The Astonishing Antebellum Money System

We often talk about “money” as if it’s always been the same, a simple and constant measure of value, the “bottom line” of meaning. But “money” has rarely been a static thing, especially in the US. The chaotic money system Americans used before the Civil War boggles the imagination.

I gave a lecture about this at the Taft Center of the University of Cincinnati. Between about 1800 and the Civil War, Americans used tens of thousands of different kinds of money. There were official US coins, minted of gold or silver, but also Spanish, French, Brazilian and other Latin American coins. The Constitution forbid states from minting coins, but not individuals. You could, before the Civil War, mint your own coins.

Legally chartered state and local banks could print their own paper money—any person or persons could start a bank, obtain a state charter, pick some worthy looking stock engravings, and start issuing currency. By 1860, nearly 9000 of them had printed notes in various denominations.

Private bank note of the Mechanics Bank of Memphis, 1854

There were also semi-legal or openly illegal private semi-banks which printed millions of dollars worth of paper notes. So an antebellum merchant might encounter pieces of paper which looked like banknotes and worked like banknotes in daily business but came from hybrid institutions other than banks. The most well know example of these de facto banknotes, “George Smith’s money,” circulated in amounts of up to $1.5 million into the 1850s. Under Joseph Smith the early Mormons tried something similar—they started the “Kirtland Safety Society” which printed hundreds of thousands of dollars in “Anti-Bank notes” which circulated as paper money.

Mines, bridge companies, shipping companies and other businesses also printed notes, using them as pay and to buy supplies. “There were ‘unauthorized banks’ everywhere,” Bray Hammond concluded: “besides partnerships and individuals operating as banks without corporate charter, there were also corporations without the name of banks that were engaged in discounting, sale of exchange, and extension of deposit credit.”

Undated paper money issued by the Delaware Bridge Company

Small businesses and even individuals also printed their own small denomination “shinplaster” notes. You could go to a printer and have notes for, say, ten cents printed up. You could then give these to customers as change, and they could try to spend them elsewhere or use them as a form of store credit.

In Washington DC, between 1837 and 1841, you could find small denomination notes, typically for 6-12 cents, issued by “professions including ‘butcher, grocer, singing master, restaurant owner, hotelier, dry goods merchant, printer and druggist’.” 1 Given the slightest chance, DeBow’s Review lamented, “the corporations of cities and towns, turnpike companies, bridge companies, rail-road companies, and individuals in all the private walks of life immediately commence the issue of notes for dollars and the fractional parts of dollars.” In Georgia alone, between 1810 and 1866, “more than fifteen hundred varieties of currency of this type circulated.” 2 Americans called these small denomination notes “shinplasters,” because you could use them to bandage a barked shin.

The term “shinplaster” included “token money,” privately stamped coins issued in small denominations to serve as change, as advertising, or as political commentary. Such tokens might pass in barter as novelties, accepted because interesting, agreeable, or attractive. Coin Collectors’s Journal of 1876 mentions 5000 varieties of token coins issued by shopkeepers, tradesmen, merchants, and small businesses. By one estimate more than fifty million pieces of private token money circulated in the antebellum United States.

Token coins mocking Andrew Jackson

There were less than 35 million people in the United States in 1860. But there were hundreds of millions of dollars worth of self-printed shinplasters and token coins in circulation. “By the time of the Civil War, the American monetary system was, without rival, the most confusing in the long history of commerce and associated cupidity,” J. K. Galbraith concluded.

People typically accepted banknotes, shinplasters and other token monies only when they knew who ran the bank or business or who issued the tokens. They worked when they stayed close to the place they issued from. As notes traveled further, they usually lost value, and merchants would only take them at a discount.

And as they moved from town to town, antebellum travelers ran into counterfeits. It was, one historian claims, “the golden age” of counterfeiting.

Anyone doing business with money had to watch out for imitations of legitimate bank notes but also “raised” notes, on which the number “one” might be modified to “ten;” or entirely fictitious notes drawn on non-existent far-off banks. Stephen Mihm’s marvelous Nation of Counterfeiters describes the village of Dunham, Quebec, where “every family in the place was engaged,” in the 1820s, “in the production of spurious bank-bills” for the Yankee market. Some estimate that at times roughly forty percent of the money in circulation was counterfeit.

“It was a popular remark among men of business,” wrote the detective Alan Pinkerton, “that they preferred a good counterfeit on a solid bank to any genuine bill upon the shyster institution.” “The handsome counterfeits of the currency put forth by the old time ‘Coney men’ were not only equal in artistic appearance,” he added, but “based upon an almost equivalent in value.” 3

To protect themselves merchants subscribed to “counterfeit detectors,’ weekly, bi-weekly or monthly lists of banknotes that gave a description of the bank’s paper money and rated the bank’s character.

rom J. Tyler Hodges, Hodges’ New Bank Note Safeguard (NY 1859) p. 134

Merchants typically needed more than one: the publishers of counterfeit detectors regularly accused their competitors of “puffing” the reputations of crooked bankers who bribed them; raising the specter of counterfeit counterfeit detectors.

So every transaction involved not just negotiation about price, but negotiation about the means of payment. “What is this money you’re giving me? What is it worth, and how can I know?”

To answer that question, England had invented a “central bank,” the Bank of England. The BOE was the Crown’s bank, and its paper notes, by 1830, were the defacto standard currency of the realm. The US twice tried to establish similar banks, the 1st and 2nd banks of the United States. But both were vanquished by political opposition.

The chaotic, unregulated system that resulted had some real advantages. Any ambitious person or group of persons could start a bank and print money to fund it. William Wells Brown, an escaped slave, described in his memoirs how he printed his own shinplasters and then used the shinplasters to buy fittings for his barber shop. The uncentralized money system democratized credit and encouraged growth. But it also slowed exchange down, and led to chronic instability and cycles of boom and bust.

Libertarian economists will generally argue that the gold standard made it all work. The US was officially on a gold and silver standard, and although in practice most people never saw either gold or silver very often, They claim the idea of gold existing somewhere, in some vault or hoard, stabilized value. It’s hard to believe, though, that gold in some bank’s vault had anything at all to do with the circulation of millions of self-printed shinplasters.

I’m more inclined to point to racial slavery. Slaves served as collateral for loans, mortgages, and issues of paper. “Slaves were viewed as an alternative to railroad bonds, agricultural land, textile factories… as an outlet for the investment funds of American capitalists.” Slaves were capital: they played the role of gold in the economy.

Slaves were enslaved because of their race: their “species.” Their alleged racial inferiority, their “species,” made it possible for them to act as “specie” in the economy, to anchor value.

By 1860 historians, in an extremely conservative estimate, put the total value of slave property at three billion dollars. A large number indeed: “roughly three time greater than the total amount of all capital, North and South combined, invested in manufacturing, almost three times the amount invested in railroads, and seven times the amount invested in banks.” 4

“Our slaves constitute the greatest portion of our wealth,” Virginian James Gholson declared, “and by their value, regulate the price of nearly all the property we possess.” 5

Slaves  regulated the price of other goods: they did, as Gholson said, exactly what gold was supposed to do.

Beyond slavery, the idea of race did the same kind of work. It established limits to what was negotiable, and the supposed inferiority of black people, their fixed nature, regulated the value of being white.

In this Georgia banknote of 1861 a white woman sits next to her slave. The slave gestures to the field hands in the cotton, while a railroad locomotive passes by in the distance. Slaves generate economic value with their labor. But the idle slave, seated beneath her mistress, established the superior value of whiteness.

Race lies much deeper in the American economy than generally assumed.






  1. Richard G. Doty America’s Money, America’s Story, (Washington, DC 1998) p. 107
  2. Larry Schweikart, Banking in the American South from the Age of Jackson to Reconstruction (Baton Rouge, LA 1987), p. 80
  3. Stephen Mihm, A Nation of Counterfeiters: Capitalists, Con Men, and the Making of the United States (Cambridge, MA 2007) p. 65, 67
  4. Stephen Deyle, Carry Me Back: the Domestic Slave Trade in American Life (NY 2005) p. 40-41. See also Ralph V. Anderson and Robert E. Gallman, “Slaves as Fixed Capital: Slave Labor and Southern Economic Development,” The Journal of American History, Vol. 64, No. 1 (Jun., 1977), pp. 24-46
  5. Deyle, Carry Me Back p. 40


  • Great post! I’m surprised no one has commented – and I’ve wanted to, but I can’t think of anything to argue about.

    So a question – you write “Between about 1800 and the Civil War, Amer­i­cans used tens of thou­sands of dif­fer­ent kinds of money.” So what happened in 1800? My work on GW’s ledgers go up until his death in 1799, and he uses many different forms of currency – banknotes from the bank of Alexandria, Columbia, Pennsylvania and Maryland currency, tobacco, guineas, pounds/pence, sterling, etc. Was 1800 when individuals started printing their own money, and why then? (Thomas Jefferson may want all the credit here somehow?)

    I want more on the slavery/race connection. I will wait for the book!

  • Jefferson HATED banks. Or at least he claimed to. The experience of Continental dollars,made people nervous about paper, but they also wanted credit and easy money. Hamilton wants a bank of england for the US, and a standard paper money backed by gold and silver. But a combination of gold standard literalism and suspicion of elites works against the central bank’s standardizing. In 1800 there were only legit 29 banks in the US, but by 1811 there were over 100, and by 1815 over 200. So after 1800 a real explosion in the number of banks starts.

  • Jefferson hated something? Impossible!
    (He did love credit though, in the form of praise.)

    Thank you!

  • […] sale, as pro­duc­ers of value, and as tar­gets of sex­ual oppor­tu­nity and genetic exchange: as col­lat­eral for loans, mort­gages and issues of paper money. Racial slav­ery was a prod­uct of cap­i­tal­ism, but not just of capitalism’s desire for […]

  • Richard Grupenhoff wrote:

    Is there a history of counterfeiting in Cincinnati around 1870? I thought I had read that somewhere.

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