Now this is funny!

[DaveG]

Those of you who remember my November 28th show report from White Plains will, no doubt, recall my purchase of a Broken Banknote, a $5 from the Farmers' and Merchants' Bank of Memphis, TN. It is signed, numbered and dated March 1, 1854.

 

I was checking on this bank in my copy of "Banking in the American South from the Age of Jackson to Reconstruction" by Larry Schweikart and discovered that the bank was forced to suspend operations in May 1847. In January 1848, two eastern stockholders instituted legal actions and "after two years of legal wranglings, the court appeared ready to turn the bank over to. . . the directors."

 

However, opponents and creditors of the bank persuaded a former director to oppose this. Following a court appearence, the two groups ran into each other. Following the shooting deaths of two members of the groups, although the bank remained convincinly solvent, its notes dropped to a 25% discount. "After six years the bank was dead."

 

(Boy, banking was different back then!)

 

The interesting part is the time sequence. The bank suspended operations in 1847, but by 1850 the court was ready to return the bank to its directors, then, Mr. Schweikart gets vague - is it six years after 1850 or six years after 1847 that the bank was dead? (or, did the bank never reopen after 1847, as Mr. Schweikart says in a separate table and which is implied in one of his sources: "Chronicles of the Farmers' and Merchants' Bank of Memphis (1832-1847)"

 

My note is dated 1854 - was it issued by a bank that was nearly on its last legs or was it issued by a "dead" bank? (Because it has images of five Type I gold dollars, the note certainly couldn't have been printed before 1849.)

 

We know that it was reasonably common for criminals to pay printers (my note was printed by Rawdon, Wright, Hatch & Edson, New York) to print banknotes for non-existent banks (usually "located" in very out-of-the-way places), that they would then pass for whatever they could get. (Hence all the "counterfeit detectors" that were issued at that time.) These fraudulent notes were called "wildcat" banknotes.

 

I'll have to do some more research. In any event, this is one "way cool" piece of paper!

[Wihlborg]

A very interesting story Dave. Keep us informed on what you find out about the note.

 

John

 

[Hoot]

Great story! Thanks!

 

hoot

[TomB]

Cool story, DaveG. You'll have to remember to bring that note with you when we get together in January.

[EZ_E]

Interesting.

 

Remember recently when a few gold bars in the Smithsonian were deemed counterfeit? Since bullion has been recovered from sunken ships recently, there is now a system of checks and balance partially in place. We now have a glimpse into the unadulterated past to view the authentic gold bars as they were actually made. Many old forgeries are complete fabrications since no one knew what an authentic piece actually looked like.

 

Anyway, I really enjoyed your story. Please follow up on it when you find out more. Thanks.