Gunyoshuhyo (Military currency) (軍用手票)

Gunyoshuhyo is pseudo currency issued during wars for military forces to pay for commodities and other necessaries in its occupying areas or areas under their control. It is sometimes interpreted as a kind of paper money issued by a government.
It is often called 'Gunpyo,' for short,
To be precise, it is a receipt; the government of the army has to pay the money to owners of it eventually. However, a defeated nation cannot pay the money, and in that case, its Gunpyo means nothing. When Japan was defeated in World War II, according to the international law of war at that time, defeated countries were not required to compensate for individual war damage and the Allies exempted Japan from the payment, which led to an international problem.

Summary

Military forces got food and other necessaries by self-subsistence in the field. It could be one-seded requisition of supplies, or sometimes plunder. However, such methods were disreputable and could cause antipathy from those who were pressed. Therefore, in wars broken out in and after modern times, each country's military force purchased commodities using military currency. In short, military currency was a receipt for commodities the military force got.

The reason a military force used their military currency instead of using their own country's monetary system was as follows; the total money supply might increase drastically, which could lead to inflation and economic disaster if they used their own country's currency; the country's currency might be used for power-keeping maneuver if their enemy country got it. In addition, since military currency was a receipt, it was possible to get more commodities than the military force could actually buy with its precious metal. Therefore, military forces could issue and circulate as much military currency as they wanted.

As stated above, military currency was sometimes mistaken as a voucher since it had an appearance and a circulation system as if it were usual paper money; however, legally, it was only a receipt, not a legal tender or marketable securities, and had to be encashed by the government of the military force. It was only a receipt to show that the military force had to pay for the commodities and/or labor to the owners of the military currency. However, there were some examples that military currency did work as real currency in limited periods and areas.

Military Currency of Each Country

During the WWII, the Allies issued their military currency, and after the WWII until the 1970's, the U.S.A. issued its military currency in US dollar and paid salary by that to the soldiers in U.S. military bases throughout the world. When the army of South Korea was dispatched to Vietnam, they issued their military currency that could be used there; the British Armed Forces also issued their military currency that could be used in British military bases throughout the world.

During the WWII, Allied Military Currency was issued in the United States.

After the WWII through the end of the Vietnam War, Military Payment Certificate (MPC, for short) in US dollar was issued and circulated in Vietnam. The military force of South Korea used the similar military currency (in US dollar) when dispatched to Vietnam.

In the 1990's, U.S. forces switched to a pre-paid card system instead of issuing paper military currency.

Japanese Military Currency

It is said that Saigo-satsu bill, issued by Takamori SAIGO during the Seinan War, was the first military currency in Japan. Afterwards, during such wars against foreign countries as Sino-Japanese War, Russo-Japanese War and the First World War (the war for captureing Tsingtao), Japanese government issued its military currency in the occupied areas and during the Pacific War (The Greater East Asian War), Japanese military currency was issued in the occupying areas, including China and Southeast Asia, based on the local currency. Type B Military Yen' used in Okinawa after the WWII, could be a kind of military currency.

As mentioned above, military currency could be issued and circulated by the military force without the permission of Ministry of Finance or Bank of Japan. Therefore, during the WWII, each of Japanese army groups overissued the military currency by their own judgment, which resulted in economic chaos.

Not only the military currency in Japanese yen used during the China-Japan battles, but also other kinds of military currency in various currency units such as peso and guilder were issued in the Japan-occupied areas. Some military currency was issued by a local financial institution such as 'The Southern Development Bank' which was established by Japanese government. Military currency based on ruble was made experimentally on the assumption that they would fought with the Soviet Union, but it disappeared without being used at all.

Series of Japanese Military Currency

According to "The Catalog of Japanese Coins and Bank Notes 2007" published by Japan Numismatic Dealers Association, the militay currencies issued by Japanese military force were classified into the following. The military currency used during Sino-Japanese War through Ko-go currency used during the China Incident, vertical style ones followed a design of the government-issued bank note called Meiji Tsuho was adopted, but bank-note styled military currencies were issued afterwards.

Sino-Japanese War Military Currency (in a currency unit, Ryo)
The military currency in the currency of the Qing period; ten ryo, five ryo, one ryo, five sen, and two sen and five bu was issued in February, 1895 when Sino-Japanese War broke out in 1895. However, since the war was terminated earlier than expected and few military currency was issued, almost all of which were collected. Therefore, that military currency is a rare article, which remains only a few pieces of one-ryo military currency.

Russo-Japanese War Military Currency (convertible into silver)
Since Japanese government prepared that military currency before the war, due to the aggravated Russo-Japan relationship, it was issued in February 1905, soon after the beginning of the war. It was written in Hangeul so that it could be used in Qing and Korea. The currencies of 10 yen, 5 yen, 1 yen, 50 sen, 20 sen, and 10 sen were issued and distributed in large quantities. Although most of them were collected after the war, quite a few Japanese soldiers who fought in the war brought back low-priced notes so the currency was relatively obtainable.

In order to keep the nominal value of that military currency, the Japanese government made it possible for the owners to exchange the currency with silver at every branch of Yokohama Specie Bank, Ltd. located at the front, assigned depositories in Japan, detached offices of Korean depository, Yasen (open battle) Post Office, Japanese common post offices at Korea and nothern China and detached offices of First Bank. The issued amount of military currency reached 140,545,000 yen by the end of June, 1905.

Military Currency in Sending Troops to Tsingtao (convertible into silver)
At the outbreak of the WWI, Japan, based on Anglo-Japanese Alliance Treaty, declared war on German Empire. When the Japanese military force executed a military operation in order to occupy the former German-leased territory in Shandong Peninsula of China, the military currency for 10 yen, 5 yen, one yen, 50 sen, 20 sen and 10 sen were issued to be used in the occupied territory in September, 1914. Accordring to the statistics in 1926, the total amount of the military currency issued in sending troops to Tsingtao was 11,812, 197 yen, and 161,956 of which was not uncollected.
The remaining currency is small in number, and these notes are treated at relatively high prices with premium,

Military Currency in Sending Troops to Syberia (convertible into gold)
At the end of the WWI, the Russian November Revolution broke out, which led to the birth of the first ever socialist regime. The Emperor followers and revolutionary regime groups had the bitter civil strife, and world powers sent their troops to Syberia on the pretense of assisting Czechoslovakian military force. Japan also sent its troops to Syberia and issued the military currency (notes) such as 10 yen, 5 yen, one yen, 50 sen, 20 sen, and 10 sen to be used in Syberia and northern Manchuria, which were guaranteed convertible to gold, in August, 1919. Therefore, both Japanese and Russian were printed on them.

The China Incident Military Currency (convertible into silver)
After the Manchurian Inciden in 1931, anti-Japanese movements in China became more serious, and the Japanese military sent its troops to China to invade the country; the Japanese military went out of control on the pretense of keeping 'public security.'
The China Incident (China-Japan war) broke out in 1937, and escalated into an all-out war as a matter of practice. In those days, in Manchuria, Japan-related Korean bank notes (equivalent to Japanese yen) were circulated and in Shanghai, Japanese bank notes were circulated. So, Japanese military, according to the development of the war, used various kinds of military currency, as well as the bank notes issued by Federal Reserve Bank Of China and Central Reserve Bank Of China under the then puppet government. That is why they issued various series and kins of military currency.

Kogo-ken Notes; a traditional, vertical note. That currency was issued in 1937 but the total sum equivalent to only three million yen was used due to its commonplace design.

Otsugo-ken Notes; the letteres printed on the Japanese bank notes at that time were erased and the large letters of 'military currency' were printed on the surfaces to be issued.

Heigo-ken Notes; the Japanese bank notes, which were not printed the letters of 'Bank of Japan,' were issued with the letters 'Military Currency by the Government of the Empire of Japan' printed.

Teigo-ken Notes: the pictures of Chinese phoenix and dragons were printed and it was issued as 'Military Currency by the Government of the Empire of Japan.'

Igo-ken Notes: the letters printed on Teigo-ken Notes were changed into 'the Government of the Empire of Japan' to be issued. Rogo-ken Notes: it has signs that started with 'Ro' of Igo-ken Notes. Although the military currency was issued in order to be used in French Indochina, very few notes were used. Therefore, the notes are sold at comparatively high prices with premium.

The Military Currencies issued during The Greater East Asia War (in a monetary unit of each country)
It is the military currency issued in various Asian Pacific areas where the Japanese army occupied after 1941. Since they were issued in many Japan-occupied areas, the monetary unit of military currency varied and there were various series and kinds.

Hago-ken Notes; It was issued in Dutch Indochina. The currency unit was gulden.

Nigo-ken Notes; It was issued in British Malaya. The currency unit was Straits dollar.

Hogo-ken Notes; It was issued in American Phillipines. The currency unit was peso.

Hego-ken Notes; It was issued in British Burma. The currency unit was rupee.

Togo-ken Notes; It was issued in the Pacific areas colonized by Britain. The currency unit was pound.

Related Laws

Hague Convention, Article No. 52, says 'Contributions in kind shall as far as possible be paid for in cash; if not, a receipt shall be given and the payment of the amount due shall be made as soon as possible.'; military currency was used as the receipt mentioned above.

According to 'the departmental order about the application procedure of permission such as the payment by the military script,' when a Japanese person living in Japan is required the payment by the military currency to a foreign country, that Japanese person has to get a permission from Finance Minister. Nowadays, the application can be done online but no request has been made online so far.

The military script in the order mentioned above means the military currency used by GHQ and US military in Japan, and not the military currency issued by the Empire of Japan. The purpose of the order was to determine the procedure for Japanese companies that were paid by American military currency to apply for the payment. The order was related with the dollar restriction, which was valid when the order was issued.

At present, American army does not issue its military currency, so there seems to be no possibility of application.

Problems related with Japanese military currency

The military currency issued by Japanese military force ceased to be in effect due to Japanese defeat in the WWII.. Since there was too much military currency issued, some of them became worthless due to inflation. It is said that some currencies were used to wrap tabacco leaves in areas where inflation was especially severe. It is considered that Japanese government was released from obligation to pay for its military currency since the Allies exempted Japan from the payment when Japan signed the San Francisco Peace Treaty.

However, even after the WWII, in the Philippines and Hong Kong, some residents who were forced to change their money into the Japanese military currency demanded individual compensation from the Japanese government. Since Hong Kong had to accept the Japanese military currency circulated in China a brust, the residents who were forced to change their currency into the Japanese military currency were financially damaged. In fact, some of them instituted a civil suit in a court in Japan, demanding individual compensation from the Japanese government. On June 17, 1999, the Tokyo District Court rejected the plaintiff's claim because of the following reasons; the international law at that time had a principal that individual war damage would not be compensated; Japanese domestic law did not have a legislation that the govenment would exchange the former military currency with other currency.

Some of the remaining military currency issued in the areas around the Philippines had stamps that demanded individual compensation from the Japanese government. That is because the organizations, which was trusted by the owners of the military currency, issued the receipt and kept the currency by stamping on each note. But such notes were returned to the former owners, and were sold to many paper money collecters.

Stamps illustrated military currency

One of three memorial stamps 'the 40th anniversary of the end of the WWII' issued by Dutch State Post Bureau in 1985 shows the picture of Dutch people kneeling down on the ground toward Japanese Imperial Palaceand and the military currency on it.