By some accounts, the military challenge coin tradition started in 1914 when soldiers and airmen were joining the newly formed flying squadrons. The story goes that a wealthy lieutenant purchased custom-made medallions for all the men in his unit. One of the airmen put his medallion in a leather pouch that he wore around his neck. During a bombing run, a U.S. plane was hit by enemy fire and forced to land in German occupied territory.
The pilot was immediately captured by a patrol that took all of his identification, but for some unknown reason, let him keep the leather pouch with the medallion in it. The young airman eventually escaped and made his way to a French town by pretending to be a civilian. He presented himself to the French with a plea for help, but no one believed him to be an American since they did not recognize his accent. Without identification to prove that he was not a spy, his captors quickly decided to execute him. As the final moment approached, the airman remembered his unit medallion and pleaded with his captors to open the leather pouch and look at the medallion inside. One of the captors recognized it and the execution was delayed to let the pilot contact his unit.
The airman's identity was eventually confirmed and he received a bottle of wine as an apology from the French instead of a bullet in the head. Because of this incident, a tradition began of carrying a unit medallion or coin at all times. To make sure that everyone participated, a Challenge Ritual evolved. The challenger would ask a soldier to produce his coin by saying "Coin Check", pulling out his own coin and rapping it on a hard surface. If he couldn't produce his unit coin, the soldier would have to buy a drink for the person who challenged him. If he did have his coin, then the challenger would buy the drink. This time honored tradition is still going strong in American military units all over the globe. "Challenge Coins", as they came to be known, are given by generals as rewards, are traded between units and are to be carried at all times. A well-prepared soldier/brother is always ready for a challenge. This tradition continues throughout the military and within some fraternity chapters.