The Department of the Treasury announced that today, Friday, July 8, 2016, will be Treasurer of the United States Rosie Rios last day working for the department. Secretary of the Treasury Jack Lew said (via Politico):
Former Treasurer of the United States Rosie Rios
“Rosie Rios joined the Treasury team nearly eight years ago, during the presidential transition. Since then, she has been a thoughtful steward of two important Treasury bureaus — the Bureau of Engraving and Printing and the Mint — and has been an advocate for women and girls including, for example, her leadership of the Treasury Women in Finance symposium.
“I am particularly grateful for her creativity and leadership in the effort to redesign our paper currency and to ensure that future notes reflect, for the first time in 120 years, the important role of women in shaping our democracy. I thank her for her service and wish her all the best in her future endeavors.”
As the 43rd Treasurer, Rios has been an advocate for everything regarding her oversight of the U.S. Mint and Bureau of Engraving and Printing including her participation at shows. Aside from her signature appearing on every Federal Reserve Note since the 2009 Series, she continued to autograph notes for collectors at conventions. She jokingly calls them “Rosie Dollars.”
Series 2009 Federal Reserve Note autographed by Treasurer of the U.S. Rosa Gumataotao Rios
Rios has worked as a business executive prior to working on the Obama campaign in 2008 in Virginia. She was hired to work with the transition team on matters concerning the Treasury Department and then was nominated as Treasurer. Rios has been serving as Treasurer since August 8, 2009.
Her future plans were not announced.
Aside from being a tough act to follow, the position may stay vacant for a while. Given the hyper-partisan nature of congress and that we are heavy into this election cycle, it is highly unlikely that the Senate would consider confirming an Obama appointment. Currently, Rhett Jeppson is waiting for a vote to confirm his appointment to be the 39th Director of the U.S. Mint. Jeppson’s nomination was sent to the Senate for “advise and consent” on July 9, 2016. A hearing about his nomination was held on March 15, 2016. The nomination remains in committee waiting for the Senate to do their job and hold a vote.
Last month, Secretary of the Treasury Jack Lew announced a series of design changes that will occur on United States currency. These changes will be phased in over 10 years to coincide with the production schedules in place currency redesign.
Obverse of the 2009-present Native American Dollar featuring the portrait of Sacagawea
I will go into the more details of the changes at a later date, but during my travels around the interwebs I came across a television news report from KIFI, the ABC affiliate in Fort Hall, Idaho. Although it is like every other news story it has one feature that no other news outlet was able to add to their story: an interview with Randy’L Teton.
Randy’L Teton is a member of the Shoshone-Cree tribe who was the model for Glenna Goodacre’s design for the Sacagawea dollar coin. Teton was a student at the University of New Mexico majoring in art history and was working for the Institute of American Indian Arts Museum in Santa Fe when Goodacre visited looking for Shoshone woman to be her model since no images of Sacagawea exist. Teton was chosen for as the model.
For anyone who has not seen or heard Ms. Teton, here is the video of KIFI’s report:
Earlier this week the Bureau of Engraving and Printing announced that in honor of Low Vision Awareness Month, blind or visually impaired persons can request a free iBill currency reader as part of the BEP Meaningful Access program.
iBill® Talking Banknote Identifier
The iBill currency reader is a product of Orbit Research. Retailing at $119.00, iBill is a pocket-sized reader that can identify all Federal Reserve Notes in circulation. Orbit Research claims that “most bills are identified in less than one second” and can announce “the denomination in a clear female voice; tone and vibration modes protect privacy.” It requires one AAA battery that is included.
The Meaningful Access Program came about as the result of a settlement between the government and the American Council of the Blind who brought suit claiming that U.S. currency violated Section 504 of the Rehabilitation Act. This was first confirmed by the courts in 2006 and subsequent appeals had judges requesting a settlement. Following the 2009 settlement, the BEP began to work on meaningful access programs.
IDEAL Currency Identifier
One of their first attempts was EyeNote, an iPhone app the camera to scan the note and identify it in 2-4 seconds. Although slower than the iBill, it is a very capable app that will allow the visually impaired iPhone user to carry one less device.
BEP developed EyeNote
According to the BEP Meaningful Access mobile application page, the BEP worked in collaboration with the Department of Education to have the IDEAL Currency Identifier that works on Android devices. This app can be found on the Google Play Store.
A more impressive app is the LookTel Money Reader available for iOS and the Mac. For the visually impaired traveler, not only can Money Reader recognize U.S. currency, but the currency of 20 other countries including the Australian Dollar, British Pound, Canadian Dollar, Euro, Indian Rupee, Japanese Yen, and Saudi Arabian Riyal. Money Reader is faster at identifying currency than EyeNote and can identify fragments, as I found in my last review.
In order to qualify for the free iBill reader, a “competent authority” must certify that your vision is 20/200 or less in your better eye with corrective lenses or that the widest diameters of visual field angular distance not greater than 20 degrees or that the “competent authority” certifies that you cannot read any printed material regardless of correction. The competent authority is usually a doctor, registered nurse, licensed therapists, institutions and welfare agencies familiar with your case.
LookTel Money Reader
If you think you, a relative, or someone you care for qualifies, download and fill out the simple form and send it to the BEP address on the form&rsqou;s instructions. It will take up to eight weeks for you to receive your free iBill currency reader.
As an aside, this is not a taxpayer funded venture. BEP earns its funding from their business operations. Most of their money is earned from printing money for Federal Reserve. They also earn a smaller amount of profit from sales to collectors.
- iBill image courtesy of Orbit Research.
- IDEAL Currency Identifier screenshot courtesy of IDEAL Group Inc. on the Google Play Store.
- All other images are property of the author.
After spending time digging out from the Blizzard of 2016, I was reading email and was reminded about a conversation I had earlier this week. Someone asked when they would see 2016 coins in their change. As someone who also hunts through pocket change, I thought it would be interesting to discuss what is involved with what business would call the movement of inventory in the supply chain.
Marriner S. Eccles Building where the Federal Reserve Board is located
The process begins when the Federal Reserve places their annual order with the U.S. Mint for coins and the Bureau of Engraving and Printing for currency. Like any organization that deals with inventory, the Federal Reserve will estimate its order based on a projection of demand.
Inventory management for the Federal Reserve requires them to know how much currency is in circulation, how much will be required based on world-wide economic factors, and what would be required to replace the current currency supply. Since the Federal Reserve ships U.S. currency world wide, especially the $100 Federal Reserve Notes, someone has to project what the world is going to demand based on economic factors that it has no participation in.
Life Expectancy of U.S. Currency
|Denomination of Bill
||Life Expectancy (Years)
Not only does the Federal Reserve has to track the amount of money in circulation but they also have to account for the different denominations in order to replace torn and worn notes. For instance, it was once estimated that 90-percent of the order for $1 Federal Reserve Notes were delivered to replace worn notes in circulation.
Once the order is placed by the Federal Reserve, the U.S. Mint and the Bureau of Engraving and Printing work to fulfill that order. The U.S. Mint strikes the coins and has they placed in one-ton ballistic bags for delivery. The Bureau of Engraving and Printing bundles the currency in packs. Multiple packs make a brick. Bricks are then piled on pallets that are used for delivery.
From Philadelphia and Denver, the coin bags are loaded onto secured trucks and transferred to the Federal Reserve for distribution. A similar transfer happens at the Bureau of Engraving and Printing in Washington and Fort Worth where the pallets are shipped to the Federal Reserve.
Although there may be a few warehouses and other distribution processes involved, the coins and currency are shipped to one of 26 “cash rooms” around the country based on need. These cash rooms are special warehouses operated by the Federal Reserve branch that store the physical currency before being distributed to the member banks.
Since the New York Federal Reserve Bank processes currency orders for overseas shipping, they order the most currency of the 12 regional banks. San Francisco provides banking services for Alaska, Hawaii, and other transactions throughout the Pacific Rim, orders the second most amount of currency.
Federal Reserve Bank of New York
Before currency can enter circulation, a member bank places an order with the Federal Reserve. It is then delivered to them from the closest cash room with the appropriate inventory necessary to fulfill the order.
Your personal bank is like the corner store in the ordering system. When the shelves are bare or threatening to go bare, they order the inventory of currency they need. The corner bank just do not order money from the Federal Reserve. Banking companies work on behalf of their branches to manage inventory. The big bank may have their own cash management operations that help ensure that they not only have the appropriate amount of currency available but they do not have too much in storage. Like product inventories, idle money is not good for business.
Federal Reserve Bank of Richmond Baltimore Coin Storage
Federal Reserve Bank of Atlanta Cash Operations
Many banks hire logistics companies to help with the flow of their currency inventory. These companies are the ones driving the armored trucks you see around town that delivers currency on order. While these logistic companies are registered currency distribution services and have permits to pick up inventory from the Federal Reserve cash rooms on behalf of the member banks, they also provide storage and delivery services.
Although your corner bank has a vault, each banking company limits the amount of currency they keep on site because of security concerns. When they need additional currency or have an excess that needs to be stored, they call the logistics company to physically move the inventory.
These logistics company do not take the currency and put it on the shelf until the bank calls back and asks for it to be returned. If a bank deposits a bag of quarters with the logistics company but another bank asks for bags of quarters, that bag could be transferred to another bank. Banks may order currency from the Federal Reserve or smaller banks from other cooperating banks, the logistics companies fulfill the orders from existing stock before accessing new stock.
Four of the largest cash logistics companies
Depending on how fast the currency is needed to circulate by your corner bank, existing currency can circulate through the logistics processing center long before the new inventory is placed into circulation.
During the recent downturn in the economy, the banks’ inventories of coins increased as people emptied jars, jugs, and bottles of coins for necessities. As the coins were returned to the bank the inventories rose beyond what they needed for circulation reducing the requirement for the banks to order more coins from the Federal Reserve. This is why it was not surprising that many people did not see current year coins until as early as April.
It is more difficult to gauge when currency reaches circulation unless there is a change in the series designation. The Series of a note is the date followed by a letter indicating that there is a change, usually to the autograph of the Treasurer or the Secretary of the Treasury. Although there is no rule, the Series date changes with an administration and the letter is added and changes as the autographs changes. Sometimes, the series date changes with the design of the currency. These are recent conventions and not the rule. All printing and design decisions are made by the Federal Reserve, Bureau of Engraving and Printing, and the U.S. Secret Service as a team.
If you want to know when the 2016 coins will reach circulation, the answer is “I don’t know.” Considering the economy is in better shape than in years past, money continues to circulate, and the U.S. Mint has produced more coins in a single year than any other in its history, if you have not seen a 2016 coin in your pocket change soon, then my best guess will be in mid-February—if the weather holds up!
- Eccles Building image courtesy of the Federal Reserve.
- Federal Reserve Bank of New York building courtesy of the Federal Reserve Bank of New York.
- Image of the Federal Reserve Bank Baltimore Coin Room courtesy of NPR.
- Image of the Atlanta Federal Reserve Bank Cash Operations courtesy of Glassdoor.com.
- Armored vehicle image courtesy of Prinéa.
Over the summer, a Harris Poll was conducted to understand how Americans feel about abolishing the one-cent coin and the paper dollar note. Even though there are pundits calling for these changes and even the end of physical currency, Harris found that those wanting to keep the lowly one-cent coin continue to hold the majority opinion.
According to Harris, 51-percent of those polled oppose abolishing the minting and use of one-cent coins versus 29-percent in favor. In 2008, 56-percent were opposed and 24-percent were in favor. While some will see a small movement to being in favor of eliminating the one-cent coin, the change is not significant when considering that the last poll was seven years ago shortly before the height of the recession and the beginning of the bank failures.
Series 1935 $1 FRN Reverse Early Design
Every so often an article is written, usually by the political elite, about ending lower denomination coins for many reasons including the high cost of mintage or the inconvenience of their existence. Others point to rise of non-cash transactions and the rise of digitally created currencies as the future.
Those of us who work in areas outside the larger commercial world has experience with a cash economy that is not tied to economic status. One of those is the numismatics industry. While many dealers will take credit cards, and will pass along the fees along to the customer, many dealers have said that most of their off-line business is a cash-based business. While larger purchases are done using checks, most will leave shows with more hard currency than other types of payments.
Collectibles businesses are very reliant on cash. In my business, I do accept credit cards but when I do shows the overwhelming majority of my business is in cash. A few weeks ago I did a two day show and had one of my best weekends ever but only had one sale using a credit card.
1909-VDB Lincoln Cent
There are people who are leery of using credit and debit cards for every transaction. We use cash to limit our exposure. In this connected world, the credit and debit card leaves a digital breadcrumb that is available to be hacked. I cannot tell you how many times I watched people in local convenience stores punch in their codes in a matter I could see them and then leave their receipts behind. This could be used to steal your money and your debit cards are not covered the same as credit cards. But the public does not see this.
A week does not go by without a report of the hacking of personal information that should not be made public. Unfortunately, it is getting to be like rain on the hot-tin roof, after a while the sound blends into the background.
According to the Federal Reserve, there was approximately $1.39 trillion in circulation as of September 30, 2015, of which $1.34 trillion was in Federal Reserve notes. That represents a lot of money that would have to be accounted for if we were to go into a cashless society. It would take a significant effort that would not make for good public policy.
The calls to make changes to change are beginning to drone on as background noise like rain on a hot-tin roof.
UPDATE: English version of the video added below.
While looking at my timeline on Twitter, I found a tweet from what could be classified as the public relations office of Banco de México (Bank of Mexico), the Mexican central bank. Although my Spanish is barely above what I remembered from two semesters as an undergrad, I know enough that if I had any question to call up Google Translate for a fairly good translation.
This one was pretty easy and I understood it before asking for help. It asks “Do you know how banknotes are made in Mexico?” Looking at the question, I shrugged and thought they were made the same way they were made in the United States. While that is pretty much the case, seeing the process from another country’s perspective, especially a neighbor, could be interesting.
While the tweet was easy, the video is all in Spanish which really tested my translation skills. After I figured out that the first part talked about the early history of Mexican money and how it was initially produced by the American Banknote Company, I stopped thinking about the translation and just watched. I picked up a few things in context and liked the presentation. I like the scenes where they test the durability of the banknotes. I do not know if the Bureau of Engraving and Printing does that, but it is an interesting concept!
See the video for yourself:
Thanks to Coin Collectors Blog reader Rombat Stephan, he found that the Bank of Mexico published an English version of the video on YouTube:
Thank you Rombat Stephan!
Secretary of the Treasury Jacob “Jack” Lew announced on Wednesday that a newly redesigned $10 Federal Reserve Note will feature the portrait of a woman. Lew will make the final decision as to who will appear on the note in accordance to 12 U.S.C. § 418.
The current $10 Federal Reserve Note featuring Alexander Hamilton
The new note is scheduled for release in the year 2020, which coincides with the passage of the 19th Amendment that declared:
The right of citizens of the United States to vote shall not be denied or abridged by the United States or by any State on account of sex.
According to the Treasury Department, the $10 note was selected to be redesigned to add Advanced Counterfeit Deterrence (ACD) based on their study of counterfeiting activity. This decision was made by the ACD Steering Committee, an inter-agency group that monitors a number of factors that go into the maintenance of U.S. currency. One of the factors includes the ongoing discussion of features that will help increase accessibility for the visually impaired as part of the court mandated Meaningful Access Program. Treasury reports that the new note “will include a tactile feature that increases accessibility for the visually impaired.”
The last time Treasury changed the portrait on U.S. currency was in 1928 when Andrew Jackson replaced Grover Cleveland on the $20 notes. Alexander Hamilton first appeared on the $10 note in 1923 when his portrait replace Andrew Jackson’s. Although the portraits have been redesigned, the same men have appeared on U.S. currency during small-sized note era (since 1928).
The last woman to appear on U.S. currency was Martha Washington. Our first First Lady’s portrait appeared on the $1 Silver Certificate between 1891 and 1896.
Series 1886 $1 Silver Certificate featuring Martha Washington (Fr #217)
Lew is asking the public to provide suggestions as to whom should be the new face on the $10 note. She should be a woman “who was a champion for our inclusive democracy,” according to the Treasury statement. You can submit comments on their new website thenew10.treasury.gov or make your suggestion on social media using the hashtag #TheNew10.
You can also visit the Bureau of Engraving and Printing in Fort Worth on June 24 and meeting with United States Treasurer Rosie Rios and Bureau of Engraving and Printing Director Len Olijar to give them your ideas. A similar event will be held at the Bureau of Engraving and Printing in Washington, D.C. on July 15. You can find more information on the BEP website.
The organization Women on 20s has been lobbying to replace Andrew Jackson on the $20 note. Their reason was that our seventh president was not exactly a nice guy and his treatment of Native tribes was less than humane along with other transgressions. In their online vote, Harriet Tubman was their popular selection. If Tubman was selected she would also be the first African-American to appear on U.S. paper currency (George Washington Carver and Booker T. Washington were the first African-American men to appear on coins; Duke Ellington was the last appearing the District of Columbia quarter).
Mockup of the $20 note featuring Harriet Tubman
In fact, Hamilton shared his bed with more than one woman – making him one of the first subjects of a political sex scandal.
While his wife, Elizabeth, and kids were staying with relatives, Hamilton began an affair with a young woman named Maria Reynolds in 1791. He was secretary of the Treasury at the time, and Reynolds and her husband started extorting money from Hamilton. Hamilton eventually confessed to the affair in full detail in a pamphlet that also featured letters between him and his mistress.
Interestingly, according to Bloomberg news, “The $10 bill is the third least-circulated among the seven major denominations, accounting for 5.2 percent of 36.4 billion notes in use at the end of last year.” The $100 note is the most circulated of all U.S. currency notes.
Image of the current $10 note courtesy of the Bureau of Engraving and Printing
Image of the Series 1886 $1 Silver Certificate courtesy of Wikimedia Commons
Mockup of Harriet Tubman on the $20 note courtesy of Women on 20s
For those of us who are political junkies, April was a relatively quiet month. At least there was something to watch that was more related to the hobby than the usual partisan bickering. Here are the coin and currency-related legislation moving through congress:
S. 925: Women on the Twenty Act
Sponsor: Sen Jeanne Shaheen (D-NH)
• A bill to require the Secretary of the Treasury to convene a panel of citizens to make a recommendation to the Secretary regarding the likeness of a woman on the twenty dollar bill.
• Introduced: April 14, 2015
• Referred to the Senate Banking, Housing, and Urban Affairs Committee
Track this bill at https://www.govtrack.us/congress/bills/114/s925
S. 95: A bill to terminate the $1 presidential coin program
Sponsor: Sen. David Vitter (R-LA)
• Introduced: January 7, 2015
• Discharged from Senate Committee on Homeland Security and Governmental Affairs by Unanimous Consent on April 14, 2015
• Referred to the Senate Committee on Banking, Housing, and Urban Affairs on April 14, 2015
Track this bill at https://www.govtrack.us/congress/bills/114/s95
S. 985: United States Coast Guard Commemorative Coin Act
Sponsor: Sen. Christopher Murphy (D-CT)
• To require the Secretary of the Treasury to mint coins in commemoration of the United States Coast Guard.
• Introduced: April 16, 2015
• Referred to the Senate Banking, Housing, and Urban Affairs Committee
Track this bill at https://www.govtrack.us/congress/bills/114/s985
During the course of searching for information, I stumbled upon the website for Women on 20s. It is a site dedicated to replacing the image of President Andrew Jackson with a woman by 2020. The group has targeted the $20 Federal Reserve Note to be replaced 2020 because it is the 100th anniversary of the passage of the 19th Amendment that granted women the right to vote.
Jackson is being targeted because as we look back through the long lens of history, he was not exactly a model person judging by today’s standards. During the War of 1812, Jackson led U.S. Army troops against native tribes working with the British against the United States to regain the lands taken following the colonies’ independence. It was said that Jackson’s troops were brutal against the native tribes on his orders, killing them rather than taking prisoners.
After beating back the British in the Battle of New Orleans, Jackson declared martial law in New Orleans and used his troops to enforce martial law. Aside from having a magistrate arrested who sided with a newspaper reporter writing who was arrested for writing negatively about his rule, he had members of the local militia who sided with the British executed without trial and went on to use it as propaganda to allegedly maintain order.
As president, Jackson’s policies to relocated native tribes lead to the Indian Removal Act that codified his policies. This lead to the “Trail of Tears” that forced the relocation of Cherokee, Muscogee, Seminole, Chickasaw, and Choctaw nations from their ancestral homelands in the southeast to an area west of the Mississippi River that had been designated as Indian Territory. It is considered the most violent and brutal act against the native tribes in United States history.
To have Jackson’s portrait on the United States central banks’ currency is also a bit ironic. Jackson was against the concept of a central bank and refused to renew the charter of the Second Bank of the United States and vetoed the bill to continue its charter. After winning election in 1833, Jackson withdrew all of the country’s funds from the bank limiting the bank’s ability to conduct business. He gave power to local banks to lend money and issued the Specie Circular, an executive order requiring government transaction be done in gold and silver coin (specie).
With the western expansion and federal lands being made for sale and the requirement that duties were to be paid in gold and silver, this created a run on banks that could not provide the hard currency necessary for people to exchange their banknote. Although Jackson paid off the country’s debt in 1835, the only year it has ever been paid off, the squeeze on currencies, lack of central management of money, corrupt bank practices, and reckless land speculation by railroads lead to the Panic of 1837. The resulting depression lasted five years and included the default of many banks and the treasuries of many states. Remember, this was long before the deposits were insured by the federal government.
Poster issued by the Whig Party blaming Jackson for the Panic of 1837
The Women on 20s organization does not believe that this should be the legacy honored on U.S. currency. But if we look into the history of all of the men on U.S. currency, there are aspects of their pasts and personal lives that would make some blush, including Benjamin Franklin’s common law wife and illegitimate son.
Women on 20s do recognize that suffragette Susan B. Anthony did appear on a one dollar coin but the coin failed because of its confusion with the quarter. They also recognize that Sacagawea, the Shoshone guide to Meriwether Lewis and William Clark, appears on the current one-dollar coin. Aside from the 2003 Alabama State Quarter, no other woman has appeared on circulating coinage (they do not count commemorative issues). Since neither dollar coin has circulated well and since the Alabama quarter was a temporary issue, the organization believes a better tribute is warranted.
In what looks like an addendum to their argument, they mention that a portrait of Martha Washington appeared on the Series 1886 (Fr. #215) and 1891 (Fr. # 223) $1 Silver Certificates. Both Martha and George Washington appeared on the reverse of $1 Series 1896 Educational Series note (Fr. #224).
To decide who they will try to lobby to appear on the $20 note, the organization started with 15 candidates. Voters were asked to select thee of the 15 candidates in this preliminary round. The top vote-getters will be subject to another final voting round.
In the first round, the 15 candidates were Alice Paul (appeared on the 2012 First Spouse gold coin), Betty Friedan, Shirley Chisholm, Sojourner Truth, Rachel Carson, Rosa Parks, Barbara Jordan, Margaret Sanger, Patsy Mink, Clara Barton, Harriet Tubman, Frances Perkins, Susan B. Anthony (appeared on the 1979-1999 dollar coin), Eleanor Roosevelt (appeared on the 2014 First Spouse gold coin), and Elizabeth Cady Stanton.
2012 First Spouse coin featuring Alice Paul
Women on 20s reported that 256,659 people had cast ballots when the first round ended on April 5, 2015. They reported that Eleanor Roosevelt, Harriet Tubman and Rosa Parks were named by as many as half of the voters as one of their top three. They added Wilma Mankiller to the final ballot. Mankiller, the first female Chief of the Cherokee Nation and the first female to be a chief of a native nation, was added because of a claimed “strong public sentiment that people should have the choice of a Native American to replace Andrew Jackson.”
Wilma Mankiller, the first female principal chief of the Cherokee Nation
Voting is open at the time this is being written. There is no closing date listed on their website.
Since congress does not control the design of the currency, Women on 20s will have to convince the Federal Reserve to change the design of the $20 Federal Reserve Note. If the Federal Reserve, whose chair is Janet Yellen, agrees to the change, they will work with the Bureau of Engraving and Printing for the design and the U.S. Secret Service to ensure that the appropriate anti-counterfeiting measures are included.
Design changes to any Federal Reserve Note can take 3-5 years to complete.
NOTE: I contacted the Women on 20s organization for comments via email. That email has not been returned at the time of writing this article. If they answer my questions, I will publish them in a follow up post.
Image of the $20 FRN and Whig Party poster courtesy of Wikimedia Commons.
Coin images courtesy of the U.S. Mint
Image of Wilma Mankiller courtesy of the Native American Encyclopedia
NOTE: I am doing research into the policies that create our money. This is not a look into the economic policies but what happened after the economic policies are executed. For this series of articles, I wanted to know what happened after it was decided that the country would sell bonds in order to fund the Civil War. This is a summary of some of the research to answer one question and tie it in with history.
First of three parts.
Did you ever want to know how or why something was done but there was no answer? Or there may have been answers but nothing definitive that would make any of the answers true? It is this type of curiosity that had me searching for the answer to one question:
Why is the greenback green?
There are references that claim that the green printed back was to differentiate the currency of the United States from those from other countries. Other references call it an anti-counterfeiting mechanism. Neither claim can tie themselves to the actual events in such a way that we can say which is the truth. Or can we?
For the history of the greenback, we have to start with Col. Dick Taylor. Born Edmund Richard Taylor on October 18, 1804 in Lunenburg County, Virginia. His father was Giles Taylor, brother of Col. Richard Taylor. The decorated Col. Taylor was the father of Gen. Zachary Taylor who would become the 12th President of the United States.
Col. Dick Taylor
Shortly after Taylor’s birth, the entire Taylor family moved to Kentucky because of exhausted lands in southern Virginia. They settled along the Ohio River outside of Louisville. In 1814, Giles moved his family Shawneetown, Illinois as one of the area’s pioneer settlers. Unfortunately, Giles died shortly thereafter leaving the family of little means.
Preferring to be called by his middle name, Taylor would be referred to by the common nickname of Dick and began travelling throughout the Midwest region to earn a living. At this time he would sign his name as “E.D. Taylor.” Dick Taylor demonstrated a lot of skill in organizing while operating as a trader on the frontier. By 1929, Taylor settled in Springfield, Illinois and married Margaret Taylor, the daughter of Col. Richard Taylor and sister of then Col. Zachary Taylor.
When the Black Hawk War broke out in 1831, he enlisted in the Illinois infantry and appointed as a colonel by the governor where he served with Jefferson Davis, General George Jones, and General Henry Dodge. Following the war he was elected to the Illinois House of Representatives then, after one term, was elected to the senate defeating a long-standing senator.
Taylor ran his senate campaign on a platform to move the capital from Vandalia to Springfield. To accomplish this, Taylor wrote a bill and worked with a representative named Abraham Lincoln, whom he met as a shopkeeper in New Salem. The bill was successful and Springfield has been the capital of Illinois since.
Taylor was a master at managing money and served the state in many capacities. In 1835, Taylor was appointed Receiver of Public Moneys in Chicago. Today, that position would be known at the comptroller. Under Taylor’s guidance, Chicago managed land sales better than any other city in the country and grew Chicago into the second largest city in the United States passing Philadelphia for that distinction. He was so well regarded in Washington, that not only did President Andrew Jackson hold a special dinner in Taylor’s honor, but appointed him to the commissions that oversaw the building of railroads in the upper Midwest.
With his connections from Springfield and working with Jackson, who is considered the father of the modern Democratic Party, Taylor became a member of the party and helped build the political machine that continues to run Chicago today. He was a friend and staunch supporter of Stephen A. Douglass and would travel the state stumping for Democratic candidates.
Taylor did not forget his friendship with Lincoln. Even though Lincoln had joined the then nascent Republican Party, he would also campaign with his friend in areas that were not strong Democratic strongholds. But for the presidential election of 1860, Taylor supported Douglas and campaigned throughout Illinois against Lincoln.
Lincoln was not a man to hold grudges and continued to seek advice from his friend especially on financial matters. In 1862 there was an impending financial crisis because of the Civil War and the hoarding of hard currency. Banks were failing because of liquidity problems and Secretary of the Treasury Salmon P. Chase was working with New York bankers to try to finance the government. Chase worked with Jay Cooke & Company to issue bonds but needed a way to make it liquid to stimulate the economy.
25th Secretary of the Treasury Salmon P. Chase
Knowing how Taylor turned around the finances of Chicago and then the railroad alliance, Lincoln turned to his old friend for advice. Taylor convinced Lincoln to ask congress to issue currency backed by the bonds but with no interest. Using what he learned in managing tickets sales for the railroads, Taylor provided Lincoln the outline for a currency system that was adopted with much reluctance by Chase.
First published in Abraham Lincoln, author Emil Ludwig found a letter acknowledging Taylor as the person who came up with the idea:
My dear Colonel Dick:
I have long determined to make public the origin of the greenback and tell the world that it was Dick Taylor’s creation. You had always been friendly to me. and when troublous times fell on us, and my shoulders, though broad and willing, were weak, and myself surrounded by such circumstances and such people that I knew not whom to trust, then I said in my extremity, ‘I will send for Colonel Taylor — he will know what to do.’ I think it was in January 1862, on or about the 16th, that I did so. Said you: ‘Why, issue treasury notes bearing no interest, printed on the best banking paper. Issue enough to pay off the army expenses and declare it legal tender.’ Chase thought it a hazardous thing, but we finally accomplished it, and gave the people of this Republic the greatest blessing they ever had — their own paper to pay their debts. It is due to you, the father of the present greenback, that the people should know it and I take great pleasure in making it known. How many times have I laughed at you telling me, plainly, that I was too lazy to be anything but a lawyer.
Lincoln, not one to miss an opportunity, used his executive authority to begin the production of a national paper currency in the form of Demand Notes as an extension of the Act of July 17, 1861 (12 Stat. 259) that authorized the printing of fractional currency.
Since the federal government did not have printing facilities, the law was written to allow notes to be produced by a “New York bank note company.” The first four issues fractional currency were printed by the American Banknote Company and the National Banknote Company. By the fifth issue, the new Bureau of Engraving and Printing began to print these notes.
First issue: 5-cents, Thomas Jefferson (Fr. #1231)
Second issue: 10-cents, George Washington (Fr. #1246)
Third issue: 50-cents, Francis Spinner (Fr. #1328)
To save time and money, the first series of notes were printed four and six to a sheet in New York then shipped to Washington where the Treasury set up the Office of the Currency Comptroller to manage. As par of the OCC, the National Currency Bureau was created to do the cutting, bundling, and distribution of the currency.
Fourth issue: 50-cents, Abraham Lincoln (Fr. #1374)
Fifth issue: 25-cents, Robert Walker (Fr. #1308)
The process for the United States to print its own currency had begun. While Secretary Chase was leading the plan to build a printing operation, congress authorized Treasury to establish an engraving and security printing bureau. That law was approved on July 11, 1862 (12 Stat. 532). With construction for a printing facility underway, Treasury hired James Duthie as the first engraver. Although he was a temporary engraver, he was provided a $1,600 per year salary (the equivalent to just under $38,000 in current dollars).
In Part 2 we introduce you to a little known geologist who may have developed more than the theory of the greenhouse effect.
- Conrad, Howard Louis. “The Originator Of Greenback Currency: Colonel Edmund Dick Taylor.” The National Magazine, June 1892, 209-14.
- Ludwig, Emil, Eden and Cedar Paul (translators). Abraham Lincoln. Boston: Little, Brown, 1930.
- Mitchell, Wesley C. A History of the Greenbacks, with Special Reference to the Economic Consequences of Their Issue: 1862-65. Chicago: University of Chicago Press, 1903.
- History of the Bureau of Engraving and Printing, 1862-1962. Washington: Treasury Dept.; 1964.
- Gurney, G., & Gurney, C. (1978). The United States Treasury: A pictorial history. New York: Crown.
- Friedman, Morgan. “The Inflation Calculator.” Accessed April 7, 2015. http://www.westegg.com/inflation/.
- Image of Col. E.D. Taylor from The National Magazine, June 1892.
- Image of Salmon P. Chase from the Library of Congress via Wikimedia Commons
- All fractional currency images courtesy of Wikimedia Commons