Handcrafted Fabrications

Banking in pre-Civil War America was challenging even in the best of times. As if conducting normal business did not have enough challenges, plenty of potential criminals knew how to game the system. These “artisans” would buy up inventories of unissued notes of failed banks and other issuers at receivers’ sales and other venues that were liquidating assets. They then physically modified these worthless notes so that they appeared to be from more highly regarded institutions. Each note was individually modified, meaning that this was not a high-volume fraud where notes were produced from a plate. “Pushers” were then employed to put these handcrafted fabrications to work in commerce, usually at a great distance from the banks noted on the front. These altered notes were used to buy anything of value from careless or uninformed merchants and other sellers. 

Design Variations 

What encouraged this cottage industry was the fact that thousands of bank-note designs were in circulation. These notes reflected the varying tastes of the bank officers who chose vignettes and other design elements from the large books that bank-note company salesmen carried. Custom vignettes and portraits (for example, of the wife, child, or grandchild of the bank president) could be done but were, of course, more expensive. So, someone inspecting a note from somewhere other than the immediate vicinity of the issuing bank would have no idea whether a note was legitimate.

The second problem that facilitated this kind of larceny was that up-to-date information on fake notes was often provided after the fact and descriptions were almost always short and cryptic (i.e., “note is dark with female at right.”) This was because the so-called bank-note reporters or counterfeit detectors of the day reported on a monthly or quarterly basis, and they covered  hundreds of non-genuine notes. There simply was not enough room to provide exhaustive descriptions. Then, of course, the criminal element also subscribed to these publications. They would either move on to other banks or make changes to their products once they had been discovered. There are even some recorded incidents where the publishers of these publications could be bribed to omit “bad” notes or list certain notes or issuers as “good” when, in fact, they were not.

The state of Indiana, as it turns out, was home to several failed or fraudulent institutions that had the dubious distinction of having their worthless notes turned into equally worthless alterations purporting to be the legitimate notes of solvent banks elsewhere.

The Pioneer Association

For years, nothing was known about this firm. That changed with the chance discovery of a newspaper filler story several years ago. This short notice appeared in the Huntington Democrat dated February 13, 1862:  

A well executed shinplaster, purporting to have been issued from Lafayette, Indiana, is in circulation. The Lafayette Courier says the bill purports to be issued by the “Pioneer Association.” payable on demand at Lafayette, signed by A.R. Barnes, Cashier and C.W.E. Smith, President. It is a base swindle; no such association exists.

The $1s, $2s, and $5s were originally printed for the Pioneer Association. All three denominations were used as host notes for alterations made for over 61 banks across the United States; mostly in Massachusetts, New Jersey, New York, and Pennsylvania. Oddly, the purveyors of these notes also produced several alterations on two Bank of the State of Indiana branches in Lafayette and Jeffersonville. The usual practice was not to produce altered notes for banks close to the location of the failed institution.

 The alteration process was simple: remove the title, city, and state from the old notes and print the desired new information in their place. Forge or make up officer names, a date, and a serial number, and the process was complete. 

Thames Bank

The second most popular bank to use for alterations was the Thames Bank of Laurel, Indiana. The Thames Bank was a short-lived institution that opened around 1854 and vanished within a year or two. Its notes were quoted at a 50-percent discount in 1855 and were worthless by 1857. After its demise, large quantities of remainder notes were available for the cost of the paper. They were soon put to work as the host notes for alterations made for over 52 banks, mainly in Connecticut, Massachusetts, New Jersey, New York, and Rhode Island. Connecticut was popular because another Thames Bank was located in Norwich. Since it had the same name, only the state and city had to be changed. 

Building a Collection

At the time of this writing, I am aware of 187 alterations on 146 banks across the United States, mainly in the northeast, that utilize notes originally intended for Indiana banks. There are undoubtedly more—perhaps a lot more. Other states such as Georgia also provided large numbers of host notes. One of the nice things about obsolete paper money is that new discoveries appear every day. For the most part, these notes are not expensive. An impressive collection of alterations can be built with a little diligence.

---

A version of this article appears in the October 2024 issue of The Numismatist (money.org)