C-Day

SOUTH VIET NAM

Months in the planning, "C-day" broke bright and early across South Viet Nam. U.S. command posts received coded radio instructions while most troops were still asleep, promptly ordered all personnel to muster for an alert. Base commanders dismissed Vietnamese civilian employees for the day and sealed off installations to ail outsiders. "We needed a period of limited combat activity," said Colonel Melvin E. Richmond, the man who oversaw the mission. "Operational requirements dictated the timing."

A top-secret assault on a Viet Cong stronghold? No. What took place last week was a strike against speculators in Military Payment Certificates, the U.S.-issued scrip used to pay American fighting men in Viet Nam. Colonel Richmond happens to be the U.S. military command's top comptroller, and C-day was the moment chosen for a surprise conversion in the $50 million worth of MFCs in circulation in Viet Nam.

Fast Profit. Military scrip was introduced three years ago as a way of curbing the growing black market in regular U.S. currency. The new red-colored MFCs were meant to be valid only in such U.S. establishments as post exchanges and officers' clubs.

The trouble was that a new black market, this time dealing in MFCs, quickly developed. Although scrip was not supposed to be tendered off the base, G.I.s who were short of Vietnamese piastres often used it to pay bills in native stores and bars, generally exchanging it near the official rate of 118 piastres to the dollar. Such MFCs would then wind up in the hands of Chinese and Indian money-changers, who in turn realized a fast profit by selling them at 140 piastres to the dollar.

Some of the buyers were Americans, who preferred to spend MFCs whenever possible and save their regular dollars to sell on the black market. They had ample reason. "Green" dollars, which wealthy Vietnamese coveted for squirreling away outside the country, brought about 200 piastres in illicit dealing. The scrip was also purchased by natives, who used it to buy military PX goods through G.I. contacts.

The risk was that the U.S. command could switch scrip at any time and thus leave speculators holding worthless paper--which is exactly what happened last week. Inside their bases, American personnel were instructed to cash in their MFCs for a series of crisp new ones. They were allowed to exchange up to $250 worth, with no questions asked, but had to give a strict accounting of how they had acquired any MFCs above that amount.

Instant Losses. When the word got out, the speculators tried to dump the old MFCs they were holding. The black-market price dropped to 50 piastres by midafternoon. As the market crashed, money-changers along Saigon's Tu Do Street suffered instant losses that ran as high as $80,000.

Obviously, the military's move had all but ended black-market manipulations in the old MFCs. But what of the new scrip? Within 48 hours after C-day, it was selling on Saigon's black market at the familiar rate of 140 piastres to the dollar. "Now that the switch has happened," explained one speculator, "we know it won't happen again for some time."

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