Greenback Planet: How the Dollar Conquered the World and Threatened Civilization as we Know it (Discovering AMERICA)

148 Pages·2011·2.15 MB·English

by  H. W. Brands

Greenback Planet
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SERIES
Mark Crispin Miller, Editor
This series begins with a startling premise—that
even now, more than two hundred years since its
founding, America remains a largely undiscovered
country with much of its amazing story yet to be
told. In these books, some of America’s foremost
historians and cultural critics bring to light epi-
sodes in our nation’s history that have never been
explored. They off er fresh takes on events and peo-
ple we thought we knew well and draw unexpected
connections that deepen our understanding of our
national character.
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H. W. B rands
Greenback
Planet
How the Dollar Conquered the World
and Threatened Civilization as We Know It
University of Texas Press
AUSTIN
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Copyright © 2011 by H. W. Brands
All rights reserved
Printed in the United States of America
First edition, 2011
Requests for permission to reproduce material from this work should be
sent to:
Permissions
University of Texas Press
P.O. Box 7819
Austin, TX 78713-7819
www.utexas.edu/utpress/about/bpermission.html
∞ (cid:11)The paper used in this book meets the minimum requirements of ANSI/
NISO Z39.48-1992 (R1997) (Permanence of Paper).
Library of Congress Cataloging-in-Publication Data
Brands, H. W.
(cid:13)Greenback planet : how the dollar conquered the world and threatened
civilization as we know it / H. W. Brands. — 1st ed.
(cid:13)(cid:13)p.(cid:13)(cid:13)cm. — (Discovering America series)
(cid:13)Includes index.
ISBN 978-0-292-72341-2 (cloth : alk. paper) — ISBN 978-0-292-73579-8
(e-book)
(cid:13)1. Dollar, American—History.(cid:13)2. Monetary policy—United States.(cid:13)
3. International fi nance.(cid:13)I. Title.
HG501.B67(cid:13)2011
(cid:13)332.4'973—dc22 2011011982
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Contents
INTRODUCTION
- 1 -
1
Fiat Lucre: 1863–1907
- 4 -
2
Strong and Stronger: 1907–1928
- 25 -
3
Skulls and Bones: 1929–1944
- 42 -
4
The View from
Mount Washington: 1944–1963
- 60 -
5
Floating, Floating . . . : 1963–1973
- 75 -
6
Petrodollars, Eurodollars and the
Invincible Yen: 1973–1989
- 84 -
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= GREENBACK PLANET =
7
Bubble and Boil: 1990–2002
- 95 -
8
Be Nice to Your Creditors: 2003–
- 109 -
NOTES
- 125 -
ACKNOWLEDGMENTS
- 133 -
INDEX
- 135 -
vi
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Greenback Planet
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Introduction
O
n January 1, 1863, Abraham Lincoln signed the Eman-
cipation Proclamation, freeing most of America’s
slaves. On March 3 of that year, he signed a revision
of the Legal Tender Act, freeing the American dollar from its
dependence on gold and silver. The fi rst measure marked the
demise of the system of political economy Americans had
inherited from colonial days; the second signaled the launch of
American capitalism toward global dominance.
The dollar had been America’s offi cial currency for decades,
but it had always been chained to precious metal; by creating
fi at money, backed only by the credit—and credibility—of the
federal government, Lincoln made possible innovations in
fi nance unimagined by previous generations. Some of these
innovations would be felt at once, as the greenback underwrote
the Union victory in the Civil War and accelerated America’s
industrial revolution. Other innovations would take longer,
not least since stubborn tradition distrusted nonconvertible
currency and continued to demand gold. Tradition compro-
mised with innovation in the 1913 establishment of the Federal
Reserve system, which allowed the government to fi ne-tune
the nation’s money supply.
The tuners, however, hit some bad notes, and when the
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