History of U.S. Currency | History is Our Story | J.P. Morgan

History of U.S. Currency | History is Our Story | J.P. Morgan


From colonial America to the pioneer West, paper currency fueled the growth of the nation. Everything from building cities and towns to facilitating the exchange of goods and services depended on an accepted means of payment. But you might be surprised to learn that the U.S. government didn’t issue money in the early 1800s – instead, banks printed their own bank notes. Many banks worked with specialized firms, like the American Bank Note Company, to assist in the design and printing of these notes. The notes were exceptionally beautiful, with elaborate ornamentation depicting portraits of public figures, scenes from everyday life, and allegorical images. With little government regulation and no standard template, the size, shape, and color of bank notes varied widely. Every note was the work of five or more artists, each a specialist in portraiture, landscapes, lettering, or borders. Such division of labor was a form of security to hinder counterfeiting. The designs were engraved on metal plates – a process which could take an artist several months to complete. Notes were printed on hand-operated presses creating four notes from a single printing plate. Sometimes, single-note plates were made, like those for our predecessor The Waterbury Bank. As America’s market economy extended nationwide, bank notes began drifting farther from their issuing institutions. With more than 1,500 banks in operation by 1860 and more than 7,000 different notes in circulation, counterfeiting had become a serious problem. The resulting chaos was a paradise for counterfeiters like Jim the Penman, who became one of the most notorious forgers in the country. To combat this, counterfeit detectors were published, which included signatures from authentic bank notes to help bankers identify fraudulent bills. They were hugely popular and boasted a circulation of more than 100,000 by 1855. As the ability to judge the veracity of bank notes deteriorated, the U.S. government recognized the need for a more stable form of currency. In 1862, the federal government began printing its own paper money, marking an historic shift in the young nation’s monetary system.

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