What Brits Likely Don’t Know About American Money

(Photo: Fotolia)

(Photo: Fotolia)

One of my favorite smells is American money. I don’t mean this in a pathological Scrooge McDuck-type way—it’s simply that I find the distinct whiff of an untouched dollar bill to be one of life’s most irresistible odors. It’s right up there with freshly cut grass, baking bread, and a roaring fire on a cold winter’s day. British banknotes, on the other hand, are disappointingly unfragrant. And as any expat living in the U.S. will tell you, scent is not the only difference separating the pound from the dollar.

U.S. bills come in denominations of $1, $2, $5, $10, $20, $50 and $100. However, the $2 bill is something of a rarity. Twos were introduced in 1862 and printed continuously until 1966 when the United States Treasury discontinued production due to people’s disinclination to use them. Ten years later, the two was brought back as part of a bicentennial celebration, but this caused the bill to be viewed with suspicion, as many people were unaware that they were once again legal tender. Anyone who’s ever tried to use a Bank of Scotland note in England during a transaction with a simpleminded shopkeeper will be able to relate to this problem.

These days, new twos are printed based on demand and according to the United States Treasury’s website: “As of April 30, 2007, there were $1,549,052,714 worth of $2 bills in circulation worldwide.” Although this may sound like a lot, that figure accounts for just three percent of the total volume of American notes currently in use.

Clearly, large portions of the U.S. public are still skeptical of the $2 bill because the final question in the FAQs section of the Treasury’s website reads, “Why did the Treasury Department remove the $2 bill from circulation?” Their answer? “The $2 bill has not been removed from circulation and is still a circulating denomination of United States paper currency.” One factor contributing to the two’s enigmatic status is that many people, when they come across one, feel inclined to hold onto it as a keepsake, which further reduces the supply in everyday use. So the $2 dollar bill and its perceived rarity has become a paradox: nobody uses them because nobody uses them.

Higher denominations of $500, $1000, $5000, and $10,000 have been in use since the late 18th century. However, these bills were last printed in 1945, and on July 14, 1969, the Treasury Department officially announced it would be discontinuing these denominations due to a lack of use. (That’s unsurprising really: can you imagine the horror of misplacing a $5000 bill?) They remain legal tender and are currently in circulation, but trying to pay your bus fare with one will almost certainly end with you walking home. In fact, many independently owned stores in the U.S. won’t accept a one hundred dollar bill, and some will even decline a fifty. These old larger bills are now mostly in the hands of collectors, and at auction they’ll regularly command prices that far exceed face value. For example, a $10,000 bill (of which there are only 336 surviving) can go for anywhere between $40,000-$140,000 depending on condition. The largest note ever produced by the Bureau of Engraving and Printing was the whopping $100,000 Gold Certificate Series, printed for a period of just over three weeks from December 18, 1934 through January 9, 1935. But these notes were never circulated amongst the public and were only used for transactions between Federal Reserve Banks against an equal amount of gold bullion held by the Treasury.

One notable difference between U.S. and U.K. banknotes is physical size. American bills are all the same dimensions, which may make for a satisfyingly neat wallet, but can cause problems when paying for things in dark places such as a late-night cab or a seedy bar where a single could easily be mistaken for a twenty (particularly through the fuzzy eyes of someone who’s enjoyed a drink or two). Further adding to this problem of differentiating between U.S. bills is the fact that they’re all very similar colors; there are no bright, distinguishing features like the regal purple of a £20 note or the lush mint green of a fiver.

Circulating coins of the United States currency come in denominations of 1¢, 5¢, 10¢, 25¢, 50¢ and $1.00. The 5¢ piece is known as a nickel (taking its name from the hard, cheap metal used to make it). The 10¢ piece goes by dime (originally spelled disme, this comes from the French dixième meaning ‘one-tenth’). And, for obvious reasons, a 25¢ coin is called a quarter. And, while we’re on the obvious, cent of course comes from the Latin centum meaning “one hundred.”

The 50¢ coin, also known as a half-dollar, has been produced every year since the founding of the United States Mint in 1794. (The cent is the only other coin to boast such consistent manufacturing). However, the half-dollar is a seldom-seen species, and things like vending machines and payphones aren’t wired to accept them. The half-dollar was originally made from silver, and as the price of this precious metal rose through the early 1960s, it got to the point where the bullion value exceeded face value. The coins were then gradually withdrawn from the public domain or hoarded by collectors as the Mint sought to produce them using less-expensive materials. By the time the coin’s composition had been changed to match that of the cheaper-to-produce clad dimes and quarters in 1971, both businesses and the public had become used to a new monetary system. These days, commemorative half-dollars featuring President Kennedy’s portrait are minted each year but aren’t issued into circulation and are intended only for collectors (although occasionally they’ll find their way into people’s pockets).

As anyone who rides public transport will tell you, you only ever really see dollar coins when you get them as change from a mass transit vending machine. For some reason, Americans prefer a paper dollar to a coin dollar (maybe because they’re lighter and fit nicely into a wallet or perhaps because a paper tip is more aesthetically pleasing than a coin tip?) Currently, because of the public’s unwillingness to use them, a surplus of over one billion dollar coins are taking up space in Federal Reserve vaults around the country. But making a permanent switch to coins would save the taxpayer millions every year because paper money has a finite lifetime (the Federal Reserve estimates that a one dollar bill has a life span of 5.9 years), whereas coins can theoretically last forever and wouldn’t need to be produced on a regular basis. So really we should all be pro-coin.

Now, if you’ll excuse me, I’m off to sniff some untouched dollar bills.

Expats: What differences have you noticed in the way that we use the dollar compared with the pound? Americans: Why don’t you like dollar coins? Tell us in the comments below:

See more:
Six (Legal) Ways to Earn Money in the U.S. Without a Work Visa
Editorial: Is Tipping in America Excessive? An Englishman’s Take
5 Financial Reasons a Brit Should Move to the U.S.

  • Viv

    I agree with you about the smell of money! I actually prefer that the paper money in the US is all the same size, as you said it makes for a neater wallet. The denomination is clearly displayed on each bill in words and numerals and the portraits are distinct enough on each to avoid confusion. There are also colour variations, although slight. Perhaps if each denomination were a distinct separate colour that would help. I wonder why that hasn’t been done?

    • Carolyn Hanson Mayer

      People would think it’s “Monopoly” money? (“Monopoly” is a popular classic board-game.)

      • simhedges

        Well, they may at first, but in the UK having notes all the same size and all the same colour sounds a little odd – I suppose it’s what you are used to (and we have monopoly too). The US is the only country I know of that has this system – are there others? And I have no idea how on earth blind people cope with notes/bills all the same size. In the UK, each time the design of the notes changes, the Royal National Institute for the Blind are consulted to ensure that we are not disadvantaging blind people with the new issue.

        • Christian Johnson

          You’re indeed correct, at least according to this article from bankrate.com: http://www.bankrate.com/finance/checking/changes-to-currency-may-help-the-blind-1.aspx. As of 2008, no other country printed paper currency in the same size and (basically) color across all denominations. The article was in response to a successful lawsuit seeking to mandate a more accessible paper-currency system, but other stories I’ve found suggest that it wouldn’t happen before the end of this decade. By then, smartphone technology might obviate the problem — if apps can recognize checks, telling a $5 from a $50 shouldn’t be that hard.

  • Barb Sigelbaum

    One choice only…paper money or jam roly poly?

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  • jasondayton

    I don’t like dollar coins for the same reason I don’t like one or two pound coins, I always lose them in the sofa or in my car. At least if its a quarter or a dime, it’s of small enough value that I don’t care all that much.

    • expatmum

      When I go over to the UK I have a small coin purse as well as a wallet for paper money. The coin purse is like carrying a brick around in my bag, it weighs so much!

    • frozen01

      I didn’t really like dollar coins for this reason, until I went to the UK and had to use one- and two-pound coins.
      I guess I just got used to it, and now I prefer the coin.
      It might have something to do with the fact that I really only use cash in vending machines, and it’s easier to stick a coin in than do that thing where it rejects the dollar bill and you have to smooth the bill out on the edge of the machine to get it to recognize that it’s actually money :o)~

  • Tara

    As an American, I actually like the IDEA of dollar coins, but the heft of them makes my wallet and pockets too heavy. Really, a dollar bill is much lighter and just easier to keep up with.

    • http://tomhodgins.com tomhodgins

      in Canada there are $2 coins colloquially called the ‘toonie’. The $1 coin features the image of a Loon on the reverse side and is known as a ‘loonie’, so calling the $2 coin a ‘two-nie’ follows a similar naming pattern.

      I also spend a percentage of my time in the US, and I can tell you I’d rather have $25 in coins in my pocket (13-15 coins) than 25 $1 bills fattening up my wallet. I use $2, $1, and 25¢ coins in Canada and toss anything smaller than that into a jar. When I’m in the US the quarters are the only coins worth spending so I end up tossing all my change aside. If you have larger denomination coins you still end up carrying the same amount of change in your pocket as countries with smaller coincs—it’s just that when you reach into your pocket in a larger-coined country you might find $5-20 in your pocket instead of $1—5.

      One difference I notice between Canadian floors and American floors is that Canadians may find coins when they clean the house or do laundry, but it’s common for American houses to have dollar bills (actual paper money) laying around half-shredded on the floor or kicked under couches, and it seems not worth the effort for them to pick them up. A Canadian bill is at least $5 so you will never seem them discarded on the floor, and if they are discarded somebody else is quick to rescue them ; )

      • Eric Scoles

        Aside: I had a girlfriend years ago who refused to believe they were called ‘twonies’. (Well, that’s how I always ASSUMED it should be spelled…)

        I don’t remember rubbing it in after I took her to Toronto for the weekend, but I might have.

  • KeystoneKarla

    My father loves using dollar coins, but has unfortunately run into a bit of trouble using them. He has had more than one cashier claim that they’re fake or not legal tender. He has had stores refuse to accept them. He has had cashiers give him a nasty attitude because there’s no room in the register for dollar coins. I think the only reason he continues to use them is because he gets a kick out of the reactions they provoke.

    On the few occasions I’ve received dollar coins, they sit unused in my purse for months. They’re hard to distinguish from the quarters I keep around for parking meters, so I tend to forget that they’re there. The meters, of course, don’t accept dollar coins nor do most vending machines, so it makes more sense to carry quarters than dollar coins.

    • frozen01

      I’ve never had a vending machine reject a dollar coin. In fact, many of them take $5 bills and give change in dollar coins.
      In my area, coin meters are becoming more and more rare as they’re replaced with card-reading meters and pay-by-phone parking.

    • Carolyn Hanson Mayer

      All true. My dollar coins have gone unused. Too easy to confuse with quarters, even when they made them in a (very slightly) polygon shape instead of round.

  • Hansel Currywurst

    Let’s not forget “bits” (“two bits” = 25 cents, so a bit must be 12-1/2 cents, somehow). Everyone knows a buck is a dollar, but a “sawbuck” is a $10 note because they used to have a large X (Roman numeral 10) printed on the back, and that’s what a sawbuck looks like. All the paper notes are “dead presidents” even though Benjamin Franklin, found on the $100, was never President. But you do have to be dead for that hono(u)r.

    • Carolyn Hanson Mayer

      I’m reminded of the old jingle “Shave and a haircut – 2 bits!” A familiar and recognizable American rhythm even without the words.

      Yes, very old! When was the last time a man could get all that for only a quarter? I think it was a common ending cadence for Barbershop Quartets, making it well over 100 years old.

    • Dan Levi

      Not trying to be pedantic, but $10 Alexander Hamilton was also not a President, but most people seem to think he was.

  • V Pitman

    I like dollar coins just fine, but as the article states, most vending machines don’t recognize them. Also, they are quite close in size to a quarter, so it’s hard to tell them apart by feel. Some dollar designs were also silver, though the one I see most often, the Sacajawea coin, is a bright gold color. Besides mass transit systems, you often get them for change from vending machines at a US Post Office, if you pay with a larger bill.
    It’s too bad more machines don’t recognize them, because sodas are usually more than a dollar, more than two dollars in many places, and two dollars in quarters weighs quite a bit more than two dollar-coins. Carry enough quarters for you and two friends, and you will have an awkward bulge in you pants, prior to your purchase…

    • Logan

      I’m not sure where you’re at, but I’ve never had a vending machine reject dollar coins. In fact, most vending machines were retooled to accept them when the Susan B. Anthony dollar coins entered circulation. If I were you, I’d try using them in a vending machine again just to see! :)

  • Eric Scoles

    I did once try to use a Bank of Scotland note at a cafe on Portobello Road. They appeared to be near-OTB Serbian or Croatian (I don’t hear the languages enough to tell them apart by ear). They didn’t want to take some random American’s word for it that what I was offering them was legal tender in London.

    • Logan

      Only Bank of England notes are of legal tender in the UK. Various banks in Scotland and Northern Ireland print their own notes, which are widely used and accepted, but are in fact not legal tender.

      • simhedges

        And you can’t force shops to accept payment in Bank of England notes even though they *are* legal tender. Credit and Debit cards and chequest are not, of course, legal tender either. I hardly ever have problems getting Scottish notes accepted in England – the thing is to hand if over confidently: if you seem nervous, then it’ll trigger off doubt in the cashier and make them wary of accepting the notes.

  • Violette Retancourt

    I had completely forgotten about the half dollar. It’s been years, probably decades since I’ve seen one.

  • Kayce

    As an American the most frustrating thing is getting Canadian coin in my change. I love my neighbors to the north but too often I get a .25 cent Canadian coin back from a register and don’t even realize until I see a Queen and not a President. This past year I took a trip to Canada and paid for almost everything with the Canadian coins that snuck into my pockets throughout the years.

    • StrawberryAqua

      I got a Canadian quarter when I was getting change for laundry, but the machine won’t accept it. Please, Canadians, take your quarters back to where they’re appreciated. ;)

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  • breanna

    I have to say coins last along time. Like I have 1816 U.S. penny in great shape. But coins are a bit too bulky to carry. And what I is most people use banks cards.

  • Jwb52z

    If we’re going to go to coin currency instead of paper, we should probably also consider doing what I’ve heard of being considered in Asia which would be to make currency out of plastic. I would also warn against sniffing US currency because it is often not very hygienic with traces of things on it like cocaine, and I meant that literally.

  • Alibia de Vente

    A fundamental fact about American currency that was overlooked. We use cards for everything. No need to carry cash when you can pay for bottled water with your card. When I travel abroad, I must remind myself, take cash.

    • CuriousTraveler66

      Oh, sorry: wrong, that’s personal preference! I still like using cash, and so do lots of other folks. It’s real legal tender. Besides: using that plastic may carry a fee, if you’re not careful (my bank now charges a fee for *debit* transactions, so it’s actually cheaper for me to use my card to charge the amount than to pay via debit). With cash, which is usually in 5s, 10s and 20s with a few 1s thrown in, there’s never any doubt or any added fee. Also, banks typically won’t give you 50s and 100s unless you ask for them; usually, a teller will ask how you want your change (meaning, in what breakdown of denominations of bills). Let’s hear it for choice! But you still won’t find me using those bloody $1 coins: they’re so heavy that they make holes in your pockets! Give me bills any day. No holes to repair.

  • CuriousTraveler66

    The $2 bills were also highly popular at race tracks, meaning horse racing: a $2 bet is the minimum, at most tracks. That, too, may have something to do with why people weren’t exactly encouraged to use the $2 bills after a while: no one wanted to look like they were encouraging gambling.

  • Bennett Seacrist

    I know I’m splitting hairs here but the quarter isn’t a $.25 piece but is a quarter dollar piece. Unlike the penny and nickel, which is designated as “one cent” and “five cents”, respectively, on the coins, the quarter is listed a “quarter dollar” and not “twenty-five cents”. If I’m not mistaken, it’s the same way on the half-dollar coin, as well.

  • nope

    dollar coins are gross and heavy and i’d have to carry so many around.