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PICTURES FROM A DISTANT COUNTRY

Images on 19th Century U.S. Currency

by

Richard G. Doty, Ph.D.

Smithsonian Institution


 

Table of Contents

FORWARD

HOW OUR MONEY GOT THAT WAY

A NOTE ON THE NOTES

CHAPTER 1 Constructing a National Identity

CHAPTER 2 The People in the Way

CHAPTER 3 The People in the Middle

CHAPTER 4 Temptress, Saint, and Helpmeet: Woman's Identity

CHAPTER 5 Childhood and Family

CHAPTER 6 Making a Living

CHAPTER 7 Whimsy

CHAPTER 8 "You Can Trust Me": Images of Worth

CHAPTER 9 Progress

CHAPTER 10 …An Age Now Ending

CHAPTER 11 Epilogue: ...And Then What Happened?

LIST OF ILLUSTRATIONS

FORWARD


Everyone knows that there is only one form of American currency, the product of a single issuer. The currency is the Greenback, and the issuer is the federal government. But this arrangement has not always been the rule: for much of the nation's history (including what many would see as its most dynamic period of growth) there was no federal currency in circulation. Instead, there were the products of private banks and other businesses, which had or took upon themselves the right and responsibility to issue currency. We call this private money obsolete bank notes, and they form the basis of this book.

The dominance of the private note lasted for approximately three-quarters of a century, roughly from 1790 to 1865. This form of currency was called into being when the national government hesitated to offer the public paper money but positively prohibited the states from doing so. It ended when the federal government decided that there were sound reasons for circulating a national currency (and distinct advantages in driving its private competition from the field). These points will be discussed in due course; for now, we might ask ourselves what a nineteenth-century American private note means. That is, what do we see in this object, and what did people a century and a half ago see in it?

The answer depends on who you are and when you are—or were.

For us, obsolete notes carry a faint whiff of flimflam, of fraud. Aren't these pieces of private paper also called broken bank notes? Were they not fraudulent from the very beginning, the products of enterprising confidence men who skinned the public, then decamped in the middle of the night?

The element of fraud was indeed potential, sometimes actual; and nineteenth-century Americans were keenly aware of the risk. But they would have replied that money with possible or genuine risk was still better than no money at all—which was what many of them foresaw in the absence of the private bank note. Indeed, to several generations of our people, the private bank note was money, pure and simple. It was how they measured wealth. It represented the difference between comfort and autonomy on the one hand, and misery and scarcity on the other.

For the citizens of a distant country, the notes represented far more than wealth and ease. In the images that they bore, images chosen by bankers and businessmen, placed on the notes by engravers and lithographers, these pieces of paper were teaching tools. They brought to the public indelible ideas of what was beautiful, moral, uplifting, worth emulating—and they were the only form of printed imagery which the average citizen was likely to see in the general course of daily routine. Our citizen would pay close attention to the scenes and portraits, because the medium upon which they appeared was money—worth the closest scrutiny by its very nature. In effect, the nineteenth-century private bank note served as a people's primer for anyone coming into contact with it. And there is a strong suggestion that it was intended for such service by those who called it into being.

The image-laden obsolete note was a teaching aid for the men and women of the nineteenth century. It can serve their twenty-first-century counterparts too, if we know how to approach it. But our objectives will be different. We are not interested in a particular image as a decorative factor; nor are we interested in it as a didactic tool, at least not directly. What we are seeking is a glimpse into a vanished world, as the people who lived there saw it. This is the Distant Country of the title of the book. The private bank note can give us some of the most revealing images we shall ever possess about this vanished land and its inhabitants, what they thought of themselves; what they thought of each other; how they viewed the issues of the day (and what they thought were the issues of the day: their list would surely differ from ours); how they viewed work, the factory, the farm, the future. It only remains for us to address the material, and draw our conclusions.

Pictures from a Distant Country is my response to the evidence at hand.

I have worked with obsolete American bank notes for a quarter of a century, first at the American Numismatic Society in New York, more lately at the National Numismatic Collection of the Smithsonian Institution in Washington. I have examined twenty-five thousand pieces over the years, rather more of them in Washington than in New York. My earliest work was simply cataloguing the material and making it retrievable for scholars and hobbyists; but I soon became interested in the beauty of the notes and the interesting scenes they depicted.

The next stage was prompted from outside. In 1993, I spent several months in the United Kingdom, finishing research on Matthew Boulton, a pioneer coiner in the British Industrial Revolution. Virginia Hewitt was then putting together a speakers' program for a British Museum symposium on bank notes she was chairing, to take place in the spring of 1994. She asked whether I would be interested in preparing a presentation with an American slant. I immediately thought of the obsolete notes (which were even less-known in Europe than they were in America), and signed on.

I already had the germ of an idea. It had struck me that women, Native Americans, and African-Americans were constant representations on nineteenth-century notes—this at a time when most of them were outside the monetary economy represented by the notes. I wondered what was going on—and as I began looking at the vignettes closely for the first time, I discovered a new world. Virginia Hewitt got her presentation (and I got another article, for the British Museum published it and the other papers in The Banker's Art: Studies in Paper Money). And I began seriously thinking of creating a book, based on what I had found and would find.

You hold the result.

I must make a few comments before we go any farther. This book is not intended solely or primarily for collectors of obsolete currency. It does not offer advice as to value, methods of conservation, or rarity. Rather, it is a highly personal look at our past, using a medium which has been underutilized by historians and numismatists alike. I must stress the personal nature of the quest: it is notoriously difficult to interpret images from a long-dead past: even when we have the renditions they left behind, we cannot know precisely what the people were thinking when they created them. I shall undoubtedly come up short, or wrong, many times throughout this book. But I have always felt that it is better to make an effort, and risk criticism, than to play things safe and say and contribute nothing to the conversation.

You may be wondering how all those vignettes got on all that currency. And you may be wondering why we had private money in the first place. The answers to both questions are intertwined, and they go back two centuries.



HOW OUR MONEY GOT THAT WAY


Consider:

Between 1790 and 1865, no fewer than eight thousand fiscal entities issued currency in America. Most of them were banks; but insurance companies, railroads, turnpikes, factories, hotels, and in one case an orphan's institute were also represented.
Most of these entities circulated notes in more than one denomination. Our current mainstays—fives, tens, twenties, and hundreds—were popular, but so were threes, fours, even sevens and nines. The average bank issued currency in half a dozen different values.

After the first two decades, pictorial representation became popular, then mandatory. By the 1850s, the average private bank note bore a central vignette, one or more portraits to the left or right of the central scene, and a smaller representation at bottom-center. In other words, the average note bore three to five portraits or vignettes.

Bankers changed the appearance of their currency on a regular basis—a minor addition or refinement every three years or so, a total redesign every decade or less.

The result was a pictorial richness never approached, let alone exceeded, before or since. The number of scenes and portraits appearing on private American currency between 1790 and 1865 has never been calculated, but it must amount to tens of thousands of images. The total would be still higher were it not for the fact that printers retained Amasters@ of the more successful or popular representations and reused them as required. That said, the wealth of material is still astounding.

How did all this come about?

It began with a basic shortage: for the first two centuries of America's story, Europeans found everything here except the one thing they most hoped to find: precious metal. The scarcity of native silver and gold annoyed the authorities in London, especially in light of the notable success of their Spanish and Portuguese competitors to the south. But it was more than an annoyance for those who settled in the new English colonies. They had been brought up to believe that precious metals were indicators of wealth, that coins made from them were absolute necessities for expansion and trade. No gold and silver, no coins; no coins, stagnation. All this might not have mattered had the English colonies remained small, their populations modest. But the opposite was true: despite their monetary handicap, New England, the Middle Colonies, and the South were demographic and economic successes virtually from the beginning. Nonetheless, a way around that handicap must be found, and soon. Otherwise, the new lands' limitation would eventually prove victorious.

The colonists' response was fascinating: over the next few decades, they experimented with every European solution to monetary scarcity. They devised several solutions of their own, including exchange systems based on tobacco and rice. They borrowed others from the native peoples whom they displaced, most notably wampum. But all of their expedients proved illusory or short-lived; except one. They devised paper money, whose value and validity were guaranteed by the local public authority.

Massachusetts brought out the first notes, in 1690. Other colonies quickly followed suit: paper money could keep pace with growing populations and economies, and that fact that it was public paper money was comforting. Surely, those in power would ensure that the amounts put into circulation were strictly limited to real need; and they would rigorously protect the public money from the attentions of the private forger. (As time proved, neither of these beliefs was well founded: colonies put entirely too much currency into circulation, and forgers were a perpetual problem. But the medium was far too valuable to abandon, so colonies and their citizens complained, but acquiesced in the system.)

When the colonies decided to make their bid for independence, they relied on paper currency to purchase supplies, secure troops, and drive an insurgent commerce. The medium had worked well enough in previous emergencies. But it failed them now, when they were most vulnerable.

Whether or not anyone realized it, one reason why colonial paper money had worked in the past was that the British Government stood behind it, directly or indirectly. For example, Massachusetts was expected to raise troops and purchase supplies as part of England's ongoing campaign against the French in Canada. If she printed currency for the purpose (which was how she and the others stumbled across the medium in the first place: all of their initial issues were war-related), she knew that she would be reimbursed by the British Government—in cash—at war's end. Obviously, the British could not be expected to pay for this war.

The rebels did not expect her to do so. But they also expected their war against her to be short and victorious, in which case their currency system would suffice, with or without reimbursement. Considering the lack of any other, orthodox, means of paying for their bid for independence, Messrs. Washington, Jefferson, and Franklin must have blenched, then prayed for a brief and brilliant campaign. What they got was the exact opposite.

The shooting phase lasted for six years, and it was inconclusive up to the very end. Washington and his generals were not strong enough to eject the British. Lord Howe and his successors were not quite strong enough to smash the insurgents once and for all. The currency reflected the nature of the conflict. Colonial (now state) paper money and a new, national counterpart called Continental Currency held their value for the first couple of years—from the spring of 1775 through the summer of 1777. But then, with New York and Boston occupied, with no victory in sight, the currency began to slide. By the end of 1777, a Continental (paper) dollar was worth only two-thirds of the Spanish-American (silver) dollar upon which it was theoretically based. The currency of the states was faring worse, with a four-to-one ratio in most instances. Still, the insurgents would have argued that a shaky currency was a small price to pay for the nation's freedom. They might have loyally added that their money would present no problem—as long as it did not continue to depreciate.

But it did continue to depreciate. Month after month, state and federal paper continued their downward spirals, and by the end of 1778, it took six dollars in Continental Currency to buy one Spanish-American dollar, or Piece of Eight (that is, if you found anyone willing to make the exchange). By the end of 1779, the rate of depreciation had quadrupled, and by the middle of 1780 (at which time the Continental Congress simply gave up issuing Continental Currency), the rate stood at forty-to-one. This was also the exchange rate enjoyed by the strongest of the state currencies. But in places like Maryland and Virginia, the situation was far worse: they were issuing two-thousand-dollar bills in Virginia in the spring of 1781. They were worth a couple of dollars in Ahard@ money.

Washington's victory at Yorktown later that year meant the end of the Revolutionary War. We had won—in spite of our money. But the first few years of peace prompted some very hard thinking on the part of politicians and businessmen. The 1780s would end with a very precise idea about the future nature of American money, about who would be responsible for it—and who would not.

The idea would be embodied in the Constitution, written in 1787, in effect by 1789. It is important to consider the economic and political complexion of the men who wrote our new basic law. They were well educated. They tended to live on or near the seaboard, where they were engaged in business and the law. They wanted to increase and ensure the majesty and renown of the United States. They proposed to do so by increasing the powers of the national government—if necessary, at the expense of those of the states.

And when they looked back on the fiscal scene of the previous decade, they saw much room for improvement. They saw what had happened to state and federal paper money during and after the Revolution (and the hardships it had wrought on the business community). They resolved that it must never happen again. So they set to work.

If they had their way, the new republic would be a hard money paradise, meaning that, whatever other expedients might be adopted from time to time, the basis for all thinking would be a precious-metal coinage. The right to make and circulate such coinage would be exclusively lodged in the hands of the national polity, not shared with the states as had previously been the case. And when it came to paper currency, the men of 1787 had very precise ideas indeed, ideas that they wrote into the body of the Constitution, plain for all to see. By Article I, Section 10, Paragraph 1, states were specifically forbidden “to emit Bills of Credit [paper money]; [or] make any Thing but gold and silver Coin a Tender in Payment of Debts.” Nor did the Constitution give the national government the right to issue currency.

But in this second instance, the framers were disingenuous. They didn't specifically prohibit the new federal government from circulating paper, because they realized that under emergency conditions, national paper might be a necessity. Still, their silence, following on a written prohibition of state currency, should do the trick. And hard money would win out, presumably to everybody's benefit.

What the framers wanted and what the country got were two very different things. A United States Mint was set up in the new federal capital, Philadelphia, early in the 1790s, and it made a determined effort to provide the country with coin, and thus to wean it away from currency. But the Mint, and the politicians who had called it into being, had no more success at defying reality than had their predecessors. Supplies of silver and gold remained in annoyingly short supply, while the national economy and population showed every sign of continuing to grow in a most healthy fashion, putting America's monetary reach perpetually beyond her grasp. To recapitulate: the federal government could not provide its citizens with coinage, had prohibited the states from providing them with currency, and had no current intention of stepping into the paper money breach itself. What did that leave? It left the private sector. It left the banks, who took up the slack, providing the country with a private paper currency.

The first of them was the Bank of North America, which opened its doors at the beginning of 1782. It had been joined by a handful of others by the end of the decade. These banks, like all those who followed, issued paper money for the public good and for private profit. The establishment of Hamilton's Bank of the United States in 1791 acted as a spur to private issues. By 1800, as the country stood on the brink of its Industrial Revolution, the private notes' potentials for good were becoming fully understood: here was how you built the factories, improved the farms, opened the roads to the New Era.

By 1800, the private notes' potentials for harm were also becoming apparent: how could you produce enough of them to fuel the expansion you desired? And how could you keep them safe, immune to forgery? The key to both problems lay in the printing technology then in use. And the solution to both would lie in a new printing technology, about to be introduced.

As the nineteenth century dawned, there were two techniques available to security printers. One could print from moveable type, or one could print from engraved plates. The typeset method had much to recommend it: it was fairly easy to master, and it made possible the production of large runs of identical notes. But it was also an easy target for forgers, a boatload of whom had copied Continental notes during the war, in an inspired bit of economic warfare. The engraving or intaglio method was far safer, for it featured a delicate yet precise line, which was very difficult to master. But it was unsuitable for large printing runs. Copper was the metal used for the plates (for no one had yet mastered steel), and the rosy metal was fairly soft, rapidly losing design details as printing went on. The only way to extend the life of a copper plate was to retouch it, re-engrave it; and when that was done, the absolute consistency that is at the heart of any security process was compromised.

The solution was to introduce new materials and new processes, products alike of the American version of the Industrial Revolution. And the key person was a Yankee silversmith, inventor, and self-promoter named Jacob Perkins. Perkins was keen to introduce steel into the printing process. He believed that he would have the best of both worlds if he succeeded: he would create a printing material which would wear far better than copper (and therefore create as many notes as the typeset method), yet at the same time would be as safe or safer than copper, because it would feature the subtlety of engraving.

The difficulty was to learn how to soften and harden steel at will: once you knew that, everything else became possible. Perkins had mastered that trick by the beginning years of the nineteenth century. But he then took matters a crucial step farther. He mastered the concept of replicating designs on steel.

The inventor mainly worked with engine-turned engraving, because he was more concerned with security than artistry, and he reasoned that a precise geometric design would be more difficult to copy than a portrait or scene. He would create his design on a soft, flat steel plate. He would then harden the steel by his special processes. Next, he would clamp the steel plate in the bottom of a transfer press, which he had also invented. The press would repeatedly roll a soft steel cylinder over the hard steel plate until it picked up the plate's design—in relief. Then the roller would be hardened, placed back in the transfer press—and be passed repeatedly over a soft steel plate, which would pick up the original design in intaglio. With appropriate additions, this plate would finally be hardened, and paper currency would be printed from it.

Jacob Perkins revolutionized the creation of money. The processes that he developed worked so perfectly that they remained the basis of security printing for over a century and a half.

At the heart of Perkins's processes was the belief that all currency should be and would be identical. Only in that way, he reasoned, would the public have an absolute assurance about which note was good and which bad. The designs he devised were therefore lacking in artistry, but infernally difficult to counterfeit. He set up a security printing establishment in Newburyport, Massachusetts, and a grateful legislature gave him a monopoly on all note-printing there and in Maine (which formed part of Massachusetts until 1820). Soon Perkins's homely-but-distinctive products were appearing across New England and well beyond. But the inventor had unleashed far more than he had anticipated.

He had assumed that all bankers would flock to his processes and designs. He was right on the first count but wrong on the second. His techniques had become common knowledge within a decade or so of their invention, and everyone agreed that they were the final word in security printing. But agreement ended there: what the bankers wanted (and what a succeeding generation of printers found it expedient to give them) was variety: far from the universality which Perkins foresaw, the bankers envisioned a broad choice of pictorial design, a host of renditions whose artistry and excellence would distinguish their notes from those of their competitors. Perkins's successors, beginning with Murray, Draper, Fairman & Company and ending with the American Bank Note Company, would find that they could give their customers what they wanted, using transfer technology for the purpose. By the mid-1830s, the process was in full swing: the American private bank note was approaching its maturity, and those who created it and those who commissioned it were finding an important new use for their product, beyond the mere buying and selling of goods.

They were finding it useful for telling the country about themselves, about itself, about where it had been, where it was going, and who was along for the ride. What they found (and what we can learn from them) will form the remainder of this book.


 

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