USA, Military Payment Certificate, 5 dollars, series 472


USA, Military Payment Certificate, 5 dollars, no date (1948), Face: black on blue, Back: brown, series 472, position 5, P-M20, VG

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The MPCs were used from 1946 to 1973. Their purpose was supposed to be stabilizing, because US currency tended to have an inflationary effect on local currencies. It worked a little, maybe, sometimes, but not really, and they gave up on the concept after the Vietnam War.

The USA got into the paper money business during the Civil War. Everyone was hoarding coins, they had to do something. Once they started they found that they kind of liked what paper money did to the economy.

Aside from China, other governments started using circulating “banknotes” starting in the 17th century AD. The practice became general in the 19th century. In the 20th century value of paper money in circulation far surpassed the value of coinage. In the 21st century paper money is fading and credit transactions are growing.

Paper money, meaning the promise of a government to pay a set amount, and the paper promise allowed to circulate at will, was probably first used in China in the 12th century AD. At that time the merchants and governments of Europe were just writing letters to each other about what they owed.