Piastres affair

The Piastres Affair also known as Piastres Scandal and Piastres Trade (l'affaire des piastres, le scandale des piastres, or le trafic de pistres) was a financial-political scandal of the French Fourth Republic during the First Indochina War from 1950 to 1953. The basis for the affair was the pegging in 1945 of the French Indochinese piastre to the French franc at a rate of seventeen to one, increased from the previous rate of ten to one to avoid devaluation of the franc.

100 piastres, French Indochina circa 1954

However the real value of the piastre in Indochina remained around 10 francs or less; when piastres were transferred to France through the Foreign Exchange Office (l'Office indochinois des changes, or OIC) the Treasury (therefore the French taxpayer) paid out the established seventeen francs per piastre, amounting to an effective subsidy of around 8.50 francs according to Jacques Despuech, author of the first book on the case in 1953 and journalist for The French Nation. Despite controls given to the OIC in 1948, the situation resulted in widespread money-laundering related to organized crime and political corruption.

The affair was brought to light in 1950 but aroused little interest among parliamentarians until 1952-1953, when it was realized that the Viet Minh was also benefiting.

In July, 1954 the Geneva Accords were signed, ending French Indochina.

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