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What Brits Likely Don’t Know About American Money
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: