Poor Richard’s Almanac

Money for nothing. September 7, 2010

It’s me, Richard Saunders of Poor Richard’s Almanac fame, here today to talk about what some have called “Benjamin Franklin’s Greatest Invention.” Can you guess what it is? The lightning rod? Electricity? America?

According to Thomas Levenson, who wrote an article by that name for American History magazine, Franklin’s greatest invention was the paper money economy. Before Franklin, there was only “the coin of the realm,” which is to say, gold, silver and copper coinage, which carried intrinsic worth. It was Ben Franklin who realized, as Levenson puts it, that “Money is not a thing; it is an idea.” But unless that idea is backed by something of real value, why would anyone accept it as payment for goods or to settle debts?

This brings us back to gold (and silver and copper). The Colonies had a coinage crisis on their hands because Britain kept a stranglehold on the amount of coins that were allowed into their American holdings. There simply—and very deliberately—weren’t enough to go around, even with the addition of the famous “pieces of eight,” cut from Spanish silver dollars, and any other coinage the Colonists could scrounge from foreign traders. Commerce was languishing, and the Colonies were facing bankruptcy.

It was at this point that Ben Franklin stepped forward with the idea of currency (currency is paper money, as opposed to coinage). And he came up with a brilliant idea to give real value to what might otherwise have appeared to be worthless paper: The governments of the Colonies could back the currency with the one thing America had plenty of: land. (The “gold standard,” backing American currency with its value in gold, didn’t come about until the Gold Rush filled America’s coffers with gold.)

The desperate Colonies welcomed Ben’s innovation. And being a printer, the canny Franklin lost no time in becoming the designer and printer of currency for the Colonies. But he quickly hit a snag. Counterfeiters had been having a field day faking coinage through the centuries (thus, the iconic image of pirates and gunslingers biting gold coins to see if they were genuine). How much easier it would be to counterfeit paper money!

Fortunately for the Colonies, Ben was up to the challenge. A friend of his, the botanist Jacob Breitnall, had made a series of prints of the leaves of various trees. Franklin realized that no two leaves—even from the same tree—were exactly the same. So if he could transfer Breitnall’s elaborate leaf prints onto his currency, it would be extremely difficult to counterfeit. (Remember, this was before the era of photocopying, or even photography; a counterfeiter would have to try to reproduce the leaf patterns freehand.) Being Ben, he experimented until he managed it, and it worked: Counterfeits of the leaf-adorned bills were few and far between.

The various Colonial currencies Ben printed were so successful that in 1775, Congress authorized the printing of a national currency. “Paper money” remains the standard worldwide to this day, though I can’t tell you what governments are backing their bills with these days. Money for nothing? Appropriately, the U.S. $100 bill—the “Benjamin”—is the most widely recognized and traded large-denomination currency worldwide. (Remember how even the blind Indian beggar in “Slumdog Millionaire” was able to recognize a Benjamin?)

Also appropriately, Ben’s $100 bill recently received a facelift from the U.S. government in an attempt to thwart counterfeiting. Innovations on the new bill include raised printing, a 3-D ribbon, a camouflaged Liberty Bell, a watermark of Franklin, color shifting, microprinting, and a security thread. As Levenson remarks, this “array of high-tech innovations” would make Franklin proud.

[Note: Thanks to that great musician, Mark Knopfler, for the title of this post.]

                Richard Saunders for Poor Richard’s Almanac