Successfully circulating bank notes in antebellum America was often
a result of developing the right perception.
When the reality of the situation was that your “bank” was located
in the bank president’s parlor and the “safe” consisted of a steamer
trunk with one lock that was broken, then marketing and salesmanship
sometimes had to be employed to keep the bank away from insolvency’s
door for another day, week or month.
One might wonder in the frontier, without the benefit of Twitter,
Facebook or even a newspaper, how would-be bankers approached the issue.
First, simply the name of your bank might sway some folks. The
Security Exchange Bank, for example, sounded a whole lot better than
the Here Today Gone Tomorrow Bank.
Second, your bank notes had to portray strength and stability.
Well-engraved bank notes portraying heroic allegorical figures, or
even better, heroes like George Washington and Thomas Jefferson,
helped to support the perception that perhaps your bank was also a
solid and reputable concern.
Third, sometimes banks tried to attach to themselves endorsements
from well-known personalities. One of the most common approaches was
to make notes payable to famous Americans like Washington, Samuel
Adams, Daniel Webster or James Monroe. The inference was that, for
example, James Monroe was somehow connected with the bank since the
notes were made payable to him or bearer.
In every case of which I am aware, no such relationship existed
nor did the famous person have any idea that his name was being used
to aid in the circulation of dubious bank notes.
Since little information was available to people who handled paper
money on a daily basis, sometimes, perhaps even often, these
subterfuges actually worked.
Notes that looked good, issued by banks with solid sounding names,
with apparently prominent men involved, were often accepted.
However, after having been burned a few times, the most common
defense mechanism was to accept no notes from banks more than 10 or 20
miles away from home. Word-of-mouth became the first line of defense
for users of bank notes.
Wendell Wolka has been a paper money collector and educator for
more than 40 years. If you have questions or suggestions, you can
email him at firstname.lastname@example.org.