Sunday, March 27, 2011

Half Dollar

The other day, I saw what appeared to be half of a dollar bill on display. Although I later learned that it was simply just a regular dollar folded over, such that half of it was no longer visible, it got me thinking. What would happen to half of a dollar bill?

According to the U.S. Bureau of Engraving and Printing, the $1 bill accounts for 45% of all currency in production. Its average life span is 3.5 years. But I was interested in what would happen to a damaged dollar. According to the department, a note that is more than half intact and undamaged can be redeemed at any local bank. The general policy seems to be that if you have the majority of the bill, you have the dollar; if you have a smaller piece, you have nothing.

Fair enough, but what about exactly half? What would that be worth?

Some banks, perhaps, would give you a dollar for it. So, hypothetically, one could slice a dollar down the middle, bring each half to separate banks, and walk away with $2. Try it again with a larger bill, and maybe you could make some money.

I think, however, this material is riper for a social experiment than financial fraud. After all, money only has "value" because we believe it does, right? There is nothing inherently desirable about a green patch of 75% cotton, but if we want the cloth note, then it becomes worth something.

So let's test something out. Let's say that half of a dollar is to be valued at $0.50. Can it work? If people believe in it, then yes. It's sort of like Frindle, only probably easier to pull off. Just tear a dollar in half, and then try paying for a $5.75 purchase with a $5, your torn dollar, and a quarter. See what happens.

The thing is, if they accept your half dollar as, well, half a dollar, then it's working. If the man who sold you the  inflatable elephant for $5.75 then goes and buys a box of peanuts for $3.50, paying again with the torn dollar, we're right on track to a monetary revolution. So long as people have confidence in the thing, it's worth something.

On that note, the link to this blog post is valued at $0.99. Mail me some Reese's, and I'll hook you up with another.

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