August 1, 2017
How much is Georgia currency worth in New Jersey?
With Brexit, the Scottish Independence Referendum and other moves toward new countries and new governments, I have been thinking about how nation states are formed.
"Money and nations go hand in hand," says Mervyn King in The End of Alchemy, his recent book about economics and banking. French Revolutionaries might say that nations hold hands with weights and measures.
It is often stated that standards in currency, weights, and measures simplifies manufacturing and speeds business transactions. "Sharing a currency reduces the transaction costs of trade within the union. If each of the fifty states in the USA used it own dollar then the cost of doing business across states would be much greater than it is today. Just as there is a federal system of weights and measures, so the dollar is the single monetary unit of account," King continues.
But there was a time when each colony had its own currency and its own exchange rates for foreign currencies. Weights and measures were similarly varied.
I spoke with historian Stephen Mihm about this time. Mihm is a professor at the University of Georgia and wrote A Nation of Counterfeiters: Capitalists, Con Men, and the Making of the United States (2009) about the speculation and counterfeiting up through the 1860s, enabled by a lack of government oversight of banking and currency. Mihm is currently writing a history of weights and measures in the United States.
In our interview, Mihm discussed the lack of collective will to establish Federal regulation of weights and measures. I feel petitions can be one way to find out what people want, or don't want. The UK parliament lists all petitions, sorted in descending amount of signatures. Here's the website https://petition.parliament.uk/ accessed today:
While I have read articles about British anti-metric feelings, many articles are in The Daily Mail. I figure a cross-check of what's really going on is the number of metric-related petitions and how many signatures they get.
Only 10 out of 32,000 petitions, and at most 237 signatures for the most popular petition. If you look at the propositions, they generally alternate between more or less metrication, at this time in the UK.
Below, Stephen Mihm gives thoughts about Colonial currency, and weights and measures.
What was the landscape of weights and measures in the Colonies?
It's very hard for people as Moderns in the 21st century to understand the degree to which weights and measures are varied so much over any given nation's territory. Prior to the 18th century, in most Western nations (or forerunners to nations) you had in some cases hundreds, thousands, and tens of thousands of individual regional, village or town measures that varied in some cases a great deal from each other, in other cases only by minor amounts but still, that they were very much different.
In the American colonies, the governments also have something similar where they may have an ideal definition and the bushel, the foot, and so forth, but they vary from both the English standards—national and regional—(laughs) as well as the standards adopted by different colonial governments.
What was Jefferson's role in standardizing currency, weights and measures?
Thomas Jefferson is best understood perhaps as a man of the Enlightenment. He's bought into the idea that the world around him could best be understood if it was subjected to a rational scientific approach. He genuinely wanted to simplify what he believed to be an older archaic, irrational system of weights and measures, as well as an older, archaic, irrational system of currency.
He, like the French, was very interested in the idea of working within a decimal system. Of making things reducible to powers of 10 and the reasons for this are many. One it links up our numeric system with a system of weights and measures. Then also it makes it easy to calculate. And it makes it very easy to relate different measures to each other. While the French are moving toward experimentation with the metric system Jefferson is simultaneously moving toward an idea of a kind of decimalization. Of both the existing weights and measures and the system of currency.
What did he win, in terms of legislation passed?
Right. He doesn't get very far. The idea of a decimal currency is enshrined ultimately in America, in the United States.
But it takes many years for that to be adopted and denominations like the dime, that today are commonplace, were at the time still considered an alien idea. Whereas things like the quarter, which are derived from a system of dividing up the dollar into eighths, which is a Spanish convention, persisted for many years.
What's most striking is that his attempt to bring science into the realm of measurement ultimately foundered on Congressional resistance. You really see a lot of skepticism, rooted in a much larger political struggle in the United States in which one of the defining features of the political parties of the time is how they view the French Revolution. And decimalization comes to be seen as a distinctly French project.
And what about George Washington? What did he want?
He was receptive to the idea of standardizing weights and measures and indeed called for it partly because he was probably much more attuned to the problems that what we call "transaction costs" that could arise by having different units of measurement in commercial transactions in different parts of the country. And so he was interested like many nationalists—and he was a nationalist—in really creating a national commercial system. And part of that was going to be creating uniform weights and measures across the entire territory of the United States.
What's the role of weights and measures, and currency, in coalescing the Colonies into one nation?
The French Revolution's reform of weights and measures was very much part of that project of creating a nation and abolishing local custom. It just doesn't happen though in the United States. It's not really until the 1820s and 1830s that there's any concerted effort made to standardize weights and measures in the United States.
There's an enormous amount of micro-negotiations that go on. We don't go into a store and order a pound of turkey and haggle over both what is the pound and what is the money that we're going to use to pay for it. But that's precisely what everyone is doing all the time back then. You might say, "your weights and measures are off" and maybe then the storekeeper might knock a couple of cents off the cost.
It's like that scene in Monte Python's Life of Brian where he's trying to buy a beer and the guy selling it insists he has to haggle over the price.
What year would this be?
All the way into the 1870s, 1880s, 1890s. Maybe even the 1920s. One of the little understood and appreciated reform efforts of the Progressive Era is to reform weights and measures. And they run studies of storekeepers and towns and cities in 1900, 1910, 1920. They find the exact same thing that you would have found a hundred years earlier.
Everyone has a diversity of weights and measures. It still hasn't been fixed. In scientific laboratories, yes, it has been fixed up to a point. But in daily commercial practice especially on the retail side, where ordinary people are going to their stores and buying things, there's still a problem.
But it's not a problem, because everyone could pass the shortfall onto the next person.
It's not that no one's complaining. People are complaining in the year 1790, 1800. They eventually petition Congress. But there's not that collective will to do something about it and there won't be a collective will until really the year 1900. Part of the reason is there really hasn't been a strong Federal presence, a national presence to do something about weights and measures. It's only with the creation of the Bureau of Standards and the year 1900 and where you actually have a true national office that has actual genuine power.
And why is that? There's no money for infrastructure? The ways the laws are written?
Because so much of the political discourse in the United States revolves around the size of the federal government today, it's hard to wrap our minds around a time when the federal government was truly minuscule.
The United States Mint is not really fully functional as a modern institution until about the 1850s. In fact, Congress contemplates repeatedly basically killing it and privatizing coinage. Which should tell you something about the size of the federal government at this time.
This is one of the most basic functions of government is in modern times is to issue the money. And that is even contemplated as being discretionary for much of the first half of the 19th century. Weights and measures are lagging even farther behind. It's just not something that the federal government has a role in. Today obviously it's a very different state of affairs. But this is a different world. —Stephen Mihm, interviewed at his home
- The End of Alchemy: Money, Banking, and the Future of the Global Economy by Mervyn King. 2016.
- A new and complete system of arithmetic: composed for the use of the citizens of the United States, Nicolas Pike. 1788. Viewed at the Rare Book and Manuscript Library at the University of Illinois.
- A Nation of Counterfeiters: Capitalists, Con Men, and the Making of the United States, Stephen Mihm. 2009.