- Tarnoff, Ben.
Moneymakers.
New York: Penguin, 2011.
ISBN 978-1-101-46732-9.
-
Many people think of early America as a time of virtuous
people, hard work, and sound money, all of which have been
debased in our decadent age. Well, there may have been plenty
of the first two, but the fact is that from the colonial era
through the War of Secession, the American economy was built
upon a foundation of dodgy paper money issued by a
bewildering variety of institutions. There were advocates of
hard money during the epoch, but their voices went largely
unheeded because there simply wasn't enough precious metal
on the continent to coin or back currency in the quantity
required by the burgeoning economy. Not until the discovery
of gold in California and silver in Nevada and other western
states in the middle of the 19th century did a metal-backed
monetary system become feasible in America.
Now, whenever authorities, be they colonies, banks, states, or
federal institutions, undertake the economic transubstantiation of
paper into gold by printing something on it, there will
always be enterprising individuals motivated to get into the
business for themselves. This book tells the story
of three of these “moneymakers” (as counterfeiters
were called in early America).
Owen Sullivan was an Irish immigrant who, in the 1740s and '50s set up
shop in a well-appointed cave on the border between New York and
Connecticut and orchestrated a network of printers, distributors, and
passers of bogus notes of the surrounding colonies. Sullivan
was the quintessential golden-tongued confidence man, talking himself
out of jam after jam, and even persuading his captors, when he was
caught and sentenced to be branded with an “R” for
“Rogue” to brand him above the hairline where he
could comb over the mark of shame.
So painful had the colonial experience with paper money been that
the U.S. Constitution
forbade states
to “emit Bills of Credit; make
any Thing but gold and silver Coin a Tender in Payment of Debts”.
But as the long and sordid history of “limited government”
demonstrates, wherever there is a constitutional constraint, there
is always a clever way for politicians to evade it, and nothing in
the Constitution prevented states from chartering banks which would
then proceed to print their own paper money. When the charter
of Alexander Hamilton's
First
Bank of the United States was allowed to expire, that's exactly
what the states proceeded to do. In Pennsylvania alone, in the single
year of 1814, the state legislature chartered forty-one new banks in
addition to the six already existing. With each of these banks entitled
to print its own paper money (backed, in theory, by gold and silver coin
in their vaults, with the emphasis on in theory), and each of
these notes having its own unique design, this created a veritable paradise
for counterfeiters, and into this paradise stepped counterfeiting
entrepreneur
David Lewis
and master engraver Philander Noble, who set up a distributed and
decentralised gang to pass their wares which could only be brought to
justice by the kind of patient, bottom-up detective work which was
rare in an age where law enforcement was largely the work of
amateurs.
Samuel Upham,
a successful Philadelphia shopkeeper in the 1860s, saw
counterfeiting as a new product line for his shop, along with
stationery and Upham's Hair Dye. When the Philadelphia Inquirer
printed a replica of the Confederate five dollar note, the edition was
much in demand at Upham's shop, and he immediately got in touch with
the newspaper and arranged to purchase the printing plate for the
crude replica of the note and printed three thousand copies with a
strip at the bottom identifying them as replicas with the name and
address of his store. At a penny a piece they sold briskly, and
Upham decided to upgrade and expand his product line. Before long
he offered Confederate currency “curios” in all
denominations, printed from high quality plates on banknote paper,
advertised widely as available in retail and wholesale quantities
for those seeking a souvenir of the war (or several thousand of
them, if you like). These “facsimiles” were indistinguishable
from the real thing to anybody but an expert, and Union troops heading
South and merchants trading across the border found Upham's counterfeits
easy to pass. Allegations were made that the Union encouraged, aided,
and abetted Upham's business in the interest of economic warfare against
the South, but no evidence of this was ever produced. Nonetheless,
Upham and his inevitable competitors were allowed to operate with
impunity, and the flood of bogus money they sent to the South certainly
made a major contribution to the rampant inflation experienced in the
South and made it more difficult for the Confederacy to finance its
war effort.
This is an illuminating and entertaining exploration of banking,
finance, and monetary history in what may seem a simpler age but
was, in its own way, breathtakingly complicated—at the
peak there were more than ten thousand different kinds of
paper money circulating in North America. Readers with a sense of
justice may find themselves wondering why small-scale operators
such as Sullivan and Lewis were tracked down so assiduously and
punished so harshly while contemporary manufacturers of
funny money on the terabuck scale such as Ben Bernanke, Tim Geithner, and Mario Draghi
are treated with respect and deference instead of being dispatched
to the pillory and branding iron they so richly deserve for plundering
the savings and future of those from whom their salaries are extorted
under threat of force. To whom I say, just wait….
A Kindle edition is available, in
which the table of contents is linked
to the text, but the index is simply a list of terms, not
linked to their occurrences in the text. The extensive end notes are
keyed to page numbers in the print edition, which are
preserved in the Kindle edition, making navigation
possible, albeit clumsy.
December 2011 