Anecdotal Signs in Our Paper Currency

by, Barclay T. Leib

February, 1999

Have you met anyone yet who actually likes the look and feel of our new $20 bills? I haven't.

Most look at it in disdain when first handed the oversized portrait of Andrew Jackson and remark: "This looks like play money." And they do so primarily because the slightly Romanesque curved lines of the old $20's scrolled borders have been replaced with straight lines and a predominance of white space. This led Edward Rothstein of the New York Times to write editorially recently: "It is as if the new design were pieced together from spare parts and there weren't enough to go around. The almost Belle Époque reverence of the old, with the sense of looking through some nobly decorated portal at a building of charm and authority, is replaced by the cavalier recklessness and rudeness of the nouveau riche….This bill looks like money that doesn't care too much about looking like money."

Why has the Treasury done this to us? Could they not have come up with a design that looked somewhat more "real," "more valuable" than this new version that has been thrust upon us together with similarly ugly and vulgar looking $50 and $100 bills? And does this really matter and merit our time on these pages?

Unlike many nations, the United States has never retired any of its notes or coins from being legal tender, but how appropriate it is in a way that this cheapened version of the $20 bill appears during the same era when Bill Clinton has in fact cheapened the value of the White House by making the Lincoln bedroom available for overnight stays to significant political contributors. The bill has appeared during the same calendar year when our President is caught in a surreptitious sexual affair with a White House intern. The symbolism of a cheapened looking bill is in fact representative of a cheapened Presidency.

The cheapened looking bill also occurs in an era when the Federal budget has been balanced for the first time in over twenty years, almost as if to say to the American people: "We've tightened our belt a bit, but it is important that you not do so. We have made the $20 look less valuable so that you would spend more of them."

It is a fact beyond repute that every time in recent history that a government has made a major change in the design and look of its currency that the resulting trend has been a weakening of that currency in the global markets and increased inflation at home.

In the early 1980's France started to phase out its venerable 10 Franc note that had been in use since 1963 in order to replace it with a new 10 Franc coin. Within a short period of time, French inflation was significantly higher and the Franc was depreciating markedly both against its brethren Deutschemark as well as the U.S. dollar.

Similarly in April 1983 and extending into March 1988, the Bank of England phased out their crisp white 1 pound note with the new 1 pound coin, and in November 1991 they introduced a new slightly smaller 5 pound note. The period immediately following the first introduction of the 1 pound coin happened to see the pound fall some 33% over the ensuing eighteen months to its all time low of 1.0345. And after the 1 pound note was withdrawn from circulation altogether, ceasing to be legal tender, the pound similarly declined by some 27% over the subsequent year. Skipping ahead to November 1991, it took less than a year from the introduction of the unpopular and small Series E blue 5 pound note for the pound to come under intense pressure, and be forced out of the ERM.

And ask any Canadian what they think of their $1 CAD coins nicknamed "Loonies" and the new $2 "Two-nie" coins? During the period since these marvels of modern-day currency design have been introduced, the Canadian dollar has come under nothing but intense and ongoing pressure.

Now the U.S. is not yet replacing the $1 bill once and for all with a $1 coin (although they have attempted to do so once with the unsuccessful Susan B. Anthony silver dollar, and certainly may try to do so again in the not-too-distant future), but by making our bills look less valuable, they are in effect encouraging us to spend them. And fly any commercial airline, visit any suburban shopping mall, and one is sure to see signs that Americans are doing just that. Neither meltdowns in Asia, or in Russia, or potentially in Latin America or Europe can seemingly stop the insatiable American consumer in his appetite to consume. The U.S. Treasury may simply be helping to ensure that this appetite does not come to an abrupt halt.

But if the design of our new U.S. notes is upsetting and potentially an anecdotal sign of incipient inflation, what of the new Euro? Its bills are smaller in size than traditional European notes, and adorned not with the traditional monuments or historical figures so rich in abundance through European history, but with non-existent buildings and bridges meant to broadly symbolize the evolution of architecture in Europe and the bringing together of separate nations. The currency will not even exist in physical form for the first three years of its life, and when it does finally come into physical being, one wonders how much these smaller slips of colored paper will really be worth.

Maybe the look and feel of currency in a global financial world increasingly dominated by credit card transactions and digitized money is not as important as I think it is. Maybe the new $20 and Euro notes which we don't get to use, feel, or keep for three years are simply signs that money is entering a new stage of existence. Just as today we accept that paper money is not backed by gold anymore - something which was an anathema to most people just a generation ago -- perhaps this is just another step toward money without even the paper. To make the process more palatable, perhaps the Treasury has simply made the currency itself purposefully look less attractive so that it will be easier to get rid of it altogether.

But in the end, we still feel that if the stuff is really supposed to be worth something, then it should really look that way. After all, despite all the new devices - watermark images, color-shifting ink, and labeled security thread - to help prevent counterfeiting, money really is only paper. Government should be working harder to make people believe in it, rather than less.

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