“As sound as a dollar,” a once-common standard of trustworthiness, was not one you would have heard used throughout much of 19th century America. In fact, before the 1860s it was a better-than-even chance that the dollar in your hand was “not worth a continental,” a standard of untrustworthiness derived from the currency of the Continental Congress, which over the course of the Revolutionary War lost almost all of its value.
The astonishing fact is that the United States did not have a uniform national currency until the Civil War, when the Union government began issuing “greenbacks” to finance its war effort. Until then all currency was issued by hundreds of individual (and frequently shaky) state-chartered banks, and sometimes other corporations; by the 1850s more than 10,000 kinds of currency were in circulation, a chaotic state of affairs that led to widespread counterfeiting and other forms of fraud.
“It staggers the imagination to comprehend the extent and ubiquity of counterfeiting during the first half of the nineteenth century,” Stephen Mihm, an assistant professor of history at the University of Georgia, writes in “A Nation of Counterfeiters.” At some times in some places, counterfeits were said to account for as much as half the paper money in circulation.
This was cowboy capitalism at its most unbuttoned, a Wild West of legal tender restrained by few laws or social conventions, for capable counterfeiters were often judged less harshly than crooked bankers (two enterprises not always completely distinct).
Mihm has researched widely and deeply to produce a marvelously entertaining study not just of counterfeiting but of the question of national identity: Who was to control the currency, the nation or the capitalists?
Hezekiah Niles, owner of the Weekly Register, the leading financial publication, considered dishonest managers of shady banks nothing less than legal counterfeiters, or worse, for counterfeiters knew they were scamming the public while such bankers pretended to respectability. As early as 1818, Niles wrote that the young nation could be on its way to being considered “a nation of counterfeiters.”
A well-executed counterfeit on a solid bank that was accepted and passed could be worth more than a genuine note on a foundering bank. Indeed, counterfeiting could be an absolute benefit if it increased the supply of currency in an economy constantly short of it.
The federal government kept a hands-off policy regarding the currency mess. A Michigan man said counterfeiters were looked upon as only a “little crooked,” for the scarcity of real money “made anything that looked like real money answer the purpose.”
As one of the chapter titles says, it bordered on alchemy, this “magical transformation of flimsy paper into concrete capital.” Mihm explicitly and implicitly raises philosophical questions about the core nature of money and what lies behind its value.
The answer is on virtually every page: confidence, as counterfeiters well knew. “Bills could function whether counterfeit or not, so long as they entered into circulation with enough trust on the part of the person receiving them,” Mihm says. “At its core, capitalism was little more than a con game.”
For 20 years early in the century, Canada, not the United States, was the center of counterfeiting. Bogus notes flowed out of the village of Dunham, Quebec, whose Cogniac Street gave its name to terms for counterfeit money and counterfeiter: “cogniac,” and “cogniacer” or “koneyacker.” Later one of the U.S. centers was along the Cuyahoga River near Boston, Ohio.
There are enough shifty characters and bizarre incidents in here to outfit a hundred novels. Along the Cuyahoga, the most notorious counterfeiter was a man named James Brown. One stormy day in 1829, a bolt of lightning blasted Brown out of his clothes and into days-long unconsciousness; when he came out of it, he abandoned his general store to take up counterfeiting and never looked back.
Mihm sees the currency situation as reflecting the inchoate nature of the country and the federal government’s limited control. That changed with the Civil War, when the government banned issuance of notes by state-chartered institutions and replaced them with a “common national currency founded on an almost mystical faith in the credit of the country.” With that, counterfeiting ceased being a local nuisance – and became a federal crime threatening national sovereignty.
Roger K. Miller, a newspaperman for many years, is a freelance writer, reviewer and editor.
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NONFICTION
A Nation of Counterfeiters
Capitalists, Con Men, and the Making of the United States
By Stephen Mihm
$29.95
