French Indochinese Piastre - History

History

Prior to the arrival of the French in Indo-China in the second half of the 19th century, cash coins similar to those used in the provinces of China circulated in the area that is nowadays known as Vietnam. There was also a silver milled dragon coin and associated subsidiary coinage in circulation. The dragon coin is believed to have been in imitation of the Spanish and Mexican silver dollars which also circulated widely in the region at that time, however the dragon dollars were worth less because the fineness of the silver was less than that in the Spanish and Mexican dollars. In the region that is nowadays Cambodia and Laos, the Siamese coinage circulated and Cambodia had its own regional varieties of the Siamese Tical (Thai Baht).

The French began their Indo-Chinese empire in 1862 with Cochin-China which is the area around the Mekong delta and Saigon, and which is nowadays the extreme southern part of Vietnam. This empire very quickly expanded to include Cambodia which had been a vassal state of the Kingdom of Siam. In 1875, the French introduced a Cambodian franc to Cambodia. Although these francs were minted in Belgium between 1875 and 1885, they always bore the date 1860. The French also began to introduce a subsidiary coinage in 'cents' into Cochin-China in the late 1870s. These cents were actually subsidiary coinage of the Mexican dollar unit as opposed to being subsidiary coinage of the French franc.

In 1884, the French Indo-Chinese empire further expanded to incorporate Annam and Tonkin-China. The following year, in 1885, the French introduced a new silver Piastre de commerce and associated subsidiary coinage throughout the entire Indo-Chinese colonies in order to increase monetary stability. The piastre was initially equivalent to the Mexican peso. The piastre was therefore a direct lineal descendent of the Spanish pieces of eight that had been brought to the orient from Mexico on the Manila Galleons. It was initially on a silver standard of 1 piastre = 24.4935 grams pure silver. This was reduced to 24.3 grams in 1895.

French Indo-China was one of the last places to abandon the silver standard. The piastre remained on the silver standard until 1920, when due to the rise in the price of silver after the First World War, it was pegged to the French franc at a varying rate hence putting it unto a gold exchange standard. The silver standard was restored in 1921 and maintained until 1930, when the piastre was pegged to the franc at a rate of 1 piastre = 10 francs. During the World War II Japanese occupation, an exchange rate of 0.976 piastre = 1 Japanese yen operated, with the pre-war peg to the franc restored after the war. However, in December 1945, to avoid the French francs devaluation, the peg was changed to 1 piastre = 17 francs.

In 1946, the North Vietnamese đồng was introduced, which replaced the piastre at par. In 1952/1953, the Lao kip (1952), Cambodian riel (1953), and South Vietnamese đồng (1953) were introduced at par with the piastre. Initially, the paper money bearing denominations both in the local currency and the piastre, but coins were denominated in the national units since the beginning. These initially circulated alongside the old piastre currency. The peg of 1 piastre = 10 francs was restored in 1953. The dual denominated notes circulated until 1955 in South Vietnam and Cambodia, and 1957 in Laos.