DEVELOPMENT AND USE OF MILITARY PAYMENT CERTIFICATES

The first issue of Untied States paper money that was generated by World War II, the HAWAII overprints, was released in July 1942. From then to the end of the war, several types of money issued by, under the authority of, or with the aid of the United States. These currencies were all interim measures to either protect the economy of the United States or an ally or to assist in the accomplishment of military objectives.

The need for special money continued after the shooting stopped, but the reasons were substantially different. The need was greatest in Germany, where American soldiers were stationed in great numbers. At that time the soldiers were paid in local currency. In this case they were paid in Allied military marks. Because of an unforeseen combination of circumstances, the Unites States was redeeming far more marks than were being disbursed each month. The resulting deficit (overdraft) reached $530,440.

 

Introduction of military payment certificates

Soon after the secretary of war approved the production of military payment certificates in June 1946, the Bureau of Engraving and Printing began its designing and printing tasks. By working extensive overtime, the bureau had the new military payment certificates ready so that the overseas theaters could meet their deadlines.

Conversion day in Europe was September 16, 1946. Before the actual conversions began, some previous ar­rangements had been made. At 6:00 pm on September 14 the European theater had lifted the top secret classification from C day and had proclaimed a moratorium for all official agencies for September 15. During this period while all monetary business was suspended, men began turning in their funds to personnel officers; the following day, C day, they began receiving their military payment certifi­cates, Series 461, in exchange. In Germany, Great Britain, Austria, Italy, Belgium, Holland, Denmark, Luxembourg, Trieste, France, Switzerland, and North Africa, all personnel, military and civilians alike, exchanged their legitimately acquired foreign currencies for scrip.

 

Although these twelve areas were affected by the conversion to scrip, this phase of currency control was aimed primarily at Germany, where the Russian-printed Allied mili­tary marks had wreaked havoc with the Army's currency control program. The European theater used scrip in coun­tries other than Germany mainly as a matter of uniformity within the command and not through necessity. Approximately $59,000,000 in francs and marks were converted into scrip in France and Germany on C day.

 
Conversion day in the Pacific command, September 30, 1946, was much more routine than that in Europe, since currency control had already been achieved in the Pacific command with the use of type A yen. The conversion actually was made in a two-week period so that there would be a minimum of interference with normal duties, and it should have rightly been termed C fortnight. In Japan, Korea, and the Ryukyus, Army post offices, exchanges, quartermaster sales stores, and other official agencies remained open during the period of exchange. Since this conversion was merely from one form of scrip to another, there was no excitement and little interference with normal administrative routine. Troops received their September pay in totally new scrip.


After the Army adopted scrip and brought an end to excess conversions, it was able to determine the exact magnitude of its overdraft. The amount as of December 31, 1946, was staggering, $530,775,440. This figure included over­drafts in all the diverse foreign currencies the Army handled during World War II.

The ten largest excesses were:

  • $270,909,788 in German marks

  • $73,037,246 in Japanese, Korean, and Ryukyus yen $25,783,329 in Austrian schillings

  • $23,761,269 in Dutch guilders

  • $19,793,680 in Indian rupees

  • $19,339,228 in Belgian francs

  • $11,344,577 in Philippine pesos

  • $4,146,237 in pounds from England and North Ireland $3,176,823 in Iranian rials

  • $3,141,603 in Czechoslovakian kroner

 

 

Even as the War Department was compiling these dis­tasteful statistics, the Army was quietly beginning to work off this overdraft. The Pacific command began dissipating its excess as soon as it brought about currency control by making the occupation forces pay for many of the services that they had been receiving free of charge from the Japanese government. For the first time the American service­men paid for personal travel on railroads, lodging at rest hotels, and fees at golf courses; officers' and enlisted men's clubs paid for Japanese employees; and occupation house­holds began paying for domestic help.


These payments were made not to the individuals fur­nishing the services nor to the Japanese government, but to the United States Army. The Army was still receiving these services free under the armistice terms, but it was crediting collections for these services against the overdraft. When scrip was collected, the equivalent yen was withdrawn from the excess account. The Pacific command was able, between August 31,1946, and February'28, 1947, to reduce its over­draft by some $10,000,000.


Early in 1947 the War Department decided to make a systematic effort to dissipate the overdraft in all overseas areas. It patterned its plan after that of the Pacific command. Through persistent work, the Army was able to reduce the deficit, which had been $530,775,440 on December 31, 1946, to $10,000,000 two years later.


The use of military payment certificates continued through 1973, when Series 651 was retired in Korea. The system underwent many changes and refinements in its twenty-seven year history. Most of those changes manifested themselves in documents that are collected today and con­sidered in this book. Even though MPC has not been used in nearly 20 years, the possibility that it will be used again remains.


The inclusive dates of issue may be found in the cata­log section. Army Regulation 37-103 governs the use of military payment certificates. The 1970 version of the regu­lation and current regulations are included as an appendix.

 
AREAS OF MILITARY PAYMENT CERTIFICATE USE

Military payment certificates have been issued in at least twenty-one countries since 1946. In addition, there are unconfirmed reports that military payment certificates have been issued in Algeria, Denmark, Egypt, French West Africa, Luxembourg, Saudi Arabia, and Switzerland. Information concerning the use of military payment certificates in these or other areas is needed. The table below indicates the areas where each series of military payment certificates is confirmed to have been used.

 

Security printers

Four security printers produced military payment certificates and A yen. Not surprisingly the Bureau of Engraving and Printing produced most series, but initially the printing was done by private companies under contract with the Bureau. Very little is known about these security printing operations.

 

Printer                                             Series

BEP                                                 611-701

Forbes                                             481 (2-4 printings), 521, 591

Stecher- Traung                             A yen

Tudor Press                                    461,471,472,481/1,541 

 

Technical aspects of military payment certificates

 

Paper, ink, and printing

Military payment certificates are printed by lithography rather than intaglio methods (the technique used for most United States paper money). The major reason for this is, of course, expense. The degree of security needed for military payment certificates was achieved in other ways. The security features used provided reasonably secure money for the relatively short life expectancy of certificates. The anticipated short life of a series is in itself an anti-counterfeiting device.


Military payment certificates are printed on planchette paper, that is, paper with small discs of colored paper imbedded at random throughout the paper. Although the number of planchettes will vary from piece to piece, and in statistical theory it is possible for a certificate to not have any planchettes, no such pieces are likely. On worn certificates the planchettes may be difficult to locate but usually a few can be found by careful examination. Many counterfeit notes have printed dots that are intended to duplicate the planchettes. The difference between genuine planchettes and counterfeits will generally be apparent under magnification or by holding the note up to a strong light. A genuine planchette adds thickness to the note, making it appear dark against the light.


The selection of inks is one of the major anti-counter­feiting devices used in printing military payment certificates. The inks are printed by applying one color over the top of another with the composite making the complete design of the certificate. Once the colors are printed over the top of one another, it is difficult for a counterfeiter to separate the colors for his own illicit printing. The problem is com­pounded in most cases by a careful selection of color com­binations.


An interesting innovation was introduced with the release of Series 461 in 1946. Ink sensitive to ultraviolet light was used for one of the background (tint) inks on the face of each certificate. This ink is not identifiable as anything out of the ordinary under sun, incandescent, or fluorescent light, but stands out under ultraviolet illumination. This is a fairly common security device used by many countries today but it was new when first used for military payment certificate printing.


Some of the contemporary documents concerning the production and introduction of military payment certificates mention a secret process when referring to this anti-counterfeiting de­vice. The use of ultraviolet sensitive inks has not been ob­served on any counterfeit certificates.


The significance of ultraviolet sensitivity to collectors has increased greatly in recent years. In the case of Series 481, ultraviolet sensitivity it is the sole visual means of distinguish­ing the printings. For Series 691 and 701 the ultraviolet differ­ences between printings are greater than for other series.
We have been experimenting with photography under ultraviolet light. We expect to include extensive images under ultraviolet light in the future on a compact disc ver­sion of this book, on the MPC web site, and or in a future edition of the printed book.

 

Numbering

There are a few misunderstandings concerning the numbering of military payment certificates. Three different num­bers appear on the face of each certificate: series number, position number, and serial number. The following discussion is about regular issue certificates. Replacements are excluded from this section.


The meaning of the series numbers should be obvious, but it is not. The series numbers have three digits. The first two digits are the last two digits of the year in which the series was printed. Series 461 was printed in 1946 and Se­ries 681 in 1968. The final digit of the series number is the counter for the series printed during the year. The majority of series end in a 1 because they were the only series printed that year: 461,471,481,521,541,591,611,641,651,661, 681, 691, and 701. If more than one series was printed in a year, the final digit was advanced as 472 and 692. When Series 692 was issued, alert collectors realized that Series 691 had been printed even although it had not been issued.


The serial number is the larger number with eight dig­its and a prefix letter as well as a suffix letter. An additional one or two digit number is called the position or plate posi­tion number. This number is not a plate number. The posi­tion number of the note indicates the position of the note on a printing plate. For example, the position number one indi­cates that the certificate was the top left hand certificate on a sheet.


An original bundle of 100 certificates will be in serial number order. Each certificate in the bundle will have the same position number! Serial numbers are applied by posi­tion number such that when 100 sheets printed in sequence are laid one on top of the other and cut, the resulting stacks of 100 certificates will be in serial number order.


The printing presses are prepared to print 8000 sheets at a time. Then the last of the 8000 sheets is numbered first so that it will be on the bottom of the stack when the top sheet is printed. Position number one on the top sheet will have serial number 00000001. Position number two on the same sheet will have serial number 00008001. Position num­ber 50 of the same sheet will have serial number 00392001 !


This system is very important to the efficient production of paper money. Understanding this system is also important to collectors in interpreting data which is available. It is par­ticularly important in understanding replacement certificates and to some extent in the study of errors. See the section on replacement certificates for additional information.

 

Position Numbering

Series 461 through Series 681, and Series 692 sheets were configured with the following number of notes per sheet:

  • fractional denominations        84
  • $1 notes                                      70
  • $5-20 notes                                 50

       

Position numbers appear on all certificates. For Series 461 and 471 they were printed by letter press along with the series designation and serial number. For later series the position number (and series) were printed by lithography along with the border.


Analysis of the serial numbers of the second printing Series 691 and 701 notes establishes that the sheets for the $5-20 denominations were not configured in the same was as the earlier series.