Changing the Currency

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                                      3
         Changing the Currency

          by J. Orlin Grabbe

     Lemme get this straight.  You left
home  and  went to one of them  foreign
places,  got a handful of their  money,
and it felt like "play money"?  But you
could  still  use it in  a  restaurant,
train  station,  or at  the  newsstand,
right?  Okay.  But  you  say  it  still
somehow  felt "unreal", and  you  never
were  able  to shake off that "monopoly
money" mind set?  Hmmm. Why is that?

      An  American in Paris who gets  a
100-franc  note with Eugene Delacroix's
picture  on it, often finds it  doesn't
kick  ass  like the US one-dollar  bill
with  George Washington's picture.  The
Parisian, on the other hand,  may  feel
that  the  watersnip on the 100-guilder
note  looks downright ridiculous, while
denizens of Amsterdam might prefer  the
bird  image  to  Sir Donald  Sangster's
ugly   face  on  the  Jamaican  hundred
dollar  bill.  The Swiss 50-franc  note
depicting  Konrad  Gessner  (1516-1565)
doesn't say anything about "In  God  We
Trust,"  but  on  the  other  hand   it
doesn't     display    the    obnoxious
"Counterfeiters  will  be   Prosecuted"
found  on  the  Russian 100-ruble  note
(vintage 1993).

      Money is funny.  That's why  more
than  ten  years ago when  the  Federal
Reserve was thinking of changing the US
currency, it formed focus groups in  an
attempt  to  gauge public reaction.  It
had  a  company called Market Facts  go
mall-trolling       for       potential
participants.  They went to the Seaview
Square  Mall in Ocean, New Jersey;  the
Buena   Park  Mall  in  Orange  County,
California;   the  Eastland   Mall   in
Charlotte, North Carolina; and the  Fox
Valley Center in Aurora, Illinois.  The
report  is entitled "Reactions to  U.S.
Currency  Redesign: Analysis  of  Focus
Group  Discussions," and was  submitted
to   the  Board  of  Governors  of  the
Federal Reserve System on September 21,
1983.

     The discussions were recorded, and-
-to  make sure every bit of information
was  properly gleaned--groups were also
observed in a conference room through a
one-way mirror.

      In general the groups stated that
while  they  did  not  care  about  the
appearance  of money, "they argued  not
to  change  it.  There was considerable
concern  that  our  money  would   look
'fake' or 'foreign.'  Participants also
wanted to know why the government would
want  to change the appearance  of  the
currency."

      The groups were divided into  two
categories:    "General   Public"   and
"Heavy Currency Handlers".  Someone who
took  orders at McDonald's  would  fall
into   the   Heavy   Currency   Handler
category.    The  later   groups   were
strongly of the opinion that money  was
"dirty"--not  in  the  Michael  Sindona
sense  of  turning "dirty"  money  into
"clean"   money--but  rather   in   the
"dirty," "shabby," "shoddy," and "worn"
sense.   Some said the US currency  was
the   dirtiest   in  the   world.    By
contrast,  a  person  in  one  of   the
General Public groups noted that  money
has   "the  denomination  on  all  four
corners."

       Some   of   the  Heavy  Currency
Handlers  thought it might  be  a  neat
idea  to have different colors for  the
different  denominations,  to  make  it
easier   to  make  change.   But   more
frequently it was remarked that "people
don't  like  change" or "the government
should leave well-enough alone."

       Today  we  know  that  the  real
rationale  for currency  change  is  to
make   the   currency   detectable   by
currency-detection     equipment     in
airports  (and possibly other places)--
in  order to detect money launderers or
anyone  else carrying large amounts  of
currency.   But  the  publicly-  stated
rationale is the misleading "prevention
of  counterfeiting."  In this light, it
is  interesting that numerous questions
were   directed  at  attitudes   toward
counterfeiting.

      Many  of  the  group participants
thought  counterfeiting was  a  serious
problem,  but "the majority  wanted  to
know  how  much counterfeiting actually
costs   the  public  each  year  before
taking  a  position on whether  or  not
currency should be changed."

     None of the participants admitting
to    any   inclination   to   actually
counterfeit money themselves,  even  if
they could do so without detection, but
about half of them said they would pass
along   counterfeit   bills   if   they
received them.  The other half  thought
that  passing  bogus  bills  would   be
morally  wrong.   But not  all  of  the
latter  would "turn in bogus  bills  to
the  authorities.   A few  participants
recounted  stories  of  persons   being
hounded by the FBI to recall where they
received  the  counterfeit bill--viewed
as a deterrent to reporting counterfeit
bills.  This  group opted,  rather,  to
quietly  destroy the bill and take  the
loss."

       The  report  concludes  that   a
Counterfeiting Threat should be used to
sell  the  idea  of  currency  changes:
"The   extent  of  counterfeiting  and,
thus, the importance of adopting a  new
form   of   currency  must  be   widely
publicized.  Without precise  knowledge
of  the  severity  of the  problem  the
public may assume that the benefits  of
adopting new money do not outweight the
costs."

      The  report  doesn't mention  any
special   information   discovered   by
observations made  through the  one-way
glass.

January 23, 1997
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