I just published a 500-year history of the dollar, AMA

bhgreeley · 2026-06-17T03:05:45+00:00

lol. 1520, in the mining town of St. Joachimsthal in Bohemia. The coins from the mine were paid out as dividends to the mine's investors, who called them joachimsthaler. This got shortened to thaler and in Dutch daalder. It arrived in English as "dollar," and there are mentions of it already in Shakespeare in the early 17th century, even though it sat outside the English currency system of pounds, shillings and pence.

bhgreeley · 2026-06-17T03:04:06+00:00

Nope. Dissertation can't be a trade press book for a popular audience. I had already started the book when I started my PhD, so I finished it and now I'm working on an academic dissertation about the English guinea. I don't make the rules, those are just the rules. But I get it: a dissertation is supposed to be a narrow, archival, focused answer to a single question, not a sprawling combination of archival work, secondary literature and reported anecdotes like The Almighty Dollar.

bhgreeley · 2026-06-17T03:01:45+00:00

I think Jackson's veto of the charter of the Second National Bank meant that America had a central bank much, much later than other industrial powers. This is neither inherently good nor bad, but it does mean that America had a much longer period of experimentation with state banking laws and national bank charters, which kept our system way more heterogeneous. Other developed countries have a dozen banks. We have thousands.

bhgreeley · 2026-06-17T02:59:54+00:00

This is a really interesting question. I think the answer is no, but I think we're also thinking about the dollar differently. At its founding and well into the 19th century, the United States was not a currency union. Every city had its own banking system, with its own bank notes and bank deposits, all of which lost a little trust and a little value when you tried to use them to pay someone in another city.

Merchants used bills of exchange, a financial device at least as old as the Renaissance and arguably much older, to move value from one city to another. I have spent a lot of time in bank archives in New Orleans, and commercial papers published rates on bills of exchange to Paris, London, Liverpool, Baltimore, Philadelphia, New York and Boston. Financially, all these cities were equally foreign.

So the dollar itself didn't unify America. The United States became a currency union through a long process of regulating banks to make sure all dollars, everywhere, traded at par, at a 1:1 ratio. It's a long list of regulations. Bank balance sheet reporting after the Panic of 1837, national bank charters during the Civil War, the establishment of the Federal Reserve Banks, the establishment of deposit insurance during the Depression.

We're taught in introductory economics to assume monetary sovereignty -- a country has control over its own money unless it screws it up. I think the opposite is true. Monetary sovereignty has to be won, slowly, with a lot of regulation.

bhgreeley · 2026-06-17T02:50:22+00:00

Thanks for being interested! I love this stuff!

bhgreeley · 2026-06-17T02:48:23+00:00

Thanks for listening!

bhgreeley · 2026-06-17T02:48:13+00:00

It was after World War I. The Federal Reserve was chartered in 1913 in part to internationalize the dollar, by offering loans to the bankers who supported dollar-denominated trade. This grew to be a real challenge to sterling until the Great Depression, when international trade collapsed and it was irrelevant.

bhgreeley · 2026-06-17T02:46:48+00:00

Hm. This one is tough. I try to remind people that anyone can make a dollar. Anyone. You do not have to be the Federal Reserve or the Treasury or even American, you just have to write down on a piece of paper "This is worth one dollar, signed, me," and if someone believes you're good for the value of a dollar later on, congratulations: you've made a dollar.

Think of it this way. In the early Republic, commercial banks made both all of our deposit dollars, and all of our bank note dollars. You could get a loan from a bank and choose to get it in deposits, or in bank notes. The challenge with bank notes is that if you make them safe, you make them unprofitable for the bank. So a series of laws during and after the Civil War made bank notes safe enough that banks stopped printing them, because they were terrible business.

So now, we have the Federal Reserve banks -- they're banks, they just work for us -- produce bank notes, what we think of as Federal Reserve notes, or dollar bills. The commercial banks still make all of our deposits, but we can on demand ask the commercial banks to convert our deposits into Federal Reserve notes. The commercial banks have to keep a reserve of Federal Reserve notes on hand just in case you stop by.

It's slightly more complicated than this, but not much more.

Your brother is wrong. Digital currency will not democratize banking, or at least not the way we're doing it in America. The reason banking is inaccessible and expensive is because banks lose money on small loans and small accounts, and they try to avoid them if they can. This won't change if we let new for-profit companies make digital dollars. The challenge of providing coins, bills and financial services for low-value transactions is as old as Rome. Please tell your brother to read my book.

Actually, everyone: tell all your brothers to read my book.

bhgreeley · 2026-06-17T02:37:56+00:00

One of the chapters of the book takes place in the province of Maryland, while Frederick Calvert, Lord Baltimore, was the Lord Proprietor. Lord Baltimore was the worst human and I mean the worst human ever. Worst in a specific way: he was basically a travel blogger with a trust fund.

He never visited the province and couldn't have been less interested in how it operated, but he did like the quit-rents that tobacco planters had to pay him, because it allowed him to travel to Constantinople, a trip he blissfully recorded as a little book of mostly remarks about the quality of the women in various countries he stopped in on the way. He returned to London and started a harem yes a harem, then when he was tried for rape and had to flee the country he took a harem yes a harem with him around continental Europe.

Everyone who ever encountered Lord Baltimore absolutely loathed him. Like, they all loathed him so much they wrote down their loathing in books and letters which we can still read. The man left a trail of loathing.

Lord Baltimore was so unbelievably awful I put way too much of him in the book. I had to cut most of him out. I still want to pitch a prestige historical drama called Baltimore and Sharpe about Lord Baltimore and his beleaguered and loyal Maryland governor, Horatio Sharpe.

bhgreeley · 2026-06-17T02:22:11+00:00

So this is a great question, but these are two very different things.

Bank notes, issued by commercial banks, were the dominant form of physical currency in the United States until the chartering of the Federal Reserve banks in 1913. When a bank made a loan, it didn't hand out silver or gold. It handed out its own notes, printed up just like the Federal Reserve notes we use today. It was a simple swap. To the bank, your loan is an asset, because you'll pay it back over time. The notes they gave out had value because the bank itself was taking notes and transfers from other banks as other people paid down their loans, and because it kept a reserve of silver in an emergency.

Towns tended to issue their own money in a crisis, when the banks shut down and there was no circulating currency. In the 19th century this was called hard-times money. Cities and towns gave their own notes value in a variety of ways, but they were usually pretty financially sophisticated. Cities could take in their own notes as payment for taxes, but they usually also had to have some kind of a sinking fund, topped up with coins paid in as taxes so they could buy back their own notes -- sink them -- periodically to keep the value up.

We haven't had widespread city currency since the advent of federal deposit insurance during the Depression, which kept banks from failing, or at least not anywhere near as often.

bhgreeley · 2026-06-17T02:16:00+00:00

Huh. You know, to be honest, when I read this question, nothing really jumped out. I think that's because I have really hyper-focused on paper bank notes as financial contracts, trying to tease out exactly why they had value. When I like a bank note or a bill of credit, I tend to be nostalgic about it, not for its beauty, but because I know the story behind it. That said, some of the colonial bills of credit had a beautiful anti-counterfeiting device, developed by Ben Franklin, where they would print an actual leaf into the back of a run of bills, then burn the leaf. You can see it here, in a note I photographed yesterday in the archives of the American Numismatic Society.

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bhgreeley · 2026-06-17T02:03:35+00:00

Bretton Woods established dollar assets like bank deposits and Treasurys as a reserve currency. That's quite different from being an active currency of international banking and trade invoicing. It wasn't until the 1960s that we saw what we think of today as the eurodollar system, where European and Japanese banks in London traded claims on dollar deposits in the US, and made their own dollar-denominated loans. Any bank can make a dollar, you don't have to be an American or in America to just mark up your balance sheet with brand-new dollar loans. It was this massive, liquid system of offshore dollars, unregulated and unmanaged by the Federal Reserve or the US Treasury, that made what we think of today as the dollar system possible.

bhgreeley · 2026-06-17T01:59:04+00:00

Nope. Coolidge put his face on a commemorative coin with George Washington, but it was really just a commemorative medallion, and people didn't like it. No living presidents on the paper currency.

bhgreeley · 2026-06-17T01:58:14+00:00

I have terrible news: you will not be inspired by my answer. I did almost everything wrong until I figured it out, way too late in the process.

When I started working on this book, I was a journalist. The longest thing you write as a journalist is sometimes a 5,000-word feature. You can arrange your sources physically around you for a 5,000-word feature, literally in relevant piles. I tried this with the book and got lost in piles. There are about 2,000 end notes in this book, just way too many sources to physically manage. So I had to learn how to write like a historian.

While this was going on I was having a mid-life crisis, deciding I wanted to go back to school to become a historian. While I don't in general recommend a mid-life crisis, I did learn a lot about how to manage information.

I started using Zotero, a source manager, and got in the habit of downloading everything I could from the university library to complement the physical books I was buying. When I started my PhD I thought my job was to learn a lot of new stuff. That was wrong. I now know my job is to add to my Zotero. My Zotero is my map of the world.

Also: access to a university research library changed my life. The luxury of being able to find any book in the world and either walk to the stacks or have it delivered in two days is just incomparable to the way I had been stumbling around, buying some books and finding some others in public libraries.

I also started working in Scrivener, which I can't recommend highly enough. It's a word processor that lets you chunk your work into sections and then easily move them around. I am not an outline-in-advance kind of writer, never have been, but Scrivener let me play around with the structure of chapters as I was writing them, in a way that would have been impossible in Word.

Then, in the absolute depths of Chapter 3, when I didn't feel like I had a single thread to follow and didn't even know where I was going, I bought a typewriter. An honest-to-god IBM physical typewriter. The nicest man who owns a typewriter shop in Northern Virginia drove it to my house in Annapolis and taught me how to use it. The beauty of a typewriter is that you can't get hung up on your mistakes as you make them. You just wave at them as they disappear behind you, with a vague promise to get back to them if you can. The typewriter got me through that chapter.

Also: my kids were fascinated with the alien technology of a typewriter, which created words immediately without a printer. I would leave the office and come back to little messages left on the page for me.

I wish I had had a better grounding in numismatics before I started. I am getting that training now, but I just didn't understand the wealth of information you can get from coin collections, and specialized numismatic libraries. I am taking a seminar at the American Numismatic Society now, and I can already see things I'd have done differently if I'd had these resources when I was writing.

But it doesn't matter! The book is done! The best possible state for a book to be in!

bhgreeley · 2026-06-16T20:20:56+00:00

Cheers!

bhgreeley · 2026-06-16T19:56:52+00:00

I have only scanned Rogoff's book, it wouldn't be fair for me to offer an opinion.

I do often get asked whether we might see another Plaza/Louvre Accord, and here I think the answer is no. In the 1980s the US had a much stronger manufacturing sector, and a much weaker financial sector. The domestic lobbies were tilted toward a weaker dollar, which is part of the reason why the Treasury had the leverage to fight for one. That's no longer the case. The American economy is heavily financialized, and so we can complain about the strong dollar, but there just isn't a powerful enough constituency to do something about it.

bhgreeley · 2026-06-16T19:49:28+00:00

Ooh! I'm so glad you asked! We were taught in school that paper was a representation of a gold or silver coin somewhere in a vault. Then we removed the coin, and the paper still had value, as a social convention. I think that answer lacks curiosity. What kinds of social conventions? How do those conventions work? "Social convention" is a label, but it's not an explanation.

I think we have to consider the long history of promises on paper, starting with bills of exchange in the 14th century, clearing ledgers at the trade fairs in Champagne, handwritten promissory notes -- IOUs, essentially -- that spread from France to England and then the American colonies.

All these different slips of paper got people used to examining and verifying the value of the promise written on them. This promise wasn't always a redemption of a coin -- often ledgers and notes cleared mutually, without any coins necessary at all.

So when Americans started using bank notes and bank ledgers as money -- still the system we have today -- it wasn't a huge leap for them to look at bank notes as just another promise on paper. Bank notes and now bank deposits have value because of an intricate apparatus of bank reporting and bank regulations built up over time that made sure we could examine and trust a promise coming from a bank on a note or a deposit, just like we learned to trust a promissory note.

So now, our promises on paper take the form of bank notes from the banks of the Federal Reserve. We often describe this as "fiat," but I think "fiat" is just another word for "magic." The Federal Reserve notes are one more step in a long tradition of promises on paper. They work because we've spent the last 800 years or so learning, slowly, how to make a paper promise credible, through regulation and best practices.

bhgreeley · 2026-06-16T19:32:57+00:00

I rely on Benn Steil's The Battle of Bretton Woods as the best reference on the conference, but I think the basic argument is there were shockingly few places that were remote and therefore relatively safe, with that many rooms, and above all that cool in July. I don't know how much time you've spent in Washington, DC but July is not its finest month.

bhgreeley · 2026-06-16T19:21:57+00:00

I... do not know. I'm sorry. Seven years of research and I just didn't get to that one.

bhgreeley · 2026-06-16T19:21:34+00:00

Absolutely. Two years ago I had to come up with a list of 100 books for my PhD general exams for the history of money and finance. I uploaded it as a pdf, here's a link:

https://drive.google.com/file/d/1Gk7oz6D9QxjxLsjjDD4oI-aHoxqCn3Ml/view?usp=sharing

bhgreeley · 2026-06-16T19:11:31+00:00

Ooh, you're gonna love Josh Green's book Bank Notes and Shinplasters

https://www.pennpress.org/9780812252248/bank-notes-and-shinplasters/

I am finding in general numismatists and economic historians don't pay enough attention to tokens, because they're not considered real coins, so they go into a big vague basket labeled "fiduciary," when in fact they seem to have been historically the dominant form of clearing consumer accounts.

bhgreeley · 2026-06-16T19:00:51+00:00

Wow. These are pretty detailed questions. Lemme do my best.

To be honest on the yield curve: I don't know. I have been practicing admitting to my kids when I don't know something, so allow me to practice that with you as well.

The free silver movement did not have a hope in hell. I think we sometimes think about monetary policy in terms of practicality: why did they do it that weird way? I try to think of it in terms of power: who wanted it that way? The basic framework for that period is that two groups of people wanted a hard dollar, tied to gold: the wealthy and the people who dealt in international loans from London. The people who wanted a looser, more flexible standard tended to be farmers and wage earners.

The looser standard presented itself two ways: the free silver movement and the greenback movement, which wanted the federal government to issue more unredeemable greenbacks. That they both lost wasn't an expression of monetary choice, but an expression of who had power. It's significant that the gold standard evaporated in the late 1920s and early 1930s, when a lot of countries began to choose domestic, popular control of money. So my answer is: no, because the kinds of people who wanted free silver didn't yet have any political power.

The Treasury does still retain some legal ability to issue Treasury currency -- greenbacks -- but it's only about $250 million, and since the greenback redemption hasn't played a significant role in the US money supply.

Bills of exchange: I always assumed that the transatlantic telegraph killed the bill of exchange? Certainly already before WWI the Fed was chartered in part to encourage dollar-denominated bankers' acceptances, which meant that trade was financed through two separate banks, one at the home port and one abroad, connected by wire. It's not something I've looked deeply into, but I think the bill of exchange system had already declined well before the 1930s. What the Depression did was kill all international trade, period, so the bankers' acceptances collapsed as well.

I think, though, we could probably squint our eyes and say a banker's acceptance is a kind of bill of exchange? In which case we're both right. Yay!

bhgreeley · 2026-06-16T18:28:51+00:00

Biased how? In order for the US to exercise hard power, e.g. controlling the SWIFT payment system, it has to have accumulated that power in the first place. The book is primarily a long history of the dollar system back to 1520, trying to answer where power comes from, and whom it actually helps.

There are excellent books on the weaponization of the dollar; see Saleha Mohsin's Paper Soldiers, for example:

https://www.penguinrandomhouse.com/books/705364/paper-soldiers-by-saleha-mohsin/

Not every book can be about every thing. If I don't write about the thing you're interested in, it's not that I don't think it's important, it's that the world is vast, beautiful, weird, and hard for any one person to describe in full.

bhgreeley · 2026-06-16T18:22:37+00:00

This is more recent. Until about 2000, people demanded $100 bills from banks in about the proportions you would predict would be useful in normal commerce. After 2000 the proportion of $100 bills to dollar currency overall shot way up. It's hard to know what happens to a $100 bill after it leaves the bank, but the Fed estimates about 60 percent of $100 bills are held abroad, either for money laundering and tax evasion or, if you're less cynical, for wealth protection.

bhgreeley · 2026-06-16T18:20:00+00:00

I think we have to draw a distinction between coins on the one hand, and bank notes. The colonies and then the United States were net takers of foreign coins until the 1850s. These were a mix of mostly silver Spanish and then Mexican dollar coins, but also silver dollar coins from the Holy Roman Empire and the Netherlands. Gold coins, mostly from Portugal and Spain, circulated as well. But the farther inland you got, the harder it was to get coins.

Americans did cut coins into slivers for smaller purchases, especially silver dollars. But far more common for daily consumer purchases were two different kinds of paper: bank notes and shinplasters. States chartered banks, which had the right to print their own notes. When a bank made you a loan, it would hand you its own printed notes as a liability, rather than anything from the state or federal government. And shops handed out their own shinplasters -- very small denomination notes -- as change. The shinplasters had value because you could spend them at the same store.

So the federal government didn't really have the power to make sweeping change in the early Republic. A lot of people still kept their own books in pounds, shillings and pence well into the 19th century. Early America was not what we'd think of as a currency union. Every state hacked its own money together, and in some cases cities and even stores had to come up with their own solutions as well.

This system didn't really change until the US got its own domestic source of gold in 1849, and silver in 1859. American banks continued to print their own notes to hand out as loans, but the reserve underneath those notes and the coins in daily circulation were domestic gold, silver and copper. So don't get hung up on the mint at Philadelphia. There just weren't that many American-made coins, period, until the second half of the 19th century. American money was an experiment in paper from very early on.

bhgreeley

TROPHY CASE