On our overseas military bases, U.S. currency is the monetary standard for soldiers and citizens buying things at the base PX. Getting the money to those overseas bases, however, has proven difficult. Shipping paper currency overseas isn’t too bad, but the expense and logistics of shipping rolls of pennies, nickels, dimes, and quarters is cost-prohibitive due to the weight and volume required to run a proper business.
In order to fill the void of coinage shortages, the AAFES (the organization in charge of on-base retailers) has started printing plastic coin-surrogates. Printed in denominations of 5¢, 10¢, and 25¢, these pog-shaped discs are given as change and are redeemable for cash if necessary. The U.S. military aren’t the only ones who have opted to use this alternative: the British military has also produced their own version of the pog coins. Because, by law, only the U.S. government can authorize a new form of currency, let alone something produced without the U.S. Mint’s influence, these AAFES fractional currency bear the caveat “gift certificate”. In practice, however, these little plastic chips fill the need for sub-dollar transactions, without the use of any metallic currency.
The need to have fractional-dollar money, but without access to metallic coins, isn’t a new idea. As you may remember from earlier articles, the mid-1800s were a complex time for United States currency. The economy had cycled through various booms and busts, but without a central bank or monetary standard, people were very nervous about money. Whenever coins were made from precious metal, like silver, gold, or copper, they would be hoarded by citizens in case things turned south. Towards the mid-nineteenth century, a lot of attention ‘turned south’: the Civil War was on the way, and a significant amount of precious metals went under floorboards, between mattresses, and buried in back yards. The U.S. Treasury was seeing its reserves dwindle, and the country began to run out of coins.
In 1862, Treasurer General F. E. Spinner came up with a solution to the dwindling coin problem. While the Mint was not able to produce coins in any significant number, Spinner realized another Federal department was producing all sorts of small-denominations, as small as ½¢. That department was the U.S. Post Office, who sold stamps with a value backed by the U.S. Government. The Stamp Payments Act of 1862 was put into place, authorizing postage stamps to replace coinage as a full-fledged currency, up to $5, and if you wanted real money, the Postmaster in your area could exchange them for silver. That same act is the first to outlaw the production of U.S. currency by anybody but an act of Congress — the exact reason that the AAFES pogs are ‘gift certificates’ instead of actual money.
Spinner and the Treasury weren’t done yet: because there weren’t many 25¢ or 50¢ stamps (far more than mailing anything would cost), and this now created a risk of postage stamp shortages, another solution was needed. The Treasury began to print ‘notes’ for larger incremental amounts. At first, these Postage Currency were designed to look as close to the postage stamps as possible, like the one at the left. A 25¢ postal currency note had five 5¢ stamps printed on it, to make it clear to retailers that the one slip of paper was worth the same as if the customer had actually brought in five 5¢ stamps. With citizen’s uncertainty about money in general — especially new, unusual paper money, which had messed up the economy only a few decades earlier — the Treasury wanted to keep things consistent.
In the following years, the Treasury began to produce fractional currency in more ‘money-like’ forms. The Treasury used their engravers to produce currency with the high quality standards and anti-forgery designs that were used in higher denomination bills. The name “postal currency” was dropped, although the money was treated the same way and were still redeemable for real money at the Post Office. The Treasury even got creative with the faces on their fractional money, too: Jefferson and Washington were already featured on postage stamps, coins, and larger bills, so with 
the fractional bills other politicians got their chance to appear on money. The Treasury even broke their own rules and put living persons on the money, which had been forbidden by an earlier law. F.E. Spinner himself appeared on a 50¢ bill, as seen to the right, immortalized on the money he developed to pull the nation out of a currency shortage. After the Civil War wound down, national money reserves grew and hoarding declined, so the U.S. discontinued the paper fractional currency and returned to coins in 1876.
The age of the Pog-based currency on US bases is limited, though. Soldiers are now being issued debit-cards, which eliminate the use of currency altogether. As electronic funds become de rigeur at base shops, these pogs will not be produced any longer, leaving them a highly collectible and interesting collectible of our soldier’s overseas activities.
