Korean won (1945–1950)

Korean won (1945–1950) was the currency issued in southern Korea after the end of World War II and before the establishment of the Republic of Korea's reformed currency in 1950. Instituted under the authority of the USAMGIK and partially managed by the Bank of Joseon, it replaced the Korean yen and functioned amid occupation, political transition, and the outbreak of the Korean War. The currency's short life reflected the overlapping influences of United States, Soviet, and emerging Syngman Rhee-era institutions.

Background and issuance

Following Japanese surrender in 1945, the Allied occupation of Korea divided the peninsula along the 38th parallel between Soviet Civil Administration and USAMGIK. The immediate need to replace the Bank of Japan in Korea-issued Korean yen prompted the US military government to authorize a new currency, administered in coordination with the Bank of Joseon and influenced by advisers from the Treasury Department. Currency design, printing contracts, and distribution involved entities linked to Washington, D.C., Tokyo, and local offices in Seoul, reflecting pressures from Soviet Union-backed authorities in the north and United Nations-aligned administrations in the south. Decisions on denomination, legal tender status, and issuance volumes were shaped by interactions among Syngman Rhee, Kim Il-sung, Harry S. Truman, and occupation officials as tensions over trusteeship and US–Soviet relations intensified.

Design and denominations

Notes and coins retained the moniker "won" and featured motifs chosen by USAMGIK and the Bank of Joseon, with printing produced by firms contracted through United States procurement channels. Denominations included small units such as 10 chon equivalents and larger notes in 1, 5, 10, 100 and 1000 won formats intended to replace circulating Korean yen values and simplify transactions for urban centers like Seoul, Busan, Daegu, and Incheon. Visual elements referenced Korean cultural emblems and neutral iconography to avoid association with either the Provisional Government of the Republic of Korea in Chongqing or northern revolutionary symbolism linked to Communist Party of Korea. Production constraints, paper shortages, and printing priorities influenced features such as serial numbering, watermarks, and anti-counterfeiting measures analogous to contemporaneous issues in United States and Japan, while decisions on minting echoed practices of the Bank of England and Federal Reserve System advisers.

Circulation and inflationary impact

Rapid political change and reconstruction demands pushed large volumes of notes into circulation, interacting with food relief operations by UNRRA and procurement needs of occupying forces. Inflationary pressures were exacerbated by disruptions to industrial centers like Keijō (Japanese-era Seoul), rice-producing regions in Jeolla Province and Chungcheong, and transportation corridors affected by repairs to rail lines formerly operated by the Chosen Government Railway. The inflow of military pay, foreign aid from USAID predecessors, and shortages of goods led to price instability reminiscent of postwar episodes in Germany and Austria. Counterfeiting and black market exchange with the Soviet Union-aligned north and with foreign currencies such as United States dollar further complicated monetary stability, spurring debates among economists from Seoul National University and advisers from Harvard University and Columbia University who consulted on stabilization measures.

Role during U.S. military government and economic reforms

Under USAMGIK, the currency functioned as a tool of economic administration during land reform discussions, tax collection reforms, and industrial policy debates involving the Korean Workers' Party in the north and emerging southern parties including the Korea Democratic Party. The Bank of Joseon carried out banking operations, credit controls, and note issuance while cooperating with US financial missions and Korean technocrats such as figures from the Korean Provisional Government diaspora and returning exiles like Syngman Rhee supporters. Monetary policy choices intersected with US-led programs addressing refugee flows, rehabilitation of ports like Pusan, and the re-establishment of civil administration that culminated in elections supervised under UNTCOK and political transitions to the First Republic of Korea. Tensions over fiscal authority between occupation authorities and Korean political actors mirrored broader disputes at fora including Potsdam Conference-era negotiations and subsequent diplomatic engagements.

Transition to the South Korean won (1950)

By 1950, the combination of inflation, wartime disruption after the North Korean invasion, and political consolidation under Syngman Rhee led to monetary reform measures culminating in the introduction of a reconstituted South Korean won. Emergency measures during the early months of the Korean War and coordination with allied finance ministries resulted in replacement policies executed by the Bank of Joseon and later by institutions aligned with the new Ministry of Finance. Currency conversion, redenomination, and withdrawal of earlier notes paralleled steps taken in other conflict-affected states such as Germany (post-World War II) and required negotiations with creditors, foreign aid donors, and occupying military finance offices. The 1950 transition formalized the separation of southern monetary institutions from northern systems under Kim Il-sung and set the stage for the long-term currency regime of the Republic of Korea.

Category:Currencies of Korea Category:1945 introductions Category:1950 disestablishments