchange rates.
To the establishment of a uniform system of national and local public finance.
To consideration by the Control Council of the question of the resumption of service at an early date on the internal public debt.
That identified valuables uncovered by military forces will be restored to their country of origin and that unidentified valuables will be held in custody by such forces, subject to their disposition by the Reparation Authorities.
  1. This memorandum was prepared in response to a request from Leahy (document No. 155) for recommendations which would be “useful to the President in preparing himself for the [Berlin] conference”. It was forwarded to Leahy by the Secretary of the Joint Chiefs of Staff on June 26, together with other reports, under cover of a memorandum which stated explicitly: “These reports represent the views of the committees only and have not been approved by the Joint Chiefs of Staff.” Leahy subsequently passed it to Truman.