Did you know that?
Banks actually did it. They would print paper money that ostensibly was covered by the coinage in their coffers. If you were lucky, it was true, but you were never quite sure. There were only a few exceptions, like the New Orleans bank whose ten-dollar notes were so reliable that they were known as "dixs" (the French number for ten) -- or "Dixies." (Thus the origin of that good old Southern nickname.)
Some areas, especially those in Ohio (!!!), were notorious for printing money they couldn't honor. Practically the only way to be certain was to present the bank with its own note. But what if that banknote was in Illinois...and you were in the California gold camps?
It wasn't until the Civil War era that the U.S. began printing "greenbacks," and the paper currency began that we know today. (If you're curious about learning more, try my book, Quilts and the Golden West. It's full of financial history, plus a lot about the gold and silver camps -- and lots of quilts! Patterns, too. Go here to take a look.)
Meanwhile, banks continued printing money -- like the First National Bank of Creede in Colorado. Unfortunately, it was one of the bad 'uns, and only stayed in business for a few years before it failed. Its failure, like many of the gold and silver camps, had a lot to do with the adoption of the Gold Standard, made law by President Grover Cleveland. Unfortunately, those whose fortunes were based on silver, instead, often went bust.
(Our banks have a bad habit of doing that around here, shades of the infamous Silverado savings&loan failure that involved Neil Bush, President Bush Sr's son, back in the 1980s.)
Although we know the Creede bank existed, its notes were nonexistent -- until this 1892 "brown back" $5 note resurfaced.
For the Denver Post's story on the article, go here.
Auction description and results are here. Zowee.
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