Except in the case of documents with numbered paragraphs, when it is obvious from the numbering that material has been omitted, diamonds (♦) are used to indicate the omission of one or more paragraphs.
Organizational and Policy Problems in Planning for Western Europe
In approaching civil affairs problems of western Europe, the planners were not obliged to begin from scratch. On the contrary, they could fall back on two bodies of precedent: the principles that had been developed in the Mediterranean and the groundwork that had been laid by COSSAC. The Mediterranean experience was especially important. The principal staff officers, including the Supreme Commander, General Eisenhower, and his Chief of Staff, Lt. Gen. Walter Bedell Smith, came from AFHQ. The Deputy Chief of G-5, SHAEF, was Brig. Gen. Julius C. Holmes, who had been chief of the Military Government Section of AFHQ. All these men brought with them a knowledge of both the strength and weaknesses of the Mediterranean organization and procedure in civil affairs. Second only to AFHQ's influence was the headquarters of the Chief of Staff to the Supreme Allied Commander (Designate) (COSSAC), which had been established in March 1943 to plan for a cross-Channel invasion. This headquarters was commanded by Lt. Gen. Frederick E. Morgan (British), who had as his deputy Maj. Gen. Ray W. Barker (American). By the end of 1943, COSSAC had over a thousand officers and enlisted men and was ready to begin functioning as a Supreme Headquarters. The organization included a Civil Affairs Section headed by Maj. Gen. Sir Roger Lumley (British) and his deputy, Col. Karl R. Bendetsen (American).
Civil affairs planners at COSSAC, and later at SHAEF, addressed themselves mainly to three related organizational questions. First was whether Civil affairs in ETO should follow the AMGOT model, or (as the British component of COSSAC held) be more closely integrated with the military organization and chain of command; second was whether the country units (first set up by the British and later supervised by COSSAC) should be the nuclei of military administrations in the field or merely of military missions to the restored governments, much like the Allied Military Mission to the Italian Government at Brindisi; third, whether prior to the beginning of operations these units should have an organizational status preparing them for one or the other of these alternative roles. The winds of organizational doctrine shifted several times, and successive organizational changes at SHAEF reflected these shifts, but in the end the view of the former British component of COSSAC, now supported by General Smith, the American Chief of Staff, won out. At headquarters, the country units were finally placed closely under the Operations Branch, G-5, SHAEF, in accordance with the plan to use them merely as the nuclei of military missions. About the same time, on 1 May 1944,
SHAEF issued a Handbook of Standard Policy and Procedure that (1) made civil affairs the responsibility of each combat commander; (2) required that normal channels of command be followed; (3) limited civil affairs to operations required by military necessity; and (4) directed that civil affairs operations in a liberated country be mobile and temporary.1 In sum, SHAEF had decided upon a type of CA organization that contrasted with the AMGOT territorial organization in static areas though it bore some resemblance to the mobile AMG's, Fifth and Eighth Armies.
If the organization of civil affairs in western Europe represented a blending of AFHQ and COSSAC principles, the supply plans represented a combination of plans drawn up in Washington and in the theater. In general, planning in Washington was concerned with the formulation of policy and determination of approved categories of supply and scale of supply. Theater planning, on the other hand, provided the actual basis on which supplies were moved, for supply sources depended on timing and shipping factors that could be finally decided only on the basis of phased theater estimates. Various plans had been drawn up, but during the summer and fall of 1943 the War Department had been primarily concerned with the day-to-day problems of the Sicilian and Italian campaigns. However, the needs of western Europe received added emphasis through the President's letter of 10 November 1943, which directed the Army to undertake the initial burden of shipping and distributing relief supplies. 2 Plans currently under preparation were designed to meet problems arising from gradual liberation by military operations, but that portion of the President's letter directing the War Department to be prepared for a collapse of Germany placed a new type of responsibility on the military forces. Accordingly studies were initiated in the Civilian Supply Branch, Army Service Forces, based upon four alternative assumptions: (a) collapse early in the year (1 February 1944) without scorching; (b) collapse early in the year with scorching; (c) collapse later in the year (1 September 1944) without scorching; and (d) collapse on the same date with scorching. A report was issued on 29 December 1943 covering the conditions in a and b. The estimates for operations without scorching provided the basis for the program referred to in these documents as Plan "A." In January 1944, COSSAC submitted civilian supply requirements for six months calculated on the basis of two operational plans, Plan I (RANKIN) and Plan II (OVERLORD). A comparison of theater plans with those worked out in Washington, the efforts to get the British to agree on responsibility for procurement, General Eisenhower's efforts to draw on the United Kingdom stockpiles for his initial requirements, and other important problems are brought out in the documents. It should be added that modern war involves the whole economic fabric of a country, and most questions of relief, recovery, rehabilitation, and morale lead straight to the vital question of supply.
Related to the supply problem were certain financial and currency questions which had to be explored and settled before plans for the economic phase of the occupation could be completed. Usually the problems of the currency to be used and of what authority should issue it are left largely to technical experts and present no particular difficulty. In the cross-Channel operation, however, such questions were very troublesome and had to be considered on the highest governmental levels. If local
currency was to be used in France as in other liberated countries it would have meant, in the President's opinion, a recognition of the French Committee for National Liberation which contravened his principle that the question of the government of France should be open to later determination by the liberated French people. Americans at first preferred to use yellow-seal dollars but the British, who had no such doctrinaire attitude on the matter of French self-determination, favored the use of the metropolitan franc.
The two governments after considerable debate agreed on the use of francs but, to safeguard the American political position, with the proviso that they would be issued under the authority of the Supreme Commander. The British were doubtful that the French would support this disposition of the question. It so happened that the British were right but this did not become clear until, as invasion approached, De Gaulle, in London, made an issue of the question that was to bring many tense moments before it was finally resolved.
1. A HEADQUARTERS ORGANIZATION FOR CIVIL AFFAIRS IS SET UP
GENERAL SMITH IS DISSATISFIED WITH THE CIVIL AFFAIRS ORGANIZATION AT COSSAC
[Msg, Gen. Walter B. Smith, CofS, AEF, to Hilldring, Chief, CAD, 7 Jan 44, CAD files, 370.21, COSSAC (7-22-43) (I), CM-IN 4373]
I want to give you very personally my first reaction to the organization and prospects of COSSAC Civil Affairs Section as I have just seen it. It seems to me that the parallel system now set up for this most important section is faulty. The system of a joint head, British and American, and similar joint heads for each division and subdivision will produce a very ponderous and unwieldy machine. My intention is to change this at the earliest possible moment and make one individual the directing head.... I feel in this case as I felt in the case of . . . Allied Control Commission that an individual of junior cabinet caliber and really national standing is required. ♦ ♦ ♦
THERE ARE TWO WAYS OF ORGANIZING A CIVIL AFFAIRS SECTION
[Msg, Hilldring to Smith, CM-OUT 3403, 9 Jan 44, CAD files, 370.21, COSSAC (7-22-43)(1)]
... I am certain that if you and Eisenhower desire to change the organization to an Anglo-American staff with a single head, there will be no objections in Washington. I have noted what you have to say about an individual of junior cabinet caliber and national standing, but we have no generals, at least I can think of none at the moment, who are of junior cabinet caliber and possess a national reputation. Therefore, you probably intend that we should commission a civilian to head civil affairs in COSSAC. As I see it, a Civil Affairs Section can be organized in one of two ways: You can place at its head a prominent civilian in uniform and give him an Army executive to keep him on the track, or you can put a capable military administrator in the top job and surround him with political, economic and financial talent he needs. Waiving the question of capability, CAD in the War Department is organized on the latter concept. However, this does not make the arrangement sacrosanct. There are admittedly many advantages to the other conception. ♦ ♦ ♦
GENERAL SMITHS PRIMARY INTEREST IS A MAN OF FIRST-RATE CALIBER
[Msg, Smith to Hilldring, CM-IN 7841, 12 Jan 44, CAD files, 370.21, COSSAC (7-22-43)(1)]
With regard to the organization of COSSAC staff, my message was simply to give you personally my first impresssions. I am really not sufficiently in the picture to make definite recommendations. My preference for a civilian executive of national standing placed in uniform to head Civil Affairs goes back to my original ideas about Mr. McCloy for AMG. I agree that CAD in the War Department is organized on the military concept, but, in the first place, you have a Secretary of War behind you and in the second place, if the present head of CAD will come to London and do the job I would ask for nothing better. ♦ ♦ ♦
THE THEATER HAS A COMPLETELY FREE HAND IN ORGANIZING CIVIL AFFAIRS
[Ltr, Hilldring to Smith, CofS, AEF, 27 Jan 44, CAD files, 321 (12-21-42), sec. 4]
♦ ♦ ♦ As to the organization of the civil affairs set-up in London, the War Department and the Combined Chiefs of Staff, I am convinced, will give you a completely free hand. You now have a double headed system which, I take it, you don't particularly like. It was established here in Washington after a conference between Generals Marshall and Morgan, but I don't believe that the arrangement was intended to be rigid or final. The Chief asked me at the time what I thought of it, and I told him that while I believed it would work, I didn't particularly like it. His response to that was that he didn't intend to prescribe an organization with any idea that it would endure until the end of time.♦ ♦ ♦
With regard to the chief civil affairs officer, I await word from you. We have already given you our views back here on topside organization of civil affairs, but have deliberately prevented the big boys from crystallizing their opinion in this connection. If you decide you want some one from the States as your civil affairs officer we will do our damndest to get him. Except for McCloy, and possibly for myself whom you so graciously mentioned in your last letter the sky is the limit. I think we can get anybody we want. McCloy is definitely out. Mr. Stimson is adamant on this proposition, and the Chief has instructed us not to bring the subject up again under any circumstances. It caused great furor around here, and I agree with the Chief that Stimson is not going to change his mind. As for myself, I am afraid the door is closed. I would give my right arm to break out of this jailhouse as you can easily understand. However, the Chief has on several occasions sensed my ambition in that direction, and on each occasion has dealt with me in his most forcible manner. ♦ ♦ ♦
CREATION OF G-5 DIVISION, SHAEF, IS APPROVED
[Msg, Smith to Hilldring, 6 Feb 44, CAD files, 210.31 (3-3-43), sec. 4, CM-IN 4260]
♦ ♦ ♦ I now have General Eisenhower's approval of my proposed plan for reorganization of civil affairs section here. Briefly, it is to retain at Supreme Headquarters a small high powered section of General Staff, possibly to be designated G-5 for civil affairs. This Staff Division will be responsible for policies and directives, for long range outline planning and for general co-ordination. General Lumley will head this staff division but he must be supported by an American deputy of very high quality in whom both the Commander in Chief and myself have complete confidence. It is for this assignment that I wish [Brig Gen Julius C.] Holmes... 1 The operating part of civil affairs including training, organization and detailed planning will be under McSherry, who is particularly qualified for this phase of the effort, and who is very anxious to take it on.♦ ♦ ♦
EUROPEAN CIVIL AFFAIRS DIVISION (ECAD) ESTABLISHED TO ADMINISTER CIVIL
AFFAIRS PERSONNEL OF ETOUSA
[The General Board USFET [United States Forces European Theater], 2 Study 32: Civil Affairs and Military Government Organization and Operations]
37. The Problem of Administration. Consideration by the War Department of the organization of CA had raised the problem of a unit to administer the personnel engaged in CA in the ETO. The plan followed in the Mediterranean area had been ruled out and various solutions were advocated.
38. Proposal by ETOUSA. On 6 November 1943, Hq ETOUSA forwarded to the War Department a proposal that seven skeleton Military Police (Zone of the Interior) Battalions be authorized, in addition to the CA operational allocations. These skeleton battalions were to operate as CA administrative organizations.
War Department Action on This Proposal
a. The proposal of Hq ETOUSA was considered by the Civil Affairs Division, Office of the Chief of Staff, the War Department. On 31 December 1943, a memorandum was furnished to the Chief of Staff, recommending disapproval of this proposal and recommending instead the organization of a "European Civil Affairs Division." [ECAD] This recommendation proposed
a Table of Distribution providing for one headquarters, one headquarters detachment, 28 administrative detachments, and seven medical detachments. Its proposed mission was "to perform the administrative and operational functions for all CA personnel (operational) in the ETO, U.S. Army, but exclusive of CA personnel assigned to Headquarters, Supreme Allied Command, and First U.S. Army Group."
b. The War Department took action on this recommendation on 13 January 1944, establishing the following allocations of personnel for the ETO:
|Hq Supreme Allied Command||90||5||160||255|
c. Thus was set up the so-called "Theater Overall Allocation" which appeared many times in the solving of the complex problems of CA manning. It was strictly adhered to through the diverse events of 14 months of rapid change, and made necessary the greatest possible flexibility in the use of personnel.
40. Action by ETOUSA. On 7 February 1944, Hq ETOUSA [GO 13] authorized the formation of ECAD and specified the provisional units authorized by tables of distribution similar to the ones mentioned in Par 39 above.
41. Activation of ECAD
a. ECAD was activated on 12 February 1944, by the issuance of its General Order No. I, which designated Colonel C. P. Stearns as commanding officer. 3
42. Original Mission
a. The original mission given to ECAD was as stated in Par 39 [above]. . . . This was further implemented by assigning to ECAD the former mission of the Civil Affairs Center.... 4
b. The mission assigned required the organization of more than 6ooo officers and enlisted men, most of whom were sent from the U.S. to England in the spring of 1944, into working regiments, companies, and detachments, able to participate in the Normandy invasion, the liberation of France, Belgium, Luxembourg, and The Netherlands. . . . At the same time it was necessary to organize a number of "country sections" which would in due course become SHAEF Missions to liberated nations, or which would take over as the governmental units of occupied nations.
c. The complexity of the administrative mission should be mentioned. The plan called for CA/MG detachments to be deployed in town after town, as the latter were uncovered by our troops. A team once deployed would not, it was believed, normally move from its assigned location. Therefore, it was felt, the ordinary method of attachment of troop units to higher commands would not apply, inasmuch as the area in which a team or detachment was deployed would pass successively and rapidly from one command to another in the tactical progress of advancing troops.
SURVEY AND APPRAISAL OF U.S. ECHELONS REQUIRED BY THE INTEGRATED COMMAND
[The Gen Bd USFET Study 32]
77. Relation of United States Forces to Integrated Command.
As soon as an integrated command was announced, the presence of U.S. forces
in the Theater made necessary two echelons of the U.S. Command:
a. A U.S. contingent in the integrated command.
b. A purely U.S. headquarters which would be, in effect, an echelon of the War Department, occupying for U.S. forces the same position which the War Office occupied for British forces.
Organization of Headquarters European Theater of Operations
a. The practical step called for in Par 77 was taken on 8 June 1943, when Headquarters European Theater of Operations was established in the United Kingdom....
b. Administrative matters solely the concern of U.S. forces became the responsibility of European Theater of Operations (ETOUSA). Matters of strategy and tactics, and administrative matters affecting the combined command became the responsibility of the Supreme Commander.
c. Civil Affairs/Military Government requirements were similarly divided between the two headquarters. The employment, policies, and combined training of CA/MG units and
personnel fell within the sphere of the Supreme Commander,
with the CCS as a higher echelon. The procurement, allocation, equipment,
promotion, pay, and personal administration of U.S. personnel for CA/MG remained
a function of Headquarters ETOUSA with the War Department as a higher echelon.
d. This condition necessitated a CA echelon in Hq ETOUSA which was established as part of the Special Staff with duties analogous to those of the Civil Affairs Division of the War Department. Liaison was effected with the integrated command.
79. Organization of First United States Army Group (FUSAG). On 16 October 1943, Hq. FUSAG was activated and certain of the functions previously exercised by Hq ETOUSA were delegated to the new command. Hq. ETOUSA continued to formulate U.S. policy and perform "parent" administration for United States troops. However, Hq FUSAG, though not operational, took over planning for employment of CA/MG units, and began to exercise a greater influence on the organization and training of CA/MG personnel, with a view to the eventual commitment of such personnel to its command.
80. Organization of European Civil Affairs Division was authorized by General Order No. 13 Hq. ETOUSA, on 7 February 1944. In matters of supply, pay, personnel, and accounting, ECAD remained administratively under Hq ETOUSA. This fact influenced the performance of the CA/MG mission.
81. Appraisal. The Civil Affairs Section of Hq ETOUSA performed, at this time, an irreplaceable function in affording a link between the highest U.S. command echelons and the War Department, on the one hand, and, on the other hand, the U.S. CA/MG organization, which was to be employed operationally as an agency of integrated command. Separation of administration, a U.S. function, from operational control under an integrated command, was shown to be sound and workable in this period. ♦ ♦ ♦
G-5, SPECIAL STAFF, IS CREATED AND THE DCCAO, GENERAL MCSHERRY, IS GIVEN A
[SHAEF G-5 Div, Directive to DCCAO (SS), SHAEF, 19 Feb 44 SHAEF files, G-5, 16.01 SHAEF (SS), Organization and Plng]
1. The following is a general directive issued to you to enable you to set up your headquarters and to start work without delay. More detailed instructions will be issued to you from time to time.
Status of DCCAO (SS)
2. a. Your title will be Deputy Chief Civil Affairs Officer (Special Staff). Abbreviation DCCAO (SS).
b. You will be in charge, during the planning and preparatory stages of Operations OVER LOAD and RANKIN, of:
(1) Training establishments at Shrivenham and Eastbourne.
(2) The Country Sections, i.e., Sections for Norway, Denmark, Holland, Belgium, France.
(3) The German Section.
(4) The rear echelon of G-5....
c. You will be assisted by an A/DCCAO (SS). This will be a British officer who will, when appointed, assist you as you decide best. In your absence, whether from sickness or other reasons, he will carry out your duties and functions.
Task in General
3. a. In general you will be the functional agency through
which the policy decisions of ACOS [ACofS], G-5, are put into effect in the
organizations referred to in Paragraph 2b, and will act in accordance with
policies and instructions received from ACOS, G-5.
b. Should you find yourself in disagreement with the policy given to you, you will represent your views to ACOS, G-5, or, in his absence to Deputy A/COS.
c. Your approach to other branches SHAEF will be through the equivalent sections of G-5 Branch.
d. You will forward to G-5 for review, detailed plans and instructions when completed.
e. You may maintain direct liaison with staffs at Army Groups, etc., keeping G-5 fully informed. ♦ ♦ ♦
LT. GEN. SIR A. E. GRASETT IS MADE HEAD OF G-5 SHAEF
[SHAEF GO 9, 22 Apr 44, SHAEF files, G-5, 300.4 SHAEF GO's ]
Announcement is made of the appointment of Lieutenant General A.E. Grasett, CB, DSO, MC, as Assistant Chief of Staff, G-5, Supreme Headquarters, Allied Expeditionary Force, in addition to his other duties as Chief of the European Allied Contact Section, vice Major General Sir Roger Lumley, GCSI, GCIE, relieved. ♦ ♦ ♦
G--5 DIVISION, SHAEF, REORGANIZED
[SHAEF Staff Memo 43, 3o Apr 44, CAD files, 370.21, COSSAC (7-33-43)(1), sec. 2]
II-Reorganization of G-5 Division
1. Effective 1 May 1944, G-5 Division, this headquarters is reorganized and will consist of the following branches:
|Displaced Persons||Public Health|
2. The G-5 Division will perform the conventional staff duties of supervision and promulgation of policies affecting Civil Affairs functions in the Allied Expeditionary Force. In addition thereto this division will be responsible for mobilizing, training and assignment of Civil Affairs personnel.
III-Announcement of Organization of Country Sections
1. The Country Sections, already established, embrace the personnel, both commissioned and enlisted, which will ultimately constitute the Civil Affairs elements of the military missions to the corresponding Allied National authorities and to such authorities as may be recognized in Denmark and Luxembourg.
2. The German section will provide the nucleus of the military government in enemy territory.
3. The Country Sections are placed under the control of the Assistant Chief of Staff, G-5, for operations and planning.
4. U.S. personnel of the Country Sections will be administered by the Commanding Officer, European Civil Affairs Division. Administration of British personnel will be as directed by the appropriate British authority.
IV-Announcement of Appointment of Chief of the Operations Branch, G-5 Division, Supreme Headquarters, Allied Expeditionary Force.
Announcement is made of the appointment of Brigadier General Frank J. McSherry, GSC, as Chief of the Operations Branch, G-5 Division, this headquarters.
2. IN FINAL PLANS CA ORGANIZATION IN THE FIELD WILL BE UNDER TACTICAL COMMANDER
THE AMGOT-TYPE ORGANIZATION WILL BE AVOIDED IN EUROPE
[Memo, Gen Smith to Lumley and Holmes, 14 Mar 44, SHAEF files, G-5, 16.01, SHAEF (SS), Organization and Plng]
I. In reply to your memoranda of March 10th requesting a decision on certain basic questions of policy and organization, the following is my reaction:
a. In framing our Civil Affairs Organization I believe we
must bear the following points in mind:
(1) Our Mediterranean organization had many defects although it did a splendid job and accomplished its object.
(2) There are certain differences between conditions in North West Europe and the Mediterranean, and our future organization must be based on the lessons we learned in the Mediterranean, and should start from where we left off. In my opinion the principal lessons learned in the Mediterranean are:
(a) The Civil Affairs Staff must be more closely integrated with normal staffs throughout the chain of command.
(b) We must avoid Civil Affairs Headquarters being set up entirely unrelated to a military Headquarters.
(c) We must avoid AMGOT organization-we have already been told to do this, and the latest paper from the U.S. Chiefs of Staff emphasizes this fact.
3. In accordance with the above.
b. It will be accepted that the command and staff channel runs from SHAEF to subordinate military commanders with direct communication with the Civil Affairs Staff of commanders on technical matters.
c. Business will be done with the Mission attached to each government from this Headquarters, or an agency thereof. Please remember that when I described the operating personnel of G-5 as a Special Staff I meant just that, and in a command it is important that G-5 itself should be organized with a very small section for each country. Civil Affairs detachments will work with local government representatives on the higher policy agreed between SHAEF and the governments concerned.
d. It will be made clear that subordinate commanders are not required to establish policies
which must emanate from SHAEF. It is, however, the responsibility of subordinate commanders to insure that the Supreme Commander's policies are implemented by the Civil Affairs Staffs. SHAEF will relieve combat commanders of Civil Affairs responsibilities behind combat zones, at the earliest possible moment. ♦ ♦ ♦
THOUGH ORGANIZED ACCORDING TO POLITICAL DIVISIONS, DETACHMENTS WILL BE MOBILE
AND UNDER TACTICAL COMMANDER
[SHAEF Memo on Organization of CA, Mar 44, SHAEF files, G-5, 16.01, SHAEF (SS), Organization and Plng]
2. . . . (f) Civil Affairs Detachments will be organized and trained to conduct Civil Affairs in the various portions of France falling within Army Group or L of C areas. These detachments will be so organized as to conform to the French political sub-division and will contain a detachment for each province and department and for the larger cities, with smaller detachments for groups of towns and villages. As the Armies advance, the detachments intended for territory about to be liberated will be sent forward and will operate under the command of formation commander in their appointed areas.
(g) The maximum possible use will be made of technical channels; that is to say, they will be used on all occasions when coordination with other branches of the staff is not necessary. Normal staff channels will be used for joint staff problems. By technical channels is meant direct channel between the SCAO of one formation and the SCAO of another formation immediately higher or lower than his. It does not mean, for instance, a direct channel from G-5, France to a detachment in an Army area. ♦ ♦ ♦
DIFFERENT TYPES OF DETACHMENTS
[The Gen Bd USFET, Study 32]
♦ ♦ ♦
b. In theory, the detachments were organized to meet all possible requirements. Since detachments destined for liberated countries were to be primarily supervisory in nature, it was not deemed necessary to have a complete coverage of all functions.
c. Detachments were placed at all govern. mental levels, "A" detachments being intended for regional capitals, "B" detachments for departmental capitals, and "C" and "D" detachments for arrondissement and city levels.
d. The composition of CA detachments is as follows:
e. The specialist reserve detachment normally consisted of eight officers and eight enlisted men. In theory, these officers were specialists but in practice they were also available as temporary replacements for Civil Administration administrative officers who were removed from detachments or casualties. ♦ ♦ ♦
CIVIL AFFAIRS SECTIONS WILL BE ESTABLISHED ON THE GENERAL STAFF LEVEL
[Ltr, Hq ETOUSA to Fwd Ech, ComZ, et al., 22 Apr 44, GO's, FUSAG 12th AGp]
1. It is planned to establish Civil Affairs Sections of a
General Staff level (G-5), at each of the following headquarters:
Armies Army Corps
Forward Echelon, Communications Zone
Advance Section, Communications Zone
Each Continental Base Section.
2. A General Staff Corps vacancy for this purpose will be provided this headquarters for Forward Echelon, Communications Zone; Advance Section, Communications Zone; and each Continental Base Section. Vacancies for Army Groups, Armies, and Army Corps will be provided from those presently authorized the Commanders concerned. At least one such vacancy should be made available to each Civil Affairs Section.
3. The determination as to the necessity of establishing Civil Affairs Sections in Divisions, and whether, if established, they should be at General or Special Staff level, will be at the discretion of Army Commanders. If such sections are established at General Staff level, at least one General Staff Corps vacancy should be made available from those authorized the Division Commander concerned.
3. BASIC POLICIES FOR CIVIL AFFAIRS OPERATIONS
BASIC PRINCIPLES FOR COMBINED CIVIL AFFAIRS OPERATIONS
[SHAEF Standard Policy and Procedure for Combined Civil Affairs Operations in Northwest Europe, rev i May 44, SHAEF files, 14.1-6.]
2. The main features of these basic principles are as follows:
(a) The conduct of Civil Affairs operations is the responsibility of each Commander in accordance with the policies laid down by the Supreme Commander.
(b) The discharge of this responsibility may require the employment of all agencies at the disposal of each Commander.
(c) Civil Affairs Staffs are provided for planning and coordination. Civil Affairs Detachments will be assigned commanders from time to time for duties in the field.
(d) The command and staff channel runs from SHAEF to subordinate Military Commanders, with direct communications between Civil Affairs staffs of Commands on matters peculiar to Civil Affairs.
(e) Civil Affairs operations are limited, except as future directives may otherwise prescribe, to the areas affected by military operations. Within these areas each commander is responsible for Civil Affairs operations in his own area.
(f) The primary objective is to ensure that conditions exist among the civil population which will not interfere with operations against the enemy, but will promote those operations.
(g) Relief, except as otherwise directed, is limited to that required by military necessity.
(h) Civil Affairs operations in a liberated territory are mobile and temporary and continue only until the situation permits the assumption of control by the Allied National Authority.
(j) Consistency of interpretation and application of policies will be secured, with respect to each of the countries affected, by country manuals. ♦ ♦ ♦
WHAT SUPREME COMMANDER EXPECTED FROM CIVIL AFFAIRS OFFICERS
[Eisenhower, Remarks Before ECAD and SHAEF Officer Personnel, 9 May 44, SHAEF files, G-5, 10, Hists and Monographs]
I wonder whether I could expedite this by asking you to forget any orders you have received so far today and break ranks and gather around here so that I can talk to you. Standing out there you remind me too much of a firing squad. ♦ ♦ ♦
First of all, you are soldiers. Don't forget that. No matter what the nature of your work, no matter what you have to do, from now on you are wearing the uniform of your country and you are part of the fighting forces of it. Now you are soldiers-with a soldier's job. Not soldiers in a Napoleonic sense-you are as modern as radar and you are just as important to the Command. We in command have learned of this necessity through experience.
We went into Africa just a year ago last November. In Africa we did not have an organization of this kind set up. In Sicily we were better prepared; in Italy still a lot better. We will be still better prepared when we are on the Continent, due to the training you have had and the work you have done . . . although humanitarian in its results, your job is to help win the war.
You have got to get the rear areas organized-electric lights, roads, and supply-and you must keep them working and get them restored as
quickly as possible to some semblance of peacetime standards, so that they can
support to the utmost the armies that are fighting at the front. You must take
that responsibility for dealing with civilian affairs, whether it is restoring
public utilities or helping a nursing mother who cannot get milk, and if you
don't do your job, the armies will fail. A modern army is of great depth in the
field. The fighting front of an army is a fringe of a tremendous organization....
.... you are part of an Allied team. Always remember that. Because your section of the army is called "Civil Affairs" you must not make the mistake of thinking you are politicians....
There can be no differences between British and Americans at any level. Problems that need adjustment are solved, and adjustments are made, on a higher level than ours. I get a directive from two Governments, and that directive is translated into its various parts and comes to you, but that doesn't mean that either of those two parts is British or American. ♦ ♦ ♦
Now a word about what you are doing here. No Commander can ever accumulate the supplies, the organization, the men that he needs in exact timing with the existence of that need. In other words, he piles up reserves. For some time some of you have been reserve. You're probably getting bored, some of you. You are a little tired of idleness, particularly when some of you were extraordinarily busy men in civil life, and
you gave up many things-made many sacrifices -and you are getting damned tired of not being used usefully in view of your sacrifices. Your time is coming, so don't worry. ♦ ♦ ♦
4. FINAL REORGANIZATION IN SHAEF TO ESTABLISH DIRECT SHAEF CONTROL OF COUNTRY UNITS
REORGANIZATION OF THE OPERATIONS BRANCH, G-5, SHAEF, TO ENABLE SUPERVISION OF FIELD OPERATIONS
[Memo, G-5 Div, SHAEF, to All Secs G-5 Opns and All Country Units, SHAEF, 24 May 44, SHAEF files, G-5, 16.02, SHAEF (SS), Opns and Policy]
1. Effective immediately, the Operations Branch, G-5, will be
divided into two groups each under a Deputy Chief of Operations Branch as
(a) Operations (Ops)
(b) Organization, Personnel, Equipment and Training Group (OPET).
2. . . . In brief the two [Ops and OPET will function under the Chiefs
of the Ops Branch as follows:
(a) Ops will:
i. Supervise operations in the field.
ii. Coordinate civil affairs operational plans with military plans at this Hq.
iii. Coordinate civil affairs operational plans with due regard to policies of higher authorities, requirements of functional branches and availability of personnel and equipment.
iv. Review CA operational plans of subordinate echelons.
v. Coordinate Post-"OVERLORD," post-hostility and surrender terms planning.
vi. Supervise the operations of Country Units, SHAEF, in the preparation of detailed plans, specialist manuals, etc.
vii. Supervise the assembly and distribution of information for CA Staffs and Detachments in the field.
viii. Supervise contacts with Allied National Authorities as they concern the operation of liaison officers.
ix. Develop plans and policies covering Civil Affairs responsibilities in connection with:
Censorship (in conjunction with Economics Branch)
Public Monuments and Fine Arts.
x. Supervise the compilation of historical records
(b) OPET will:
(i) Develop plans and policies concerning Civil Affairs personnel and their equipment, organization and training.
(ii) Arrange for the issue of the necessary directives and orders to effect such of these policies as are approved.
RESPONSIBILITIES OF COUNTRY UNITS REDEFINED IN ACCORDANCE WITH FINAL PLAN OF SHAEF MILITARY MISSIONS TO THE GOVERNMENTS [Memo, G-5 SHAEF to All Branches and Secs, G-5, 5 Jun 44, SHAEF G-5 files, 16.02, SHAEF (SS), Opn and Policy]
Role of the Country Units
I. In general, Country Units will perform the following roles:
a. They will be detailed planning and working parties at the disposal of G-5
b. They will form a reserve of expert personnel who will have specialized in, and concentrated on, problems affecting their respective countries. This reserve may be drawn upon from time to time to provide a CA Mission to the national authority with which they are concerned or to provide personnel for any need that may arise in their respective countries.
Tasks of Country Units
Tasks of County Units will include:
a. The production of a country handbook which they will keep constantly under examination with a view to improving it and bringing it up to date with current policy.
b. Constant study of the problems affecting their respective countries with a view to increasing the store of knowledge affecting these countries and to preparing personnel for operations in these countries.
c. The preparation of detailed plans in accordance with the requirements of branches of G-5.
Relationship With G-5
3. a. Country Units will be under the general surveillance of Ops Branch for matters affecting organization, planning, and broad policy. The
chain of command to Chiefs of Country Units will be run through Chief of Ops
b. The Country Staff Sections in Ups Branch will keep in close and constant touch with the country units to insure that country units are kept "in the picture," and so that the Staff Sections themselves can represent the views of Country Units in SHAEF. Except in purely technical matters Country Staff Sections will be the normal channel for conveying information and instructions to Country Units.
c. Branches of G-5 will have direct access to Country Units on technical matters. ♦ ♦ ♦
Relationship With National Authorities
4. a. Netherlands, Belgian and Norway Country Units will continue their existing contacts with the National Governments with which they are concerned, but will not discuss policy.
b. For France, however, when conversations are reopened with a French Authority, such conversations will be conducted on a G-5 level and not through the medium of the French Country Unit. ♦ ♦ ♦
5. CIVILIAN SUPPLY: MILITARY PROGRAM
COMBINED SUPPLY SUBCOMMITTEE SUBMITS ITS ESTIMATES
[Memo, Wright, Dir, ASF, for the Dir, CAD, 3 Feb 44, Hiss, ASF, Civ Sup, DS-175]
1. Estimates of the minimum needs of the civil population of enemy occupied Europe for a period of six months after surrender or collapse of the enemy are hereto attached. (Tab A).5 These estimates reflect the discussions which have taken place in the series of meetings held with the British representatives on this subject during the past ten days.
2. The basic assumptions underlying these estimates are:
a. that there will be no damage done to the European countries upon withdrawal or surrender of German Forces; and
b. that only those minimum supplies should be provided which are essential to avoid disease and unrest. Detailed instructions to the Technical Services outlining the assumptions in further detail are attached. (Tab B)
3. The attached estimates (Tab A) are in no sense a supply program. They are rather an analysis of the needs of the countries in question, prepared in order to provide a basis of discussion with interested supply and shipping authorities and relevant planning agencies, so that a statement of requirements and an outline of proposed supply action may be developed.
4. One of the basic problems yet to be determined is the responsibility as between the U.K. and the U.S. for furnishing supplies against such program as may be finally adopted. Ultimately this responsibility must be discharged by the C.C.S. under 324/1 6 , and appropriate recommendations to this end will be formulated as promptly as possible. This problem requires coordinated consideration by the military, supply, shipping, political, and fiscal agencies of -the supplying governments....
5. A preliminary study of the problem of supply responsibility based on views of certain U.S. supply authorities, indicates that only a fraction of the entire program (probably not over one-fourth) would be shipped from the United States and that substantial priorities of the program may be supplied from within Continental Europe. ♦ ♦ ♦
ESTIMATES ARE COMPLEX AND TENTATIVE
[CCAC-64, Sup Subcomm. to CCAC, 16 Feb 44, CCAC files, 400 (9-21-43), sec. 2]
1. Combined civilian supply operational requirements have been submitted to the Combined Chiefs of Staff by Headquarters, Supreme Commander, Allied Expeditionary Force. These requirements have been published as alternative plans, Plan I (RANKIN "C") and Plan II (OVERLORD) in C.C.A.C. (S) II. The comments herein with reference to SCAEF requirements are directed to Plan I. . . .
2. SCAEF Plan I requirements have been prepared on the basic assumption that provisions should be made for initial relief items such as food, fuel, medical and sanitary supplies and equipment, soap, clothing and footwear, and in addition that provisions should be made for "industrial first aid equipment" (i.e., rehabilitation of general industry and spare parts for automotive
transportation). It should be noted that SCAEF requirements have been calculated only for those areas where it is anticipated troops will come into contact with the civil population during the course of operations.
3. The Supply Subcommitte has approved a combined program of requirements for all of enemy-occupied Europe in event of a German collapse without "scorching," (C.C.A.C.(S) 12) hereafter designated as Plan A.7 Note should be made that approval of Plan A requirements does not carry with it the assurance that such requirements can be met.
4. Both Plan A and SCAEF Plan I have been computed on the
basic policy that provision must be made for (i) those items necessary for
immediate relief (i.e., food, clothing, medical and sanitation supplies); (2)
those items necessary for the distribution of relief (i.e., fuel, and initial
repairs to public utility, communication and transportation systems), and
(3) those items which will have the effect of reducing the direct relief burden
at the earliest possible date. In providing for the third class of needs, the
two plans differ.
a. Plan A includes requirements for rehabilitation of the textile industry. The question of provision of fertilizers recommended by the War Department has been reserved for consideration by London.
b. SCAEF Plan I specifically excludes requirements for rehabilitation of agriculture and raw materials for rehabilitation of the textile industry, but, as noted in paragraph 2 above, includes a wide variety of items for "industrial first aid equipment."
a. That SCAEF be informed that Plan A, as published in C.C.A.C. (S) 12, has been approved as establishing needs for Europe in the event of collapse;
b. That SCAEF accordingly be further informed that Plan A was regarded as supplying the basis for a statement of SCAEF requirements in lieu of SCAEF Plan I, as published in C.C.A.C. (S) II;
c. That SCAEF be requested to comment on and, if so desired recommend changes in Plan A. ♦ ♦ ♦
[CCAC(S) 12 (rev), Sup Subcomm. to CCAC, 18 Feb 44, CCAC files, 400 (9-21-43), sec. 2)
1. The Supply Subcommittee has agreed, subject to the conditions stated hereinafter and in the several enclosures, upon certain preliminary estimates concerning civil relief for the military period for the countries of Europe (excluding the U.K., U.S.S.R., and neutral countries) prepared on the basis of complete German collapse, occurring in the early part of a calendar year and without "scorching."
2. These estimates have been prepared for the purpose of furnishing overall minimum estimates of needs of each of these countries for supplies from sources outside the respective countries and of affording a basis for the initiation of procurement action.
3. The express right has been reserved by the representatives of both the War Office and the War Department, in authorizing the agreement upon these estimates, to require reconsideration of any estimate with which either of them is not satisfied in the light of further expert examination of altered circumstances.
4. Further sets of estimates are at present being prepared by the Supply Committee, (1) on the assumption of collapse with "scorching" and (2) on the assumption of operational invasion with "scorching."
5. For purposes of initiating procurement (subject to approval by C.C.A.C. 8 and allocation of source of supply) consideration will be limited to the estimates for Norway, Denmark, Holland, Belgium (including Luxembourg), France (including Corsica), Germany, Austria, Italy (including Sardinia), Yugoslavia, Albania, and Greece (including Crete and Dodecanese).
It should be noted that the estimates for Germany and Austria, with the exception of medical and sanitary supplies, soap, and agricultural rehabilitation, are based solely upon caring for the displaced persons (including forced labor, prisoners of war, and refugees) from other nations found within their borders.
6. The estimates for the remaining countries have been included in order to provide a more complete picture. So far as the Subcommittee is aware, there is as yet no decision as to the extent, if at all, the U.S. and the U.K. are to assume responsibility for the supply of any of these countries. Such remaining countries are Finland, Poland, Czechoslovakia, Hungary, Rumania, and Bulgaria.
7. It must be clearly understood that accept-
ance or approval by the C.C.A.C. of the estimates stated for each of the several countries covered does not involve any commitment by the War Department or the War Office that any of such countries are in fact to be furnished with either the quantities or the kinds of the indicated supplies.
8. The Supply Subcommittee recommends:
a. That the Combined Civil Affairs Committee approve the estimates, subject to the reservations contained in paragraph 3 and 7 above, and take note that necessary supplemental information is being prepared as to the extent to which such requirements can be met and as to sources of supply and to the shipping implications.
EISENHOWER ASKS IMMEDIATE ACTION ON SUPPLY RESERVES
[Msg. SHAEF to WD, 23 Mar 44, Mel-4, CCAC files, 44 (9-21-43), sec. 2, CM-IN 16199]
... Imperative to detailed operational planning for movement of supplies that a credit be established for SCAEF. We have knowledge of supplies now available in UK and, because of shortness of time, must insist on use of such supplies to fullest extent possible to meet initial requirements. . . .
In order that we may make actual allocation of supplies to army groups and indicate source of supply, must receive allocation of procurement responsibility by 27 March....
. .. The basis of allocation statement requested . . . is larger in amount than actual army groups figures. However, considered advisable here that our responsibility to make allocations of supplies between army groups with indication of source should be protected by larger allocation of procurement responsibility so that SCAEF will have an operational reserve credit on which to draw for unforeseen contingencies. ♦ ♦ ♦
Repeat that matter of immediate concern to us is authority to draw on supplies now available in UK. Where items available in UK are not same as our stated requirements, but can be used as substitute we will accept ... 9
INITIAL SUPPLY FOR OVERLORD To COME FROM UNITED KINGDOM STOCKPILES
[Msg, CCS to SHAEF, CM-OUT 14303, 25 Mar 44, CCAC files, 400 (9-21-43), sec. 2]
2. Foodstuffs. You are authorized to use foodstuffs from UK food reserves as set out in CIV308 for OVERLORD subject to all conditions set out in CIV-308....
3. Medical and sanitary. You are authorized to draw on medical and sanitary supplies procured in UK for Civil Affairs purposes Northwest Europe to limit of availability even though not in similar units to CCAC (S) 12 items. Balance of your requirements will be provided from U.S. to the extent they correspond with CCAC (S) 12 items, unless you are later notified to the contrary.
4. Soap. You are authorized to draw on soap supplies procured in UK for Civil Affairs purposes Northwest Europe to limit of availability. It is understood that at present there is no soap available. Requisitions for balance should be submitted to U.S. Request that you notify us early whether you desire quantity shipped to and stockpiled in UK and if so how much?
5. Clothing and footwear. You are authorized to draw on such supplies procured in UK for Civil Affairs purposes in Northwest Europe. Uncertain here what quantities actually now available in UK for this purpose. Balance should be requisitioned on U.S. State whether, and if so to what extent, you desire balance now shipped and stockpiled in UK. ♦ ♦ ♦
9. Above information sent you in view of urgency of your request to enable your planning to proceed. Detailed consideration of some of your requirements in comparison with tentative operational estimates at present urgently proceeding here and you will be notified shortly. Comment as to your estimates in scale or specifications is being forwarded by separate cable referring to all foregoing items. ♦ ♦ ♦
SCAEF'S RESPONSIBILITY FOR RELIEF SUPPLIES IN HIATUS AREAS
[CCS to SCAEF as Contained in SMC-IN 2674, 27 May 44, SHAEF files, G-5, 2080]
♦ ♦ ♦ 1. The general policy of the United States and United Kingdom is that responsibility for the initial provision and distribution of relief supplies to all areas under your jurisdiction to be liberated from the enemy shall be a military responsibility and that such military responsibility shall not be confined to combat zones and areas of lines of communication.
2. Although it may not be essential to the successful accomplishment of your military mission to provide relief supplies in all areas of countries under your jurisdiction which are to be liberated from the enemy, planning for such an eventuality must be realized as a requirement and should be undertaken by your headquarters. It is recognized here that you alone are in a position to estimate the extent to which you will be required by circumstances to assume the initial burden for carrying out relief and rehabilitation measures in Europe to insure the least possible interruption to the advance of Allied Forces to the ultimate objective.
3. As Supreme Commander, AEF, you will assume responsibility
under operations RANKIN and OVERLORD for the initial provision and distribution
of relief supplies in all liberated areas under your jurisdiction, whether or
not such areas or territories constitute combat zones or lines of communication,
subject to the limitations and definitions set forth hereafter:
a. Such distribution must be accomplished without hindrance to the successful completion of the operation, particularly with respect to the logistical and administrative support required to sustain the forces allocated to you for the defeat of Germany.
b. Your responsibility does not extend to such areas and territories as may now or hereafter be decided to be areas which will be occupied by the armies of the U.S.S.R.
c. Your responsibility will not include areas or territories outside the combat zones or lines of communications, if it is determined by you that conditions within such areas or territories are not sufficiently stabilized to warrant the provision of relief supplies therein.
d. The scale of relief to be provided for all enemy-occupied countries is contained in CCS 324/I, a copy of which has been forwarded to you....
4. You are directed to undertake all measures necessary to carry out this responsibility. Policies established by the Combined Chiefs of Staff concerning relief in liberated areas are contained in CCS 324/I. Indigenous resources will be utilized to the fullest extent and local authorities made responsible for transportation, distribution, and accountability of relief supplies to the extent deemed desirable by you. In so far as concerns areas or territories outside combat zones and lines of communication as determined by you, your responsibility shall be to make available such relief supplies as are deemed necessary by you. Your responsibility for distribution in such areas will be limited where possible to delivery at ports or other appropriate terminals. The distribution of supplies thereafter shall, unless otherwise directed by the Combined Chiefs of Staff, be the responsibility of the local authorities. You will receive further instructions on this point and on your dealings with foreign governments on relief matters.
5. Your responsibility in this respect will continue until a determination has been made, based on your recommendation to the Combined Chiefs of Staff that the military situation permits transfer of this responsibility.
6. The Supreme Allied Commander, Mediterranean, is being furnished a copy of this directive and in order to insure uniformity between the theaters concerned, SACMED will effect such coordination with you in coming operations as you may deem necessary. ♦ ♦ ♦
SCAEF CANNOT EARMARK TRANSPORTATION FOR CIVILIAN SUPPLIES
[Min of Mtg Held in McCloy's office, 30 May 44, CCAC files, 400, Fr (3-14-44), sec. I]
Mr. Monnet . . . talked at length particularly with respect to the urgent necessity of providing transportation equipment. . . . He indicated that the French railroads were in extraordinarily bad shape and would need supplementing by additional equipment and quick repair materials and by automotive equipment. Mr. Monnet suggested that the Theater Commander be informed that he should set aside trucks for this purpose.
General Clay stated that SCAEF could not take any more trucks than had been shipped to him because of supply, shipping and port conditions in Britain, particularly the latter.
Mr. Monnet stated that despite General Clay's statement he could not help but insist that trucks
be supplied for distribution of civilian supplies and that SCAEF allocate trucks for this specific purpose.
Mr. McCloy stated that SCAEF could not allocate trucks for this purpose during the military period.
General Hilldring stated that transportation would be the prime bottleneck (luring the operational period both for the troops and civilian population. General Eisenhower had been charged with both problems, and has been given all the transportation we have. Under the circumstances he must be permitted to pool his transportation in order to get the maximum use out of it. ♦ ♦ ♦
LIBERATION WILL NOT END FOOD SHORTAGES
[Ltr, McCloy to Monnet, Mission of the French CNL, 2 Jun 44, CCAC files, 400, Fr (3-14-44), sec. I]
In accordance with your request there is enclosed a survey containing preliminary estimates of the important needs of France for civilian supplies during the initial six months period after German collapse. ♦ ♦ ♦
It is most important that there not be created an impression in France that the day of liberation will bring an end to food shortages or restrictions. It is of equal importance that the French people should have no reason to believe that the United Nations have made promises as to food and other supplies which cannot be fulfilled. In this connection you are urged to preserve with the utmost care the confidential character of this information in order that revisions which undoubtedly will have to be made in the light of supply availability, shipping or other considerations will not give rise to confusion or misunderstanding. ♦ ♦ ♦
U.S.-U.K. AGREEMENT ON DIVISION OF RESPONSIBILITIES FOR PROCUREMENT AND
[Aide-mémoire, Br Embassy, 8 Jun 44, CCAC files, 400 (9-21-43), sec. 4]
7. Discussions have been proceeding for some time between the United States Government and His Majesty's Government in the United Kingdom, on the provision of relief in Europe during the military period. Both Governments are fully alive to the importance of starting procurement forthwith but His Majesty's Government in the United Kingdom for their part have hitherto found difficulty in agreeing on the basis for procurement in the absence of agreement on the manner in which the ultimate financial burden of such relief should be distributed. In view of the urgency of the matter, however, His Majesty's Government in the United Kingdom, in the light of discussions that have been taking place between representatives of the two Governments, are now prepared to proceed on the understanding set out below.
2. His Majesty's Government in the United Kingdom have considered the proposals put forward by the United States members of the Combined Civil Affairs Committee and are prepared, subject to the reservation contained in the following paragraph, to agree that initial procurement under Plan A should go forward on the following basis:-That the United States shall bear initial procurement responsibility for purchases in the United States, that the United Kingdom shall bear initial procurement responsibility for purchases in the United Kingdom and the British Commonwealth, excluding Canada, and that procurement responsibility for purchases in countries other than the United States and the British Commonwealth should be divided equally between the United States and the United Kingdom.
3. This agreement on the part of His Majesty's Government is, however, subject to the reservation which they understand is accepted by the United States members of the Combined Civil Affairs Committee, that the arrangement outlined above shall in no way prejudice the ultimate financial settlement for the cost of relief during the military period, which is a matter for negotiation between the two Governments.
4. It would be appreciated if the State Department would confirm their acceptance of the proposal made in paragraph 2 above and of the reservation in paragraph 3, so that appropriate instructions may be given to the British members of the Combined Civil Affairs Committee in order that procurement may go forward without delay.
5. It is the view of His Majesty's Government that any such final settlement between the supplying countries must be on an equitable basis and must be based upon a recognition of the relative financial strengths of the countries concerned. In this connection, His Majesty's Government desire to place on record their view that in the light of the difference in the financial strength between the United States and the United Kingdom, they would not be able to regard an equal sharing of the burden of relief in the military period between the two countries as an equitable settlement.
6. It will be noted that in paragraph 2 the po-
sition of Canada has been specifically reserved. This will be treated separately and will no doubt be the subject of special negotiations between the three Governments. ♦ ♦ ♦
[Aide-mémoire, Dept of State, Washington, 8 Jun 44, CCAC files, 400 (9-21-43), sec. 4]
The Department of State has carefully considered the Aide-mémoire presented by the British Embassy. . . . The Department is pleased to confirm its acceptance of the proposal made in paragraph II and the reservation made in paragraph III of the Aide-mémoire. The United States Government will accordingly instruct its representatives forthwith to proceed with procurement on the basis specified in paragraph II and assumes that the Government of the United Kingdom will take corresponding action.
... The Department takes the view that the final settlement should be on a fair and equitable basis, in the determination of which no relevant factors should be excluded. 10 ♦ ♦ ♦
SHAEF HANDBOOK SETS FORTH PRINCIPLES OF CIVILIAN SUPPLY PROCEDURE
[SHAEF Fld Handbook for CA (France) (Provisional), 16 Jun 44, SHAEF files, G-5, 115.04, Hist]
286. General. Responsibility has been placed on Commanders of Army Groups and L of C/ ComZ having area responsibility for the provision to civilian populations within the zones of operations and lines/zones of communication of the CA supplies/stores necessary to meet such relief and rehabilitation requirements as will assure accomplishment of the military operations.
287. Provision of CA Supplies/Stores. Credits will be given authorizing the use by such Commanders of the CA supplies/stores made available to the Supreme Commander by the Combined Chiefs of Staff. Commanders will call forward the supplies/stores thus allocated.
288. During the planning stage initial overall estimates of Civil Affairs Supply requirements will be made by SHAEF.
290. Supply Organization. Except for inherent organizational differences, CA Organization for Supply operations in U.S. and British formations will conform to a common pattern with regard to the methods of obtaining and distributing CA supply/stores.
291. Scale/Basis of Issue. Subject to such restrictions as may from time to time be issued by SHAEF, CA supplies/stores will be provided by appropriate commanders to civil populations on a scale/basis of issue designed to bring local standards up to a minimum consistent with the standards of military necessity. For provision of foodstuffs, a standard of 2,000 calories per day per head is established.
292. Distribution. CA supplies/stores will be made available in local areas by delivery to authorized French authorities for distribution by them to civilian populations. At the earliest possible date consistent with military operations, arrangements will be completed for turning over CA supplies/stores, at points of initial entry, to French authorities for distribution.
293. Payment for Supplies/Stores. Except when operational necessity requires otherwise, CA supplies/stores will be provided to French authorities only on prepayment. A list of prices to be charged for these supplies/stores will be prepared by SHAEF and furnished to lower HQs through technical channels prior to the start of operations. In accordance with the established Financial policies, arrangements will be made for loans to such authorities when they do not possess sufficient funds to cover the cost of supplies/ stores to be furnished. Where it is impracticable for loans to be advanced to French authorities who do not possess sufficient funds to cover the cost of the supplies/stores to be furnished, delivery may be made by or under authority of appropriate commanders with payment temporarily deferred. Instructions regarding receipt forms and the disposition thereof will be provided through technical channels.
294. Direct Issues to Consumers. In accordance with relief policies established by SHAEF, appropriate commanders will be authorized in emergencies to allow the direct issue by CA Detachments of CA supplies/stores to actual consumers. In order to permit future settlement between the countries concerned, a certificate covering these issues must be accomplished by the U.S./Br officer responsible for the distribution of such supplies/stores.
295. Utilization of Local Resources. Prior to
the issue of imported CA supplies/stores, French authorities will be required to make maximum use of existing local resources including manufacturing and production facilities. This will be accomplished by ensuring that locally available supplies/stores are procured and distributed by the French authorities before similar CA supplies/stores made available by SHAEF are distributed. However, military procurement of supplies/stores for CA purposes may be affected where necessary. Such purchases will be in accordance with policies and procedures laid down by the GPA [General Purchasing Agent] in the US Zone and the Procurement Board in the British Zone.
296. Use of Civilian Labour. French authorities receiving CA supplies/stores will normally be required to hire, pay and furnish civilian labour for the handling of such CA supplies/ stores at the time and place of turnover from the CA representative. However, CA Detachments may be permitted to hire civilian labour through appropriate military channels when French authorities are unable to provide that required for this purpose. The cost of such labour will be borne by the French authorities concerned.
297. Use of Military Transport. When French civil authorities, after receipt of relief supplies, are unable to provide transport for their distribution, CA Detachments will apply to formation/HQ for the use of military transport.
298. Stock Control. SCAEF will exercise control of credits allocated to commanders and resesves the right of transfer with regard to such stocks regardless of allocations made. To implement this policy periodic reports to SHAEF will be submitted by lower Hqs, indicating the status of credits allocated to them. Instructions regarding the form and periods of submission will be transmitted through technical channels. ♦ ♦ ♦
6. BRITISH AND AMERICANS ARGUE OVER KIND OF CURRENCY TO BE USED
QUESTION OF THE TYPE OF CURRENCY TO BE USED IN NORTHWEST EUROPE
[Ltr, F. Phillips, Br Sup Council in North America, to Daniel W. Bell, Undersecy of State, 6 Feb 43, CAD files, 123 (2-6-43), sec. I]
1. A number of difficult questions relating to currency arrangements for future operations remain unsettled and in the spirit of the messages exchanged between the Secretary of the Treasury and the Chancellor of Exchequer, who agree that all such questions should be the subject of common discussion, I would much welcome an opportunity to go over some of the important questions with you.♦ ♦ ♦
2. It is, I think, agreed policy in all cases that we should use ordinary local currency whenever it is available or can be obtained. But we know that owing to considerations of availability of such currency and of military security we shall not be able to rely solely on this method of payment....
For the operations in French North Africa we are using British Military Authority (BMA) notes and you are using ordinary dollar notes distinguished only by the yellow seal. The first and most important question is whether the same policies should be adopted in European operations. We suggest that there would be great advantage in your using special notes as we do.
Many of the arguments which led to your decision in the case of North Africa do not apply to the countries of Europe. North Africa was a dubious neutral; the expedition was a great adventure and it was important to do everything to avoid any possibility of political friction. In Europe we are more likely to be dealing either with genuine allies or with genuine enemies. It is true that the yellow seal dollars have been more popular than our BMA notes but this has been no disadvantage to us. We have had no difficulty, so far as I have heard, in getting our notes accepted for the current purposes for which they were designed; and the preference for dollars only becomes a decisive factor when it comes to hoarding. . . .
On the other side, it seems to us that there are certain definite disadvantages in the use on the continent of Europe of ordinary dollars even if they are distinguished by a yellow seal or other similar markings. . . . What arrangements we may make for passing the cost of occupation to the enemy countries are a matter for later decision when it comes to making an armistice but it is at least a grave complication if the inhabitants of those countries have, in the meantime, received genuine American dollars which sooner or later can be used in the United States. They are likely to become an immediate instrument of hoarding. If, on the other hand, you use spe-
cial notes and put on the enemy government the burden of recalling them within a given time after which they will become valueless . . . this particular trouble is taken off of your shoulders. .. .
3. A second question, if one assumes that special notes are to be used, is whether they should be denominated in sterling and dollars or in the local currency concerned. I fear that the practical answer is that even if we preferred local currency denominations, we could not print the notes in time. At least for the present we feel that we must increase our stock of sterling BMA notes rather than try to make a new series of notes for all possible countries concerned.
4. In the case of the Western European Allies, the question remains of the use to be made of the local currency Which the exiled governments have prepared. Those governments have asked both our governments to discuss the question of future currency arrangements with them. I think we are agreed that we must take full account of their views but that, for reasons of military security we cannot disclose our plans in advance. We are anxious that they should produce their notes in quantities considered adequate by those authorities. ♦ ♦ ♦
BRITISH FROWN ON USE OF SPECIAL CURRENCIES IN LIBERATED COUNTRIES
[Min of Mtg Held in McCloy's Office, 24 Sep 43, 11 CAD files, 123 (2-6-43)]
♦ ♦ ♦ Before the combined meeting, Mr. Taylor [U.S. Treasury] distributed to the U.S. members copies of the memorandums setting forth Treasury Department opinions regarding ... Occupation Currency, European Theater and . . . Rates of Exchange for the Metropolitan franc. An exchange of views of the U.S. members took place and it was agreed that, after the Treasury memorandums had been studied, an agreement would be effected on the American side prior to coordination with the British.
Sir David Waley [UK] stated to the combined meeting the
British position concerning various aspects of the problems under consideration,
with several details, relative thereto, including the following points:
(1) The British prefer to use currencies of the countries to be liberated and, if possible, to avoid use of BMA notes and yellow seal dollars.
(2) Regarding supplies of various currencies, Dutch guilder notes are being printed in Montreal for the Netherlands governments-in-exile.
(3) The British desire to use Metropolitan francs as invasion currency for France. It is not certain, however, that the supply available is adequate.
(4) The situation regarding amounts available of Belgium francs, Dutch guilders and Norwegian kroners remains to be clarified....
(5) The governments-in-exile would make available, in advance, supplies of their currencies, subject to future settlement. Early payment would be expected for such currencies used for payment of troops and other military disbursements....
(6) The British are inclined to leave a large measure of responsibility to the governments-in-exile as to fixing their rates of exchange. ♦ ♦ ♦
U.S. TREASURY FAVORS USE OF YELLOW SEAL DOLLARS IN THE SPEARHEAD PHASE
[Treasury Dept Memo, 23 Sep 43, sub: Occupation Currency, ET, Circulated by Taylor to UK Members of Mtg Held in McCloy's Office, 24 Sep 43, CAD files, 123 (2-6-43)]
I. Occupational Currency Problems in Military Operations
In considering currency problems associated with military operations it is convenient to distinguish between the three stages of occupation: (I) the spearhead invasion period, (2) period of military control, and (3) period of civilian control.
I. Spearhead Invasion Period. During this period the military is fighting to establish its bridgehead or foothold over the area and all other considerations should be completely subordinated. ♦ ♦ ♦
II. The U.S. Army must be certain that "Spearhead" Currency will be eagerly accepted by the local population in friendly areas
The primary consideration in the choice of a currency to be used by the military in the opening stages of an invasion is the effect the use of that currency will have on military operations. The Army must have a currency that can be easily obtained in adequate amounts and that will be accepted without hesitation by the people in the invaded areas.
The U.S. dollar seems to be ideally suitable for use by American military forces during the initial stage of an invasion operation. Throughout the world the dollar is the symbol of the financial
strength and of the vast economic resources of the United States....
The use of U.S. currency dollars may have the added effect of inducing a feeling of currency stability and economic order, thereby removing one factor of disruption to the local economy that is attendant upon any military invasion. ♦ ♦ ♦
The U.S. Army is quite satisfied with its experience in North Africa and Sicily with yellow seal dollars and is prepared to employ this same type of currency during the initial period of invasion elsewhere if the situation seems to warrant it.
III. British Views on Currency To Be Used in Spearhead Operations
Prior to the landings in French North Africa, the British War Office indicated that it was in favor of using special military currency (such as the British Military Authority note) for spearhead operations. The British cited the experience of Germany in Western Europe where the Nazis used special military currency and also referred to the use of BMA notes in Tripolitania as illustrations of the successful use of that type of currency. The British opposed the use, by the United States, of the U.S. dollar on the grounds that it was too expensive a currency, i.e., because it would probably have to be honored at face value in the future. The American Government, however, felt that all other considerations should be subordinated to the one paramount issue-the success of the military operations.
The question of money costs is not and should not be a decisive consideration, particularly since, in the final analysis, the cost of the operation obviously does not depend on the type of currency employed, but depends, rather, on other broad policy decisions.
Apart from the fact that ultimate costs can be controlled in
other ways, the relationship of the use of U.S. dollars to costs is not likely
to be significant for the following reasons:
(1) The shift from spearhead currency to local currency can be effected in a very short period of time....
(2) When it is decided to recall dollars from circulation, it is anticipated that the great majority of these notes will be returned to our officers in exchange for local currency. ♦ ♦ ♦
Since the invasion of North Africa, British views about the desirability of spearhead currencies have changed and they now seem reluctant to continue the use of the BMA note. This reluctance may have stemmed from the fact that the British feared that the BMA note would circulate at a discount vis-à-vis the dollar unless it was linked to the dollar. By linking the BMA note to the dollar it became subject to some of the criticisms which the British levied against the use of yellow-seal dollars. Even when linked to the dollar the BMA note did not receive as favorable a reception as did the yellow-seal dollar.
London now tends to favor the abandonment of the BMA note for use in friendly areas and the adoption of local currencies in their possession and refugee currencies printed in London (and Montreal) by the refugee governments. This view raises the question anew as to what currency should be used during the spearhead period.
In addition to the objections mentioned above to the general use as spearhead currency of yellow seal dollars and BMA notes, the British have additional objections to their use in friendly countries. They feel that the exiled governments strongly resent the use, in the initial and later periods, of any currency other than the refugee currency prepared by those governments or such old local currency as may be in their possession.
The exiled governments in oral discussion with U.S. Treasury officials and in memoranda submitted have advanced the following reasons for their opposition to the use as spearhead currency of any but their own prepared or old local currency:
1. The refugee governments view the use of currencies not under their control as being both an infringement of their sovereignty and politically injudicious inasmuch as it may tend to prejudice their case in the eyes of the local populace. . . .
2. That the injection of such currencies will lead to a disruption of the monetary system through increasing distrust on the part of the local population in their own currency and may give rise to premiums on foreign currencies and discount for local currency....
3. Currencies not controlled by the exiled governments will be hoarded by the local populace. . . .
It is not felt that these arguments are particularly weighty in view of the significance and importance of the military operations. These objections may be answered forthwith:
1. The Sovereignty of the Governments-in-Exile. The argument that the use of currencies not under their control may infringe the sovereignty of the governments-in-exile appears to be premised upon a faulty perspective. These governments will owe their very existence to the efforts of the Allied military machine. Unless they object to the use of the Allied armies as an infringement of their sovereignty, there can be
little basis for objecting on that ground to the use of one of the economic weapons which those armies deem effective to assure complete victory. ♦ ♦ ♦
2. Disruption of Local Currency Systems. Objections have been voiced to the use of yellow seal dollars in the spearhead operations, on the grounds that many different kinds of currencies would necessarily have to be dealt in and these would tend to disrupt the local economy and render it difficult for the local government to control its currency system at a later period.... The yellow seal currency and BMA notes could readily be withdrawn from circulation at a date to be determined after the invasion, by placing a time limit on the period within which they would be accepted as legal tender....
3. Currency Hoarding. In view of the fact that the yellow seal dollars and the BMA pounds are currencies expressly designed for use in spearhead operations and distinguishable from the currencies circulating in the United States and Great Britain, the withdrawal of these currencies from circulation should present no great problem...
. refugee government currencies might constitute a military hazard. Some of the governments-in-exile do not enjoy wide popularity among the native population. . . . For American troops to appear in the guise of liberators and immediately start using currencies of the governments-in-exile might prejudice the case of liberation in the eyes of local inhabitants. ♦ ♦ ♦
THE THEATER STRONGLY OPPOSED TO USE OF YELLOW SEAL DOLLARS
[Msg, SHAEF to WD, 8 Nov 43, CAD files, 123 (2-643), sec. I, CM-IN 4980]
Use of Metropolitan francs as spearhead currency strongly favored this Theater, sufficient supply of same being available for initial operations. Plans should be made for supply of another currency, preferably an allied military franc. Possibilities of having such currency printed here now being explored upon which you will be advised later. Strenuous objections exist against use of yellow seal currency for the following reasons:
It seems inappropriate to liberate an occupied country and
immediately introduce a new currency;
It adds one more type of currency to be dealt with by finance officers, British and Canadian Field Cashiers.
In those cases where costs of operation will be charged to country occupied, it will be impossible to have country bear expenses initially if yellow currency is used as this will always remain an obligation of the United States to redeem....
AN ALLIED MILITARY NOTE THAT LOOKS FRENCH WILL BE USED
[Msg, Hilldring to McCloy at SEXTANT, 5 Dec 43, CAD files, 123 (2-6-43), sec. I, CM-OUT 1927]
... The currency that we are proceeding to print is the Allied military franc and not the French Republic franc. Both Mr. Hull and Mr. Stimson are agreed that the printing and use by Allied military forces of a French Republic Franc would confer upon the Committee a degree of recognition with respect to Metropolitan France which would jeopardize if not endanger the President's formula for dealing with the Committee. The Allied military franc in any form is not acceptable to the Committee according to Monnet. However, Monnet has been informed by Mr. Stimson that in his opinion there is no alternative in view of the terms under which the French Committee has been recognized by the United States. In the light of this understanding, Monnet has conferred with the War Department, State and Treasury Officials in the preparation of an Allied Military franc which is least objectionable to the French and we are proceeding to provide this type of Allied military franc. ♦ ♦ ♦
PRINTING OF ALLIED MILITARY FRANCS IS HALTED
[Memo, Hilldring for CG, ETOUSA, 17 Dec 43, CAD files, 014, Fr (3-8-43) (1), sec. 2]
1. Supplementing my memorandum of 6 December 1943 [Chapter XXII, sec 3] regarding the above subject, you will have received from the Combined Chiefs of Staff through the British Chiefs of Staff cable dispatched to COSSAC today concerning monetary and fiscal planning for the various Western European countries. However, the following should be added in order to bring information up to date in regard to plans for France.
2. Paragraph 6a of my memorandum of 6 December 1943 indicated that we could proceed at once with the preparation and printing of A. M. francs for use in Metropolitan France. A few days later the British Ambassador to the United States, Lord Halifax, called upon the Secretary of State and informed him unexpectedly that the British Government is now opposed to use of an Allied Military franc. The British now propose a French national currency
issued by the French National Committee.
3. In view of the President's message of 26 November 1943 and the principles set forth in the Dunn-Wright formula for civil affairs for France, the above mentioned developments brought to a halt the arrangements which had been started for the printing of an A.M. franc issued by the Bureau of Engraving and Printing, Treasury Department. Consequently the cable sent you today by the Combined Chiefs of Staff stated that final decision regarding franc currency must await further consideration at highest levels.
4. You will be kept posted of further developments as promptly and fully as practicable. Planning for France and other Western European countries is being pressed forward here as a matter of urgency.
SCAEF TO ISSUE A SUPPLEMENTAL FRANC BUT WILL NOT CALL IT MILITARY
[Cable GOV 2, CCAC to SCAEF, 29 Jan 44, GOV 2, CCAC files, 123 (10-30-43), sec. I, CM-OUT 12364]
.. . following is present status of plans regarding production of supplemental invasion currencies for countries indicated below: France-design for franc note issue has been approved by US and UK authorities and concurred in by French mission in Washington. This supplemental franc issue will be printed in Washington on behalf of Allied Military Commander and for use under his authority. No mention of military is contained in design. Treasury Department indicates printing can commence by February 15 and probably earlier....
WAR DEPARTMENT AGREES TO EXPEDITE THE SHIPMENT OF FRENCH FRANCS
[Msg, SHAEF to WD, 4 Feb 44, CCAC files, 123 (10-30-43), sec. 1, CM-IN 2923]
Have seen GOV 2 . . . seriously concerned at lack of finality in currency arrangements for continental operations. Essential that all necessary currency for OVERLORD be available in UK at least one month before D Day. We must also bear in mind possibility that RANKIN might occur before OVERLORD D Day, or might rapidly follow launching of OVERLORD....
[Msg, CAD to SHAEF, 6 Feb 44, CCAC files, 123 (10-30-43), sec. 1, CM-OUT 2661]
... The packing of French francs for the first shipment to London has already started and the last of printing of forty billion will have been finished before April 15. It is believed that this time schedule can be shortened. Currency will be shipped periodically as sufficient stocks become available...
LOCAL BELGIAN, DUTCH, AND NORWEGIAN CURRENCY FOR ALLIED TROOPS
[Msg, CAD to CG, ETO, 29 Apr 44, CCAC files, 123 (10-30-43), sec. 1, CM-OUT 29891]
We have been informed by Morgenthau that the governments of
Belgium, Holland, Norway, acting in accordance with our request, have made
available to you amounts of their local currency for use of American Armed
Forces that may participate in the liberation of these countries. Our request to
these governments was that the currency should be turned over to you as Supreme
Commander in such amounts and such places and in such units as you might deem
necessary.. . .
[Msg, SHAEF to WD for CCAC, 9 May 44, VOG 36, CCAC files, 123 (10-30-43), sec. 2, CM-IN 6821]
Currencies turned over to the War Office by the Belgian, Dutch and Norwegian governments-in-exile are available to SCAEF for all purposes, including needs of U.S. forces without prior conclusion of Treasury agreements as to terms and conditions. SCAEF now exercises control over these currencies with the War Office acting as SCAEF's agent. The Financial Branch, G-5 Division, SHAEF, is the Staff division charged with responsibility to SCAEF on these matters.
CIVIL AFFAIRS CURRENCY SECTIONS CREATED
[SHAEF Admin Memo 11, 4 May 44, CAD files, 319.1, Currency-Fr]
1. In accordance with directives of the CCS to this Headquarters, a Civil Affairs Currency Section will be activated for each country in which operations are undertaken by the Allied Forces. Each such currency section, when activated, will have the following functions and powers:
(1) Receive, hold, and supply adequate currency for pay and procurement of Allied Army Forces for Civil Affairs operations.
(2) Provide a central depository and clearing house for funds issued to and deposits received from the Allied Expeditionary Force, including Civil Affairs.
(3) Provide a central financial medium for such measures as may be necessary to insure an adequate banking and currency structure.
(4) Receive, hold and supply such stocks of postage stamps as are necessary in the interests of the Allied Expeditionary Force.
(5) Maintain such control and subsidiary accounts as may be required for the purposes of the U.S. and British Governments.
(1) Establish sub-sections.
(2) Designate one or more banks as its agent and make and withdraw deposits with banks.
(3) Make advances directly or indirectly to governments and their political subdivisions, para-Statal institutions, banks, industrial enterprises and others in the absence of other loan sources, when such advances are justified by military necessity, and to hold all evidences of debt or obligations arising from such transactions and to take any steps necessary to recover funds so advanced.
(4) To act as required as depository for and/or to exercise control over assets seized or impounded by the Allied Military authorities.
2. The first of the currency sections described above is hereby activated and attached to 21 Army Group. It will operate as a section of a Civil Affairs staff of 21 Army Group and will be subject to the authority of the Controller of Finance and Accounts of said staff. This Currency Section will consist of six officers (three U.S. and three British) and 10 enlisted men (U.S.). ♦ ♦ ♦
4. For security reasons Currency Section hereby activated will include the name of the country in its title only after D Day. Before D Day it will be referred to as Currency Section - 21 Army Group.
5. The Currency Section - 21 Army Group will immediately take control of all currency in coin for operation OVERLORD presently held by the British War Office as agent for the Supreme Commander, Allied Expeditionary Force. ♦ ♦ ♦
6. All currency requirements of Allied Forces in operation OVERLORD, both for military pay and procurement and for CA purposes, will be drawn from the Currency Section....
7. Pay branches of the respective services will arrange for the Currency Section to be provided with continuing estimates of their future currency requirements for military purposes, at such times and in such forms as are required by the Currency Section for organization of proper flow of deliveries from the War Office. Pay branches of the respective services will arrange for the provision in their estimates and in their shipping schedules for the movement forward of sufficient funds in bulk to take care of all currency requirements for military purposes on the continent through D plus 60.
8. Funds for CA purposes will be provided to the C A organizations in operation OVERLORD directly by the Currency Section, which, under agreement with the War Office, U.S. Fiscal Officers and the British DPIC may use their facilities for physical handling and movement of currencies to the extent it considers necessary. An advance detachment of the Currency Section, with bulk funds for CA purposes and with adequate transport facilities, will move forward by D plus 15 or as soon thereafter as movement considerations allow. The full Currency Section with bulk funds for both CA and military purposes, will move forward with the 21 Army Group Headquarters, or by D plus 35, whichever is earlier, subject to movement considerations.
9. Upon notices by the Currency Section that it is in a position to operate, the respective pay branches of all services will make arrangement for their currency requirements on the continent to be provided by the Currency Section. After movement of the Currency Section to the Continent, currency requirements in the UK for operation OVERLORD will be drawn by the respective pay branches directly from the War Office in accordance with arrangements to be notified to them by this headquarters.
10. All funds advanced by the Currency Section to the respective pay branches for military purposes will be reported by the receiving pay branch to the U.S. War Department, the U.S. Navy Department, or the British War Office, in accordance with the recipients' nationality. The Currency Section will independently report all such advances to this headquarters. ♦ ♦ ♦
7. ALLIES AGREE ON CURRENCY FOR FRANCE BUT DE GAULLE'S SUPPORT IS UNCERTAIN
SHAEF WANTS FRENCH COMMITTEE AUTHORIZED TO CONTROL CURRENCY
[Msg, SHAEF to WD for CCAC, 4 May 44, VOG 32, CCAC files, 123 (10-30-43), sec. 2, CM-IN 2965]
1. Preliminary discussions with the French military mission
indicates that they consider the financial problem could best be met by solution
on the following lines:
a. French authorities would organize or provide financial facilities and service to be expected in any well-ordered administration.
b. SCAEF should rely on French authorities to operate the economic and fiscal system.
c. French authorities would make necessary advances to public authorities and to banking systems through established French channels.
d. To meet inflation situation, French plan to continue price control and rationing systems and to soak up purchasing power by use of Corsican Scheme....
e. To carry out above, it would be necessary for the French to use our supplemental francs.
2. All of above would be subject to over-riding power for emergency action by Allied commanders in absence of or failure of French authorities.
3. Following the policy indicated by intended extension of Lease-Lend arrangement with the French Committee of National Liberation to include Metropolitan France, we are prepared to agree in principle to the above program. We feel that definite plan with some French authority is necessary, and the FCNL is the only body with which satisfactory arrangements can be made prior to arrival.
4. We consider that there are strong psychlogical arguments against SCAEF alone declaring supplemental francs legal tender. We should prefer that FCNL issue primary declaration and that SCAEF support this by statement for information if necessary. Thus French would be fully responsible for the success of their financial program. SCAEF would retain such notes as he requires against proper accounting, though the whole issue would be the responsibility of FCNL.
5. In our view, these arrangements would achieve the essential purpose of putting the French authorities in a position adequately to carry out their financial functions of civil administration. ♦ ♦ ♦
U.S. WANTS SHAEF TO ISSUE CURRENCY IN FRANCE
[Transcript of WD Telecon 449, between Holmes, in London, and Hilldring, in Washington, 11 May 44, CCAC files, 092 (4-20-44)]
L.-... This affects our program about French currency. I'll expect
an answer on that any time soon.
W. - I hope so. That has been a little difficult to handle. I will be glad to tell you what the U.S. short of the highest authority, is recommending with regard to this matter, and informally, the British Staff Mission will go along with our proposal, and here is our proposal: I'll give you the exact words here-"We approve, in principle, the program set forth in VOG 32, except that the FCNL shall not be set up as the issuing authority for currency in France."
L. - Who is the issuing authority?
W. - SHAEF is the issuing authority. Here's the next paragraph: "It must be made clear to the French Military Mission, and other representatives of the Committee, with whom you may deal, that any arrangements made with them must be considered tentative, and not preclude consultation with and assistance from other elements of the French people with whom you may feel it necessary or advantageous to deal while your forces are in France." (You've heard that before).
Third paragraph: "It should be made clear, also that the basis of authority for the issue of supplemental francs is vested in SHAEF, and not the FCNL, and the FCNL should not be held out as the issuing authority." ♦ ♦ ♦
RATES OF EXCHANGE
[Msg, CCS to SHAEF, 11 May 44, GOV 46, CCAC files, 123 (10-30-43), sec. 2, CM-OUT 35242]
.. . You will decree the following rates of exchange on D Day, or not later than your entry into respective areas. Dollar-sterling cross rate will be $ 4.303 1/2 equal one pound sterling....
France: 200 French francs equal one pound sterling; 49.5663 French francs equal $1.00; Belgium: 176.625 Belgian francs equal one pound sterling; 43.7732 Belgian francs equal $1.00. Netherlands: 10.691 Dutch guilders equal one
pound sterling; 2.6496 Dutch guilders equal $1.00. Norway: 20 Norwegian kroner equal one pound sterling; 4.9566 Norwegian kroner equal $1.00. Denmark: 24 Danish kroner equal one pound sterling; 5.9480 Danish kroner equal $1.00.
The exchange rate to be decreed between the U.S. yellow seal dollar and the BMA pound note, if you find it necessary to use such currencies in forthcoming operations, will be $4.o3 %2 equal one pound, that is, at the same rate at which pound sterling funds in official U.S. accounts in banks in the United Kingdom can be purchased with and reconverted into U.S. dollars.
Convenient rates in rounded figures for British Army accounting purposes will be furnished to you by the War Office for Belgium and the Netherlands.
SCAEF TO ISSUE CURRENCY PROCLAMATION OVER HIS OWN SIGNATURE
[Msg, SHAEF to WD, VOG 53, 24 May 44, CCAC files, 123 (10-30-43), sec. 2, CM-IN 19307]
Since we have received no reply to our VOG 32, and understand
informally that you are not favorable to paragraph 4, we propose to issue
proclamation over signature of SCAEF, substantially as follows:
"A. In order to prevent any shortage or currency, due to the disturbance of war, supplemental franc notes will be used to supplement the existing currency.
"B. I. All notes bear on the reverse the French colors and the words 'Liberté, Egalité, Fraternité.' Supplemental francs shall be legal tender in Liberated Metropolitan France and shall in all respects be equivalent to other French lawful money of like face value. No person shall in any transaction whatsover discriminate between supplemental francs and such other existing French lawful money.
"C. . . . However, transactions in all foreign currency, including U.S. dollar and Sterling notes are forbidden, except as permitted by the appropriate authority."
It has been represented to us that the inclusion of the last two sentences in B I above involve an unnecessary assumption of sovereignty. However, unless the supplemental franc is declared legal tender there is the danger that it will not receive universal acceptance. Necessity for issue of this proclamation on D Day requires immediate decision....
[Msg, CCAC to SHAEF, 27 May 44, CCAC files, 123 (10-30-43), sec. 2, CM--OUT 42763]
Action proposed in VOG 53 is approved subject, to omission of final sentence in your paragraph
I (B) : "No persons shall in any transaction whatsoever discriminate between supplemental francs and such other existing French lawful money." The reason for this omission is that it seems unnecessary repetition of a provision likely to be unpalatable to the French.
You are authorized to show the draft to the French in advance and to obtain French support announcements.
HAS EISENHOWER LEGAL AUTHORITY TO ISSUE CURRENCY IN FRANCE
[Msg, Gen Smith for McCloy, SMC-810, 25 May 44, SHAEF files, G-5, Negotiations With the French, an. 10]
We have just sent a message to the Combined Civil Affairs Committee suggesting a rephrasing of paragraph 4 of VOG 32 on the subject of French Currency.
I must admit that our recommendation is rather a solution of desperation. We believe that General Eisenhower had no real legal authority to declare this currency legal tender in liberated Metropolitan France or in the area of any other Allied Nation, and that the situation which will confront us on the Continent is entirely different from that existing in North Africa where our status initially was one of military occupation.
I also believe that since the French Committee for National Liberation has now declared itself the Provisional Government of France, it will be particularly resentful of a declaration of legal tender by the Supreme Commander as this will be considered a flagrant violation of French sovereignty. Whether the future French Government, whatever it may be, will fall in line later and confirm such a declaration by the Supreme Commander remains to be seen. Since the question of currency is a vital one, and since time is of the essence, I would like to recommend this matter to your urgent and personal attention.
CURRENCY PROCLAMATION WILL BE ISSUED WITH OR WITHOUT
SUPPORTING STATEMENT BY THE FRENCH
[Msg, SHAEF to WD, 5 Jun 44, VOG 61, CCAC files, 123 (10-30-43), sec. 2, CM-IN 4053]
1. We have not yet been able to show draft to the French or
obtain supporting announcement. We have not yet authorized issue of currency
A. It is considered most important that support announcement should, if possible, be obtained and that this would be seriously prejudiced by a fait accompli.
B. Small amounts of supplemental francs likely to be circulated in the early days.
2. Proclamation by SCAEF will, in any case, be issued as directed with or without supporting statement, as soon as we consider that the currency situation requires it.
3. Pending issue of proclamation, we are trying to prevent all publicity of currency question here, including rate of exchange, and request you arrange same in U.S. . . .
MATTERS PERTAINING TO BANKS, PUBLIC FINANCE, AND CONTROL OF
PROPERTY To BE HANDLED BY THE INDIGENOUS AUTHORITIES
[SHAEF Fld Handbook for CA (France) (Provisional), 16 Jun 44)
73. Responsibilities set forth in this Section will be executed by the French authorities. In the event circumstances prevent the French authorities from executing their responsibilities the following action will be taken to fulfill them. Except as otherwise indicated this action will be taken.
74- Supplemental franc notes issued for use by the Allied forces will he made legal tender and will be interchangeable with regular franc currency and coin and administrative currency (such as that issued by the Communes) without distinction.
Rates of Exchange
75. The official rate of exchange expressed in terms of French francs to the dollar and French francs to the pound sterling will be announced to the population.
Transactions in Currencies
76. All transactions in currencies will be controlled.
Banks and Moratorium
77. Control of banks and other financial institutions will be in accordance with the program of the French authorities. If the situation in any locality is critical, however, and runs on the banks are threatened, the appropriate commanders, if possible not below Army, may, through the French authorities, in their discretion, cause the banks to be closed and a general moratorium to be declared. A report will be made to SHAEF of action so taken.
Loans and Advances
78. . . .
a. Advances for Civilian purposes. Expenditures by public authorities will be financed by the French authorities themselves in accordance with the usual procedure. If an advance is required, a public authority will apply through the normal administrative channels or to the Bank of France or other French banks. If these methods fail and the need is essential and immediate, or if the failure to obtain funds will prejudice the military situation, an advance from CA funds may be made. Advances from CA funds will be to the highest level of public authority in the area and will be limited usually to a 30-day period. This authority will not normally be delegated below Army.
b. Advances for Private Enterprises. CA advances to essential private enterprises may be authorized only if they are unable to obtain their requirements from banks or other available sources and if their need is immediate and urgent and capable of prejudicing the military effort if not relieved. This authority will not normally be delegated below Army.
c. Emergency Advances. Notwithstanding the provisions laid down in "A" and "B" above, appropriate instructions may be issued to authorize CA officers in lower echelons to make advances to the minimum extent necessary to provide against a temporary and extreme emergency when the approval of higher authority cannot be obtained by normal communications and the military effort may be prejudiced if the advance is not made immediately.
79- Matters of public finance will be handled in accordance with the program of the French authorities. Non-essential expenditure should be discouraged and those of a capital nature will always be subject to special scrutiny. Existing tax laws should be maintained. Basic policy should be to continue service on the public debt, but if the fiscal situation dictates, payments of principal may be postponed. Government monopolies and municipal enterprises should be controlled and their revenues used in the normal manner. All bona fide government pensions and all social security benefits should continue to be paid.
Control of Property
80. Control of enemy and United Nations property
including freezing and blocking regulations will be carried out by the French
authorities. In the event of the French taking no satisfactory action:
a. All reasonable steps necessary to preserve the property of the United Nations and their nationals will be taken, within such limits as are
imposed by the military situation and a report of the situation regarding all classes of property will be made to SHAEF.
b. The appropriate French authorities will be urged to take measures to impound or block all assets of enemy governments, enemy banks, hostile individuals and organizations and all persons acting on behalf of the foregoing and, where appropriate, assets of all persons resident in enemy occupied territories. In the event no action is taken by French authorities, report is to be made to SHAEF. ♦ ♦ ♦
FINANCIAL PROBLEMS-A SURVEY
[Financial Branch, G-5, SHAEF, Report on Financial Problems in Liberated Areas, 22 March 1945, SHAEF files, G-5, 113.21, Financial Branch]
♦ ♦ ♦ Basic Approach to Financial Problems
The primary responsibility for the acceptance by the liberated nations of certain financial policies considered desirable from the military standpoint rested on the U.S./UK Treasury representatives who negotiated with officials of the respective nations. SHAEF participated in carrying on the discussions and in facilitating the operations of the financial programs developed by the various liberated governments. In the case of France earlier negotiations were necessarily on a tentative basis because the position of the Provisional Government had not been clearly defined.
From the beginning of planning long before D Day, the rights of the liberated nations as sovereign powers to determine their own financial policies and to be opposed to unnecessary interference in their internal financial affairs were recognized. SHAEF's interest in the financial programs of the liberated nations was based on several considerations which were made clear to the various official representatives in the initial conference.
First, it was emphasized that the interest of the Supreme Commander was in making sure that a financial policy would be adopted which would not produce an unstable economy that in turn might interfere with military operations. Secondly, it was stressed that it was beneficial for all liberated governments to adopt reasonably similar programs for controlling foreign exchange and the property of Nazis and other hostile persons and organizations. Authorities of the liberated countries appreciated the problem. This is illustrated by a quotation from a letter from M. Hubert Ansiaux, Director Delegate of the Banque Nationale de Belgique, to SHAEF in connection with certain currency negotiations, as follows:
". . . On the one hand it is recognized that the Belgians alone have the sovereign right to fix the exchange parity of the Belgian currency on Belgian territory. On the other hand it is recognized that the Commander-in-Chief has supreme power during the period and in the field of military operations. It would be deplorable from a political point of view if these two powers were not exercised in the same way and in mutual agreement."
From the commencement of planning SHAEF has followed the general policy of consulting with the financial authorities of the liberated areas in order to ascertain what their financial programs were going to be regarding inflationary control, taxation, closing of banks, deNazification of financial institutions and internal financial measures such as freezing, blocking and property controls. During these discussions members of the staff of SHAEF advised the officials of these governments on such matters as freezing and blocking controls, submitted questions to them for consideration and reply, and pointed out any apparently weak spots in their financial planning. As time passed it became evident that the various governments were going to be able to assume more and more financial responsibilities so that adjustments in the financial plans were made accordingly. This was especially true in the case of France.
In the field of freezing and blocking controls it was essential to ensure that the various governments had working knowledge of the freezing and blocking controls practised by the U.S./UK from the point of view both of policy and of administration. There was need for discussion to overcome certain peculiar local problems. In Belgium, for example, it was found that the constitution might have been construed to prohibit freezing and blocking control without arrest. After discussions and the obtaining of legal opinions the Belgian authorities undertook to establish freezing and blocking controls. Bank accounts, safe deposit boxes and real and personal property of enemy governments and their agencies were blocked. Advice was also given to the Belgian authorities as to methods of setting up Property Custodianship procedures for handling the property thus seized. ♦ ♦ ♦
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Last updated 18 February 2004