Historian Stephen Mihm tells us how some shop owners tried to combat counterfeit money in the 19th century. Read more here.
PETER ONUF: Major support for BackStory is provided by The National Endowment for the Humanities, The University of Virginia, and The Joseph and Robert Cornell Memorial Foundation.
ED AYERS: From the Virginia Foundation For the Humanities, this is BackStory.
BRIAN BALOGH: We’re the American Backstory hosts.
Welcome to the show, I’m Brian Balogh, 20th Century Guy, and I’m here with Ed Ayers.
ED AYERS: 19th Century Guy.
BRIAN BALOGH: And Peter Onuf, our resident–
PETER ONUF: 18th Century Guy.
BRIAN BALOGH: We’re going to begin today back in the 1820s.
There were a lot of things that were different back then from today. One of them was the money that people carried in their wallets. It wasn’t printed by the federal government. It was printed by private banks.
And when we say “private banks,” we’re not talking Bank of America. A lot of these were fly-by-night operations. And each had its own currency designs, which meant there were hundreds of different currencies circulating. That made life a lot harder for merchants and a heck of a lot easier for counterfeiters.
STEPHEN MIHM: And so let’s say that you’re a store keeper.
PETER ONUF: This is Steven Mihm, a historian at the University of Georgia.
STEPHEN MIHM: And someone comes in. You don’t know who they are. And they hand you a bill on, say, the Bank of Utica. It’s a $3 bill. And you want to know whether it’s counterfeit or not.
PETER ONUF: If you were a savvy merchant, you’d whip out a little book called A Counterfeit Detector. It supposedly listed every single bank note in circulation and explained the difference between good notes and bad ones. So you’d look up that Bank of Utica $3 bill.
STEPHEN MIHM: And of course, it gives you this endlessly bewildering description about how in the counterfeit, the horse looks vaguely suspicious. Whereas, in the genuine, it doesn’t.
PETER ONUF: It’s a guilty horse.
STEPHEN MIHM: It’s a guilty horse. I’m serious, a lot of this is deeply subjective, obviously. And hopefully, that will help you determine whether or not it’s counterfeit or not.
BRIAN BALOGH: Sales of these books were booming in the early 19th century. And that’s because counterfeiting was booming. As much as 30% of the money in some parts of the country was fake.
Nowadays, that number is just a fraction of a percentage point.
PETER ONUF: All that fake money had to come from somewhere. And in the 1810s and the 1820s, that somewhere was a dirt road just over the US border in Quebec– Cognac Street.
BRIAN BALOGH: Now, to understand Cognac Street, you have to ditch your image of a loan counterfeiter working in a basement at night.
Imagine instead, a vast hive of activity– printers, engravers, people whose job it was to sign the false notes, to transport them up and down the East Coast, and pass them into circulation. There were rivals gangs, complex family alliances, and arson attacks on enemies.
Think drug cartel.
STEPHEN MIHM: In other words, this was not a small enterprise. It was one that actually bound people together across a vast, clandestine economy that spanned hundreds of miles– as far west as Indiana, as far south as Georgia. It was an economy that, in a very perverse way in its complexity, mimicked the genuine economy that was taking shape south of the border.
PETER ONUF: In that sense, Cognac Street isn’t unusual. If you look closely, fraud and deception have always haunted the American economy. So for today’s April Fools’ edition of BackStory, we’re asking how generations of Americans have made deception work with them.
ED AYERS: We’ll meet a 19th century showman who invited Americans to enjoy being tricked, and rewrote the rules of marketing while he was at it.
We’ll find out what Wonder Woman has to do with the lie detector.
And yes, we will try to sell the Brooklyn Bridge.