(;1 STrAT.] FRANCF-MUTUAL AID SETTLEMENT-MAY 28, 1946 All of the foregoing conditions described in a through e above reduced the need for American military personnel expenditures in the French local economy. 3. Extra-legal activities of military and civilian personnel in their relations with French citizens. The U.S . Armed Forces inaugurated currency control shortly after VE-Day and is continuously strength- ening the control system. It should be noted: a. The sale of U.S . Government property of material in short supply in France was eliminated by speedy joint action of military and civilian police. However, the seriousness of having French civil- ians participate in black market operations may not have been brought home as effectively as possible. b. The very understandable desire of French citizens for a few of life's material comforts provided a great temptation to all Allied personnel having access to Post Exchanges and Quartermaster stores. c. Although a premium over the official rate was consistently quoted for U.S. currency in the open market, owing to the very restricted availability of dollar notes in the lowest denominations sought by civilian operators, dealings of this nature were extremely limited. In any event, all of the foregoing types of transactions have re- sulted in a substantial "value received" on the part of the French population, and represent enhancement of the French economy for which a certain amount of dollars would have had to be spent. MEMORANDUM III MEMORANDUM By the French Representatives on the amount of net troop pay It is difficult to discover all the reasons why the amount of net troop pay was so low, because the accounting procedure agreed upon in London on August 25, 1944, does not appear to have been exactly followed. Memorandum II by the War Department contains an accurate analysis of most of those reasons, and as a whole gives a fair story of what happened. It should be emphasized however that one of the main reasons for the low amount of the net troop pay is to be found in the fact that a very important quantity of U.S . Army supplies was sold for francs to the French population through various channels, and specially through sales by individual members of the American forces at black- market prices. Therefore the needs of the U.S. Armed Forces for French currency were covered to a large extent by francs obtained under conditions other than those foreseen at the time of the conclusion of the Agreement of August 25,1944. 4203 Extra-legal activ- ities; currency control. Ane, p. 4201
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