A Warlord, An Overprint and A Flag

Posted on 3/10/2015

Due to the collapse of the Japanese economy under warlord rule, the Central Bank of Manchukuo was formed where it began issuing banknotes in an effort to strengthen the economy.

Prior to a formal Japanese invasion of the Chinese mainland, Japan had established proxy rulers — warlords. One of those warlords was a man named Chang Tso-lin. In mid-1927 he gained control of Manchuria, but his rule was short. By June of 1928 the Manchurian economy had collapsed under over-taxation and he met an untimely death at the hands of the Japanese who were unhappy with his rule. Japan had learned its lesson; when the formal occupation of China began a bank was needed to unify the currency (as there were numerous Chinese provincial banks). A bank was also necessary to control the money market and also to stabilize the currency.

In 1931 the Japanese Occupation of Manchuria had begun and by March of 1932 Manchukuo had been formally established. It only took four months before the Central Bank of Manchukuo had been founded and banknotes began to be issued. The bank was an agricultural, industrial and commercial credit supplier; this helped to bolster the local economy and reduce the risk of another episode like Chang Tso-lin. Its head office was in Hsingking with numerous branches in Harbin, Mukden, Kirin and Tsitsihar.1

In their haste to get an official currency circulating, the first Japanese issues of the Central Bank of Manchukuo banknotes were overprinted on Chinese notes from the Provincial Bank of the Three Eastern Provinces. Initially backed by silver for stability, the notes for the Central Bank then became tied to the Japanese yen in 1935.

1929 1 Yuan Banknote, obverse
1929 1 Yuan Banknote, reverse

The notes from the Bank of the Three Eastern Provinces were overprinted on the front and back. The first line of the red overprint on the front is: “The Central Bank of Manchou.” The second line has the new date of 1932 and the old date is crossed out by two lines at the bottom. On the back, the bank title is printed in English at the top in black ink.

The first regular issues from the bank arose in December of 1932, which were the “five color flag” notes, the flag of Manchukuo. These notes were printed in Japan and prepared in a hurry. They were of low quality and had plain backs. Only the 100 Yuan had intaglio printing initially but in later series all denominations received intaglio printing and back designs.2 The “five color flag notes” were issued in five denominations: 5 chiao, 1, 5, 10 and 100 yuan. For these notes a 9 as the first digit in the serial number denotes a replacement note.

ND (1932) 1 Yuan Banknote, obverse
ND (1932) 1 Yuan Banknote, reverse

Initially the Central Bank issued 150 million yuan in notes by the end of 1932. Since the currency was tied to the Japanese yen, it experienced the same inflationary problems towards the end of the war. By the time that World War II had officially ended on the deck of the USS Missouri, the Central Bank of Manchou had issued over 12 billion yuan. So much currency was issued, in fact, that only about half of the notes were backed by anything at all. These almost worthless billions were later redeemed by the Tung Pei Bank in 1948.3

The Central Bank of Manchukuo was only a small portion of Japanese invasion money issued during the 1930s and 40s. Throughout Oceania and Asia Japan issued its own currencies. These notes are wonderful pieces of history readily available to collectors that would make an excellent addition to any collection with their rich history and vibrant color.

1. C. Frederick Schwan and Joseph E. Boling World War II Remembered (Port Clinton: BNR Press), 662.
2. Schwan and Boling, World War II, 662.
3. Schwan and Boling, World War II, 662.

PMG is an independent member of the Certified Collectibles Group (CCG).

Stay Informed

Want news like this delivered to your inbox once a month? Subscribe to the free PMG eNewsletter today!


You've been subscribed to the PMG eNewsletter.

Unable to subscribe to our eNewsletter. Please try again later.

Articles List