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CURRENCY ARRANGEMENTS DURING INVASION AND
  OCCUPATION OF ENEMY OCCUPIED TERRITORIES BY
  UNITED NATIONS ARMED FORCES
800.0146/43
     The Secretary of State to the Secretary of the Treasury
                          (Morgenthau)
                                      WASHINGTON, July 31, 1942.
  DEAR MR. SECRETARY: By your letter of July 20, 19421 -you have
raised the question of provision for a, currency that United Nations
armed forces would need within a few days or weeks after invasion
of ay enemy occupied territory; and also the problem of provision
for a sound monetary, banking and fiscal order in any such areas,
which the occupation authorities would have to administer behind
the advancing armies. You enclosed an able memorandum on the
subject, which has been carefully considered.
  I shall, of course, be glad to sit down with you, or anyone you
designate, as well as with a representative of the War Department,
to discuss a recommendation to the President in respect of these very
important problems. I have designated Assistant Secretary Adolf
A. Berle, Dr. Herbert Feis,2 and Dr. Leo Pasvolsky,3 of this Depart-
ment, who will be available at your convenience.
  It may be useful for me to put before you certain tentative lines of
thought which have developed in our own talk on the subject and
which I submit for your consideration.
   (1) An agreement between ourselves and the British to assure
either joint or completely coordinated action in this field would ap-
pear to be essential. In any re-occupied territory it must be contem-
plated that there may be both British and American troops. The
pay of these troops, and any cash outlays that may be made by the
several occupying forces would at once become a large element in the
currency circulation of the region. It would seem clearly desirable
to avoid all possibility either of divergent policy or of conflicting
policy, and clearly desirable that there should either be a coordinated
policy agreed upon in advance or a joint policy.
   The agreed-on arrangement could obviously take one of various
 forms and I assume this is one of the first matters to be discussed
 between the three Departments.
 1 Not printed.
 2Adviser on International Economic Affairs.
 'Special Assistant to the Secretary of State.
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