Why The US Used To Pay Soldiers With Fake Money
Would you want to be paid in “military currency”?
In the aftermath of World War II, the victorious Allied powers had a number of pressing problems to deal with. Most of these problems are well known. The democratic countries had to contend with what to do with the powerful Soviet Union. Central Europe was concerned with the denazification of millions of Germans. Then there was the problem of rebuilding dozens of cities and repairing thousands of miles of infrastructure that had been wrecked during the fighting. Another problem, which does not get as much attention as the rest, was how to stabilize and revitalize the economies of the defeated countries.
The United States spent years and millions of dollars trying to tinker and fix the European economy. They were largely successful but in order to do so, the United States started paying their soldiers in a type of fake currency that would raise eyebrows today.
One of the biggest concerns in occupied and wartorn zones was the effect of the US dollar (or British pound) on the local economy. Since the US dollar was stable and plentiful, it was the preferred currency almost everywhere between 1945 and 1950. The problem was that if local economies started relying on US dollars over their own local currency, there were concerns that they…
