I had never heard of this particular type of bill before, but maybe you have. It's amazing what you can find just by checking out sites like Now I Know!
The U.S. Constitution specifically gives Congress the power to coin money, and an 1884 Supreme Court decision makes it clear that this power also applies to paper currency (in that case, backed by gold.) And with rare exception, money printed for use in one state is valid for use in the other states and American territories. One exception: the bills pictured, below.
Pay attention to the sides of the front of the bill — you will see the word “HAWAII” printed, vertically, on either side, next to the seals. The obverse is more clear, with the word “HAWAII” printed over the picture of the Lincoln Memorial and spilling into the sides. What’s going on here?
On December 7, 1941, Japan bombed Pearl Harbor, Hawaii, bringing the U.S. into World War II in the process. Hawaii (not yet a state) was isolated both geographically and politically and — given the losses at Pearl Harbor especially — was the most likely widely-inhabited American candidate for a successful Japanese occupation. Any successful occupation would also allow the invading Japanese to seize, potentially, hundreds of millions of dollars in currency from Hawaiian financial institutions. With federal spending still in the tens of billions, such an outcome would have been significantly harmful to the American economy. The HAWAII-emblazoned bills were the solution.
In January of 1942, the military governor of Hawaii (the territory was under the military’s control after the Pearl Harbor bombing) recalled most of the currency in the future state, with some allowances as to not pull all of the cash out of the islands’ economy. Five months later, bills like the one pictured — called “Hawaii overprint notes” – were issued. The theory was simple: if Hawaii fell into Japanese hands, these bills would no longer be legal tender in the United States. This contingency plan never came into play.
In total, over 65 million Hawaii overprint notes were created (totalling over $300 million), in four denominations — $1, $5, $10, and $20, with the $5 note pictured above the rarest of the quartet. On October 21, 1944, ten months before Victory over Japan Day, the required use of these bills ceased.
I can certainly understand the reasoning behind this, but it seems like a lot of expense to me. I can't help but wonder if there might have been a cheaper solution. But then, the government isn't worried too much about how much it spends. After all, it's only our money and not theirs that's being spent! True then...true now!
Coffee on the patio. Be sure and wear something warm, as it's a little chilly first thing in the morning.