Could eliminating the $100 bill keep Americans safer? Former Treasury Secretary Larry Summers thinks so.
Writing in The Washington Post's Wonkblog, Summers said he supports findings from Harvard University researchers showing a "linkage between high denomination notes and crime."
Bills of high denomination make it easier for criminals to carry large sums with little bulk or weight. "He is surely right that illicit activities are facilitated when a million dollars weighs 2.2 pounds as with the 500 euro note rather than more than 50 pounds as would be the case if the $20 bill was the high denomination note," Summers said, referring to the analysis by Harvard senior fellow Peter Sands.
Summers, a Harvard professor, said the study makes a compelling case for halting issuance of high denomination bills, such as the $100 U.S. note and the 500 euro note ($556), and even withdrawing them from circulation.
Technology has but eliminated the need for large notes to conduct legal commerce, but Summers concedes that eliminating the bills won't be an easy thing to do, citing, in part, reluctance among some officials within the European Central Bank.
"I'd guess the idea of removing existing notes is a step too far. But a moratorium on printing new high-denomination notes would make the world a better place," Summers wrote.
The ECB currently faces many challenges on its homefront -- including a refugee crisis and economic weakness -- that inhibit its ability to address global problems, Summers wrote. But unilaterally agreeing to reduce the number of high denomination bills in circulation would be an easy and inexpensive way to combat crime around the world.
Even better, Summers said, would be a global agreement to stop issuing notes of $50 or $100. In standing together, world financial leaders could show they back the interests of ordinary citizens more than those of "big money."
Calls to eliminate the $100 bill aren't anything new. In 1986 in a bid to reduce drug trafficking, New York Mayor Ed Koch urged President Ronald Reagan to eliminate the $100 bill.
But eliminating the $100 bill today would be especially difficult. The note is in wide circulation throughout the world, used legitimately by foreign countries facing currency crises and their citizens as a safe way to store their money.
The Federal Reserve estimates that at the end of 2015 there was $1.08 trillion in $100 notes in circulation globally, or 10.8 billion $100 bills.
Despite Summers' plea, the Treasury doesn't appear ready to give "Benjamins" the heave-ho. On its website, the agency says neither it nor the Federal Reserve have any plans to change the denominations in use today, which include $1, $2, $5, $10, $20, $50 and $100 notes.
In fact, Treasury hasn't moved to stop distributing any high denomination bills since 1969, when the Federal Reserve announced plans to immediately halt circulation of $500, $1,000, $5,000 and $10,000 bills. To this day, some of these notes remain in circulation, but are destroyed by the Federal Reserve Banks upon receipt.
Ben Franklin may not soon join William McKinley, Grover Cleveland and James Madison in the currency dustbin, but Summers is right to urge world financial leaders to do more to better protect the interests of ordinary citizens.