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Greenback: The Almighty Dollar and the invention of America

by Jason Goodwin
321 pages,
ISBN: 0805064079


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Birth of the Greenback
by Christopher Ondaatje

The dollar bill, in its present form, was first issued in 1957. Although called "paper money" it is in fact a curious mixture of linen and cotton with coloured silk fibres running through it. It is hailed as water resistant. On the front of the dollar bill, on the right hand side, is the seal of the United States Treasury with the scales of balance in the top segment, and the key to the U.S. Treasury in the bottom segment. At the bill's centre is an engraving of the 1795 Gilbert Stuart portrait of George Washington, the first President of the United States of America. On the reverse of the dollar bill, however, something a little sinister becomes apparent. It is said that "anyone with a ruler, compass, and a taste for voodoo can use a dollar bill to design a nine-pointed star traditionally associated with calling up the Devil himself."
Then there is the unexplained significance of the number 13. There were 13 original colonies, 13 signatories of the Declaration of Independence, and 13 stripes to the flag. On the Great Seal of the United States there are 13 stars above the eagle, 13 plumes of feathers on the upper span of the eagle's wing, 13 bars in the shield below the eagle, 13 leaves on the olive branch held by the eagle, 13 olives, and 13 arrows held by the eagle's other claw. There are also 13 steps on the pyramid illustrated on the left circle of the bill's other side, with 13 letters to the two Latin words printed above. Also above the pyramid is an all-seeing eye¨a masonic emblem. "A popular theory fingers a masonic sect called the Illuminati whose aim is to overthrow governments." A secret and ruthless group, very little is known about them.
There are 7 trillion dollars in the world today¨most of which exist electronically. Fourteen billion of these are in paper bills¨a third of which are held outside the United States. Thus "there are more dollar bills in existence than any other branded object including coke cans." But how did this extraordinary currency come into being? Jason Goodwin, in his fluently readable style, documents the story of the Dollar in his book Greenback which is also, as the subtitle suggests, very much the story of the invention of America itself. Much more than a simple medium of exchange, the U.S. dollar from the very beginning was an icon of revolutionary unity with symbolic and psychological significance. It was a primer in American purpose, probably the first American work of art, and an instrument of change, pitting Federalists against Republicans, farmers against industrialists, silverites against goldbugs, and the money power against the people. It was this struggle that forged the identity of the dollar, and ultimately shaped American civilization.
The U.S. dollar originated in the late 1700s when the Colonies were faced with the decision of either staying monetarily in debt to England and its King, or else creating a new national currency. (The word "dollar" is actually short for Joachimstaler¨the thaler coin being first made at the silver mines of Joachimstal in Bohemia which is now part of the Czech Republic). The Colonial economy in the 1700s depended largely on foreign coins, barter, and commodity money. The Massachusetts Bay Colony was the first to issue Colonial currency in 1690, and quite quickly other colonies also began to issue their own paper currency. These Colonial notes were practically always denominated in Spanish milled Dollars, but they were also denominated in British pounds, shillings and pence. Not surprisingly the British declared all Colonial currency illegal in 1764. A little while later, the Continental Congress, in 1775, issued a new currency to finance the revolutionary war lead by General George Washington. The notes had no backing in either gold or silver and were called Continentals. They were backed simply by the expectation of future tax revenues. However, these notes soon became devalued¨hence the phrase "not worth a Continental." Nevertheless, this was the first time that United States currency was issued solely on the basis of its purchasing power¨a situation that still exists today. Unfortunately, the devaluation of the Continental caused widespread distrust of paper money, a theme that would become enduring in the evolution of American paper money. Then, in 1781, the Continental Congress chartered the Bank of North America in Philadelphia to further support the revolutionary war. It was the nation's first commercial bank. In 1784 Thomas Jefferson turned the dollar into the world's first decimal currency, and the Continental Congress adopted the dollar as the unit for national currency. It was one of the first symbols of American unity. Following the American Revolution, the new nation conceived the idea of a central bank and, after the Constitution was adopted in 1789, Congress established the First Bank of the United States.
The story of the American dollar and indeed the turbulent financial history of the country is told by Jason Goodwin in a hypnotising and intimate way. It seems that throughout American history the nation has either struggled from a lack of currency or from an overabundance of it. From Continentals issued to finance the American Revolution, to Confederate currency backed by cotton, and today's Federal Reserve notes backed by faith in the U.S. Government, the history of America is told through its currency. Changes in American currency usually came about during times of crisis such as the American Revolution and the Civil War. Faith in paper notes is an enduring theme in the history of American currency. Today we take it for granted that U.S. dollars will always be accepted everywhere but, as Jason Goodwin demonstrates, it hasn't always been this way.
Whether referred to as spondulicks, bucks, dough, wad, ready, boodle, beans, or simoleon¨the dollar is the most instantly recognisable money in existence. A direct descendant of "Pieces of Eight" it is also now the oldest currency in continuous use throughout the World. Before the dollar Americans used shells¨wampum¨as money. This was before 1691 when Massachusetts became the first place, since medieval China, to issue paper currency. Let's face it, the American War of Independence couldn't possibly have taken place without it¨even though Congress overprinted dollars to such an extent that people eventually used them as wallpaper.
Incidentally, the motto of the U.S. dollar "E Pluribus Unum" was literally stolen from the masthead of the Gentleman's Quarterly¨the lineal ancestor of GQ; and the world's best known symbol the $ sign, was dreamed up by an Irish trader in 18th Century Florida. Almost every engraver in America worked, at some point during his career, for one of the bank-note companies which were throwing out a whole array of dollar bills on which steamboats and ploughshares portrayed the breakneck speed of America's growth. By 1860 the U.S. had around 9000 privately issued dollar bills¨a third of which were counterfeit.
"Money is a belief that has to be shared." It can be anything you like¨gold, silver, shells, nails, or even paper. "But everyone must agree on what it is. We accept paper money, because we believe others in turn will accept it too." This book is the story of one of those pieces of paper¨the American dollar, the most famous currency ever created, and possibly the greatest invention ever. ˛
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