The United States took it first prisoner of war in WWII on December 7, 1941 when a midget sub piloted by Kazuo Sakamaki beached on the shores of Oahu. By the end of the war, over 425,000 POWs were housed in the US.
The Geneva Conventions allowed for POWs to be put to work by their captors who were supposed to compensate the prisoners for their labor. The United States paid POWs who worked $.80 per day — the same amount earned by a private in the US Army. Prisoners worked in a variety of industries including agriculture, lumber and light manufacturing. The business owners paid the US government for the prisoners’ labor.
Prisoners were not paid in cash. The amounts they earned were credited to them on account. In many camps there were canteens or exchanges where the prisoners could purchase personal care items, stationary, hobby supplies and even food. Chit booklets were distributed to facilitate purchases. The amount of the chit booklet was deducted from a prisoner’s account balance.
Prisoners could accumulate a significant amount of money during their captivity. Upon repatriation they received a check in the amount of the balance of their account. Although the checks were denominated in US dollars, they could only be cashed by US military disbursing officers overseas. This was done for two reasons.
First, it prevented a prisoner from obtaining US dollars while still in the United States which could aid in escaping. Second, the military disbursing officers paid out Allied Military Currency denominated in the currency of a prisoner’s home country. AMC was issued by the Allies as occupation currency which resulted in the vanquished country paying the expenses of the occupation. Rather than being a liability of the United States, the balance in a POWs account became a liability of his home country.
For more information on the use of POW labor see History of Prisoner of War Labor by the United States Army 1776-1945 by LTC George P. Lewis. I also recommend the new book by my colleagues David Frank and David Seelye, The Complete Book of World War II USA POW and Internment Camp Chits.