Where the buck never stops

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.

Goodwin’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.