As strange as it may seem, the “Vietnam Generation” – meaning, those of age to have fought in that conflict – are in their very late 60’s, at best, and more likely in their early- to mid-70’s. In addition to the more “televisable” repositories of collective memory that have been lost, there are nuances within those repositories that fade into the background.
One such is the “MPC” – the “Military Payment Certificate.”
The MPC (pdf link) was a form of “occupation currency”, used by the Armed Forces of the United States from 1946 to 1973. The idea was to try and control inflation in occupied zones, as well as attempting to limit black market activity in the various occupied nations as close to the minimum as possible. The very first iteration of this practice, however, was the “HAWAII Overprint” note, issued from 1942 to 1944.
The Hawaii Overprint was an otherwise-valid US note that was printed by the US Mint in San Francisco, but that was stamped “H A W A I I” on the reverse. The rationale was that, in the event of the island chain’s invasion and capture by the Japanese Empire, all existing “HAWAII” stamped notes could be declared invalid, preventing Japan from trying to inflate the United States’ currency reserves by mass-dumping captured cash back into the US economy via Mexico. In fact, a version of this strategy was employed by the Nazi SS in their “Operation Bernhard”, which resulted in £15-20 million worth of nearly undetectable counterfeit notes being in circulation by the end of World War 2; adjusted for inflation, this amounted to approximately £493,146,000 – 657,528,000 (c.$611,052,280 – $814,736,370) in 2022 figures.
The United States’ MPC, along with various similar types of scrip from other occupying powers, accomplished this by paying Allied troops stationed “in country” in specifically made military scrip, instead of the normal national currency. In this way, the troops could spend their pay within the local economies, without injecting inflationary levels of hard currency – such as US dollars or British pound-sterling notes – that would trade at far higher levels of exchange on the local black markets, thus forcing the occupation governments, in turn, to print vast quantities of paper currency to compensate, devaluing the local currencies even further. In fact, such a resultant death spiral of currency hyperinflation in post-World War One Germany (albeit for different reasons) was one of the root causes that allowed the rise of Adolf Hitler’s Nazi Party.
The United States continued its use of the MPC throughout its occupation period in both Europe and various parts of the Pacific, into the 1960’s, when the war in Vietnam began to accelerate. In the same way as in the post-World War Two era, the South Vietnamese đồng (which had replaced the French colonial piastre in 1953, at their independence) was simply too weak to survive against the US dollar. MPCs were issued as pay for US troops posted in the country, to limit the arbitrage impact. The method the United States used to effect this was to arbitrarily convert to a new issue of MPC to US troops; US troops were never told when a “Conversion Day” (or, “C Day”) would happen, but would find themselves suddenly restricted to base, where they were informed that they had to exchange their old MPC issue for the new version, as the previous MPC issue would not be valid for exchange after that C Day. This, in turn, prevented the MPC from acting as a wholesale stand-in for the US dollar.
The MPC program was retired after the United States’ involvement in Vietnam ended. The MPC system was deemed unnecessary by then, as by the 1970’s, the nations occupied at the end of World War Two had been long ago released from their occupied status, and their economies were, in general, strong and flourishing. As a result, the circulation of US dollars paid out to US troops stationed there was not deemed to be destabilizing, and the United States went back to simply ferrying US dollars in cash to various bases for direct disbursements to troops stationed there.
In 1997, following the dissolution of the Soviet Union at the end of 1991, the United States found itself deploying forces to semi-permanent stations for “peacekeeping” duties – occupation duties, in all but name – in portions of the former Yugoslavia, as the region exploded in a series of ethnic and sectarian wars.
The costs of transporting cash to troops stationed in the hostile areas quickly became very expensive. Given that the United States’ Department of Defense (DoD) had established a vast, world-girdling logistical network by then, and given that there was very little available for purchase in the war zones, the DoD expanded what had been a pilot program used in various military basic training facilities within the US, into the “EagleCash” system.
EagleCash functions in a manner similar to a gift card, in that it allows deployed troops to use an ATM-like kiosk to transfer money from their bank accounts in the US to the EagleCash card, then use that card to purchase various goods and services from on-post stores and exchanges.
There is, however, a catch: The EagleCash system, like so many other things in the 21st Century, is a great, streamlined system of finance that functions reliably to pay troops forward-deployed in hostile areas…as long as the backbone infrastructure the system relies upon works.
With the rise of cyber warfare, as well as the potential for a disruption of the satellite communications network – to say nothing of actual nuclear warfare – there is a very good chance that the United States and its allies may well need to return to an MPC-type system of finance for deployed troops. While there is a specific entry in the Code of Federal Regulations (pdf link) regarding MPC’s, it remains unclear if the US government is prepared to reissue paper MPC’s in the event of some major network disruption…
…And unpaid troops can become very unhappy and disgruntled troops, very, very quickly.
Food for thought.
