(FORTUNE Magazine) – What fresh frauds would he be perpetrating now, if he were alive? P.T. Barnum, who twice rewrote his own biography, would fit in perfectly at the Weekly World News (WORLD WAR II BOMBER FOUND ON MOON; WOMAN ATTACKED BY FUR COAT; SNEEZING INCREASES YOUR BUST SIZE). As a former showman and freak finder, he'd be a natural for daytime television, maybe hosting his own show, Midday Midway with P.T., which could show him scouring teaching hospitals for guests (Tuesday: "Siamese Twins Who Love Too Much"). Far-fetched? It's tame compared with what he really did.

Barnum's first big success was a hoax. In 1835, at the age of 25, he charged New Yorkers admission to see and hear a shriveled-up old crone who, Barnum claimed, had once been George Washington's nursemaid. This would have made her 161. When public enthusiasm for the maid's recollections of "dear little Georgie" subsided, Barnum hit upon a ruse he would employ many times: He sent anonymous letters to newspapers, insisting the exhibit was a fraud.

The "nurse," declared one letter, wasn't really a person at all--she was "a curiously constructed automaton, made up of whalebone, India rubber and numberless springs" ingeniously put together. The exhibitor was "a ventriloquist," and all the conversations apparently held with the old lady were purely imaginary. The public, feeling the need for a second look, rushed back.

It was by such adventures and experiments--richly depicted in P.T. Barnum, America's Greatest Showman (Knopf, $45), by the father-son-and-son team of Philip Kunhardt Jr., Philip Kunhardt III, and Peter Kunhardt--that young Phineas chanced on a discovery every bit as significant, commercially, as Bell's of the telephone or Goodyear's of rubber: People, he found, liked being fooled, as long as they believed themselves in on the joke. The more whimsical the imposture, the greater its amusement value. To quote Barnum: "My dear sir, the bigger the humbug, the better the people will like it." And they did, whether he was promoting a Grand Buffalo Hunt in Hoboken, New Jersey (he filled a racecourse with a herd of listless animals, brought down from Boston), or exhibiting what he claimed to be a "woolly horse" found by Colonel John C. Fremont's expedition to the far West. (Fremont disclaimed all knowledge.)

Barnum probably is best remembered as an exhibitor of "curiosities" (he preferred that word to "freaks"), and these are luxuriously displayed in the Kunhardts' coffee-table volume. Here one may view General Tom Thumb, Admiral Dot, and Commodore Nutt (all midgets), Jo-Jo the Dog-Faced Boy, living skeletons, fat ladies, a frog swallower, the Wild Men of Borneo (who, it turns out, were two retarded brothers named Davis from Ohio), the Missing Link, and, by no means least, Chang and Eng, the Siamese twins who so triumphed over their impediment that they fathered 22 children.

LONG BEFORE Barnum went into the circus business (1870), he was already rich--one of America's first millionaires, after John Jacob Astor. Indeed, he may have been the first man outside organized religion to profit from the palpably untrue. He was incomparably famous. General Grant, at the height of his own fame, believed Barnum better known.

Given a life so bubblingly fantastic, the Kunhardts, to their great credit, go easy on commentary--social or otherwise. They give Barnum an obligatory thwack for believing in the superiority of his own race. And they supply perspective, noting that Barnum's was the great age of hoaxing--stunts and practical jokes not yet having acquired the bad aroma they possess now. Most important, they illuminate an aspect of Barnum's character not previously appreciated: his capacity for earning the friendship of his performers.

He paid good wages. He shared profits. Star acts became rich in his employ. He was decent in his business dealings and treated talent--however peculiar--with respect. He pretty much had to. Today, curiosities thrust themselves forward for the thrill of being exploited--free--on television. Barnum had to court his, then keep them assembled in a kind of family.

En famille he was liked. There were exceptions (Chang and Eng, for some reason, couldn't stand him). But the rest of the company rallied to his defense when, in 1856, an improvident investment reduced Barnum temporarily to bankruptcy. Tom Thumb wrote: "My Dear Mr. Barnum, I understand your friends, and that means 'all creation,' intend to get up some benefits for your family. Now, my dear sir, just be good enough to remember that I belong to that mighty crowd, and I must have a finger (or at least a 'thumb') in that pie." It is hard to imagine Ricki Lake's guests according her a similar generosity. When Barnum died in 1891, a camera caught the Missing Link laying a wreath upon his bier.