HomePaper MoneyPaper Money USMoney of Necessity: U.S. Military Payment Certificates

Money of Necessity: U.S. Military Payment Certificates

Money of Necessity: U.S. Military Payment Certificates

By Tyler Rossi for CoinWeek …..

During World War 2, the United States Military marched straight into a monetary exchange issue: What do you use to pay your soldiers and still maintain limited control over the local economy? A large influx of a high-performing hard currency (like the U.S. Dollar) into a recently liberated yet still war-torn nation would risk severe inflation.

Anticipating this problem, the military worked with the Treasury Department to issue five series of paper currency notes and a number of different coins to be used as Allied Military Currency (AMC). Denominated as local German Marks, Austrian Schillings, French Francs, Italian Lire, and Japanese Yen, these AMCs did not pose as high an inflationary risk – especially if they were withdrawn from circulation as intended once local minting and printing facilities were brought online. From the military’s perspective, the major issue with AMC was their general lack of control. Since soldiers were free to convert their AMC into U.S. Dollars whenever and wherever they could, there was no effective way to monitor and control these transactions.

In July 1946, and in conjunction with the Treasury, the War Department introduced a new trial system of payments, the Military Payment Certificate (MPC). Denominated in U.S. Dollars, these were first issued by the Pacific Command immediately after World War 2 ended. These notes were highly regulated and were only issued in five distinct conditions as described by financial regulations:

  • When the likelihood of “sizable” quantities of U.S. dollars being captured was high
  • When the government of an Allied force (not a local government) prohibits the use of U.S. dollars within its forces
  • When local foreign exchange regulations do not allow the circulation of U.S. dollars
  • When large influxes of foreign currency would result in the devaluation of the local currency
  • When the U.S. military will be deployed in-country for over 180 days

Once their use was approved, MPCs were to be the only legal monetary tool used by the U.S. Armed Forces and could be disbursed only by and to authorized military personnel. Soldiers could use MPCs at official military-operated facilities (such as entertainment facilities, mess halls, and post offices) or used as travel payments, remittances, charitable denominations, or payments to civilian contractors. While soldiers were able to convert MPCs into local currency, not only could local currency not be converted into MPC, but local civilians were also not allowed to use the bills.

MPCs were a quick success, and in August 1946, Secretary of War Robert Porter Patterson, Sr. approved their use in all areas occupied by the Allies. One month later, the first series (461) was issued. Ultimately, the U.S. Treasury would issue 13 series, print but not issue two, and design but never print one. While used until 1973 and circulated within 19 foreign countries, the program would not be canceled officially until 2003.

Three different numbers can be found on the obverse face of each certificate: the series, position, and serial numbers.

The first two digits of the series number stand for the last two digits of the year of issuance and the last digit represents what number series it was for the specific year. For almost all series, the last digit is a 1 because there was only 1 series printed for that year. However, Series 692 was the second series printed in 1969. It just so happens that Series 691 was printed but never issued.

The position number represents where on the uncut sheet the bill was during printing, with numbers starting at 1 running from top to bottom and left to right.

The serial number, 10 digits including a prefix and suffix letter, acts exactly the same as a serial number on a U.S. Treasury note.

For the first 19 years, until 1965, there were seven official denominations: 5¢, 10¢, 25¢, 50¢, $1, $5, and $10. It wasn’t until 1966 that the Treasury also began printing a $20 note. There were four different sizes used. All bills denominated in cents were the smallest size (110 mm by 55 mm); the $1 was medium (112 mm by 66 mm); the early $5, as well as all $10 and $20s, were large (156 mm by 66 mm). The last size (136 mm by 66 mm) was employed for all $5 MPCs starting with Series 521. Just as all U.S. Gold Certificates were backed by gold bullion, MPCs were backed by an equal value in Treasury notes held in a special fund by the Defense Finance Accounting Service.

Taking advantage of the fact that the Bureau of Engraving and Printing (BEP) was authorized to contract the printing of Military Payment Certificates, they worked with two Boston-based printers: Tudor Press and Forbes Lithograph Corporation. The Tudor Press printed all of Series 461, 471, 472, the first issuance of Series 481, and all of Series 541. Forbs Lithograph Corp. was responsible for the remainder of Series 481, and all of Series 521 and 591. The BEP was directly responsible for printing all remaining series.

Unlike Treasury notes that used special intaglio presses, MPCs were made using offset printing. This process involves a cylindrical plate, engraved with the image, being used to apply ink to a rubber roller which is then transferred the image to the paper. All MPCs used four colors on the face and two on the reverse. To achieve this layered coloring, each sheet was printed multiple times with each color applied one after another.

While definitely one of the most colorful and elaborate products ever issued by the BEP, these notes were also relatively easily counterfeited. This is despite the inclusion of planchette paper, multiple-colored inks, and an ultraviolet light-sensitive ink as anti-counterfeiting security measures. Planchette paper, paper with small discs of colored paper inserted randomly throughout the sheet, was quite difficult for counterfeiters to duplicate. Instead, some counterfeits resorted to printing colored dots instead.

In a final effort to prevent Military Payment Certificates from being hoarded or used as fuel for the black market, destroying the value of the local currency, the War Department instituted a series of conversion days. Also known as C-Days, on these dates military bases were to be closed to civilians and the current MPC series was officially canceled, collected, and lost all value. C-days marked the last possible date that American soldiers could trade in their old bills, either for USD, local currency, or the new MPC series. The average duration between C-days was 2.77 years or 33.23 months. The short life of these bills served as the most effective anti-counterfeiting measure.

After being withdrawn from circulation, the U.S. proscribed a set of regulations to govern MPC destruction. Once collected and a schedule for destruction was written up, the MPCs were burned in the presence of three responsible authorities. If proper incineration facilities were not available, then it was permitted to destroy MPCs by shredding, macerating, or exposing them to caustic soda. Interestingly, these alternative methods needed to be witnessed by only two responsible authorities.

Yet despite efforts to destroy all outdated Military Payment Certificates, they are quite common today. Examples of each series are illustrated below.

Bill 1 – Series 461

Money of Necessity: U.S. Military Payment Certificates

Bill 2 – Series 471

Bill 3 – Series 481

Money of Necessity: U.S. Military Payment Certificates

Bill 4 – Series 521

Bill 5 – Series 541

Money of Necessity: U.S. Military Payment Certificates

Bill 6 – Series 591

Bill 7 – Series 611

Money of Necessity: U.S. Military Payment Certificates

Bill 8 – Series 641

Money of Necessity: U.S. Military Payment Certificates

Bill 9 – Series 651

Bill 10 – Series 661

Money of Necessity: U.S. Military Payment Certificates

Bill 11 – Series 681

Bill 12 – Series 692

Money of Necessity: U.S. Military Payment Certificates

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About the Author

Tyler Rossi is currently a graduate student at Brandeis University’s Heller School of Social Policy and Management and studies Sustainable International Development and Conflict Resolution. Before graduating from American University in Washington D.C., he worked for Save the Children creating and running international development projects. Recently, Tyler returned to the US from living abroad in the Republic of North Macedonia, where he served as a Peace Corps volunteer for three years. Tyler is an avid numismatist and for over a decade has cultivated a deep interest in pre-modern and ancient coinage from around the world. He is a member of the American Numismatic Association (ANA).

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