U.S. Economic Warfare in French North Africa, 1942–44: The Fight Against Nazi Collaborators and Financial Profiteers

Supporting U.S. troops who landed in French North Africa in November 1942 were a host of Treasury officials whose novel mission was to block enemy financial dealings that could damage the war effort. The decision of Allied leaders to work in North Africa with unsavory French officials who had supported the Vichy regime created special challenges for these economic warriors as they sought to prevent the enrichment of suspected Nazi collaborators. One of their special concerns was setting the dollar-franc exchange rate. This high-stakes negotiation has received little attention from scholars, but resolving it was critical to the success of the Allies’ administration of North Africa and engaged the personal attention of President Roosevelt and Prime Minister Churchill. U.S. Treasury officials learned that suspected French collaborators were gaming the exchange system to earn hundreds of millions of dollars in profits. Attempts to prevent such windfalls were impeded by local French officials who protected powerful bankers, by White House and State Department officials who valued French cooperation, and by the inherent ambiguity of who fit the collaborationist label. Treasury officials ultimately failed in their hopes of acting as final arbiters of justice in a violent and chaotic world. The unknown history of their efforts, however, sheds light on one of the least appreciated facets of this global struggle—economic warfare—and the complicated rivalries among allies over how this mission weighed against other political and strategic imperatives.