Money From the Free Banking Era

It's hard to believe but there was a time in the United States (1837 - 1863, also known as the Free Banking Era or Wildcat Banking) when there was no central bank and paper money were issued by a variety of private banks.

Unenumerated Blog has a neat collection of bank notes from this freewheeling era of banking:

During this era the U.S. had no central bank and paper money was issued by a variety of private banks. Some was even issued by manufacturing and retail companies. This money was backed by gold, silver, real estate, stocks, bonds, and a wide variety of other assets. You can no longer cash them in, but they are now worth often substantial sums as collectibles. As you can see below, the note designs were more varied and creative than modern money, and were remarkably free of politicians' faces.

Link - via The Home Page of J. Orlin Grabbe

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Yep. That's why people called official US paper currency "banknotes" for decades after they'd forgotten what the word really meant.

There was a downside, as the note was only as good as the bank that issued it. This was no problem if you were near enough to the bank to know how healthy it was, but if you tried to pay a bill in Tennessee with a note from the Bank of South-East Boston, you might have a problem.

Fun fact: In the ante-bellum South the most reliable banknotes were from the rock-solid Bank of New Orleans. The most useful bills were $10, equivalent to $100 today, and they had a big "DIX" on the back, the French word for "ten." These became known as "dixies" to English-speaking Americans, and the region where they were readily accepted became known as: Dixieland.

No joke! I have personally seen dixies on sale in antique coin and currency shops.
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