The United States of America has had it’s fair share of frenzied economic and industrial periods. One such worth mentioning is that which took place during the 1830s leading up to the Civil War. With the first American coinage being struck just some 40 years prior in Philadelphia, the bustling communities and markets were finding themselves short on enough money to go around; couple that with the War of 1812, the Mexican War in 1846, the Panic of 1857 and the uneasy period leading up to the Civil War, the US Treasury found most of it’s coffers tapped out.
The Treasury’s answer to this were “promissory notes” or printed “Treasury Notes”. In the meanwhile, however, local banks were printing their own form of paper money now called “Broken Bank Notes”. The idea behind these notes, and why the US Government allowed them for a time, was based upon the principle that each bank would only circulate as much currency as they could personally match in respects to the amount of silver and gold coin they had on deposit. Remember, this was a major transitional period where we were not yet on a fiat money system (this will be on the test) and every cent had to be backed by precious metal which had a set monetary value.
The notes yielded during this time are considered to be some of the most beautiful and wildly unique ever made as banks would contract companies to design for them whatever they felt. There was no real standard or restriction to the design so long as the designated areas for hand-written signatures and dates were present and uniform.
Unfortunately, many loan recipients weren’t able to pay the banks back, the banks couldn’t cover the currency in circulation and they would literally go broke, hence the name “Broken Bank Notes”.
I encourage all to find time to enjoy the wonderful artistic and historical qualities these issues of history have to offer.