Where the buck never stops
Archie Cotterell
GREENBACK: THE STORY OF THE ALMIGHTY DOLLAR AND THE INVENTION OF AMERICA by Jason Goodwin Hands* Hamilton, £14.99, pp. 299, ISBN 0241140986 It is a seductive idea to assess 'the invention of America' through the history of the dollar, for no other country's conception of itself is so intrinsically bound to its currency. The biggest brand in the world, from its introduction the dollar has financed capitalism and conflict in equal measure. In the process it has shaped the American psyche.
Goodvvin's narrative, which elegantly recounts the difficulties preceding its arrival as an instrument of global hegemony, establishes that from the beginning the dollar was symbolic of — and a receptacle for — the aspirations of the American people.
This will come as little surprise to those who equate Americans with vulgar displays of wealth. But rather than simply being an engine of ostentation the dollar has been the vehicle — the 'stored possibility' — through which the two sides of the American character, pragmatist and dreamer, have been fulfilled.
Taking its name from the Czech 'thal', meaning the valley where the silver was mined, the original dollar was descended from Spanish pieces of eight. When the first paper dollar was issued in Massachussetts in 1691, it ignited a 200-year stand-off between those who embraced the possibilities of paper and those who believed in the sanctity of gold and silver.
It was a disagreement that divided the nation down predictable lines. Democrats, frontiersmen and Jeffersonians mistrusted paper. sensing the invisible hand of East Coast bankers and overseas interests. Yet it was the much reviled bankers who, capriciously perhaps, and certainly to their own advantage, financed the opening of America.
When Alexander Hamilton persuaded Congress that the emergency paper debt acquired during the War of Independence should be shouldered by the federal government and paid off through sales and excise duties, he effectively created the debt market. Armed with easy money, the pioneers poured through the Cumberland Gap and into the West. With new lines of credit and cheap land available, they laid the basis of the modern US economy, establishing the twin principles of mobility and debt. In a world that had no history and no class hierarchy, money quickly became the lubricant of social position and individual freedom.
But this rapid expansion brought its own geographic and economic problems. As individual banks and states could issue currency a bewildering array of banknotes came into existence. And with banks going bankrupt as successive land booms turned to bust, so currencies acquired a discount the further they travelled from their issuer. Besides attracting counterfeiters and 'shavers' — who collected a large number of banks notes and 'shaved' the discount by returning them to source — such promiscuous valuations undermined confidence, encouraged trickery and ultimately ensured the introduction of a single currency. It was, quite literally, the beginning of mass production.
Greenback is an interesting, oblique addition to the standard literature about the birth of America. It bristles with information, anecdote and etymology, and is convincing on the mechanics of printing technology and note design. It is, necessarily, an economic narrative and this can lead to a certain dryness. Some extraordinary men made America, but, without underestimating their importance, central bankers, legislators and economists are not always the most fascinating.
To the present day the dollar's design reflects that peculiarly American collision of history and myth. It is an agreeably contradictory symbol for a land where you can use a gun but not a cigarette lighter; where you can roll your car at 16 but not drown your sorrows until five years later.
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