No Obligation But . . .

The U.S. Treasury last week tried to clear up a year-old financial mystery with some fiscal double talk. It stiffly announced that the U.S. is not obligated to redeem the millions of dollars worth of invasion currency which U.S. armies have used in invaded countries. Said the Treasury: "No promise of redemption was ever made. No invasion currency carries any legend suggesting redemption by the U.S. . . . We have no secret understandings that we will ever do so."

Despite these uncompromising words, the plain fact was that the U.S. has already made good in part on much of this currency. The U.S. has paid dollars to Allied nations to match the amount of French and Belgian francs, and Dutch guilders, etc. which the U.S. has spent to pay its troops and buy supplies.

Even in Italy, where $350,000.000 worth of "Four Freedoms" lire were issued by the Allied armies, the lire used to pay U.S. forces (but not those used to buy services, supplies, etc.) have been matched by dollar credits to the shaky Bonomi Government (TIME, Oct. 23, 1944).

In effect, the U.S. has already supplied dollars to offset invasion currency, although there is no guarantee that it will be used for redemption. In view of this, skeptical money men last week wondered: would the U.S. eventually have to make good, in the same manner, on the millions of dollars in invasion marks now being spent in Germany?

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