Banknotes in Vietnam from 1954 to 1975

Written by Ta Thi Thuy Duyen | May 24th, 2022

Today, there are many options for transacting money from internet banking to electronic wallets. However, in the past, there is nearly only one way: through banknotes and coins. As people in the past have used this form of money every day and also did not yet have a diverse digital kind of communications, banknotes (and coins) formed a good means for transferring a government’s ideologies and messages. This was especially important in situations of wars or conflicts since it was the time when people needed to be led, directed, or, at times, manipulated.

After the French withdrawal from Vietnam, following the Geneva Agreement in July 1954, Vietnam became divided into two parts: the Democratic Republic of Vietnam (DRV) in the North and the Republic Vietnam with the support of the US in the South. With the existence of the two governments in Vietnam, both governments always aimed to claim their legitimacy for leading people during the times of struggle, and banknotes were a good tool for that. By examining the Vietnamese banknotes of North and South Vietnam in the period from 1954 to 1975, I shall show the way that banknotes were used as a means of propaganda by the two governments of South and North Vietnam, to please their supporters and to show superiority over the other side.

Part 1: Divided Vietnam: Anoverview of different versions of banknotes in South and North Vietnam

1. North Vietnam

There were two currency reforms in North Vietnam.

The North Vietnam government recognized that money and economic pressure could contribute a lot to the ongoing wartimes. After gaining victory in the Vietnam border war in 1950 and achieving recognition by the People’s Republic of China and the Soviet Union, they established the National State Bank on May 6^th, 1951 according to the command number 15/SL of president Ho Chi Minh [1]. Also in the same year, the national bank published a new version of banknotes with denominations of 10, 20, 50, 100, 200, 500, 1000, 2000, and 5000 dong. The ratio for exchanging money was 1: 10 [2].

Later, due to some changes in economic policies (for more details, seebelow), the government decided to execute another currency reform. Particularly, in this period, they only exchanged low denomination banknotes which were 1 xu (1/100 dong), 2 xu, 5 xu, 1 hao (1/10), 2 hao, 5 hao, 1 dong, 2 dong, 5 dong, 10 dong [3].

1. South Vietnam

During the existence of the Republic of Vietnam from 1955–1975, as the government witnessed significant political changes, there were several currency reforms in this part. However, we also can divide their banknotes versions into two main periods.

The first period was from 1955–1963 in the First Republic of Vietnam under president Ngo Dinh Nhiem who was a Roman Catholic and successfully gained power with support from the US [4]. The main theme in this period‘s banknotes was peaceful working lives, nature, and hometown belonging.

Then, with religious and political conflicts peaking in 1963, this led to the First Republic of Vietnam coup by general Duong Van Minh. President Ngo Dinh Nhiem and his brother, Ngo Dinh Nhu, were killed which marked the end of the First Republic of Vietnam. This event started a political instability in the South until the military seized control by Nguyen Cao Ky in 1965. However, the chaos in Southern politics remained until the presidential election in September 1967. Nguyen Van Thieu won the election and started the Second Republic of Vietnam [5]. The installment of this new government led to new versions of banknotes. More historical figures and outstanding architectures were chosen  to adorn the banknotes of this period.

Part 2: More than economy: The affordances of banknotes

1. Building trust for supporters and swingers

Building trust in peopleis one of the most important missions. It would be meaningless if a government claims “national strength” without the endorsement of the people. Therefore, governments need to build “trust” among the people. There are many different ways to implement it: reduce taxes, protect people's interests/life (especially in wartimes), and propagate those messages. An effective approach to spread “trust” among citizens is embedding them into the iconography of banknotes since banknotes are means of transaction that people use mostly everyday and hold in their hands. Furthermore, banknotes have both, economic and political meaning.

Particularly, right after establishing the National State Bank in 1951, in the same year, the North Vietnam government implemented a new version of banknotes with more authentic figures compared to the previous versions, encouraging fighting spirit and building trust in society.

Those iconographies were the government’s claims for the upcoming victory based on solidarity between different classes in society, thorough military equipment preparation, and a fighting spirit of people and soldiers. This can be compared to research investigating the relationship between the role of Islam in nationalism and banknotes iconography: The examination in 66 Turkishes and 33 Pakistanis of nowadays shows that figures and images displayed on banknotes could affect the rise and fall of Islam’s role in state nationalism [6]. This effect may be put over more beneficially in wartime and in the situation where banknotes were a main communication tool. Therefore, images in North Vietnam banknotes in this period of time did not simply focus on the issue of war, but were building trust people who used and would use them as daily payment.

1. Legitimation for fighting

Similar to building trust, it was also very crucial to establish legitimacy for fighting in the war. Why are you legitimated to fight against the other part? Why should I be on your side and not the other? A government, when choosing to participate in a war should have answers for those questions and convince their citizens and supporters. In the combat, South Vietnam, not North Vietnam, needed to establish this legitimacy especially when it saw increasing American intervention in the South government after 1965. Therefore, portrayals of historical figures in Vietnamese history as well as their famous battles were chosen as imagery of Southern banknotes in 1966.

The common characteristics of these historical figures is either fighting against foreign invaders or fighting to unify the country. By placing these historical figures on banknotes, the South Vietnam government seemed to affirm the continuation of history to strengthen the legitimacy its own existence and the need for battle. That they, not the North Vietnamese government, represent the people (and history) of Vietnam like previous historical events.

1. Iconography and targeted audiences

After finishing the border war and implementing , the Northern government faced many difficulties in developing the domestic economy. From 1953 to 1956, they carried out a major land reform. The new policy caused a lot of conflicts within society. Based on the main idea of “ownership by the whole people not individuals”, there was a substantial change in size of average land holders. After the land reform, the number of landlords reduced rapidly from 6,499 to 1,101 (in square meter per person) and vice versa, the number of small peasants and landless peasants increased significantly from 455 to 1,431 and from 199 to 1,528, respectively (in square meter per person). Meanwhile, rich and middle-class peasants nearly remained the same from 2,141 to 2153 and 1,151 to 1,665, respectively. It shows that the land reform was not sustainable as there were only changes in the highest and lowest class of society [7]. The economy of the young government faced many difficulties. Moreover, a new currency reform was implemented in late 1958 and early 1959.

There may be two possible reasons for the currency reform. Firstly, there was a controllable increasing inflation in North Vietnam from 1955. It peaked in mid-1956 when the value of dong decreased at the minimum 50% from October 1956 to March 1957 [8]. In order to deal with the inflation issue, the ratio in current exchange was 1:1000 (1 new dong exchanged to 1000 old dong). Therefore, very low denominations such as xu (1/100 dong) and hao (1/10 dong) appeared in exchange instead of the remaining available denominations. Moreover, denominations were not only adjusted, but iconography changed, too. The theme of fighting readiness was replaced by factories, excavations and agriculture developments.

Similar to marketing, banknotes‘ messages have their own main target audiences as well. Arguably, those messages accommodate denominations or banknote values since low-income people are likely to use small denominations while higher denominations are more likely to circulate in higher social spheres [9]. Applying the arguments in the situations of chaotics after the land reform for low and middle classes in Northern society, it is likely that theimagery of the new banknotes was meant to emphasize economic stability and to enlist their (low and middle class) citizens for a brand-new policy, more precicely low-level agriculture corporations, an alternative and continuation for the land reform policy in 1953 [10]. 

Part 3: Propaganda strategies in North and South Vietnam compared

While South Vietnam with its economic potential focused on banknotes authentification, more hidden propagandas and applied big counterfeits and leaflet strategies (as the employment of historical figures for imagery), North Vietnam added propaganda messages directly in their banknotes and used small “fake news” strategies in order to implement economic war.

South Vietnam, based on the economic support from the US, had more economic potential compared to North Vietnam although they also witnessed much instability. To avoid counterfeiting, they cooperated with many of the world's major banknote production companies such as Bradbury, Wilkinson, & Company and consulted banknote production prices between companies to increase printing quality but also reduce the costs. As a result, For each banknote (especially the period 1966-1975), with every denomination, they produced many different versions. For example, during 1973, they had 5 types of 100 dong, 4 types of 200 dong, 4 types of 500 dong, 2 types of 1000 dong. Banknotes that were counterfeited would be discontinued and withdrawn. Therefore, the withdrawal would not have much impact on the overall economic situation [9].

The messages they chose for the imagery on banknotes were often quite simple but effective. For example, banknotes contained historical figures as shown in part 2, the message of the banknote reform of the 200 dong banknote in 1958 to counterbalance the unstable economic situation in the North. Besides, in 1970 when a new version was issued, they used the image of the Independence Palace in all banknotes’ obverses, and the reverses had some familiar animals. This roots in people's communication habits when using animals as denomination indicators such as "1 horse", "1 cow"..., thereby creating a natural attachment for their currency and the people [10].

In addition, they also implemented large leaflets spreading strategies: the 1965 fake North Vietnam 1-dong leaflet proposed by the US Army Psychological Warfare Office (US-MAAG) is an impressive example. The messages attached to the images are mentioned in the penguin banknote of the Northern government. The image of the independence palace, a symbol of the victory of the Northern government, was associated with the idea of an "invasion" of the Labor Party. Meanwhile, the image of farmers working on a paddy field was connected with the note "rice jar", a metaphor for the bad economic situation in the North. In addition to spreading messages, these leaflets, because of their very good printing technique and since they were printed in the same size as real money, could be cut into counterfeits and disrupt the opponent's economy [11].

Such grand strategies were often not applied by the North. Instead, they used small-scale methods such as producing a few counterfeits and spreading fake rumors. According to Official Dispatch No. 12/098/119/M of the Governor of the National Bank of Vietnam sent to the Finance Minister on May 25th, 1968, the North of Vietnam had spread rumors that South Vietnam's 500 dong banknote (with the main figure of Nguyen Hue) would no longer be used. The aim was to make People feel vulnerable and insecure, so they would be afraid and exchange their available banknotes, thereby causing pressure on the economic system and stability. In addition, North Vietnam also produced an amount of 500 dong counterfeits and distributed them to Southerners. As a resultstrategy could disrupt South Vietnam's economy. Furthermore, the North Vietnam government also spread rumors that the 200 dong banknote (with the main figure of Tran Hung Dao) could be exchanged in Ben Cat (Binh Duong), which was in a certain area, and this was a call to exchange money to cause confusion among people [12].

Conclusion: On top of the economic affordance that people may assume to be first about money, banknotes have many different affordances. Delivering propaganda is one of those affordances. In a context of war, banknotes played an important role to build trust, legitimacy and propagate new policies to (a) social sphere(s) since banknotes were one major communication tool in the past. Utilizing those affordance of banknotes and applying smart currency strategies could creat major effects internally and externally to a combat. 

References:

[1] Ho Chi Minh. 1951. “Sắc Lệnh Số 15/SL Của Chủ Tịch Nước: Sắc Lệnh Thiết Lập Ngân Hàng Quốc Gia Việt Nam". chinhphu. Last modified May 6, 1951 (24 May 2022).

[2] Vietnam National State Bank. 1991. Tiền Việt Nam (một số mẫu hình). Ha Noi: Vietnam National State Bank.

[3] Hồ sơ về phát hành tiền ngân hàng mới thay đổi đơn vị tiền tệ và hu đổi tiền ngân hàng cũ năm 1959 collection. “Công văn số 095-TTg của thủ tướng chính phủ về việc phát hành tiền mới". National Archive Center III, Ha Noi, Vietnam. 

[4&5] Turley, S. William. 2021. “Vietnam - The two Vietnams (1954–65)". Encyclopedia Britannica. Last modified August 26, 2021 (24 May 2022).

[6] Saleem, R.M.A. 2017. “Nationalism, Banknotes and Islamic Iconography". In State, Nationalism, and Islamization, edited by Mark J. Rozell. Cham: Palgrave Macmillan.  https://doi.org/10.1007/978-3-319-54006-1_4

[7] Shabad, Theodore. 1958. “Economic Developments in North Vietnam". Pacific Affairs 31, no.1:36-53, doi: https://doi.org/10.2307/2753681.

[8] Szalontai, Balazs. “Political and Economic Crisis in North Vietnam, 1955–56". Cold War History 5, no.4 (2005): 395–426, doi:10.1080/14682740500284630

[9] Elisabeth & Sven Guenther. 2021. “Contested affordances: Ancient Roman coins, economic cycles, and changing social-political context". Art style, Art and culture International Magazine, no. 7: 203-26, doi: http://doi.org/10.5281/zenodo.4589551.

[10] Friedman, A. Herbert. 2004. “Propaganda banknotes of the Vietnam war". psywarrior. Last modified October 8, 2004 (24 May 2022).

[11] Hồ sơ về biện pháp đối với kế hoạch phát hành tiền tệ của Cộng Sản năm 1965-1973 collection. “Công văn của Ngân hàng quốc gia Việt Nam về kế hoạch phát hành tiền Cộng sản". National Archive Center II, Ho Chi Minh city, Vietnam.

[12] Hồ sơ Việt cộng tuyên truyền phá hoại tiền ngân hàng quốc gia Việt Nam collection. “Thông cáo của Ngân hàng Quốc gia Việt Nam về các biện pháp chống bạc giả năm 1968-1970". National Archive Center II, Ho Chi Minh city, Vietnam.

[13] Friedman, A. Herbert. 2004. “Propaganda banknotes of the Vietnam war". psywarrior. Last modified October 8, 2004 (24 May 2022).

[14] Hồ sơ Việt cộng tuyên truyền phá hoại tiền ngân hàng quốc gia Việt Nam collection. “Thông cáo của Ngân hàng Quốc gia Việt Nam về các biện pháp chống bạc giả năm 1968-1970". National Archive Center II, Ho Chi Minh city, Vietnam.