James Ledbetter - One Nation Under Gold: How One Precious Metal Has Dominated the American Imagination for Four Centuries

A book of this scope requires considerable collaboration, both direct and indirect. My most frequent content collaborators have been the librarians and archivists who guided me through mountains of ore to find the golden nuggets. Many, including those at the New York Public Library and Columbia University Library, have done so anonymously. But especially helpful were Jennifer Cuddeback and Alexis Percle at the LBJ Library, Diane Shaw at Lafayette College, Valoise Armstrong at the Eisenhower Library, and Andrea Faling at the Nebraska Historical Society.

Over the course of four years I deployed a small army of researchersincluding Zoe Carpenter, Douglas Grant, Sarah Miller, Bartie Scott, Christian Wallace, and Mauro Whitemanwhose contributions to this book have been indispensable.

Many friends and allies generously reviewed and commented on portions of the manuscript prior to publication. My thanks for this aid go to Liza Featherstone, Martin Hipsky, Michael Kazin, Richard Panek, Anya Schiffrin, Jack Shafer, Paul Smalera, Joseph Stiglitz, Bernhard Warner, and Julian Zelizer.

Writing a book while holding a full-time job is greatly aided by supportive bosses. I am fortunate to have had twoChrystia Freeland at Reuters and Eric Schurenberg at Inc.while working on this project.

The team at Liveright and Norton has been spectacular throughout. Robert Weil is an outstanding, erudite editor whose style and insights are reflected on every page. Marie Pantojan patiently helped me through the editing process; Gary Von Euer and Don Rifkin provided a careful and insightful copyedit; and Steve Attardo gave the book its handsome look. My agent, the intrepid Chris Calhoun, championed the project when it was purely theoretical and pushed me to write a compelling proposal.

My deepest thanks go to my familyErinn and Henry. This book took many weekend afternoons in the library and quite a few nights away on research trips. I am exceedingly grateful for their patience and support.

OTHER BOOKS BY JAMES LEDBETTER

Unwarranted Influence: Dwight D. Eisenhower
and the Military-Industrial Complex

The Great Depression: A Diary (coeditor)

Dispatches for the New York Tribune: Selected
Journalism of Karl Marx

Made Possible By... : The Death of Public
Broadcasting in the United States

Starving to Death on $200 Million: The Short,
Absurd Life of the Industry Standard

ABOUT THE AUTHOR

James Ledbetter is the editor of Inc. magazine and Inc.com. He was previously the opinion editor of Reuters and has also worked on staff at Slate, Time, and the Village Voice. He is the author or editor of five previous books including, most recently, Unwarranted Influence: Dwight D. Eisenhower and the Military-Industrial Complex. His writings on politics, business, and media have been published in The New Yorker, the New York Times, the Washington Post, Quartz, American Prospect, Industry Standard, Mother Jones, the Nation, New Republic, and dozens of other publications. He lives in New York City with his wife and son.

At this sawmill near Coloma, California, James Marshall found gold flakes in January 1848. While it was not the first gold discovery in the United States, it altered the nations economic and political landscape more than any other. Courtesy Library of Congress

GEORGE WASHINGTON WAS NOT an especially successful farmer or businessmanbut he was a meticulous bookkeeper. In 1779, encamped in Middle Brook for months after the stalemated battle of Monmouth, New Jersey, the Revolutionary War general unleashed his financial frustrations in a letter to his nephew. Much of the wealth he had inherited through marriage was, once the war began, loaned out to Virginia neighbors and merchants. The trouble was that by the time the borrowers paid him back, the money they used was worth a fraction of its earlier value. I am now receiving a shilling in the pound in discharge of Bonds which ought to have been paid me, and would have been realized before I left Virginia, but for my indulgence to the debtors, Washington complained. At twenty shillings to the pound, this implied a loss of 95 percent. Washington said in the same letter that his losses exceeded ten thousand pounds; according to one biographers estimate, that was approximately a years worth of his farms income.

Continuing his tirade, Washington wrote, It is most devoutly to be wished that the several States would adopt some vigorous measures for

It is almost impossible to overstate the dislike that most of the Founding Fathers, and indeed most of the American ruling class, had for paper money in the late eighteenth and early nineteenth centuries. The currencies issued by most states depreciated to the point of being worthless. One historian has gone so far as to argue that the colonies themselves were so tapped out by their own useless money that they embraced the idea of a federal government just to unburden themselves of their debt: Paper money, therefore, or rather the reaction from it, helped to secure the adoption of the federal constitution.

With the crucial exception of slavery, no issue tormented nineteenth-century America longer or more passionately than the question of what our money should be. The money question gouged deep wounds into every major public policy concern of the era: the structure of government; economic growth and the expansion of national land; the concentration of wealth, geographically and individually; the conduct of wars, and the debt and inflation they created; and the very meaning of the Constitution, including the amendments that ended slavery itself.

As hated as paper money might have been, there were no universal alternatives. Commerce in the regions that would form the United States was for more than its first century conducted in a hodgepodge of currencies. Gold was the most enduring and in some ways the most powerful of these currencies: until the twentieth century there was never a point when gold could not be used to pay most debts, and some specific types of debt required gold. But any currency based on a physical substance will inevitably be subject to limitations, and golda bulky metal that must be mined, refined, measured, stamped for purity, and heavily guarded against theftis especially limiting. In this sense, gold as a means of currency is overqualified: Because there is only so much gold in a country at a given time, how can economic activityand, especially, economic growthtake place if no one wants to part with his share?

The answer, much of the time, is that it cannot. And thus, an abundance of alternative, sometimes exotic currencies, official and unofficial, sprang up. Silver coins were officially minted through the early nineteenth century, and were widely used until the mid-1830s, but at many points their use was rarer than their imprimatur might suggest. Market discrepancies between the prices of gold and silver meant the silver coins were often more valuable if melted down. One government official estimated that at the outbreak of the Civil War in 1861 there were, for example, probably fewer than one thousand silver dollars in circulation in the entire country.