COUNTERFEITING IN BOSTON, 1806-1808

The freewheeling commercial world that was budding in Boston during the early nineteenth century has been ably captured by Jane Kamensky’s The Exchange Artist (2008). Kamensky focuses on the story of Andrew Dexter, Jr., a speculator whose rise and fall served as a cautionary tale for the newfound banking and paper money industry.

The book is well worth a read, but the short version is that Dexter financed his schemes by gaining a controlling interest in a particular bank and then issuing more bank notes than the institution could ever possibly redeem. The most infamous of these was the Farmers’ Exchange Bank of Glouscester, Rhode Island, which issued an incredible number of notes beginning in the spring of 1808. Dexter quite literally used the bank to print money in order to finance an extravagant real estate project known as the Exchange Coffee House.

$10 bill issued by the Farmers’ Exchange Bank in April 180

The scheme eventually collapsed when the public realized that the bank was unable to meet its extensive obligations, but knowledgable exchange brokers likely reaped a profit by divesting themselves of the specious notes in advance.

The public thus needed to be wary not only of counterfeiters, but of bankers as well. Uncertainty allowed exchange offices and information brokers like Gilbert & Dean a variety of ways to profit from their particular knowledge. In February 1806, the firm published a broadside (12″ x 18″) that promised “to meet the public anxiety respecting Counterfeit Bills” by listing known fakes in circulation and providing details about all of the regional banks that issued notes. The Baker Library at Harvard University has the only copy of this seminal counterfeit detector that we know of.

A typical description listed problems with the paper (too dark, too thin, etc.) or details like poorly set type and missing or altered elements for the public to ferret out fake bills. Gilbert & Dean were notably not doing this as a public service but to reap a profit, as the broadside cost 12 and a half cents (a bit or eighth of a dollar). Nearly fifty examples of counterfeit bills are noted, giving a good impression as to the scope of the problem.

The broadside was such a success that the firm published a follow up during the summer of 1806. The Special Collections Research Center at the University of Chicago holds a copy of this rare pamphlet entitled The Only Sure Guide to Bank Bills; Or, Banks in Now-England: With a Statement of Bills Counterfeited. Promising “utility with profit,” it also warned:

The twelve-page pamphlet provides details on forty-six banks while noting that there were seventy-four banks in operation in the whole United States, the balance of which were located in New England.

$1 note for Union Bank of Boston counterfeited by Burroughs in 1807

To read the complete article, see:
GILBERT & DEAN AND COUNTERFEITING IN BOSTON, 1806-1808 (www.anspocketchange.org/gilbert-dean-and-counterfeiting-in-boston-ca-1806-1808/)

To read the earlier E-Sylum articles, see:
BOOK REVIEW: THE EXCHANGE ARTIST BY JANE KAMENSKY (www.coinbooks.org/esylum_v11n15a06.html)
NEW BOOK: THE EXCHANGE ARTIST: AMERICA'S FIRST BANKING COLLAPSE (www.coinbooks.org/esylum_v11n35a04.html)

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