Base Money: U.S. Military Payment Certificates and the Transpacific Sexual Economies of the Korean War, 1950–53

Abstract

In early September 1952, First Lieutenant George Haney was brought to US court-martial for the illegal transfer of US military payment certificates (MPC) to his “Korean girlfriend” Yun Kil Soon. A World War II veteran, Haney had served in the Korean War since November 1951 with the primary duty of supervising the US Army’s Seventh Division R&R center and processing thirty thousand members in the unit.¹ Between July and early September 1952, the married forty-year-old officer traded several hundred dollars’ worth of MPC and ration cigarettes with Yun. MPC, the American military scrip, were the “official medium for all financial transactions on overseas [US] military bases” from their inception in 1946 until the termination of the last series in 1973, and their use, transfer, and possession outside the military was prohibited.² (See figs. 1, 2.)

Figure 1.

MPC Series 472 (issued and used between 1948 and 1951), Billed were issued in demoninations from 5 cents to 10 dollars. Courtesy of the US Army Finance Corps Museum, Fort Jackson, SC.

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Figure 2.

MPC Series 481 (issued and used between 1951 and 1954), Billed were issued in demoninations from 5 cents to 10 dollars. Courtesy of the US Army Finance Corps Museum, Fort Jackson, SC.

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Later, on September 23, 1952, Corporal Robert Shaull, one of the men whom Haney may well have processed for R&R, was in Sasebo, Japan.³ The twenty-three-year-old member of the US Army, who recently had rotated back to Japan after serving in Korea, spent the night off base in Sasebo. He visited several restaurants and bars, where he consumed a significant amount of “beer and gin fizzes,” after which he went to “a house of prostitution” run by a Japanese “mama-san,” Reiko Fujihara. It was not his first visit to Fujihara’s house. With familiarity, he negotiated the price for “the remainder of the night” with Kimiko Oda, one of the women working at the place, and proceeded to her room upstairs. Shaull’s visit to the “house of prostitution” came to light as he was apprehended by the military police the next day for the murder of Oda. The military court judged that Shaull had fatally attacked her “under the influence of liquor and sex.”⁴ On his way to murder, Shaull had also violated military prohibitions against consuming liquor, visiting unlicensed establishments, sexually associating with a local woman, and, presumably, using MPC outside military contexts. The prohibitions notwithstanding, all these behaviors were common practice among US servicemen stationed abroad, and as was noted in Shaull’s court-martial record, the illicit nature of the activities left the locals involved at risk of violence.

The stories of Shaull and Haney introduce us to how illicit transactions involving sex and military currency became a dominant form of exchange between the occupying force and local women and formed the basis of the local economies in Korea and Japan during the Korean War (1950–53). US bases in Japan were used as transmission hubs for troops and supplies en route to Korea, and soldiers flew regularly between the two countries throughout the war. The cross-border movement of the troops resulted in the rapid growth of the sexual markets in both countries. Joseph McNinch, a US medical officer who served in the war, noted high incidence of venereal disease among US troops in the Far East Command and attributed the army’s failure to keep venereal disease under control to the fact that “the [Korean] war resulted in the movement of large numbers of troops through Japan to Korea and from Korea to Japan.”⁵ Notably, venereal disease was not the only thing transferred through sexual transactions between US servicemen and local women in Korea and Japan. The MPC that Haney illegally handed to Yun—a de facto payment for her services as “girlfriend”—were also carried between the countries and used widely in local transactions. In the Japanese clubs and bars that Shaull and many other R&R returnees would have likely visited, MPC notes circulated as a common form of payment for drinks and sexual entertainment. These MPC notes were a crucial element of the cross-border sexual market catering to US soldiers during the Korean War.

The prevalence of illicit sexual liaisons and other black market activities, as well as the military’s tacit acceptance of these behaviors, has been discussed from certain angles before. Gender scholars of US militarism and the Korean War have investigated the issue with a focus on the military’s instrumentalization of women’s bodies and sexuality. Since Cynthia Enloe’s pioneering work, feminist scholarship of US foreign relations has long criticized the military’s ideas of what it should provide its male members with (e.g., sexual service for soldiers stationed abroad) for the organization to function.⁶ Maria Höhn, in the context of post–World War II Germany, carefully examines the gap between the Washington-level “non-fraternization” policy and its failed implementation at the local level.⁷ Seungsook Moon and others investigate various ways in which authorities condoned sexual liaisons between soldiers and locals while maintaining legal prohibitions against them.⁸ One way or another, the host governments and the US military have been involved in promoting unequal sexual encounters between locals and the occupying forces. In response, extant scholarship has endeavored to highlight authorities’ accountability for the procurement of sexual services to the troops and highlight the hypocrisy of the military’s official nonfraternization stance. This policy-oriented approach, while important, is generally limited to the state regulatory aspect. Notably, far more practices took place as informal exchanges, and the social history of these is yet to be written. The lacuna is more conceptual than methodological, as the emphasis on state-sanctioned sexual recruitment indicates and reproduces the perception of sexual black markets as something accidentally grown outside legal regulation. However, if much of the sexual black market was facilitated by the military’s mobilization of women’s sexuality, the presumed boundary between licit and illicit practices needs to be reconsidered.

For social historians interested in the history of the Cold War and US empire, the stories of illicit and intimate exchanges belong to the historiographies of everyday lives under US occupation.⁹ Social lives extend far beyond what the law regulates. American goods appearing in local markets signal much more than just corruption and an ill-functioning economy in the occupied country. They were a manifestation of people’s daily struggles and a symbol of the asymmetrical material and political power between occupied and occupier. Deregulated sexual and intimate exchanges between the troops and local women are a crucial part of the historiographical accounts.¹⁰ It is commonly noted that local women, largely through their sexual transactions with the occupying forces, served as major suppliers of American goods to local markets, but there has been little discussion on why they became the primary providers of these goods and how such items functioned as a de facto currency for sexual transactions and within local economies.¹¹ That is to say, the economic and symbolic value of US Army supplies, including MPC, is usually taken for granted without attendance to the actual process of value production.¹² This oversight is partly due to the understanding of crisis as a state of exception and of black markets as a byproduct of such social and economic instabilities.¹³ The analysis of the monetization of MPC on sexual black markets during the Korean War challenges this view and advances our understanding of how money and goods acquired their values. This investigation questions the common perception of the informal economy’s eclipse of the national economy as incidental or a disordered outcome of scarcity and emphasizes connections between the local economic crisis and the global political economy in which the crisis is created.

MPC was a “base money” in two senses. It was a military note that was meant to be valid only within overseas US bases. At the same time, despite all the restrictions, it served for both troops and local civilians as a basic means of exchange in the local economy. An attention to the process by which MPC became currency through circulation outside military contexts challenges a dominant idea in existing literature: that black markets for sex or money were exceptions that lay outside legal regulations and formal economic practices. The dual characteristics of MPC as a base money instead force a consideration of the importance of crisis and illicitness to the US war and occupation abroad since the end of the World War II. Analyzing how the two black markets combined into an overall sexual economy of the Korean War also helps us integrate the often separate fields of scholarship on militarized sexual encounters and the everyday economy of war and occupation.

The MPC market was by nature a global economy. MPC appeared in local markets across countries where overseas US bases were stationed. In early April 1951, Shim Keun Sup, a Korean owner of a camera shop in Busan, handed $175 in MPC to First Lieutenant George Rhodes in exchange for a Canon camera that the soldier had sneaked in from Japan.¹⁴ When Adele Grabienski, a German national, was offered twenty dollars in MPC by Private Robert Erb at the Flying Dutchman Inn in Nuremberg, Germany, on January 7, 1953, she already had in her possession another ten dollars in MPC.¹⁵ The MPC economy was global because profits from MPC exchange depended on the fact that the same MPC series were simultaneously used in all overseas US bases at varying exchange rates to local currencies. The differentials for many of those currencies yielded profit.¹⁶ The differing value of local currency to US dollars and MPC reflected the country’s political and economic status in the post–World War II US-led capitalist world. Therefore, the MPC market never belonged solely to a country in crisis. It was a global military economy that worked within the emerging “US basing system,” the worldwide expansion of US military posts in the early years of the Cold War.¹⁷

At the same time, the currency market reminds us of the criticality of social relations in the economy.¹⁸ Economic practices and social lives under occupation were never entirely dictated by the logic of the occupiers. In executing the off-base circulation of MPC , local civilians like Shim Keun Sup and Adele Grabienski played a crucial intermediary rule. The sexual market was at the center of the currency flows in local economy, thanks to both the massive number of military notes women received as payment for sexual services and the market simply being a convenient place for unregulated MPC exchanges among soldiers and civilians. Importantly, the link between the sexual market and the currency market was not coincidental. Local bars, dance halls, and brothels, where foreign soldiers were willing to spend money, composed one of the few working economic sectors in wartime Korea, and it was this sector that arguably provided the material basis for the postwar recovery in US-occupied Japan.¹⁹ “Licensed recreational facilities” were far outnumbered by black market businesses.²⁰

These deregulated sexual transactions occurred in private houses, inside military camps, and at locally run hotels situated just across the street from state-sanctioned dance halls that hosted drinking and dancing but not—officially at least—the purchase of sex. Documenting this lesser-known social history is also to highlight that the legality of these sexual markets was never quite clear because inconsistent enforcement and feigned ignorance often contradicted military prohibitions. The Oriental Club, near Camp Kobe in Japan, for instance, was placed “off limits” after a fight involving two US soldiers occurred in May 1951. The day after the restriction was placed, however, after a hearing of witnesses, a provost marshal in charge lifted the order and put the club “on-limits” again.²¹ Moreover, in many cases, black market premises were not very difficult to crack down on, as many of them sprang up along the licensed facilities in the same districts, yet the authorities frequently chose to do nothing. In this regard, gender scholar Park Jeong-Mi notes that the wartime mobilization of women’s sexuality for foreign troops wasn’t necessarily done through the establishment of “comfort stations”—facilities similar to what the Imperial Japanese Army ran during World War II—but included various forms of government-supported private businesses and a temporary recruitment of women from the area.²² These facts suggest the need to expand our investigation beyond the scope of direct recruitment of women by authorities, because many seemingly private arrangements were an extended form of military involvement. Second, they force us to reflect on archival practices that privilege “top secret” or “confidential” policy files in which one hopes to find more evidence of military directives on the recruitment of women’s sexuality. Many of the incidents involving black market activities and individual transactions were recorded not in those files but rather in unit-level daily reports of miscellaneous crimes and violations. An attention to these more mundane records helps us document daily encounters between soldiers and locals that were not captured in the confidential policy records, and it makes plain the hierarchical structure of the archives that historians have criticized yet reinforced.²³

During the war, the camps and troops in Korea constantly moved, and many resources, including sexual and labor services, were improvised on a temporary basis. One contemporary report detailed an instance from June 1953, where a US IX Corps unit stationed near Chuncheon hosted a dinner party for which they recruited more than fifty Korean women from nearby villages through the personal network of Corporal Robert Peace. The commanding officer authorized this recruitment without inquiring into the nature of Peace’s personal relationship with the “Korean girl of his acquaintance.”²⁴ This is how the wartime sexual market worked: it was openly illicit and knowingly unregulated. And this is where MPC notes were openly bought and sold and then further trafficked to US base towns in Japan. Many of the accounts of these incidents are categorized as miscellaneous transgressions, further indicating that authorities were aware of the prevalence of such practices yet treated them as minor violations. To the extent that authorities’ decision not to enforce their own regulations constituted active involvement, the sexual markets that emerged in Korea and Japan during the Korean War were black markets by design. This observation offers a new explanation of the US military’s nonfraternization stance and its influence on the seemingly free market transactions of individuals. Yet this is not to simply expand the boundary of the state-sanctioned sexual recruitment for troops but to point out the unsettled nature of the legality of these practices. The sexual black markets show the fluidity of boundaries between formal and informal economy, free and unfree exchanges, and regulated and unregulated practices.

***

The inception of the MPC program predates the Korean War. The US military launched the military scrip program in 1946 as a new measure to prevent the overseas US base economy from mixing with local economies. The main idea behind the MPC program was to stem the flow of US dollars into the black market because during World War II such black market flows had resulted in a huge overdraft of US Army funds.²⁵ Between 1946 and 1958, five MPC series were simultaneously used in eighteen countries and territories (see table 1.) The Korean War coincided with the printing of two series, no. 472 (1948–51) and no. 481 (1951–54). Japan and the southern part of Korea, both first occupied by the United States in 1945, had been part of the MPC base economy network since its inception. As the number of overseas US bases expanded after World War II, so too did MPC spread around the globe. However, by 1949, many of the overseas military installments that the United States had built or taken over had closed down.²⁶ It was again during the Korean War that the number of US outposts resurged “by about 40 percent” globally.²⁷ In the particular context of Northeast Asian geopolitics, the Korean War was an important impetus behind the 1951 bilateral security treaty between the United States and Japan that granted the former “the continued and fundamentally unrestricted use of bases in Japan proper and total administrative control over Okinawa until ‘peace and security’ were achieved in the Far East.”²⁸

The US defense budget allocated for overseas operations also increased dramatically during the Korean War. Between 1945 and 1952, the United States spent $4.3 billion occupying Germany and $2.2 billion occupying Japan—more than for any other countries.²⁹ The Korean War cost $30 billion in 1953 dollars and remains one of the most expensive wars in US history, after World War II, the Vietnam War, and the recent wars in Iraq and Afghanistan.³⁰ The war was excessive in many ways—an unnecessarily prolonged war with a high cost in terms of human lives, territorial and material damage, and social trauma that lingers in the peninsula and beyond.³¹ The massive dispatch of troops was followed by construction of military facilities and manufacture of supplies, and troop salary payments added to these already large expenses. Accordingly, the amount of MPC notes issued and circulated on and off bases sharply increased as troops were sent to Korea.³²

In Korea, a robust black market economy dealing in military goods and MPC arose as a result of inflation, supply shortages, and unreliable aid. Between June 1950 and July 1953, the national commodity price index rose 2,258 percent.³³ The retail price index for food skyrocketed from 328 in June 1950 to 8,863 in August 1953.³⁴ This inflation resulted from the overprinting of money as well as supply shortages caused by the destruction of domestic production infrastructure. By early 1951, the country’s production capacity was “almost zero,” and the domestic economy was primarily maintained by foreign aid made through the US-led UN program.³⁵ Approximately $579 million in civil aid went to Korea during the war.³⁶ However, this emergency relief was not sufficient to assist everyone in need, and the implementation of infrastructural reconstructions and long-term economic plans would not come along until after the war.³⁷ To put it into perspective, the $579 million in civil assistance composed only 2 percent of UN assistance to Korea; the remaining 98 percent covered military expenses.³⁸ The discrepancy between these aid amounts shows how the wartime civil economy existed to serve the military economy. Indeed, as a US congressional report notes, the civil assistance program was designed to keep [South] Koreans at a “bare subsistence level” so that they “would not interfere with military operations.”³⁹ Black markets in wartime Korea were therefore not a by-product of a total absence of resources but an outcome of the ironic coexistence of excess and scarcity: an abundance of (destructive) military supplies and a dearth of (constructive) civilian aid. This disproportion forced people to seek “second[ary] jobs, sale of stolen property, black market activities, or extortion in some form or another.” It is in this context that MPC filtered out of the army and became a common medium of exchange on local markets, which were “commonplace” and full of contraband military supplies and equipment.⁴⁰

During the war, one of these markets, Kukche shijang (International Market) in Busan, grew to be the largest black market, where daily transactions reportedly exceeded “a billion Korean won” and set “the domestic market price for the country.”⁴¹ In Seoul, Tongdaemun shijang (Dongdaemum Market or East Gate Market) was a major market, where, for example, people who could afford it bought winter jackets converted from army camel blankets.⁴² In these markets, people traded MPC notes openly, referring to them as “market dollars” (shijungbul) and “free dollars” (chayubul).⁴³ Currency flows through the black markets depended on three mediating mechanisms, all involving MPC: (1) an MPC-enabled discrepancy between official and black market exchange rates; (2) local human labor, especially sexual labor, often paid for in MPC; and (3) the circulation of MPC between Korea and Japan via the network of US bases. In June 1952, American war correspondent Henry S. Hayward detailed how these three processes went hand in hand. As of June 1952, the official rate of Korean won to the US dollar was 6,000 to 1. On black markets, MPC notes easily sold for 9,000 won and greenbacks for 15,000 won. In the scenario Hayward presented, on a Korean black market, a soldier could use $10 in US greenbacks to buy 150,000 won and then sell the won for $16 in MPC. The soldier could then take the $16 in MPC to a US base town in Japan and exchange it on base for $16 in US greenbacks. This process thus yielded a $6 profit on every $10.⁴⁴ The local participants in this cross-border money conversion chain operated on “a block system,” where small-time dealers managed lesser amounts while “mama-sans” and “papa-sans” handled the larger transactions.⁴⁵ Hayward added that “much of this traffic is connected directly with prostitution rackets” and that “several hundred million dollars yearly” flowed through the sexual markets in Japan and Korea.⁴⁶

The widening gap between the official and black market values of Korean currencies vis-à-vis the US dollar had much to do with the currency exchange policy in wartime Korea. In 1945, the South Korean government implemented a dual exchange rate system that would last throughout the war.⁴⁷ A multiple exchange rate system is typically used when a country experiences difficulty with payment balances and decides to establish different rates for different economic sectors, choosing the best for each.⁴⁸ In the case of South Korea, the government adopted the program to stabilize the domestic economy by way of maximizing foreign currency reserves and facilitating civilian economic sectors in the immediate postliberation period. The Korean War further extended the need for these currency controls. In essence, with its dual rate policy, South Korea intended to set an official rate in agreement with the foreign government while simultaneously recognizing a different, more flexible market rate that supposedly reflected changes in both international and domestic currency markets.⁴⁹ Therefore, in principle, the foreign currency exchange policy did not prohibit individuals from converting US dollars into Korean currency or vice versa. Currency could be converted legally through Bank of Korea accounts with government oversight.⁵⁰ In practice, however, most individual trades became black market transactions because they took place outside this official reporting system. Furthermore, these unofficial transactions commonly involved unauthorized possession and handling of MPC notes on local markets.

The US and Korean governments’ basic approach to setting the official rate of US dollars to Korean won was to overvalue the Korean currency as a way to keep the Korean economy afloat.⁵¹ The rate at the beginning of the war was $1 to 1,800 won. It later increased to $1 to 2,500 won in November 1950, then $1 to 6,000 won in November 1951. The latter rate remained unchanged until February 1953, when the Korean government conducted a currency reform, replacing the Korean won with the hwan at a rate of 100 to 1. Later the two governments agreed to settle the exchange rate at $1 to 180 hwan.⁵² Yet despite these revisions, the governments kept the Korean currency significantly overvalued compared to what the market would bear, and soldiers and locals both stood to benefit from exploiting the difference between the official and black market rates. In March 1952, for example, MPC was sold at the price of $1 in MPC to 10,000 won, and the greenbacks were traded for 15,000 won in black markets.⁵³ Despite the illegality of these transactions, the price set in black markets was considered a “true rate” or “actual value” of the [inflated] Korean currency vis-à-vis US dollars, as it was de facto the only place where currency trades were subject to market forces.⁵⁴ The unofficial names for dollars and notes circulated on local markets, “market dollars” and “free dollars,” not only reflect the unregulated nature of the trades but, more importantly, suggest that the currency black market was the default way to exchange currencies.

What is interesting about black market rates is that both MPC and greenbacks were traded at rates higher than the official rate, but the value of MPC was always lower than that of US greenbacks on local markets. In the meantime, within the army, the military scrip maintained a fixed one-to-one exchange rate with US dollars. In other words, MPC was the medium that ultimately realized differentials among US greenbacks, MPC, and local currencies. The relatively lower market value of MPC was due to restrictions on the use of MPC. To accept MPC was to accept risk—not only risk of criminal prosecution but also risk that a sudden currency reform would render MPC useless scraps of paper. For example, in early 1953, following the spread of a rumor about the issuance of a new MPC series, the MPC price on the market dropped from 22,000–24,000 to 14,000 Korean won, while greenbacks were still sold for 27,000–30,000 won per dollar.⁵⁵ Unlike greenbacks, MPC notes in the hands of anyone other than authorized military personnel would immediately become useless in the event of currency reform. And yet, despite MPC being worth less in trade than dollars, soldiers continued to use MPC notes directly “in purchase of local goods and services” because of their convenience and because the black market rate for MPC was still better than the official rate, which made “the market in MPC’s and in greenbacks a closely interrelated one.”⁵⁶ These transactions, free of the regulations of the conversion cap and transaction history required by the official conversion channels, allowed soldiers easy access to illicit goods and services, including sexual services, with little fear of their own authorities and thus became the major supply channel of military notes to local economies.

One description of how MPC filtered into local economies through sexual transactions comes from a June 24, 1953, letter a Korean woman, Park Song-Ja, sent to the Prosecutor’s Office in Busan. In the petition, she asked police to crack down on “evil brothel owners and brokers” who were profiting off women like her.⁵⁷ The core of the unfair contract made between brothel owners and women like Park was a multiple-conversion trick. As summarized in the Korean newspaper Kyunghyang Shinmun, Park was a war refugee, evacuated from Seoul, who ended up working at a house of prostitution where the main customers were foreign soldiers. As she detailed in her letter, she had received an advance of 1,500,000 in Korean won, but she had been unable to pay off this debt largely because of currency manipulation schemes her employer engaged in.⁵⁸ On paper, when a US solider paid ten dollars, after the deduction of one dollar for food and fees, the remaining nine dollars were to be divided in half between the owner and the woman. However, in practice, the woman received far less than half the amount. The brothel owners managed this sleight of hand by using different exchange rates to calculate women’s payment and their own share. In Park’s case, the owner first converted the dollars to Korean hwan at the rate of 1 to 230.⁵⁹ However, the woman’s portion was calculated at the rate of 1 to 150 using the lower-than-official rate arbitrarily set by the “Special Café Association” of brothel owners themselves.⁶⁰ As a result, the woman received only 675 hwan ($4.50×150) while the owner took 1,625 hwan ($10.00×230 − $4.50×150).⁶¹ In her letter, Park asked for help for the “tens of thousands of other women” who were trapped in debt because of this trick.⁶² Park’s story offers us a fuller picture of how the “prostitution rackets” that Hayward observed became the marketplace for MPC handling. Ignoring the restrictions of off-base MPC circulation, local business operators accepted the military notes from soldiers in exchange for sexual services. The sexual markets manipulated different exchange rates to maximize profit, and in turn, thanks to their handling of large sums of foreign currencies, these sexual markets became a focal point in setting the market price for MPC and US dollars vis-à-vis Korean currency.

It is important to note that the sexual economy’s centrality to the currency market was not simply about “prostitution rackets” like Park’s workplace but about a wider wartime economy. On September 5, 1950, Private First Class William MacDonald and Corporal James Bedwell made a day trip to downtown Busan, not far from where Park Song-Ja worked. It was an authorized trip to purchase food supplies for their unit stationed near the city. As soon as they finished the assigned duty, instead of going back to their unit, the two soldiers headed to a local shop, where MacDonald exchanged his own ten dollars for 18,000 Korean won. With the money converted, they bought two bottles of Korean whiskey from another store. At about nine o’clock that night, they were sitting at a café when two Korean men approached and asked the soldiers whether they “would like some women.” The Korean brokers brought them to a nearby hotel run by a Korean woman named Kim Ik Duk. Then the brokers went the house of another woman, Kim Chung Ja, to ask her “to serve as a prostitute for two American soldiers.”⁶³ The price the brokers suggested to the soldiers was 5,000 won, which at the time was less than three dollars at the official exchange rate. MacDonald accepted the deal, and Bedwell declined because he thought the price was too high (implying he knew something about the typical price for such transactions). Only a few months into the war, the two foreign soldiers showed no difficulty navigating the labyrinth of downtown Busan alleyways to find what they wanted, all of which was officially impermissible yet readily available. The off-base MPC conversion service, a local liquor store, a teahouse, Korean brokers, and a Korean-run hotel were linked to one another in the sense that they were sex-mediated black markets. The exchange rate MacDonald and Bedwell first encountered at the local shop could have been set by the Special Café Association, and the MPC notes bought and sold at Park Song-Ja’s district might have circulated to the shops and cafés MacDonald and Bedwell visited. As such, the sexual economy in wartime Korea was not only about transactional sex per se; rather, it formed a larger nexus of material and intimate transactions, including brokering as well as manual and intimate labor provided by local civilians.

The case of MacDonald and Bedwell also suggests the various forms taken by sexual transactions between foreign servicemen and Korean women. Kim Chung Ja’s arrangement “to serve as a prostitute for two American soldiers” was likely one of many irregular jobs she did to make ends meet.⁶⁴ For others, like Park Song-Ja, it was a form of forced labor associated with organized crime. Not far from where MacDonald and Bedwell shopped, dance halls in downtown Busan that were legitimately “open to all United Nations Forces” hired Korean women as foreign soldiers’ dancing partners.⁶⁵ Some women took on “girl friending,” a form of employment that could secure their livelihoods for a few months at a time. US Army payrolls also registered the job title “house girls,” another more-official option available to women, although the sexual functions often expected of the job did not appear in the military’s employment description.⁶⁶ In these various forms, the sexual market followed troops all around the country.

Aside from Busan, other major base areas included Incheon, Gimpo, and Daegu. A port city, Incheon operated the Army Support Command Korea Depot, and Gimpo and Daegu hosted major air bases through which troops and war supplies traveled both domestically and internationally. On the afternoon of December 12, 1950, Corporal Leo Edwards “visited a house of prostitution located in the [Gimpo] District,” where Edwards ran into several other soldiers with whom he drank two to three bottles of whiskey.⁶⁷ On the same day, at a local restaurant in Incheon, a group of GIs got into a dispute with Korean customers seated nearby over a soldier’s “Korean girlfriend.”⁶⁸ Around the same period, while the armed conflicts were concentrated in the North Korean territory, Seoul also momentarily regained a certain degree of normalcy. Media reports on “unlicensed dance halls” in downtown Seoul testified to the city’s quick recovery.⁶⁹

Yet soon after Edwards’s lazy afternoon, the front situation drastically changed. By mid-December 1950, the front was pushed down below the 38th parallel, and by early January 1951, Seoul again fell under the control of the Korean People’s Army. During the early months of 1951, the northern parts of South Korea, especially the areas close to the 38th parallel, experienced intense armed conflict. Compared to the urgency felt near the front lines, the camps stationed behind remained relatively intact, and soldiers’ violations of curfew and other regulations continued to be reported in the Daegu area. Among them was the case of Private Sylvester Clark, who was apprehended in an off-limits drinking parlor in Daegu on April 1, 1951.⁷⁰ Ten days later, Sergeant Lawrence Ellison and four fellow GIs were found at “a house of prostitution” located about six miles from the city.⁷¹ A month later, in May 1951, several Korean places, including Club Lucky Seven, Lucky Star Cafe, and Tea Room Korea, were placed off limits to the members of the Daegu military command.⁷² A longer list of prohibited places released by the command in November 1951 included Victory Cabaret, China Nights Club, and Club Hawaii, as well as several “houses of prostitution” and “private residences.” Club Lucky Seven and Tea Room Korea also reappeared.⁷³

Unregulated sexual transactions weren’t deterred by the immediacy of war on the front either. Along the eastern front in Gangwon Province and through the western front in Gyeonggi Province, the presence of Korean civilians in the restricted areas was “a constant problem” to which the US military admitted it did not have a fundamental solution.⁷⁴ Between December 1951 and January 1952, a number of GIs were investigated for having Korean women inside the camp located in Sehyon-ni, Cheorwon, on the eastern front. An unidentified soldier in the unit was involved in letting the Koreans in and arranging deals between soldiers and women.⁷⁵ In Yanggu, about sixty-five miles from Sehyon-ni, while the 512th Engineer Dump Truck Company was stationed in the early months of 1952, Korean males who had formerly worked as houseboys in the camp would bring women and “stay a few days and then go somewhere else.”⁷⁶ In Camp Casey in Dongducheon, an hour and a half north of Seoul, near the western front, “a tremendous rise” in venereal disease rates among unit members was reported, soon after the First Battalion, Twenty-Third Infantry Regiment, of I Corps moved into the area in mid-December 1952.⁷⁷

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One way or another, inside and around the camps across the country, sexual markets sprang up and followed the movement of the troops, and these were the major routes through which MPC were trafficked to wider local markets. On October 10, 1952, Yim Hak Won, a Korean civilian hired at a US camp in Chongpyong-in, a town on the eastern border of the front in Gangwon Province, had forty-five cents in his possession when he was brought into an interrogation room as a witness to a post exchange smuggling case involving his GI boss. Yim testified that he had acquired this small amount of US currency from a [Korean] girl in order to buy some American cigarettes from a solider in the camp. According to his account, Yim made a currency transaction with the Korean woman four times, for a total of one dollar and thirty-five cents.⁷⁸ Civilian employees working at US camps might make deals with GIs over a pack of post exchange cigarettes, but to do so, they had to find a way to convert Korean won into dollars outside the camp.

This episode leads us to the second point of the mediating mechanism: human labor was crucial to the process of MPC circulation to off-base markets. MPC was a valuable currency only under certain conditions. The main purpose of the MPC program was to control any unofficial trafficking of US dollars into the local economy. The US military implemented various methods to restrict the conversion of local currency and US dollars into MPC and vice versa.⁷⁹ For example, the army strictly used separate payment systems for American personnel and Korean civilian employees. GIs were paid in MPC and instructed to use the notes for all forms of on-base transactions. Local employees, meanwhile, were paid in Korean currency. GIs were permitted to exchange MPC only in limited amounts by the army disbursing office. Getting around the exchange restrictions necessitated local intermediaries through whom multiple conversions could be made. Korean women in close relationships with GIs were some of the most accessible and stable suppliers of the notes for those who did not have direct access to MPC.

In November 1952, an American supply officer named Sidney Dutcher, who was in charge of the laundry facilities in his unit, was accused of exchanging MPC for Korean won without proper authorization. The investigation revealed that he had given about one hundred dollars in MPC to a Korean woman, Kim Chun Ja. Kim sold part of the MPC notes “twice in the market at the rate of 120,000 won for $10.00 and at another time 100,000 won for $10.00” in Seoul, which was about two times the official rate of $1 to 6,000 won at the time.⁸⁰ Kim then gave Dutcher back 300,000 won and kept the remaining amount of the hundred dollars in MPC for herself. As for their relationship, the investigation file reported that over the previous six months, Dutcher had occasionally paid Kim roughly forty to fifty dollars in MPC and sometimes brought her food supplies, such as cans of meat.⁸¹ According to the testimony of Kim’s landlord, Dutcher came to see Kim every three days on average and usually visited her in the evening and left early the next morning.⁸²

Nothing about their arrangement seemed unusual. Dutcher paid Kim with MPC and army supplies, just as many other GIs did with their local partners. Kim’s conversion of MPC on the black market was also a predictable move. But why did Kim return of a portion of the Korean won to Dutcher? Here is where the specific arrangements between the two deserve a further look. Dutcher was in charge of a dry-cleaning facility staffed by Korean civilians to whom he distributed paychecks in Korean currency. In order to issue payment to the workers, he was supposed to convert MPC to Korean won through the military disbursing office. Taking advantage of his access to a large quantity of MPC, Dutcher brought the military notes to Kim and had them converted at the more favorable market rate. This way, Dutcher could make a profit off the money designated for his laundry workers’ wages while still paying them their full due. Moreover, the profit from the off-base exchange allowed Dutcher to maintain his contract with Kim without spending his own money on her rent and living costs. It is also true that Kim profited by taking the surplus produced by the transaction. However, this is not simply to say that an American officer and a Korean civilian schemed to defraud the US government in a black market conversion. Rather, this story indicates how critical women’s sexual and intimate labor was in the moneyed process of MPC notes. Kim needed to take the military notes to the market to secure her own payment. Even if military notes were treated as money between GIs and women, this form of payment required the women to put extra labor into realizing the potential monetary value of MPC. Despite the military notes’ status on the black market as de facto currency, their life as money was temporary. Korean civilians had no legitimate access to MPC notes, and a sudden currency reform or the troops’ departure from the country could turn them into useless paper overnight. It was thus best to convert the notes as quickly as possible, before their value vanished.

Additionally, as MPC prices constantly fluctuated on the market, there was always a delay in determining the monetary value of MPC that women received from GIs. Kim and Dutcher didn’t know how much each would earn until Kim sold the notes on the market and Dutcher then decided the woman’s share of the profit. The officer may have been satisfied with whatever amount he received as long as the money was enough for him to pay his Korean workers at the laundry. Or he may have asked for more for himself. Kim, to some extent, had control over the MPC notes she handled. For example, she could wait until the rate became more favorable, and she had no obligation to tell Dutcher how much she actually made in the transaction. All these social aspects mattered in turning MPC into money. Kim and Dutcher’s social relationship of intimacy and of money allowed for relatively stable transactions, yet what each had to do to maintain the contract illustrates how the military notes’ moneyness was actualized through intimate interactions that always “occur in relation to social power.”⁸³ It was a process of commodification of and through women’s bodies and sexuality. The way MPC regained monetary value through the women’s labor of circulation illustrates how the economy is deeply imbedded in social relations and human lives; it attests to “the relational, heterogeneous nature of money.”⁸⁴ On the other hand, that anything could potentially function as money does not simply mean everything can be money. As Martijn Konings puts it, money does “[have] a significance that is uniform across and independent of its localized materializations. There is an element of ‘moneyness’—a quality that is common to all the objects that we routinely recognize as counting as money.”⁸⁵ In the case of MPC, its omnipresence across overseas US bases with different exchange rates in each country, which was a manifestation of global unevenness in the early Cold War, was the crucial condition that enabled it to be a base currency beyond US bases—but only through the medium of gendered and racialized human encounters.

***

Passing from military to civilian hands was only the first step in the MPC profit chain. Here the third mediating mechanism comes into play: the connections between the markets in Korea and Japan. The main destination of MPC notes in wartime Korea was Japan, particularly the sexual markets in Japanese base towns. On November 1, 1952, the same month that Dutcher was brought to court-martial for his involvement in MPC black marketeering with Kim Chun Ja, Japanese newspaper Yomiuri Shinbun published a story about thriving “red” markets in Tokyo. Red was a nickname for MPC, which were colored red, in contrast with ordinary US greenbacks. The so-called red market in Japan was similar in many ways to the one in Korea. As the report goes, “[US] soldiers chiefly open their wallets and spend freely on ladies of the night,” with some of the money going to the “pedicab services and bars” soldiers visited.⁸⁶ Local brokers bought MPC from the women and resold them to larger brokers, as happened in the block system in Korea.⁸⁷ Bars and teahouses in Ginza, one of the busiest districts in Tokyo, were among major marketplaces where the notes were smuggled in. Reportedly, Matsumoto Shirō, a former owner of Nobel, a bar in the district, handled “139,300 dollars (50,148,000 yen [at the official rate of 360 yen to $1]) in just three months.” Sometimes, women themselves traded a large sum of the notes. The Yomiuri Shinbun article details one such case, involving a Japanese woman nicknamed Standing Kimono, who bought up “the dollars from the hundreds of women of the red-light district” and resold them to brokers. The account identifies the MPC flowing into Tokyo as having come from all over Japan and Korea: “Sasebo and Moji” (in Kyushu) were the main places where “Chōsen” (Korean) MPC entered the market, while domestic MPC were from “Sendai, Tachikawa, Gotemba, and Yokohama,” among others.⁸⁸ The depiction of the red markets in Japan suggests that the connection between Korea and Japan was integral to the operation of both markets. Notably, all the places mentioned in the Yomiuri Shimbun report hosted US bases at the time. The red markets in Tokyo and many aforementioned base towns were major destinations for MPC smuggled out of Korea. Like in Korea, the sexual market, including bars and other local establishments and services, was at the center of the currency transactions. While the report differentiates the domestic supply and the international, mostly Korean, supply of MPC, the domestic markets were, as well, part of the Korean War economy.

The US bases in Japan saw extensive utilization in the early 1950s as staging points for troops and supplies during the Korean War, which extended the use of the bases beyond the official ending of the US occupation of Japan in 1952.⁸⁹ As this happened, the MPC market in Japan grew on the sexual markets created for soldiers stationed on the bases in Japan and for those who came back from Korea for rotation or on leave. First, the bases in Japan largely served as transmission hubs for forces and supplies moving to and from Korea. In late June and early July 1950, for example, post exchanges in Tokyo and Yokohama extended opening hours to meet demand from soldiers passing through on their way to Korea. Special arrangements were made so that soldiers could buy cigarettes outside an established post exchange at the Yokohama RTO and exchange US dollars for MPC.⁹⁰ Such busy scenes well illustrate how the war quickly transformed the bases in a war operation mode. The constant influx of war supplies and troops into Japan continued throughout the war and expanded the sexual economy in the base areas for the incoming and outgoing troops as well as soldiers staffed on the bases in Japan.

Among the many local businesses catering to soldiers was the Casino Cabaret, located near Camp Kobe. From January through August 1951, one Major Paul Roberts visited the establishment late at night about once a week and consumed a few bottles of beer. As he became a regular, the major was allowed to pay on credit. “George,” a Japanese civilian who worked as a singer and interpreter for English-speaking customers at the cabaret, arranged a deal that enabled Roberts to settle his outstanding balance once a month through George.⁹¹ Such credit-based payment became a common practice, thanks to soldiers stationed in the camp throughout the Korean War, and these base towns provided the basis of the growth of domestic MPC markets in Japan. The economy of overseas bases around the world has been a crucial element of US occupation and war making in the post–World War II world. Catherine Lutz points out that the Vietnam War “would not have been fought as intensely as it was” without bases in the neighboring countries.⁹² Even when soldiers didn’t fight as combat forces in war zones, the war extended to and was supported by the bases, creating a transregional economy of US war and occupation.

The other major function of US bases in Japan was to host service members who came back from Korea for rotation and R&R leave—a program for short-term leave that the US military offered to its troop members. This cross-border movement enlarged the unofficial flow of currencies, goods, and venereal disease between Korea and Japan. R&R for the Korean War was inaugurated on December 28, 1950, and in total sent over more than eight hundred thousand UN troop members on three-to-five-day R&R leaves from their tours of duty throughout the war.⁹³ The first R&R reception center in Japan was established in Camp Kokura in Fukuoka and later expanded to other bases around Japan, including “Itami Air Base for the Osaka area, Komaki Air Base for the Nagoya area, and Tachikawa Air Base for the Tokyo area.”⁹⁴ Further, according to the previously mentioned Yomiuri Shimbun report, Kokura (Moji), Sasebo, and Tachikawa bases, all host to major R&R centers, witnessed large domestic MPC markets. MPC markets that formed in and around R&R centers were directly connected to the currency market in Korea. While on R&R, soldiers spent huge amounts of money that they brought from Korea. Many R&R returnees carried bundles of MPC notes with them and spent them on food, drinks, and women without going through the official conversion channels. As such, “Chōsen MPC” not only referred to the notes smuggled into Japanese base towns whose economy was dependent on the Korean War; it also included money flown into the country along with soldiers via R&R.

R&R was a military-supported program in every manner. All the parties involved—the US military, troops, and Japanese government—saw their own interests in it. The military perceived the program, which gave soldiers access to comfortable accommodations, rest, drink, and sexual services, whether explicitly sanctioned or not, as necessary to boost morale among its members. For soldiers, R&R was one of the most anticipated parts of their tours of duty. That R&R was obscenely called “I&I (Intercourse and Intoxication)” and “A&A (Ass and Alcohol)” among GIs explains what R&R meant for them. Japanese clubs offering “superb Japanese beer,” “female vocalists singing American pop,” and “a plethora of Japanese girls waiting to be picked up” are what one Korean War veteran recalled about his R&R vacation in Japan thirty years after his tour.⁹⁵ The military was well aware of what was most sought after among R&R returnees and conveyed that the time was “your own, to do with as you please.”⁹⁶ In his record of the US Air Force’s execution of the R&R operation, Annis G. Thompson, without irony, assessed the program to be “the greatest holiday of history” for soldiers.⁹⁷ In its implementation of R&R, the military never questioned its belief that a war troop or a military base stationed in a remote area couldn’t be sustained without “sexualized rest and recreation.”⁹⁸

The Japanese government found the program to align with its own economic interests. Thompson’s account reveals that GIs spent an average of seventy-five dollars per day while on R&R.⁹⁹ To put that into perspective, the average monthly salary for privates in the US Army at the time was between seventy-eight and roughly eighty-two dollars.¹⁰⁰ While they had an option to stay at military-offered R&R accommodations, soldiers were “free to reject these facilities and find their own recreation.”¹⁰¹ Most R&R soldiers chose the latter in anticipation of activities not included in the official package of the program, and they quickly left the reception center to visit their “sweethearts or girl friends” and participate in local “cabarets, dance halls, stage shows, geisha houses, and moving picture theaters.”¹⁰² When in 1992 Francis Hulshof, a Korean War veteran from Missouri, recalled his time in Korea, he said R&R was something that “everybody looked forward to and I did, too.” Hulshof carried more than $500 that he had saved in Korea to spend on R&R. That large sum he brought to Japan quickly disappeared as he visited “the largest nightclub in the world” in Tokyo, spent nights at a hotel on “a four-poster [feather] bed,” and shopped for his family back in Missouri. Forty years after his tour, Hulshof remembered the official exchange rate to have been 360 yen for a dollar, and it was common among soldiers to “barter with ‘em, or try to get the price down” while they “had to have … American money exchanged to yen.” Yet he made sure to leave enough money to buy a case of whiskey “for two dollars a bottle” and then bring it back to Korea. He could resell the whiskey “for twenty dollars a bottle,” which well paid for his extravagant shopping in Japan.¹⁰³

With the entwined political and economic interests, the US military and Japanese government cooperated to make R&R a celebratory event. In April 1951, the twenty-five thousandth R&R man, Sergeant First Class George Quick, arrived in Japan. As Quick disembarked from the airplane, he was greeted by a military band’s musical performance on the runway at the Tachikawa base and then received an invitation to Tokyo governor Yasui Seiichirō’s office. At the governor’s office, Quick was awarded a large key with the message “Tokyo Welcomes You” (see fig. 3). A welcoming reception and a tour of “an impressive restaurant and a leading night club” followed.¹⁰⁴ The fifty thousandth, seventy-five thousandth, one hundred thousandth, and eventually millionth R&R soldiers were treated similarly (see fig. 4). The metaphoric master key was the Japanese government’s strong welcome message that acknowledged R&R’s contribution to its national economy and the sex-related business as central to its success.¹⁰⁵ Scholars have pointed out that the sexual economy of R&R played a crucial role for Japan’s post–World War II economic recovery. Tanaka Yuki suggests that in Yokosuka alone, a US naval base town in Kanagawa Prefecture, “the total revenue” from the R&R business was somewhere “between 200 million and 300 million yen” in 1952.¹⁰⁶ Murray Sayle writes, “Reputedly, the first $200 million [of the US procurement that was used to help Japan’s post–World War II economy] came from the earnings of Japanese ‘pan-pan’ girls entertaining US troops on R&R from Korea.”¹⁰⁷ As Sarah Kovner discusses, once a small fishing town, the naval base town of Sasebo transformed into “the main staging area for U.S. and United Nations forces” and hosted “as many as 10,000 sex workers” during the Korean War.¹⁰⁸ Located near Camp Kokura at the Fukuoka base, the site of the first R&R reception center, Sasebo saw its economy fluctuate in accordance with the numbers of incoming and outgoing troops in the area throughout the war. Kovner’s observation forms part of a critique of the Cold War narrative focusing on US projects such as “the direct procurement program” that gave massive contracts to Japanese manufacturers for war supplies during the war.¹⁰⁹ Commonly called “Japan’s Marshall Plan”—or, in Japanese prime minister Yoshida Shigeru’s infamous words, “a gift from the heavens for Japan”—the Korean War significantly contributed to Japan’s post–World War II economic recovery.¹¹⁰ This narrative glosses over the multitude of local women and men who provided their sexual and manual labor in the towns surrounding US bases.

Figure 3.

George Quick, selected as Combat Cargo’s 25,000th R&R passenger, was welcomed at Tokyo Governor’s Office (April 1951), The Greatest Airlift (1954), 144.

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Figure 4.

50,000th R&R passenger, The Greatest Airlift (1954), 145.

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In March 1952, the two hundred thousandth army R&R soldier flew from Korea to Japan. To mark the occasion, General James H. Van Fleet, Eighth US Army commander, delivered a celebratory speech in which he praised the R&R program as “a reward for the courage, hardship and sacrifice displayed by all members of the 8th United States Army in Korea and their comrades of the United Nations.”¹¹¹ In the same month, a letter signed by the Kunitachi Purification Enforcement Commission (KPEC) arrived at General Headquarters.¹¹² Located between Kokubunji and Tachikawa in metropolitan Tokyo, Kunitachi was a small city with a population of fifteen thousand in 1950. Its economy had been based on two colleges and five high schools until Tachikawa Air Base became the designated R&R center for the area, at which point it transformed into a base town. The military investigation reports on Kunitachi note that during peak season, one witnessed “a constant stream of [US] Armed Forces personnel entering and leaving the hotels [with their female companions] from early evening until early morning.”¹¹³ Local hotels added English signboards to their building entrances and welcoming messages for GI customers. Written in English and illustrated with an image of a Japanese woman in a kimono, a roadside billboard posted by Hotel Kunitachi guided American GIs to the town (see fig. 5). The scenery in Kunitachi was not unlike that of other R&R towns, but what’s interesting in the case of Kunitachi is that the town’s residents organized an anti-R&R campaign. Dated June 10, 1951, Nakayama Ichirō, president of Hitotsubashi University and a member of KPEC, a group of residents and leaders of the town, wrote General Headquarters to report how in a matter of months “the once quiet school town” was “suddenly going to ruin” and asked for a solution.¹¹⁴

Figure 5.

Billboard Advertisement for Hotel Kunitachi, Courtesy of the National Archives and Records Administration, College Park, MD.

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In the beginning of 1952, the City of Kunitachi, the Kunitachi Municipal Police, the National Rural Police of Japan, and General Headquarters conducted a joint investigation on the petition (see fig. 6). As no office showed an inclination to close down the premises in question, Nakayama clarified the intention of the KPEC petition, explaining, “Prostitution was not the problem, but the complaint was based on the excessive noises emanating from the hotels at night time.” He added that KPEC would support “some arrangements [that] would not result in placing the town or the hotels ‘off-limits’ to military personnel.”¹¹⁵ Eventually, hotel managers in Kunitachi agreed to take down “suggestive road signs” and replace them with signs “more conducive to a wholesome atmosphere.”¹¹⁶ As it turned out, this action was only a temporary solution. On June 17, 1952, Nakayama sent another letter to General Headquarters to give an update on the situation: “The hotel owners are preparing for summer season by every obstinate means of advertisement, most likely to make the best use of the season.”¹¹⁷

Figure 6.

Map of Kunitach with hotels under investigation marked, Courtesy of the National Archives and Records Administration, College Park, MD.

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The economic and social changes that Kunitachi endured show how the base economy in Japan was integrated into the sexual economy of the Korean War. The temporary prosperity of these R&R towns depended on the ongoing crisis in wartime Korea. The situation illustrates one common critique of capitalism: the idea that prosperity and stability in one region or one group are based on scarcity and crisis in different regions or social groups.¹¹⁸ Contrary to the myth that stability and rationality are the normal state of the economy—a view that continues to hold sway despite the crises of recent memory, from the 2008 financial crisis to the COVID pandemic—critics of capitalism have historicized how crisis and instability are an ever-present condition of the system. As Susana Narotzky and Niko Besnier point out, “Periods of [presumed] stability, such as the moment of economic growth and welfare expansion,” were only briefly enjoyed following “World War II in North America and Europe.” The geographical disparity reminds us that such growth and stability were made possible only through “extractive practices that made life harder for many elsewhere.”¹¹⁹ In the particular context of US global expansion in the early Cold War, Japan’s transformation into a base nation exemplifies how the interlinked yet hierarchical system of war base empire was crucial to the establishment of US-led military capitalism. If the base economy in Japan was a continued state of the war, crisis in Korea was not an exception but a very element of the US war making and basing system abroad that enabled its neighboring country’s recovery from the debris of Word War II.

At the same time, the story of Kunitachi reminds us that the national benefits of R&R to Japan were unequally distributed. Nakayama’s aforementioned comments reveal concern about the degrading reputation of the town, not about the exploitation of local women. Furthermore, sexual labor often involved risk of violence. Many of the court-martial cases discussed in this article were prosecuted because of soldiers’ violence against—including sometimes killing of—local civilians. Shaull, for example, was brought to court-martial for his alleged murder of a Japanese woman working at the brothel he visited in Sasebo.¹²⁰ In Korea, active war accustomed soldiers to carrying deadly weapons with the “real possibility of physical killing.”¹²¹ On October 29, 1951, an intoxicated Corporal Lovell Kane fatally shot Korean woman Cho In Sun, whom he called his “girl friend.” The shooting happened in her home, in front of her daughter and other residents of the house owned by Lee Kan Nan, whom the camp members called the “Battery’s Mamasan.”¹²² The women who made their livelihoods providing sexual pleasure to foreign troops shared a similar predicament in both Korea and Japan, even as one country suffered an active war and the other endured postwar occupation. Their common experiences under different living conditions contribute to the understanding of war as a global experience of nonstate actors. The joint investigation handled by General Headquarters and Japanese authorities reveals how the R&R economy was backed by military sponsorship that cared little for the plight of those who lived on precarious labor for foreign soldiers. No party at the meeting challenged Nakayama’s stance that the town’s reputation was the real issue. The US and Japanese authorities both recognized the centrality of unapproved sexual and other entertainment to the R&R package, and they let the sexual black market thrive with little interference.

In 1951, the US military distributed an R&R booklet that introduced “special services hotels” to off-duty soldiers, part of the official R&R package (see fig. 7).¹²³ The map vividly depicts far-flung base facilities and recreational services provided to R&R returnees all over the country. One can easily imagine how many more bars, clubs, and restaurants surrounding the registered hotels offered places for unregulated sexual and monetary transactions. The stories of what went on in these places we know from contemporary court-martial reports and later oral testimony. We know of Major Paul Roberts, who paid his monthly drink bills to George; Private First Class Thomas Boling, who was interrogated about his alleged larceny of eighty dollars’ worth of MPC notes, part of which he was suspected to have given to his Japanese girlfriend; and First Lieutenant Douglas Craddick in Okinawa, who smuggled out “fifty cartons of American cigarettes” via Okinawan acquaintances.¹²⁴ We also know of Privates Claude Mitchell and a few other soldiers who spent the evening with two Japanese women at a sake shop in Yaesu, a village near Camp Fuchinobe, on February 22, 1951; Corporal Gilbert Orosco, who’d recently finished his service in Korea and was a repeat customer of Sakurai Emiko at the Little House in Zama, Honshu, in April 1951; and Corporal Charles Deboard and Corporal Ervine Williamson, who visited Minnie’s, a watering hole in Ninomiya, Honshu, on December 29, 1951, accompanied by their Japanese “girl friend[s]” Jeannie and Ruby.¹²⁵ Beyond this, there were undoubtedly multitudes whose escapades went unreported. At the premises like the Little House and Minnie’s, GIs who came back from Korea mingled with soldiers serving on bases in Japan. Outside the special service hotels, brokers treated MPC for soldiers, enabling exchange of the notes without the bothersome reporting requirements and transaction caps of official channels.¹²⁶

Figure 7.

Map of Special Service Hotels in R&R booklet, Japan: Rest and Recuperation (1951). Left column is a list of hotels designated for enlisted men and right column for officers. Enlisted: Kinugawa Spa, ¥440; Nikko Kanko, ¥420; Shiga Heights, ¥420; Kambayashi, ¥630; Mampei, ¥420; Nagisa, ¥150; Yamanaka, ¥320; Gohra, ¥400; Gamagori, ¥760; Takeshima, ¥760; Biwako, ¥1,180; Nara, ¥1,300; Karatsu Seaside, ¥2,240. Officers: Kanaya, ¥420; Akakura, ¥660; Fuji-View , ¥320; Fujiya , ¥390; Shizuua , ¥360; Miyako , ¥1,180; Aso Kanko, ¥ 2,400

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The MPC flowed from women and small-time brokers into the hands of larger brokers in Ginza and other commercial districts in Tokyo. With the MPC notes coming from R&R centers and supply bases, the currency market worked in close connection with larger-scale organized crime, which often involved soldiers themselves. Sometime in June 1951, Lieutenant Colonel Joseph Barrette, commanding officer of the Tokyo Finance Office, was informed in “top secret” of an impending MPC reform call scheduled for public announcement on June 20, 1951, that would turn the existing 472 series into 481. While the MPC reform was intended to crack down on the currency black market, Barrette took this opportunity to profit off the soon-to-be-obsolete 472 notes. Between June 21 and June 25, 1951—a five-day grace period given to individuals who had not been able to convert their old notes by the initial cutoff time of 9:00 p.m. on June 20, 1951—Barrette schemed to traffic a large sum of MPC in collaboration with Charles Martin and Dominador Meneses, two civilian members of the Department of the Army, and Edward Sassoon, a Tokyo-based commercial entrant. Upon receiving Barrette’s request to “locate any currency,” Martin acquired $14,000 in the 472 series through Meneses. Barrette, with his access to new MPC notes brought to the Tokyo Finance Office, exchanged them into the 481 series. The Shibuya house of Kawashima Ichirō, a Japanese national, was used to handle the money. Out of the $14,000 converted into the 481 series, $7,000 was given to Meneses, and the remainder was split between Martin and Barrette. At Kawashima’s house, Sassoon provided another $40,500 worth of the 472 notes. While Sassoon had no status in the army that allowed him to possess or circulate MPC, his procurement of such a large amount of MPC through an unauthorized channel indicates how vast the currency black market in Japan was. Much of the 471 notes that Sassoon delivered to his cosmugglers may have come from restaurants and bars frequented by R&R soldiers, where customers often paid in MPC—places and people who were now desperate to find a way to sell their useless old military notes.¹²⁷

It is true that sexual and other black market transactions involving foreign soldiers and local women had existed since the beginning of the US occupation in Japan. As John W. Dower observes, by early 1946, “many American goods … made their way onto the market, often arriving by way of panpan who received them from their patrons,” and a street near the Ueno station in Tokyo was full of small black market vendors.¹²⁸ While the pre–Korean War occupation provided the material conditions for a rapid buildup of the base economy in the early 1950s, the Korean War shifted the bilateral US-Japan relations to the triangular nexus of the base war empire across the United States, Japan, and South Korea, and the transpacific mobility of MPC was a crucial component of this new phase of the base economy in Japan.

***

Although MPC were designed to be a regulated medium of transaction for overseas US troops within their base economies, the scrip soon permeated out into the local economies of the countries where troops were stationed and became used against regulations for daily transactions off base. While the worldwide presence of US troops as well as MPC notes showcases the global military economy that the United States established in the early years of the Cold War, equally important in the operation of the MPC market is the socially mediated process of economic transactions. Realizing MPC’s monetary value on local markets required the mediation of human labor, and this need was met primarily by local women’s sexual and intimate labor. These sexual markets catering to the troops became the marketplace of unregulated MPC transactions through which the military notes were transferred to wider domestic and international markets. The MPC valuation process, achieved through the commodification of women’s bodies and sexuality, highlights how the material and symbolic power of US troops in the occupied country was a condition as well as a creation of unequal social and economic encounters between occupying forces and locals.

The US troops continued maneuvering and rotating across war zones and bases after the Korean War. On December 22, 1953, about five months after the Korean War ended with the armistice, Gerald E. Ferguson, “Mr. One Millionth R&R,” arrived in Japan from Korea. This time, his arrival was welcomed by Fukuoka’s “Miss Kokusai” instead of a city mayor. The millionth returnee took a picture with her while holding his award key.¹²⁹ A couple of decades later, the R&R program for US troops serving in the Vietnam War was carried out on a far more extended scale: the available locations included “Hawaii, Hong Kong, Kuala Lumpur, Manila, Penang, Singapore, Sydney, [and] Tokyo” in 1969.¹³⁰ MPC, too, was used globally, including in Korea and Japan, until the last series, no. 651, was retired in 1973. Meanwhile, Vietnam had its own denominations in circulation, going through four different series between 1965 and 1973. The termination of MPC coincided with the gradual decline of overseas US bases after the mid-1970s. While the military scrip program itself was discontinued after the height of Cold War confrontations, the transpacific sexual economy of the Korean War allows us to reflect on the repeated pattern of US military operations abroad since the end of World War II. It shows how the global system of US military bases and interventions has created and depended on a sexual economy of illicit encounters and unofficial transactions that sustain regional economies while fulfilling the desires of the occupying forces.

Jeong Min Kim is Assistant Professor of History at the University of Manitoba. She is currently completing a book about the transpacific black market and sexual economy that formed across Korea, Japan, and the US during the Korean War.

I thank the AHR editors Alex Lichtenstein and Mark Bradley, and anonymous readers, for their constructive feedback on earlier drafts of this article, as well as Nathan Draluck’s team for their editorial support. Comments from Rebecca E. Karl and late Marilyn B. Young formed the basis of my analysis at the dissertation stage. Selda Altan, Charles Kim, Naoko Koda, and Adrian Thieret provided valuable suggestions during the revisions. Parts of this article were presented at George Washington University, Sophia University, and Yonsei University. I am grateful to Jisoo Kim and Gregg Brazinsky, Noriko Ishii, and Henry Em for their invitations to the respective places. I also thank Sarah C. Chambers, Tracey Deutsch and Mary Jo Maynes, coeditors of Gender and History for their encouragement at the 2017 Berkshire Conference on Women, Genders, Sexualities. Special thanks go to Robert McConnell, Curator at the US Army Finance Corps Museum for providing me with images of MPC notes used here. I further thank my colleagues in the Global Perspectives on Society program at New York University Shanghai from 2017 to 2019 and my current colleagues in the Department of History at the University of Manitoba for their intellectual support.