Who made a dollar worth a dollar?

dollar

Some years ago, the founder of this blog, VThunderlad, suggested that the time had come for the English-speaking world to scrap its old Christmas carols and adopt a new set. I was willing to be convinced, until he proposed that the first to be retired should be “The Carol of the Bells.” “The Carol of the Bells” is the one Christmas tune of which I have the strongest and most numerous memories, and so as soon as he recommended ditching that one I was dead set against scrapping any Christmas carol, even the drab, barely-singable ones.

What brought this story to mind is the ongoing discussion about redesigning US currency, a discussion most recently brought into the spotlight with the US Treasury Department’s decision to partly replace Andrew Jackson’s portrait on the $20 bill with Harriet Tubman’s. Since Jackson was a slave-trader whose most remembered political achievement was forcing thousands of Cherokee people to leave their homes in the southeastern US, costing an untold number of lives, there has long been a demand that his face should be removed from the $20 bill, but the Treasury Department opened the year with a proposal to remove, not Jackson’s portrait from the $20 bill, but Alexander Hamilton’s from the $10 bill.  The success of the Broadway musical Hamilton (much more productive of sympathy for its protagonist than Bloody Bloody Andrew Jackson ever was,) doomed that plan and redirected attention to the $20 bill. Even now, it looks like the Harriet Tubman $20 bill won’t be making its debut until 2030, after four presidential elections, any one of which may bring in an administration that will put a stop to the whole thing. Even if the plan goes through as announced, the new bill will feature on its reverse an image depicting a statue of… Andrew Jackson! The whole thing feels like a fiasco.

Andrew Jackson’s fans aren’t that numerous nowadays, but he is still a popular figure in the state of Tennessee, which was his home in adulthood, and in the border area between North and South Carolina, where he was born and raised. So people from those places felt singled out by the push to remove him, and resisted that push intensely enough to force the Treasury into the ridiculous position it now occupies. I say we should take a lesson from the United Kingdom’s decimalization of its currency, accomplished on a single day in February 1971. If we want to redo the currency, we should do it all at once.

What changes do we need to make? I can think of seven:

  1. The $100 is so attractive to counterfeiters and so inconvenient to the average currency user that it is not reasonable to continue its production.
  2. The $1 and $5 bills wear out so frequently that it would be logical to discontinue their production and replace them with coins. In the past, the USA has introduced dollar coins but kept dollar bills in circulation, with the result that it has not made economic sense to redesign vending machines and cash registers to take the dollar coins. Therefore, currency users have found little use for the coins. Only the discontinuation of the bills will prompt the redesigns necessary to bring the new coins into wide circulation.
  3. All US bills are the same size and texture, exposing the visually impaired to the threat of larceny every time they pay with cash. The $50 bill should be larger than the $20 bill and the $20 bill larger than the $10 bill.
  4. The $.50 piece has never caught on and is valued almost exclusively as a collector’s item. Ceasing production of this coin would inconvenience no one and please collectors by giving scarcity value to a coin many of them can’t help but hold onto, even though, as a coin still in production, it is worth only its face value.
  5. Each $.01 piece costs more than $.01 to produce, yielding negative seignorage. Moreover, they are nearly as inconvenient to currency users as is the $100 bill, and tend to fall out of circulation almost immediately. The presence of the $.01 piece in the US currency system benefits only two groups: the zinc industry, which would still be doing just fine without the subsidy the piece represents, and retailers who advertise prices of “$9.99” or “$19.99” knowing full well that, on the one hand, these keep them under the psychological barrier that $10 and $20 present to many customers, and on the other that buyers will leave a $.01 piece rather than claim it in change. As such, the $.01 piece not only costs the taxpayers money and unnecessarily inflates the price of a strategic mineral, it also encourages deceptive trading practices. Its production should be discontinued.
  6. As the physical size of bills should decline in proportion to their value, so the diameter of coins should decline in proportion to theirs. So, the $5 piece should be the largest coin, the $1 piece the next largest, and so on, so that the $.05 piece, not the $.10 piece, should be the smallest coin.
  7. All the men who are now or have ever been on the obverse of US coins or bills should be retired from them, and should be replaced by the faces of others who symbolize reasons why a dollar is worth a dollar.

The first six points are relatively familiar, and I don’t propose to enlarge on them. Point seven does require a bit of explanation.

That all the men who have been featured on the obverse of coins should be retired I support by the example of the not-entirely-unsuccessful resistance diehard Andrew Jackson fans have put up to the idea of removing him from the $20 bill. Only if every region and interest group that has ever succeeded in putting the face of its favorite on the money simultaneously gives up that success will reform go through.

Why should the new faces symbolize reasons why a dollar is worth a dollar?  Ever since the end of the seventh century BCE, when Alyattes of Lydia struck the oldest coin known to numismatics, it has been customary to put an image on the obverse of the coin indicating the power that gives the coin its value. In Alyattes’ case, that image was a lion, an image that his house apparently used as an heraldic device:

Lydian_trite_15_o

The coin was worth what it was worth because Alyattes and his kinsmen said it was worth that much, and no further explanation was required. It better not have been required, since it wasn’t going to be forthcoming from the unadorned gouge on the reverse:

Lydian_trite_15_r

A bit later, Alyattes’ old neighbors in Lycia started stamping portraits of their kings on the obverse of their coins, and the Greeks then started putting deities symbolic of the community at large on the obverse of their coins and doing imaginative things with the reverse. In each case, the point was to show who guaranteed the value of the coin, and with the reverse designs to give some background as to why that guarantee could be trusted.

The USA has no king, of course, but the images on US currency are still meant to show why a dollar is worth a dollar. Abraham Lincoln is on the $.01 piece and the $5 bill, and Ulysses Grant is on the $50 bill, because the Union’s victory in the civil war of 1861-1865, and the subsequent rise of a relatively strong central government, made it possible for the USA to build single internal markets for capital and labor, to conduct trade policy on a grand scale, and to break free of British economic domination once and for all.

Thomas Jefferson is on the $.05 piece and the $2 bill, and Andrew Jackson is on the $20 bill, because these two men were instrumental both in the territorial expansion of the USA in North America, and in the creation of the Democratic Party, which, despite the anti-nationalistic ideology of its first century of existence, as a political party operating on a national scale could not but act as a force consolidating the USA, thereby inadvertently promoting the ends which Lincoln and Grant served consciously.

Franklin Roosevelt is on the $.10 piece, not only because he had polio and the anti-polio efforts of the March of Dimes were very much associated with the $.10 piece at the time when Roosevelt’s portrait was put there, but because his New Deal policies normalized the idea of a mixed economy in which large-scale state intervention would both ease the plight of those individuals who took financial or career risks that did not pay off and counter the extremes of the business cycle. Moreover, leading the USA’s efforts in the Second World War, the Roosevelt Administration did three things that still help to make a dollar worth a dollar. First, in the period from September 1939 to December 1941, Roosevelt did what Woodrow Wilson, in an act of negligence approaching outright treason, failed to do in the period August 1914 to April 1917, and forced the UK to give up its gold reserves, its equity in strategically vital US industries, its naval bases in the Western hemisphere, and other assets that not only would have been dangerous had they fallen into German hands after a British surrender, but which also represented the dead hand of the former colonial power on the American economy and the US position in world affairs. Second, the USA did play a key role in defeating Nazi Germany and Imperial Japan, two powers which would have built an intolerable world had they won a secure triumph, and which would have left the world in utter chaos if, as was more likely, they had been unable to hold onto their gains. The USA emerged from the Second World War, not into either of those nightmare scenarios, but into a world in which it had greater access than ever before to the markets of Western Europe and Northeast Asia. Third, it was under the Roosevelt Administration that the USA established the relationship with Saudi Arabia that has periodically stabilized the price of petroleum over the last 70 years, a stabilization that has made possible worldwide industrial development that well merits the words of Gordon P. Merriam, an official of the Roosevelt administration, who called Saudi Arabia’s petroleum reserves “one of the greatest material prizes in world history.”

George Washington is on the $.25 piece and the $1 bill because if the thirteen colonies had not made a successful military revolt against the British Empire, there would be no US currency, and if the USA’s elites had not managed to create a stable political system in the aftermath of that revolt such currency would be valueless.

John Kennedy is on the $.50 piece because television promotes nostalgia for celebrities who die young, but also because his tough talk about Berlin still highlights the relationship between the USA and Germany, a relationship which guarantees US access to markets throughout the German Empire (or, as it is politely known, the European Union.) In turn, Germany’s desire for access to the American market keeps its behavior in check to some extent, though occasionally one does see the Chancellor unilaterally disregarding Germany’s international commitments, triggering a movement of populations which threatens to dissolve the borders of states in Central and Eastern Europe. And the Germans do still behave recklessly when they see an opportunity to set up operations in territories that have historically been within Russia’s sphere of influence. However, these tendencies are to some degree inherent in Germany’s geopolitical position and the deepest structures of its political culture. The attraction of trade with the USA can moderate Germany’s bent to those forms of bad behavior, but only a strong Russia can contain it, and nothing can eradicate it. So it is not unreasonable that an American coin should commemorate the US-German relationship.

Alexander Hamilton is on the $10 bill because, as the first Secretary of the Treasury, he did a great deal to create a viable financial system in the USA. The musical may have kept him on the bill, but that fact would make it absurd to dump him and only him from the currency.

Benjamin Franklin is on the $100 bill, not only because of his role in the War of Independence and the writing of the Constitution, but also because, as a scientist and inventor, he represents the roles that basic research and technological advancement have played in the enrichment of the USA. Besides, Franklin’s remark that Americans had a higher standard of living than their cousins in Europe because the country’s low population meant that the USA was a country of “cheap land and high wages” explains more about the USA’s economic and political history than any other five words could.

So those guys do a pretty good job of explaining why a dollar is worth a dollar. For old-fashioned types who want the design of the currency to include an explanation as blunt as Alyattes’ family crest, there are the words printed on each bill, “Federal Reserve Note. This note is legal tender for all debts, public and private.” A dollar is worth a dollar because the Federal Reserve Board says it is, Congress has passed a law saying that you have to take dollars if your debtors offer to pay in them, and the Secretary of the Treasury and the Treasurer of the United States have signed their names to the whole thing. If we’re going to change the images on the currency, we’re going to have to choose a set that give at least as good an explanation of why a dollar is worth a dollar as does the existing set.

What does the existing set leave out?  The first thing that comes to my mind is the smallpox epidemic that wiped out about 90% of North America’s population when European settlers arrived on its shores in the sixteenth century. Without that, Europeans may well have established more of a foothold on these shores than the Vikings had a few centuries before, but there is no way that a federative nation-state dominated by their descendants would today span the continent.  Perhaps the descendants of the natives would today be more prosperous than is the actual United States of America and perhaps they would issue currencies even more valuable than the dollar, but the dollar wouldn’t exist if it were not for that incomparable disaster.

You can’t really put the smallpox virus on a coin; it would be an ill-omen, for one thing, and in quite bad taste. Besides, the thing is just unsightly:

smallpox

So, I would suggest that the $.05 piece carry a portrait of Dr Donald Henderson, who led the World Health Organization unit that completed the eradication of smallpox in 1967-1977. Honoring Dr Henderson would also honor both technological advancement and international cooperation, two other pillars of US economic might. Dr Henderson is still alive, and no living person may appear on US currency, but by the time this program could be implemented he’ll probably have died.

Some other points illustrated by the faces now on the currency would still have to be brought out. The main enemy US foreign policy confronted, beginning a decade or more before the formal inception of the United States in the 1770s and continuing up to about 1965, was the British Empire. In all those years, the USA’s chief international objective was to resist, contain, and destroy British influence. As I mentioned above in regard to Woodrow Wilson, some American leaders weakened in this resolution or even tried to betray the project altogether, but the general thrust was to restrict the British, whether by fighting them, supporting their opponents, or insisting on the highest possible price for whatever support the USA might give them in some or other limited enterprise. Even today, when Britain is a satellite of the USA in military affairs and a province of the German Empire in its domestic arrangements, memories of that tension linger. It’s hardly surprising they should, since the president of the United States, Barack Hussein Obama II, is the son of a man who may very well have been assassinated by the British Secret Service in 1982.

If we have to retire George Washington, Benjamin Franklin, Thomas Jefferson, Abraham Lincoln, U.S. Grant, Franklin Roosevelt, and John Kennedy from the currency, whom shall we choose as the symbol of the country’s two-century-plus struggle against Perfidious Albion? I would suggest Samuel Adams, who as an opponent of the Stamp Act of 1765 emerged as the best-known leader of the first step in the process that would reach its climax when the Union Jack was hauled down and the Stars and Stripes were raised in Singapore almost exactly 200 years later. So I propose Samuel Adams for the $.10 piece.

The political stability of the USA has of course been a major factor in raising the value of the US dollar above that of the Thai baht, let alone the Sudanese pound. George Washington is so much the obvious symbol of this circumstance that it is no wonder he is on two denominations of currency, but perhaps someone else could symbolize the same thing as effectively. Much of the cult of Robert E. Lee which is now in the process of evaporating from the USA comes from the fact that Lee’s surrender and his subsequent advocacy of reconciliation with the North were vital to preventing the decades of guerrilla war that usually follow the defeat of a major rebellion. Neither Lee nor any other representative of the Confederacy would be acceptable on US currency now, so I won’t propose him. But perhaps we should look to a gracious loser, rather than to a circumspect winner like Washington, to be our embodiment of political stability, since stability can’t be achieved without both. Perhaps Takanka Iyotanka, a.k.a. Sitting Bull, would serve this role as effectively as Lee did in a different time. The leader of his people and the last man to surrender his rifle at the end of the Great Sioux War in 1881, he strove in his last years to find a place for the Plains nations in the postwar world. Those efforts were repaid by an assassination at the hands of renegade Sioux working for the US authorities, which in itself should serve to remind us that it can be more dangerous to be a peacemaker than to be a warrior.

Much of the wealth of the USA has its roots in the unrewarded toil of dispossessed slaves, of Native Americans, and of women long excluded from direct participation in the labor market. Harriet Tubman is an excellent symbol of this fact, and of the initiative the dispossessed have taken to remedy this situation. She also takes over for Lincoln and Grant as a celebration of the Union’s victory in the Civil War. So, I propose her for the $1 piece.

Technology and basic research are vital to the USA’s economic position, as are the periodic expansions of opportunity to groups previously excluded from participation in the market. Moreover, the ability of various religious groups to live in peace is vital to the political stability, and therefore to the material prosperity, of the USA. One person who symbolizes all four of those things is Maria Mitchell. Mitchell was the first human being to use a telescope to discover a comet, the first American woman to earn a living as a scientist, and a Quaker lady who thought deeply about the relationship between science and religious faith, and about the role of religion in public life. I propose Maria Mitchell for the $5 piece.

Organized labor and the mixed economy are not beloved by the American far-right, but they should be pretty happy seeing pets of theirs like Sam Adams and the guy I have in mind for the $20 bill. So they shouldn’t complain too loudly when we acknowledge that working people not only have as much right to organize to demand better terms for their labor as investors have to form corporations to demand better terms for their capital, but also that increased wages and improved working conditions, which only organized labor can secure, do in fact increase economic activity by moving wealth away from those who would tend to hoard it and towards those who tend to spend it more quickly.  And without organized labor behind them, politicians like Franklin Roosevelt could never have built the mixed economy with the benefits, both to individuals and to the nation as a whole, mentioned above. I would suggest Cesar Chavez for the $10 bill, as symbol of organized labor, of American agriculture, and of opportunities won by the previously dispossessed.

The US financial system has its ugly side, but we started this exercise by facing the fact that the North American smallpox epidemic of the sixteenth century was a sine qua non of the USA’s existence, so I suppose we can stand to acknowledge that a dollar wouldn’t be worth a dollar without that system. Some might think the dollar would be worth a lot more than it is if the USA had a radically different system, but we aren’t trying to speculate about ways to increase the value of the dollar, only about ways to explain the value it actually has. So the $20 bill should feature a financial figure. Alexander Hamilton may have been the single most important figure in the inception of the system, but we can’t make any exceptions- they all have to go. So I would turn to a later stage in the development of the system, and, since the US currency is made up of Federal Reserve Notes, I would choose someone who symbolizes the founding of the Federal Reserve. The basis of the original Federal Reserve Act of 1913 was something called “the Aldrich Plan,” which Senator Nelson Aldrich put forward after a famous meeting on Georgia’s Jekyll Island. So I suppose I’ll suggest Nelson Aldrich for the $20 bill.

For the $50 bill, I think the choice is actually pretty obvious. George Washington Carver symbolizes technological advancement, opportunities won by the previously dispossessed, the unrewarded toil of the still-dispossessed, and American agriculture. Besides, his name has “George Washington” in it, so even if we can’t keep GW on the currency, at least we can tip our hats to him.

Those are the obverse portraits I would suggest. For the reverses, I would suggest three themes that don’t much lend themselves to prominent individuals as symbols. Those would be the natural resources of North America, the Atlantic and Pacific Oceans, and the system of legal title that gives US land-owners secure claim to their property.

For the natural resources of North America, I would suggest a wilderness scene on the reverse of the $.05 piece, depicting the world that the people who died in the great smallpox epidemic never had the opportunity to develop with the technology they and their descendants would likely have imported from the Old World had they lived. On the reverse of the $1 piece, I would suggest an agricultural scene suggesting the Great Plains, the sort of image that the people Harriet Tubman led to freedom might have had in mind as a hope for their future. And on the reverse of the $10 bill, I would suggest a scene depicting the Hoover Dam, which, coupled with Cesar Chavez on the obverse, would put the West Coast on regular US currency for the first time. And of course the three together would represent a chronological progression that thrusts up to the present day, inviting currency users to write themselves into the story.

There aren’t any generals or admirals or wartime political leaders of the USA on my list of obverse portraits; the only warrior is Takanka Iyotanka, who led a valiant fight against the USA. I’m anything but anti-military, but we only have eight units of currency, so some major things have to be left unrepresented. I believe it was James Bryce who said that it was wondrous how ready Americans were to identify as their countrymen’s martial valor what might more accurately be described as the Atlantic and Pacific Oceans. Those bodies of water have secured US independence by physically separating North America from Europe and Asia. That isn’t the whole story; when George Washington gave his Farewell Address advising against undue involvement in quarrels abroad, he was speaking to a nation that bordered on territories claimed by Britain, France, and Spain, with Dutch and Portuguese bases less than a week’s sailing away. Never since has the USA been within reach of so many revisionist world powers. Anyway, I suggest a scene of the Pacific on the reverse of the $.10 piece, an ocean which the relentlessly anti-British policy inaugurated in Sam Adams’ day made it possible for the USA to reach and, for a time, to dominate, and a scene of the Atlantic, the ocean on whose shores Nantucket’s Maria Mitchell passed her days, on the reverse of the $5 piece.

Secure title to land is a pretty hard thing to illustrate, but an absolutely indispensable part of the story of what makes a dollar worth a dollar. People who have secure title to land can borrow against it to make major investments, and without the ability of so large a segment of the US population to invest substantially the country would not have developed the industry it did or the middle class it did or the democratic politics it did. I’m not sure exactly what images could be put on the reverses of the $.25 piece, the $20 bill, and the $50 bill that would make this point; a mortgage book isn’t a very inspiring sight, neither is a loan officer’s desk. Maybe a house with some big trees out front, suggesting long residence, might do the trick. Or a picket fence, or a hearth, or something like that.

Advertisements

1 Comment

%d bloggers like this: