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If you look at a $1 bill, you probably see nothing remarkable about the familiar portrait of George Washington on the front and the elaborate Great Seal of the United States on the back. Perhaps it took a British historian to see more. Jason Goodwin, author of Greenback: The Almighty Dollar and the Invention of America (Henry Holt, 300 pages), sees the dollar as an artistic reflection of the 225-year development of American economic power.
In Greenback, Goodwin romanticizes the development of American paper money, from the earliest bank notes, which often carried no value beyond individual state lines to the modern $1 bill, designed as part of the 20th century New Deal. The nation's struggle from the Revolutionary era to the Industrial Age to create a currency that would become the world's most dependable form of payment is chronicled in exacting detail.
Goodwin argues that transforming the dollar into the world's most trusted currency was no small miracle. From the closure of the First Bank of the United States in 1811 to massive counterfeiting schemes that crippled banks after the Civil War, fascinating anecdotes and facts about the dollar, as well as the politicians and bankers who guided its odyssey are woven together in Greenback.
On Feb. 13, BusinessWeek Online Reporter David Shook spoke with Goodwin by telephone at his country home in Sussex, Britain. Edited excerpts of their conversation follow:
Q: Your book reads like both history and nostalgia. What is it about American currency that interests you so?
A: It is definitely a history book in one sense. But I also tried to write a book about the dollar and American money as if it were something beyond finance.
The $1 bill, in particular, has this character: It sells, it's worth more than the [face] value of the bill itself, and it's a historical artifact rich with legends and conspiracy.
Q: You have a particular interest in the $1 bill. Is it really so unique?
A: Nothing else compares to the beauty and mystery of the dollar. Compare it to the artwork on the euro note, for example, which has a rather pathetic and bland image of bridges and archways that are not even real but are meant to represent stages of European architecture without the risk of appearing any more German than French. It's the most boring printed currency ever created -- a terrible compromise.
But the dollar is so odd and quirky compared to other currencies. On the back you have these very esoteric and absolutely distinctive motifs in the Great Seal of The United States, specifically the unfinished pyramid below a blazing eye. I found in researching this book that the Seal is the root of many conspiracy theories -- and many people find the symbol quite disturbing.
What does it really represent? It is likely that it was, in fact, inspired by the Masons. And Benjamin Franklin, who spearheaded the design of the Great Seal, was a Mason. So was Roosevelt, who lifted the Great Seal's image from obscurity when he placed it on the back of the $1 bill in 1935. However, nothing in my research suggests that the symbol represented a hidden Masonic message. Perhaps it is the eye of God. Or it is the sovereign eye of the people watching over the republic, watching for any signs of power undermining liberty.
Q: Counterfeiting is a serious problem -- and has been going back to the 1800s. Most of our currency was redesigned in the last 15 years to stop counterfeiting. Why wasn't the one-dollar bill changed?
A: The one-dollar bill is actually quite vulnerable to counterfeiting. It's all one color on one side. The U.S. has changed the larger-denomination bills to stop counterfeiting, particularly since there was an explosion of counterfeit bills coming out of Far East in the 1980s. Those bills were so good that even the U.S. Secret Service was baffled by them.
So in the late '80s we saw this move by the [Treasury] to change the bills quite radically.... With the changes, the Treasury made the faces on the bills larger, pushing them to the left, adding holograms that can be seen if you hold the bills under the light.
However, the White House [under Ronald Reagan] wouldn't allow the $1 bill to be altered significantly. They said you can't mess with the dollar anymore than you can mess with the American flag.
Q: You say that the U.S. $1 bill is cherished, but as the value of it weakens against inflation, do you think we'll eventually see the $1 bill replaced entirely by a coin the way Britain has done with the pound?
A: Eventually there will be less call for the $1 bill. We've already seen so much less use of paper money [in general] due to credit cards and other electronic transactions. But there will always be people who want to use dollars -- poor people, gangsters.
The transaction of passing bills from hand-to-hand is a sort of social activity, a ritual conversation that will live on.
Q: I imagine your research took you to the Bureau of Engraving & Printing in Washington.
A: I did do the tour. The best part about it was not the money but the reaction on people's faces when they see all those bills being printed. People have their eyes out on stalks when they see all this hard currency going by on the printers. It's awesome. Even children were mesmerized.
Edited by Patricia O'Connell
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Copyright 2003, by The McGraw-Hill Companies Inc. All rights reserved.
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