From is inception, one the primary missions of the Finance Corps has been to administer the payment of Soldiers. How that was accomplished has varied over the decades, based in large part on trends in currency and banking. When it was established in 1775, for example, the Continental Congress, short of “hard” money such as gold and silver, turned to the printing presses for a solution. The paper currency, called Continentals, were originally pegged at a 1:1 ratio with gold—a $1 Continental note was accepted as if it were a $1 gold coin.
But the ease of printing money and the mounting cost of the war led Congress to print so many of the bills that, lacking the ability to be legally “redeemed” for gold or silver, they quickly became perceived as being almost worthless. Congress was not alone in this semi-counterfeiting scheme, however: the Continental Army printed up its own “certificates” with a face value of $200 million and used it to purchase supplies. The rampant inflation caused by the almost unlimited printing of Continentals led to widespread price inflation was merchants demanded exorbitant amounts of the currency—a pair of shoes might be priced at $5,000, for instance, and a suit could run as high as $1 million. In April, 1779, General George Washington lamented that “a wagon load of money will scarcely purchase a wagon load of provisions.”
This experience led the Federal government to shy away from unredeemable paper money, and for a time Finance Corps officers disbursed gold and silver coins to Soldiers. (Private banks issued notes that were supposed to be redeemable in gold or silver.) But the exigencies of wartime financing led President Lincoln to reintroduce unbacked paper money, called “greenbacks,” in order to avoid borrowing money at interest from foreign creditors. Luckily for the Union Soldiers, the greenbacks did not depreciate the way the Continental had.
For almost the next hundred years, cash was king as far as the Finance Corps was concerned. But the increasing popularity of checking accounts following World War II led the Corps to introduce paychecks in place of physical, which eventually gave way to the direct deposit commonly used by civilian employers.
But the Finance Corps was relieved even of this responsibility in 2016 with the announcement of the introduction of the Integrated Personnel Pay System-Army (IPPS-A). Designed in part to facilitate the audit capabilities of the Army General Fund Enterprise System used to manage assets and finances, IPPS-A provides instantaneous access not only to pay records, but also personnel files and other information that can be leveraged by Army leaders to make the most of the skills of the personnel under their command.
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