6 June 1944 - 25 July 1944
Throughout the early days of the operation the work of Imprest holders in operational units, the supply of funds, and the accounting for expenditure, worked smoothly and on simple lines, because the changeover to the Active Service System of accounting had taken place as soon as units entered the concentration areas.
All the difficulties which the change entailed had been met and overcome before the operation began. Each officer landed with an advance of pay book and every Imprest holder had previous contact with the appropriate cashier, and was familiar with the procedure for drawing and accounting for Imprest funds in the field.
As there was a possibility that the enemy in retreat would destroy large quantities of FRENCH currency notes, supplemental FRENCH francs were specially printed in AMERICA to meet the emergency.
Of the total number printed the share allotted to 21 Army Group was 2,899,500,000 francs.
By agreement with the FRENCH Provisional Government the rate of exchange was fixed at 200 francs to the pound sterling.
Immediately prior to embarkation all ranks were paid 200 francs. Corps and divisional Field Cashiers embarked with a set of seven boxes of currency specially prepared in suitable note denominations and waterproofed. The value of each set was 4,750,000 francs which was estimated to cover the formations expenditure for two weeks.
On 21 June the Base Cashier disembarked at MULBERRY with 5 1/2 tons of preloaded currency to the total value of 335,440,000 FRENCH francs. This bulk supply was safeguarded in the cellars of the Chateau de COURSEULLES which had been specially reinforced by concrete. Further supplies of preloaded currency were landed during the period 29 June to 17 July. In all a total of 65% tons of francs, amounting to a sterling equivalent of $321,750,000 was despatched to FRANCE without the loss of a single franc.
Corps and divisional Field Cash offices landed with their formation HQ.
Between D+2 and D+12 eleven Field and one Area Cash Office arrived and commenced to operate. No. 3 Forward Base Pay office, which disembarked on D+13, took over the buildings of a bank in BAYEUX for the purposes of distributing funds to forward cashiers and payment of military bills.
Later this unit moved to DOUVRES and made the underground passages of the radar station there into vault accommodation for the bulk supply of currency. During the period D+18 to D+24, a further seven field cash offices arrived in the beach-head together with an advance detachment of No. 9 Command Pay offices.
26 July-26 September
As the area of liberated territory increased certain changes were made in organisation.
The most important of these was in the role of the Forward Base Pay Offices. These units had been originally designed as advance sections of Command Pay Offices, with the primary function of paying bills in forward areas and to act as repositories of bulk supplies of currency to which corps and divisional cashiers returned at intervals to replenish their treasury chests.
During this period it was found that corps and divisional cashiers could not be spared for these journeys, and money was therefore delivered to Forward Base Pay Offices, and these in turn fed forward to corps and divisional cashiers.
At the same time the payment of bills was decentralised to all cashiers.
A P.R.I. deposit account scheme was instituted by which units were enabled to draw, deposit and transfer from their regimental funds sums within specified limits. The system allowed the P.R.I. to hold the minimum in cash in the field and to draw funds from the nearest field cashier on production of a P.R.I. pass book. This reduced the possibility of loss of regimental funds to a minimum and proved a great convenience to the account holder.
Over two thousand P.R.I. deposit accounts were opened and hundreds of thousands of transactions passed through the ledger accounts maintained in Command Pay Offices.
The army’s initial requirements of BELGIAN currency were estimated at a thousand million francs.
This sum was requested from UK in August, but owing to sea transport difficulties the consignment did not arrive until 5 September. On the same day pre-loaded vehicles went forward to Rear HQ Second Army, and on the morning of 7 September advances were issued to corps and divisional cashiers.
It was imperative that FRENCH francs in possession of the troops in BELGIUM should be exchanged immediately on crossing the border, because the difference in the purchasing power of the BELGIAN and FRENCH francs had already led to black market dealings in currency.
To counteract these practices, cashiers had been provided with a secret authority to draw funds in an emergency from banks, and on 5 September, Guards Armoured Division cashier drew 3,500,000 BELGIAN francs from the National Bank of BELGIUM.
BELGIUM, and particularly BRUSSELS, possessed large stocks of attractive goods, and the rate of expenditure of the armies doubled in a few weeks. The sterling equivalent of total currency transactions handled by army cashiers during this period equalled £388,000,000.
Deficiencies arising from overpayments etc. amounted to £2,000, approximately .0005 per cent of the total amount handled.
The speed of the advance of the armies and the ever lengthening L of C led to supplies of currency being sent from UK by air. Supplies of DUTCH guilders and GERMAN marks were flown forward on 6 and 11 September in preparation for the future. In all, £5,500,000 in BELGIAN francs, £4,750,000 in DUTCH guilders and £ 3,250,000 in allied military marks were sent in this way.
On 25 September the cash reserves housed in the radar station at DOUVRES, which then amounted to the sterling equivalent of £32,250,000 were transferred to PARIS and deposited with the National Bank of FRANCE.
On 26 September the supply of currency in bulk was taken over by the various Currency Sections set up for this purpose by Supreme Headquarters. For distributional convenience, the Pay Services 21 Army Group continued to supply funds to the RAF and certain of the allied contingents ; adjustment was effected through the currency sections.
To relieve the pressure on army resources, the fullest possible use was made of civilian banks which for cash duties were for a time unofficially incorporated in the Pay Services. Cashiers opened army bank accounts in BAYEUX, ROUEN, AMIENS, LILLE, PARIS, BRUSSELS and ANTWERP. Post Offices, NAAFI/EFI etc. were encouraged to pay in their takings to these bank accounts wherever their location made it feasible.
27 September 1944—14 January 1945
In the first week of October officials of the BELGIAN Treasury and of the National Bank explained to representatives of the Pay Service of HQ 21 Army Group the intention of the BELGIAN Government to control inflation by replacing the existing note issue With a new currency. It was pointed out that, apart from the secrecy in which the change-over had to be shrouded, the problem was complicated by the fact that unless the military authorities agreed to institute certain safeguards, the Government scheme which limited exchanges to 2,000 francs, would be defeated by people who were in a position to bribe allied soldiers to exchange large sums of money for them through the agency of the army cashiers.
Consequently, while arrangements were made to exchange all BELGIAN currency in the possession of troops, orders were issued explaining the reasons for the Government’s action, forbidding military personnel to exchange currency for civilians, and restricting the amount of money which could be sent to UK in postal orders.
At the same time no unit exchanges were made unless they were accompanied by a certificate signed by the OC unit, stating that the amount involved included only pay and allowances. The allied forces were allowed six days in which to complete their exchanges. The amount of money which was involved reached such proportions that the change-over could not have been effected in time Without the employment of special counting boards staffed by BELGIAN civilians.
The Pay Service found little trace of soldiers being tempted to participate in illegal money transactions in BELGIUM, but in HOLLAND, however, where a black bourse between BELGIAN francs and DUTCH guilders flourished and in which the armed forces participated, the Pay Service exchanged a sum of guilders far in excess of what they had originally distributed in pay and allowances.
In the early stages of the operation it had not been possible to carry out any pay documentation of enemy PW.
However, steps were now taken to open an account for each prisoner and, where applicable, to issue official receipts to prisoners through camp commandants for money which had been impounded during the previous months. The working pay for employed prisoners was credited to their accounts. The token money, specially printed in ENGLAND, was not used for payment of services. Instead, canteen supplies were issued on a fixed scale and the cost charged to the prisoner’s account.
As so many of the men who were granted local leave on the Continent came from either HOLLAND or GERMANY, it was necessary to make special arrangements for them in PARIS and BRUSSELS for currency exchanges. Civilian cashiers working under RAPC supervision were installed in each of the leave hostels, and carried out an average of 30,000 exchanges weekly.
When UK leave commenced special facilities were arranged also at CALAIS for exchanging local currency into sterling.
As at this time 21 Army Group was operating in three countries it became necessary to establish two new Command Pay Offices, one in BRUSSELS and another in TILBURG, in addition to the one operating at ST OMER. In the last week of December No. 2 Base Clearing House which had been operating in LONDON moved to RENAIX.
15 January 1945 - 8 May 1945
The main operations of the Pay Service were those resulting from the move into GERMANY,which necessitated the introduction of Allied Military Marks and the use of small denomination reichsmarks. The highest denomination of the former Was 100 Marks, while the use of original GERMAN reichsmarks was limited to notes of not more than 50 Marks.
The Allied Military Mark ranked equal with the RM, and the exchange rate was fixed at forty marks to £1 as against the previous rate of fifteen RM.
All currencies held by troops moving into GERMANY were exchanged and this course was successful in that no illegal currency transactions were reported. A very considerable volume of exchanges was involved, as units and formations crossed and recrossed the frontier. As operations advanced into GERMANY it was necessary to establish a fourth command pay office which was located at RHEINE.
Operation GOLDFLAKE involved the setting up of an organisation at MARSEILLES at which lire were exchanged. For security reasons it was necessary to change into FRENCH currency and later into BELGIAN currency. This exchange also stopped the possibility of illegal currency transactions in FRANCE. To ensure that no lire were retained by the troops, their total holdings were exchanged, and the restriction limiting exchanges to sums derived from pay and allowances was waived.
Financial arrangements had to be made in anticipation of the large numbers of PWX and DPs likely to be liberated. Teams of cashiers were formed for the purpose of making immediate advances of pay to liberated prisoners, while all allied liaison officers, including ITALIANS, were given advances of funds to assist their own nationals.
Special financial arrangements were made with representatives of the USSR Government in connection with the repatriation of RUSSIAN citizens.
Forged notes found by a field cashier in receipts from an army post office led to the discovery that a gang of civilian forgers was operating in PARIS and the FRENCH provinces. These notes were clever imitations of the FRENCH francs specially printed in AMERICA for the invasion forces. As a public warning of the existence of these forgeries would have had a damaging effect on the validity of the supplemental franc, secret measures had to be taken to withdraw the entire issue from circulation as quickly as possible. The gang of forgers was arrested by the PARIS police shortly afterwards.
