Everyone knows about D-Day. Many of us remember VE-Day and VJ-Day. But C-Day? What is that all about? To understand C-Day we must go back to the post WWII era and the need for a stabilizing currency in Europe. The response was the creation of the Military Payment Certificate (MPC).
MPC evolved from Allied Military Currency as a response to the large amounts of US Dollars circulated by American servicemen in post-World War II Europe. The Franc, the Deutchmark, the Yen and the other currencies of the post war nations were under assault. The local citizens might not trust local currencies as the future of their governments was unclear. Preferring a stable currency like U.S. dollars, local civilians often accepted payment in dollars for less than the accepted conversion rates. The flourishing blackmarket in fact, fueled this problem. US Dollars became more favorable to hold, inflating the local currencies and thwarting plans to stabilize the local economy.
Contributing to this problem was the fact that US occupying forces in Europe and Asia were being paid in dollars, which could be converted in unlimited amounts to the local currency with merchants at the floating (black market) conversion rate, which was much more favorable to the GIs than the government fixed conversion rate. From this conversion rate imbalance, a black market developed where the servicemen could profit from the more favorable exchange rate.
To reduce profiteering from currency arbitrage, the US military devised the MPC program. MPCs were paper money denominated in amounts of 5 cents, 10 cents, 25 cents, 50 cents, 1 dollar, 5 dollars, 10 dollars, and starting in 1968 20 dollars. MPCs were fully convertible to US dollars upon leaving a designated MPC zone and convertible to local currencies when going on leave (but not vice-versa), and were illegal for unauthorized personnel to possess, thus, in theory, eliminating US dollars from local economies.
Although actual greenbacks were not circulating, many local merchants accepted MPC on par with US dollars, as they knew they could use them on the black market. This was especially evident during the Vietnam War when the MPC program was at its zenith. To prevent MPC from being used as a primary currency in the host country, thereby destroying the local currency value and economy, MPC banknote style would change. Many veterans can recount a conversion day or C-Day.
C-days in Vietnam were always classified, never pre-announced. On C-day, soldiers would be restricted to base, preventing GIs from helping Vietnamese civilians — especially local bars, brothels, bar girls and other black market people — from converting old MPC to the newer style MPC. Since Vietnamese were not allowed to convert and frequently lost savings by holding old worthless MPC, they would be very angry about their MPC loss. It has been rumored that they would then "arrange" to have the nearest U.S. base rocketed or mortared the next night.
To the GI, MPC was an unwieldy way of providing currency. The size was unusual and the volume required to carry even an small amount of the paper currency was awkward. In addition, it did not wear well in the climate of Vietnam and wore out fast.
Thirteen series of MPC were issued between 1946 and 1973, with varied designs often compared to Monopoly money due to their colors. After the Vietnam War MPC was never again issued, and the concept lay dormant until the late '90s when it was replaced by a Stored Value Card system, presently used by U.S. armed forces in Iraq.