Cash Only Society

How would America be right now if it were a cash only society?

Meaning, if it never went with anything except cash only.

And what would America’s big crisp bills be besides just $50 bills and $100 bills?

I’m not clear if you’re suggesting there be no individual credit (or maybe any credit) or that credit or cash equivalents cannot be used for purchasing. Two different questions.

I think he’s asking how big would the dollar bill increments be for mega-transactions that amount into the millions and billions. No checks?

If one had to purchase homes and autos with cash only, I suspect there would be many fewer cars on the road and homeowners. If small corporations and small unincorporated business could not borrow, there would be many many fewer of them. I suppose large corporations might be able to get by with only stock, but I’m not sure how they would have become large in the first place.

Either the government would start making higher denomination bills, or businesses would start using private debt to move money around. Theft would increase, as would the cost of almost all financial services. Money laundering would become much harder to track, and organized crime would increase as moving money around became less suspicious. It’d be worse than what we have now for no benefit.

Years ago when I lived in Taiwan it was very much a “cash only” economy. Credit cards were unheard of.

The university that I taught at gave me a large envelope of $100 New Taiwan Dollars each week. I paid the rent in cash and paid cash for all my purchases from a TV to towels and blankets. Life in general went on. No one owed anyone any money.

The other odd thing was that there was no bill larger than $100 NT. The equivalent of $2.50 US! This meant purchases of even small items like a TV or a motor scooter took several envelopes of cash. And no one batted an eye. The idea was that by limiting the size of the largest bill, inflation would be kept in check. Figure that one out!!??

Taiwan did go through a terrible inflationary period after the Japanese were forced out after the end of WW 2. The mainland Chinese who took over started printing money like crazy. People were starving because they could afford the price of rice. Finally in 1949 40,000 Yuan was accepted in exchange for one New Taiwan Dollar. Most people with any money at all were wiped out.

This explains the Taiwanese fear of inflation and there desire to keep all transaction in cash, but the idea that limiting the size of the largest denomination bill has an effect on inflation is just plain wacky.

From what I understand today there are $2000 NT bills the equivalent of $66.50 US. And younger locals are using credit cards.

The highest denominated currency the U.S. has ever authorized was the $100,000 bill used in 1934-35. Adjusted for inflation, that would be about $1.7 million today.

Of course even in 1934, money orders had been around for about a century and checks had existed for 300 years just so people wouldn’t have to carry around huge amounts of cash.

When I lived in the Republic of Georgia it was cash only. We were paid in cash and our rent, utilities and everything else we bought was paid for in cash (Georgian Lari banknotes). It worked fine. I still live like that. I paid cash for my car in the US (though it was a cashiers check not actual cash as it would have been in Georgia).

I’ve never had any debt so it really would not change anything for me.

Did one pay for a house in cash, and how did you keep that much cash secure?

Thailand is, for most people, a cash-based economy. When I try to use a credit card anywhere except for big, retail anchor stores I get a frowny-face and the shop owner has to come out, inspect the card and then tells me there will by a few percent surcharge if I use the card. They’ll ask my which bank I use, and then tell me where the nearest brach is. They really want the cash.

The largest bill here is 1000 baht which is only about $30. I’ve made two big purchases - a car for about 600,000 baht and a house for around 1.1 million. For the car, I had to go into my bank and withdraw the cash. It was an unimpressive stack of bills that easily fit into a small purse or fanny pack.

The house purchase was done in a single day by an interbank transfer, which comes with a 50 baht fee.

There’s a common misconception here that credit cards are somehow risky or can’t be trusted, and I’m guessing that most ordinary folk who live from hand-to-mouth just don’t have a need for one.

Yeah, cash rules in Thailand. In all my years here, I may have seen two or three checks but only one that I can remember for sure.

My (soon-to-be) ex told me when she was a kid in Japan her father would come home from work at the end of the week with an envelope stuffed with cash which he would dutifully hand over to her mother who would count it and hand him his allowance keeping the rest for bills and whatnot.

I grew up in a cash-only society, for all practical purposes. Wealthy people had checking accounts, but you had to maintain a high minimum balance (maybe $1000). My father got a pay envelope with his pay in cash every Thursday. Eventually, the company was held up one Thursday, so they started paying by check. But most of the workers had no bank accounts so it was arranged that they could cash the checks at the issuing bank two blocks away. Payday lunch time saw long lines at the bank. We paid bills in one of two ways. Utility (phone, electric, gas, whatever) could be paid, for a small fee at a bill-paying establishment a block away. Others he got money orders from the bank. I think that cost him about 10 c. Then, around 1950, the banks started offering “special” checking accounts that had no mimimum balance, but charged 10 c. for each check you wrote. My father didn’t hesitate to get one of those.

It wasn’t completely cash only. Department stores would issue their own “charge cards” that operated more-or-less like credit cards, but could be used only in the issuing store. But things like food shopping (we shopped every day, there were no freezers and the fridges were small) we always paid cash. Although, where you were known, you could always say “charge it” and the grocer would write it down on a slip of paper that was sitting, along with dozens (hundreds?) of similar ones pinned to the wall behind him and we would come on Friday morning and pay it off (or at least make a payment towards it).

My memories of this go back to the 1940s. Around 1964 or so, the year I got married, suddenly all the banks were offering credit cards. The main ones were BankAmeriCard (now Visa) and MasterCard. There were also Amex cards, but you had to pay an annual fee and far fewer merchants took them.

Slightly off topic…

I was just on a tour in Spain, and the guide was talking about Euros and the denominations available. At the end, he said that there are 500 Euro bills printed, but they were commonly nicknamed “Bin Ladens”: Everyone knew they were out there, but nobody knew where they were. :slight_smile:

The common understanding is that they were all in the hands of drug smugglers, being the largest common denomination around.


I am not sure about homes, but people paid cash for cars. Among all the people I knew, both expats and Georgians, nobody had a bank account. We were paid in Georgian Lari cash and would immediately go downtown to a money exchange guy (who kept an AK-47 in his booth) and would convert 80% to USD since the Lari was a weak currency.

We just kept $4K - $5K at home in a drawer. That was enough to get out of the country at short notice.

It’s not just drug smugglers who favor large-denomination Euros (and large-denomination US currency). Non-criminals in countries with weak or unstable currencies may prefer to keep money in Euros or US dollars. Perhaps 2/3 of the US hundred-dollar bill are circulated outside the US.