336. Money: Is It Even Real?

Dark Knowledge, the third title in my Metropolis series of novels set in nineteenth-century New York, was released by Anaphora Literary Press on January 5, 2018, making it available from Amazon and Barnes & Noble.  Signed copies are available from the author.  For more about this and other works of mine, see below following the post. 

A note to my friends:  Yes, I publicize my books, because you have to, and this year there will be more.  BUT: Don't buy them unless you really wish to read them.  I don't want to be one of those writers whose friends say, "Oh my God, he's published another book!  I suppose we'll have to buy it."  Some of my friends buy all my books, some buy none, and some buy some but not others, and all of that is okay.  In time, books usually find their audience.



SMALL TALK

Greenwich Village, including the West Village where I live and the East Village, has seen many significant beginnings.  For instance:

• Jane Jacobs, the pioneering preservationist, wrote her first book, The Life and Death of Great American Cities, while living here, and in the 1960s helped defeat an urban renewal plan by Robert Moses that would have devastated Washington Square Park -- the first defeat of such a plan.
• The first public meeting of the NAACP occurred here at Cooper Union in 1909.
• Margaret Sanger, the founder in 1916 of the first birth control clinic, lived here.
• Thomas Paine, the fiery patriot whose 1776 pamphlet Common Sense helped bring on the American Revolution, lived here.
• Bell Labs, where TV, talkie movies, lasers, and the transistor were developed, was here from 1898 to 1966.
• Dating from 1971, Westbeth, the first large-scale adaptation of an industrial building (Bell Labs) for residential use, is here.
• Bob Dylan first performed here, at Gerde's Folk City, in 1961.
• Billie Holiday first sang her protest against lynching, Strange Fruit," here at the first racially integrated nightclub, Café Society.
• The first community garden was here.
• Hare Krishna was founded here in 1965.
• The gay rights movement began here with the Stonewall Riots of 1969.
• The first rock musical, Hair, was produced here at the Public Theater in 1967.

And so on, and so on.  Notice how many of these "firsts" occurred in the wild and raucous 1960s, before the West Village became a hopelessly high-rent district.  For that kind of creativity, today you'd have to go to the distant farther reaches of Brooklyn, or even out of the city.  Which raises the question, "Does gentrification kill creativity?"  Probably, alas, though some may argue otherwise.

Money: Is It Even Real?

     There are three subjects that have always fascinated, even obsessed people: sex, health, and money.  Books on these subjects may not make the bestseller lists, but they are sure to sell.  Because we want and need – or think we need – a lot of all three.  So let’s consider money.  Not that I’m an expert on the matter, I am not; these are simply the thoughts of a layman. First of all, what is money?

     “Money is fiction,” a Wall Street professional remarked, with an enigmatic smile, when queried by a TV host planning to do a program on the subject.  The program that resulted told of a small Pacific island where the commonly accepted money was statues.  The statues were installed at various spots on the island, usually on someone’s property, and everyone knew who owned each.  If one islander bought a plot of land from another, the buyer might give one of his statues in exchange. No need to move the statue, since in this small community everyone knew who the new owner was.  The statues were not made on the island but imported from another island that produced them.  On one occasion when an islander imported a new statue by ship, and the ship foundered in a storm, sending the statue to the bottom of the sea, it hardly mattered; everyone knew who the owner of the lost statue was, and credited him with this new acquisition.  Even at the bottom of the sea, this hunk of stone was accepted as money, because the islanders believed in its value.  Money is fiction.

     In America today, a huge society where no one can know everyone, we don’t use statues for money, we use dollar bills.  But a dollar bill is in itself just a piece of printed paper; it has no intrinsic value.  We accept it as having value because we have faith in the U.S. treasury and the U.S. economy, and right now the dollar is very strong compared to other currencies, because people the world over know that the U.S. economy, if not robust, is still stronger and healthier than all the other economies, some of which are on life support.  People believe in the dollar.

     Why paper money?  Because it’s easy to tote around.  I came to appreciate this once when, traveling in our western states, I began getting silver dollars in change; the novelty soon wore off, and I was annoyed at having to lug around this heavy weight in my pockets. 

     Still, there was a time when governments minted gold and silver coins that had the value designated on them; in times of economic crisis people grabbed them and hoarded them.  But their value still depended on the common belief that gold and silver had value; without that act of faith, even gold and silver coins would be worthless.

     But this country didn’t always have dollars.  Back in the first half of the nineteenth century the common currency was notes issued by banks that were under state, but not federal, regulations, and those regulations varied from state to state. The notes of the big New York banks, being backed by substantial assets, were highly prized throughout the nation and could be redeemed in gold and silver coins (specie).  But in boom times there were so-called “wildcat banks” in the South and West launched by enterprising gentlemen who had high hopes but only the flimsiest assets; when the boom ended, those banks usually went bust.

     New York City has always been a place where people came to make money.  It began as a flourishing port, and as money flowed to it, it became the nation’s leading money center as well, with banks and insurance companies clustered along Wall Street and in its vicinity.  But merchants and drovers from other states flocked to it, the drovers driving cattle and other livestock to sell, and the merchants coming to replenish the goods of their stores.  With them both drovers and merchants brought what was termed “uncurrent money,” notes drawn on the banks of their region, often obscure little country banks that New Yorkers viewed with distrust.  These notes were honored in the city, but only at a discount that fluctuated, maybe seventy or sixty or fifty cents on the dollar, as reported in long lists of small print in the daily newspapers. 

     Dan Drew, a former drover who had become proprietor of the Bull’s Head Tavern, where drovers sold cattle to the city’s butchers, saw a chance here to make money.  He opened a firm on Wall Street and began buying uncurrent money at a discount.  Knowing him from his days at the Bull’s Head, the drovers flocked to him, eager to unload their unwanted bank notes even at a steep discount.  Drew then hung on to the notes and waited patiently until their value rose a bit, at which point he sold them at a profit.  Nice for him, but less so for the drovers.

     This state of things, with no federal currency and only bank notes from different states with different regulations, was chaotic.  There were those who called for a national currency that would be honored in every corner of the country, but many were suspicious of a strong federal government and resisted change.  (Yes, there were libertarians back then, too.)  Change did finally come, but only as the result of a crisis.  Which is the American way: resist reform until things blow up in your face, then think about it.

     What blew up in everyone’s face was the Civil War. Suddenly, in 1861,  the U.S. government found its expenses soaring, as it put out contracts for uniforms, tents, blankets, rifles, bayonets, ammunition, and everything else needed to fight a long and costly war.  New York banks ran out of money to lend, and foreign banks demanded an exorbitant rate of interest, so President Lincoln decided on a bold and risky step: to print paper money in large quantities backed by nothing but the name of the federal government; the government’s creditors would either accept it or not.  And so, once Congress passed the Legal Tender Act of 1862, the printing presses got busy and bills began rolling out whose green print gave them the name of “greenbacks.”  The creditors accepted them, but with gold in hiding and greenbacks plentiful, the value of greenbacks declined in terms of gold.  Then news of Union victories caused the price of greenbacks to rise, and the price continued to fluctuate, depending on news from the battlefields.

An 1862 greenback.

     And so, with the country locked in a fierce struggle to preserve its very existence as a nation, speculators began betting on the price of gold.  If the North lost the war, gold would be of value, but greenbacks might be repudiated by the government.  But if it won the war, greenbacks would be of value, and gold would be less attractive.  To put it simply:

                    a Northern victory:         a Northern defeat:

                    gold up                           gold down

                    greenbacks down          greenbacks up

A wild speculation followed, with traders betting for or against greenbacks, and against gold or for gold, while the big operators planted agents at the front to wire back the battle news at once, to give them an advantage in trading.  Lincoln in the White House was well aware of all this, though powerless to stop it.  “What do you think of those fellows in Wall Street who are gambling in gold at such a time as this?” he asked Governor Curtin of Pennsylvania.  “They are a set of sharks,” said Curtin.  “For my part,” said Lincoln, banging his fist on a table, “I wish every one of them had his devilish head shot off!”

     And this regarding a speculation where no one ever saw gold, just certificates and statements of account.  Greenbacks versus gold: paper against paper, fiction against fiction.  Yet fortunes were made and lost.

     Clearly, to talk about money is to talk about gold.  So where is there gold, great chunks of it, today?  In this country, in a fortress-like building in Fort Knox, Kentucky, which holds, in the form of gold bars, a large portion of the U.S. government’s official gold reserves, worth some $380 billion and constituting about 3% of all the gold ever refined throughout human history.  Guarding this treasure are alarms, video cameras, microphones, minefields, barbed razor wire, electric fences, and armed guards, plus helicopter gunships, tanks, and an Army combat brigade in the vicinity.

The Fort Knox gold vault today.

Bars of gold in the gold vault of the Federal
Reserve Bank of New York.

     Yet there is even more gold – some 7,000 metric tons of it -- in the underground vault of the Federal Reserve Bank of New York at 33 Liberty Street in downtown Manhattan.  In that vault, resting on bedrock 80 feet below street level and 50 feet below sea level, is 40% of the world’s gold, most of it held in trust for the central banks of foreign nations. 

     The gold at Fort Knox has long gripped the public’s imagination, as seen in the James Bond movie Goldfinger, based on the novel of the same name, where the villainous Goldfinger sends Pussy Galore’s Flying Circus to spray the soldiers guarding Fort Knox with deadly nerve gas, so that he can steal its hoard of gold bullion.  (Needless to say, James Bond foils the plot, and the gold remains under wraps at Fort Knox.)  In fact, the gold at Fort Knox is so closely guarded that conspiracy theories surface from time to time, asking whether there is any gold there at all, following which assurances are made by those privileged few who are allowed to inspect the vault.  In this layman’s humble opinion, there is gold aplenty there, and I’ll leave it to the experts to debate whether or not this hoard should even exist.

     Gold fascinates us as no paper money ever can.  It is the refuge sought by many whenever the economy seems threatened and paper money is suspect.  Today nutritionist Gary Null, who also opines on economic matters on radio station WBAI, predicts that in the near future the dollar will be dethroned as the world’s most stable and sought-after currency, with resulting disruption in world markets.  So where does he advise savvy investors to put their money?  In gold.

     As a layman I don’t presume to know whether Null’s advice is sound.  There have always been “gold bugs” predicting imminent financial ruin and talking up gold as the only safe form of wealth.  But in the long run stocks and bonds have outperformed gold, which, like all commodities, fluctuates in value.  

     A new form of money has surfaced recently: bitcoin, a digital currency launched in 2009 by persons unknown using the name Satoshi Nakamoto and not backed by any central bank.  Like conventional money, however, it depends on people having faith in it.  It has proved profitable for some, but at present I see it, and other digital currencies that have since appeared, as just another form of funny money, a highly speculative venture that could well end as most speculations do: in a bust.

     All this talk about money and gold rings strangely in the supposedly Christian West, for Jesus was not exactly friendly to wealth.  In Matthew 19:24 he famously declared, “It is easier for a camel to go through the eye of a needle, than for a rich man to enter the kingdom of God.”  The poor were much dearer to him than the rich, and in the temple he overturned the tables of the money changers and drove them out. 

     The early Church condemned usury – the lending of money at exorbitant interest rates – and Henry Adams’s classic work Mont-Saint-Michel and Chartres observed that the Virgin, to whom the cathedral of Chartres is dedicated, had little interest in bankers.  This suspicion of bankers, whether Christian-inspired or not, has persisted into modern times and even infiltrated popular entertainment.  Whenever the radio soap opera Ma Perkins required a villain, the writers trotted out the local banker, who never failed to cause trouble until finally foiled by Ma.  And following the financial crisis of 2008, the reputation of bankers in this country was, for a while, somewhere below that of cockroaches.

     But as feudalism and the age of faith transitioned into capitalism and a more secular time, the churches – both Roman Catholic and Protestant – found that bankers and the money they provided (at a good interest rate) were, under certain circumstances, perhaps acceptable.  It’s no coincidence, I suspect, that the Medici family of Florence, the greatest bankers of Renaissance Italy, provided two Popes to the Vatican, as well as two queens to the kingdom of France. And in 1942 Pope Pius XII by papal decree founded the Vatican Bank, a privately owned institute located exclusively on the territory of the Vatican and reporting to the Pope.  Its operations have been murky and touched by scandal and corruption, including charges of money laundering. Today Pope Francis is encouraging more transparency and reform in the operations of the bank and the Curia, but there is an old Italian saying, “Popes come and go, but the Curia is forever.”

BROWDERBOOKS  

All books are available online as indicated, or from the author.

1.  No Place for Normal: New York / Stories from the Most Exciting City in the World (Mill City Press, 2015).  Winner of the Tenth Annual National Indie Excellence Award for Regional Non-Fiction; first place in the Travel category of the 2015-2016 Reader Views Literary Awards; and Honorable Mention in the Culture category of the Eric Hoffer Book Awards for 2016.  All about anything and everything New York: alcoholics, abortionists, greenmarkets, Occupy Wall Street, the Gay Pride Parade, my mugging in Central Park, peyote visions, and an artist who made art of a blackened human toe.  In her Reader Views review, Sheri Hoyte called it "a delightful treasure chest full of short stories about New York City."

If you love the city (or hate it), this may be the book for you.  An award winner, it sold well at BookCon 2017.

Review 

"If you want wonderful inside tales about New York, this is the book for you.  Cliff Browder has a way with his writing that makes the city I lived in for 40 plus years come alive in a new and delightful way. A refreshing view on NYC that will not disappoint."  Five-star Amazon customer review by Bill L.

Available from Amazon and Barnes & Noble.

2.  Bill Hope: His Story (Anaphora Literary Press, 2017), the second novel in the Metropolis series.  New York City, 1870s: From his cell in the gloomy prison known as the Tombs, young Bill Hope spills out in a torrent of words the story of his career as a pickpocket and shoplifter; his brutal treatment at Sing Sing and escape from another prison in a coffin; his forays into brownstones and polite society; and his sojourn among the “loonies” in a madhouse, from which he emerges to face betrayal and death threats, and possible involvement in a murder.  Driving him throughout is a fierce desire for better, a persistent and undying hope.

For readers who like historical fiction and a fast-moving story.

Reviews

"A real yarn of a story about a lovable pickpocket who gets into trouble and has a great adventure.  A must read."  Five-star Amazon customer review by nicole w brown.

"This was a fun book.  The main character seemed like a cross between Huck Finn and a Charles Dickens character.  I would recommend this."  Four-star LibraryThing review by stephvin.

Available from Amazon and Barnes & Noble.

3.  Dark Knowledge (Anaphora Literary Press, 2018), the third novel in the Metropolis series.  Adult and young adult.  A fast-moving historical novel about New York City and the slave trade, with the sights and sounds and smells of the waterfront. 

The back cover summary:

New York City, late 1860s.  When young Chris Harmony learns that members of his family may have been involved in the illegal pre-Civil War slave trade, taking slaves from Africa to Cuba, he is appalled.  Determined to learn the truth, he begins an investigation that takes him into a dingy waterfront saloon, musty old maritime records that yield startling secrets, and elegant brownstone parlors that may have been furnished by the trade.  Since those once involved dread exposure, he meets denials and evasions, then threats, and a key witness is murdered.  Chris has vivid fantasies of the suffering slaves on the ships and their savage revolts.  How could seemingly respectable people be involved in so abhorrent a trade, and how did they avoid exposure?  And what price must Chris pay to learn the painful truth and proclaim it?

Early reviews

"A lively and entertaining tale.  The writing styles, plot, pace and character development were excellent."  Four-star LibraryThing early review by BridgitDavis.

"At first the plot ... seemed a bit contrived, but I was soon swept up in the tale."  Four-star LibraryThing early review by snash.

"I am glad that I have read this book as it goes into great detail and the presentation is amazing.  The Author obviously knows his stuff."  Four-star LibraryThing early review by Moiser20.

Just released; available from Amazon and Barnes & Noble.

4.  The Pleasuring of Men (Gival Press, 2011), the first novel in the Metropolis series, tells the story of a respectably raised young man who chooses to become a male prostitute in late 1860s New York and falls in love with his most difficult client.

What was the gay scene like in nineteenth-century New York?   Gay romance, if you like, but no porn (I don't do porn).  Women have read it and reviewed it.  (The cover illustration doesn't hurt.)

Reviews

"At times amusing, gritty, heartfelt and a little sexy -- this would make a great summer read."  Four-star Amazon customer review by BobW.

"Really more of a fantasy of a 19th century gay life than any kind of historical representation of the same."  Three-star Goodreads review by Rachel.

"The detail Browder brings to this glimpse into history is only equaled by his writing of credible and interesting characters.  Highly recommended."  Five-star Goodreads review by Nan Hawthorne.

Available from Amazon and Barnes & Noble.

Coming soon: The Next Big Thing.  What was it in the past, and what will it be in the future?  Want to take a guess?

©   2018   Clifford Browder