American Dream Money

American Antiquarian Society, Worcester, Massachusetts/Bridgeman Art Library
A one-hundred-shilling note printed by Benjamin Franklin and David Hall, 1759

We place a lot of confidence in paper money. We trust in pieces of paper that seem to have no intrinsic value whatsoever. We pass paper bills from hand to hand with little or no questioning of their worth. During some periods of American history people were able to turn in these pieces of paper to some institution or another for specie, that is, for gold or silver, which most people believe do have some intrinsic value; but not anymore. Today the paper bills rest exclusively on faith, on the confidence we have that the notes are genuine and that everyone will accept them.

Almost from the beginning of American history Americans have relied on paper money. Indeed, the Massachusetts Bay Colony in 1690 was the first government in the Western world to print paper currency in order to pay its debts. Although this paper money was not redeemable in specie, the Massachusetts government did accept it in payment for taxes. Because Americans were always severely short of gold and silver, the commercial benefits of such paper soon became obvious. Not only the thirteen British colonies, but following the Revolution the new states and the Continental Congress all came to rely on the printing of paper money to pay most of their bills. By the early nineteenth century hundreds of banks throughout the country were issuing notes that passed as money. No place in the world had more paper money flying about than did America. By the time the federal government began regulating the money supply during the Civil War, there were more than ten thousand different kinds of notes circulating in the United States.

All this paper passing from person to person helped to make possible the extraordinary expansion of the American economy in the eighteenth and early nineteenth centuries. Entrepreneurs had credit and capital readily available, and anyone who wanted to trade with other Americans found this circulating paper a useful medium of exchange. At the same time, however, all these different paper notes offered abundant opportunities for criminals to make money. Counterfeiting gold and silver coins was hard to do, but someone with ink, paper, plates, a printing press, and a little talent for engraving could create fraudulent copies of notes issued by governments and banks. Slipping countless amounts of these forged notes into circulation could make someone a rich man; or at least many aspiring American counterfeiters thought so.

Not surprisingly, the prevalence of counterfeiting in early America—and no country in the eighteenth and early nineteenth centuries had more of it—has spawned a series of studies, of which this spirited account by Ben Tarnoff is only the most recent. Out of the hundreds if not thousands of counterfeiters in early America Tarnoff has chosen…

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