Maine banks, businesses and, yes, counterfeiters alike once printed the state’s paper currency. Paying bills in the ‘wild West.’

Imagine heading down to the local coffee shop for your morning caffeine boost. You get your medium with extra cream and no sugar and reach into your pocket to pull out that well-worn $10 bill. Ah, the familiar printing: There’s handsome William McKinley on the left-hand side, and the seal of the Treasury Department down in the right-hand corner. And of course, printed across the center in large, ornate script is the bill’s provenance: The Pejepscot National Bank of Brunswick, Maine. Something comforting, you think to yourself, that this bill was printed not that many miles away.

This should all seem pretty foreign today, not least because the Pejepscot National Bank ceased operations after a merger with another Brunswick bank in 1929. But there was a time in Maine’s history when this story would have made sense. In fact, until shortly after the Great Depression, much of the paper money used in Maine was printed and issued locally — by a host of private printers, with various designs and, more importantly, various credit-worthiness.

Plenty of these bills are still around, according to Larry Corbett, who appraises such items at Republic Jewelry & Collectibles in Auburn.

“These notes did and do still exist,” says Corbett. “Maine is only a small piece of the pie and every state has these . . . but (it seems) more people kept the Maine notes and now we’ve seen an abundance come out.”

The wild West of U.S. currency history

Paper money as we know it is a relatively new invention. Take a look at the greenbacks in your wallet and you’ll see that they are all “Federal Reserve notes,” meaning they are issued by the Federal Reserve on behalf of the U.S. Treasury, which prints the notes through its Bureau of Engraving and Printing.

Today, 12 Federal Reserve banks around the country are tasked with issuing money, the closest to Maine readers being in Boston. In other words, the most local currency you’ll find today is coming from Massachusetts. (Look for a “1” or an “A” on a bill to signify that it came from the Boston Federal Reserve bank.)

But before the days of a large, centralized treasury department, paper money functioned quite differently. The first paper money issued on U.S. soil actually predates the country, and it worked more like an I.O.U. than our current cash system. (This goes to explain why we use the term “bill.”)

In 1690, the government of the Massachusetts Bay colony gave authority to local leaders to print personal promissory notes. The residents of the colony were at the time engaged in King William’s War, battling the French and their American Indian allies in Maine and Acadia. The colony needed to raise funds in order to pay soldiers, but lacked the ability to directly tax its citizens.

In theory, the notes the local leaders issued could be redeemed by the bearer for compensation, in several forms, paid by the issuer. In effect, the colony was borrowing from its people with the intent to pay them back in the future, by issuing these personal promissory notes.

But, as you might expect, people liked the notes. It’s a whole lot easier to barter with paper currency, standing in for whatever commodity you’re trading, than it is to physically barter your commodity. Just imagine carrying around a $50 note versus $50 worth of millet. So it’s not surprising that the colonists held onto the notes, using these in their business interactions as a stand-in for the items they wanted to buy and sell.

And this system also worked well for the colonial governments, soon to become state governments, which found that if people didn’t readily redeem the promissory notes, they didn’t actually have to hold collateral for the full amount in issuance.

This period, known as the Free Banking Era, was sort of the wild West of U.S. currency history. There were few rules and a lot of people and institutions taking part in the action.

“When you look at the older Maine notes (before the mid-1800s), you have a lot of variety,” says Corbett. These were still essentially promissory notes, being issued by different private and public groups. There were few if any rules about the size or style of these printings, as each bill simply reflected a promise of payment on the part of the issuer.

Between 1700 and the Civil War, when the federal government began imposing currency rules, millions of dollars’ worth of currency was issued “on a private scale,” says Corbett. Today, examples of this currency can be found issued from governmental or private corporations, all now defunct, that once operated in Portland, Bangor, Auburn, Bridgton, Skowhegan, Saco, Ellsworth, Sanford and many other locales around Maine.

The printers could, and did, put just about anything they wanted on the notes. Some depicted early-American leaders, much like we’re used to today. Lady Liberty was a common guest on these notes, as was George Washington. Many had representations of life on the farm, or proud portrayals of contemporary industry (you’ll find a lot of trains on these early bills). A $1 bill printed by The Ship Builders Bank of Rockland in 1854 features, appropriately, a ship under construction. Some bills, on the reverse, even had advertisements for local businesses.

But it’s not just for a lack of standardization that this era is considered akin to the wild West. Counterfeiting was rampant, in large part because it was relatively easy to do. Some forgers took worthless notes from shuttered banks and simply erased the bank’s name, writing in the name of an active bank. Others created their own banks, albeit fake ones, and printed notes to match. Master counterfeiters sometimes dressed as wealthy aristocrats, hoping their enhanced personal appearance would better ensure success when trying to pass off fake bills.

Maine was no exception to the counterfeiting wave. And during the Civil War even the federal government practiced counterfeiting, flooding the seceded Southern states with fake Confederate state dollars in hopes of debasing the Southern currency.

Because of the destabilizing effect possible by large-scale counterfeiting, America’s early colonial government gave counterfeiting by others mortal consequences. Government leaders realized its damaging effect during the Revolutionary War, when Great Britain printed and distributed vast quantities of Continental Dollars in an attempt to cripple colonial currency.

Currency legally printed by Benjamin Franklin and others often bore the phrase “To counterfeit is death,” and long prison sentences and even executions were employed as means to deter it.

After being caught with $10,000 in counterfeit Continentals, two well-known British “shovers” — as counterfeiters were then called — were tortured on the orders of George Washington, who hoped they would reveal information about the British counterfeiting attempts. The shovers were eventually hanged for their crimes.

Lewiston, Auburn banks printed notes

But counterfeiting was not the only problem with the open system of printing currency in the United States. Banks issuing notes without the actual money to back them up often went to extremes to keep people from redeeming bills. Take the case of the Union Bank of Tennessee, whose notes were only redeemable in New Orleans.

And when the banks couldn’t meet the need for printed money, other organizations stepped in. Hotels, restaurants and bars that couldn’t make change for the large denomination bank notes would issue their own smaller denominations, the values of which might be drastically different at an establishment down the street. In some parts of the country, people took to cutting up large denomination notes to create their own “change.”

The environment was unpredictable and volatile. Perhaps hardest hit were shop owners, who relied on guides like “Bicknell’s Counterfeit Detector and Bank Note Reporter.” With so many different, and sometimes forged, notes in circulation, proprietors had to consult not only annually updated guides, but sometimes professional “note brokers” before accepting payment from a customer.

Neither did the federal government benefit from unregulated money printing. An environment with almost no regulation meant counterfeiters were able to siphon vast amounts of wealth from the economy. Further, because it had no skin in the game, the federal government was not benefiting from a centralized monetary policy in the way colonial governments had benefited in previous eras.

So around the advent of the Civil War, by which time U.S. banks had issued more than 10,000 kinds of bank notes, the federal government began to slowly shift its monetary policy not only as a way to maintain control but to raise much-needed funds. Among the changes was a standardization of currency. Banks could only print money with the consent of the Federal Reserve. This gave the federal government tighter control over national fiscal policy, made counterfeiting more difficult and made the tracking of bills easier.

The “later Maine notes,” those printed between about 1860 and around 1930, were “technically issued by the (Federal) Reserve,” says Corbett. These were made in much larger numbers, as the value of the dollar began to drop sharply after the Civil War, and they are notable for their consistency. As opposed to the earlier local notes, the later notes were all roughly the same size and style, the printing dictated by the newly established Federal Reserve system.

But they were still being printed locally. Before the establishment of Federal Reserve district banks, the organization still needed someone to print and issue its regulated U.S. currency. And the easiest way to do that was to turn to local banks. Dozens of banks around Maine and thousands around the country were contracted by the Federal Reserve to do large series of printings.

Take the case of the Pejepscot National Bank in Brunswick. Founded as a commercial bank in 1857, Pejepscot became a “national” bank in 1865 — entitled to print U.S. currency. Between then and 1931, the bank printed $1,269,440 of national currency in various denominations.

Corbett says that among Maine banks, those in “Portland, Lewiston, and then Saco and Auburn” were responsible for the majority of the reserve-backed currency, though many banks in other cities and towns did such printing. An example is a $10 bill printed in 1929 by the National Shoe & Leather Bank of Auburn, which is currently in the possession of Republican Jewelry & Collectibles. 

“I would say that I see half-a-dozen (old Maine) notes a year,” says Corbett. They are common enough, he says, that when he sees one he doesn’t “think it’s that special.” Still, there’s something neat about them, he says, and could be valuable as well.

“If you live in Portland and you found one of these notes from Portland, you would probably hold onto it,” he says. Corbett says the founder of Republic Jewelry, Dan Cunliffe Sr., is an avid collector. He “has a big box of Maine notes.” When someone comes in wanting to sell local notes, “we usually put them aside so that Dan can see them,” says Corbett.

Starting in the early 1900s, the Federal Reserve began moving the printing and issuing of currency from local bank partners to designated Federal Reserve banks in major cities. By the early 1930s, the transition was complete.

As to the value of Maine-made currency today, “Every single note is different,” says Corbett. He stresses that without a proper appraisal it’s impossible to give a fair valuation to any old, Maine bills. For instance, while you can buy a 1857 $10 note issued by the New England Bank of Fairmount for about $250 online, older colonial notes can be worth several thousand dollars depending on their condition.

And while they are rare, Corbett says that because so many were printed, plenty exist today. So you just might come across one of these old, Maine bills some day. Just don’t accidentally spend it on your wake-up cup at the coffee shop.

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