When The US Burned All Of Its Money In Hawaii

“To win by strategy is no less the role of a general than to win by arms.” —Julius Caesar

In A Nutshell

At the start of the Pacific War, there was the very real danger of the Japanese invading Hawaii. The possibility of the enemy getting their hands on $200 million circulating in the islands worried authorities. Their extreme solution? Burn all of it.

The Whole Bushel

Wartime emergencies often call for extreme measures. After the Japanese attack on Pearl Harbor, Hawaii was placed under martial law. It was an unprecedented and unparallelled experience for the territory’s American citizens. They were subjected to curfews, blackouts, and censorship of news and mail. Residents who were considered dangerous (mostly those of Japanese origin) were arrested and sent to internment camps.

In anticipation of a possible land invasion, the populace began hoarding basic items and cash. It was the latter that worried the military brass. At the time there was about $200 million worth of Uncle Sam’s money circulating in the territory. If the Japanese captured and occupied the islands, they could help themselves to the cash, which couldn’t be differentiated from the rest of the currency stock, and use it anywhere in the world. It would be a supreme irony if they could finance their war courtesy of the US.

Realizing the seriousness of the situation, Military Governor Delos Carleton Emmons issued an order on January 10, 1942 to recall all US paper money in Hawaii. Individuals were allowed to keep only $200 each and businesses $500 plus a little extra for payroll purposes. To keep the economy going, the restrictions were lifted six months later with the issue of new, overprinted notes on June 25. These were ordinary dollar bills but for the word “HAWAII” stamped across the reverse side and two smaller prints on the sides of the obverse.

The idea behind the overprinted notes was to make Hawaiian currency distinctive so that it would be easy for the government to declare the money worthless should the Japanese seize it. There was no more need for residents to hold onto the non-overprinted notes and these were subsequently recalled. From August 15, only the new notes could be used in Hawaii, Palmyra, and Midway Islands, but GIs also spent it in places like the Philippines.

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There remained the problem of what to do with the $200 million of regular notes confiscated by the authorities. It could be shipped back to the mainland, but the military found logistical problems in ferrying the bulky cargo across the sea. They determined that the most sensible option was to burn all of it. The money was sent to a local crematorium where the burning commenced. A fine mesh was placed over the smokestacks to keep unburned scraps from floating out, ensuring complete destruction. But there was so much money that it was taking too long to destroy. Authorities had to requisition the bigger furnaces of the Aiea sugar mill to make double time on the work.

The overprinted notes continued to serve as legal tender until October 1944 and were recalled in April 1946. Today, they are extremely collectible, especially the $5 note, of which only nine million were printed. There are also the even more valuable “star notes,” which are bills with an asterisk after the serial number to indicate that they were replacements for damaged money. So if you ever come across some Hawaiian currency, don’t throw it out. It might be worth something.

Show Me The Proof

Featured photo credit: Smithsonian via Joshua Kennon
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