A Counterfeiter's Paradise Read Online Free PDF

dispute between two very different theories of value. Hard-money supporters like Hutchinson saw value as being fixed and intrinsic. They believed that money only had value in proportion to its metallic content, and that silver and gold alone provided the bedrock upon which the edifice of a secure economy could be constructed.
    Paper’s proponents, on the other hand, thought of money in more utilitarian terms: they argued that money had value because it could fulfill certain tasks, like buying a bushel of wheat or a day’s worth of labor. Precious metals weren’t intrinsically valuable, but rather derived their value from a cultural convention that made them exchangeable for goods and services. If money was a standard of exchange agreed upon by a group of individuals—defined not by its form but by its function—then a scrap of paper could serve the purpose just as well as a silver coin. Through the power of belief, paper could be magically transformed into money. As one Congregationalist preacher from Ipswich, Massachusetts, pointed out in a widely read pamphlet, life was full of such acts of faith. He likened paper bills to women: “necessary Evils…Metamorphised into things called Wives.”
    Paper money’s most articulate advocate came not from Massachusetts but from Pennsylvania. Benjamin Franklin was twenty-three years old in 1729 when he published “A Modest Enquiry into the Nature and Necessityof a Paper-Currency.” His immediate reason for writing the pamphlet was to convince the Pennsylvania legislature, which had been printing paper money since 1723, to put more currency into circulation. But while he was on the topic of currency, the young printer couldn’t resist engaging in the philosophical wrangling that so preoccupied his fellow colonists to the north. The true value of money, Franklin claimed, was its ability to purchase another man’s labor. “The riches of a country are to be valued by the quantity of labour its inhabitants are able to purchase,” he wrote, “not by the quantity of silver and gold they possess.” Since labor was what made money valuable, there was no reason to prefer precious metals to paper. Both were arbitrary instruments of exchange, but paper provided a more plentiful and convenient material.
    Increasing the quantity of paper money would have a number of positive effects, Franklin argued. It would prevent wages from declining, keep interest rates low, and decrease dependence on European exports. He made a convincing case. His essay was widely read, and succeeded in persuading the Pennsylvania legislators to authorize another issue of paper money. Two years later, the Assembly hired him to design and print the notes. In his
Autobiography
, Franklin recalled the episode with characteristic immodesty. “This was another advantage gained by my being able to write,” he observed. As Pennsylvania’s official money manufacturer, Franklin came up with creative ways to thwart counterfeiters. He intentionally misspelled the word “Pennsylvania” on his bills, hoping to catch forgers who corrected the error. He also added botanical motifs by casting real leaves in lead and then printing them directly onto the notes, creating intricate patterns that were difficult to duplicate.
    Better than anyone, Franklin understood paper’s potential. Faced with a scarcity of coin and an abundance of entrepreneurs, colonial America needed a way to convert the ambitions of its inhabitants into real economic growth, and paper currency met that need. Paper let ordinary people—not just the privileged few with access to precious metals—participate in thebuying and selling that fueled local markets. Franklin’s defense tackled the core question of the currency debate: What is value and how is it created? By putting labor at the center of economic value, he cast the laboring classes as society’s most important members—the shopkeepers, artisans, and small businessmen that in Franklin’s