Sometimes directions help out with in collecting paper money

Directions play a part in quite a few different ways in life, including in collecting paper money from the early 1800’s.  During this time, it was up to the banks to produce paper money (they would file for a charter with the United States government, and this would allow the bank to produce their own paper money).

 

Collectors often look for paper money in a couple of ways for their collections.  They will look for a certain bank, city, or even state that the money was produced in.

If there was a major metropolitan area, the more banks were likely to be there.  The east coast area has quite a few different banks that offered paper money.  This was true to just past the Mississippi river.  The farther west you went, the fewer banks you would run into.  The gold rush in California that started in 1848 was what helped bring some banks (and eventually a United States mint in San Francisco) that far west.

Even up north in places like North Dakota, Washington State, and even Alaska have very few banks at all.  There have been a few bills (collectors also call them “notes”) to turn up for a few banks in these states, and are highly sought after.

What fun direction can your collection go?

Broken Bank Notes From The 1800’s

This sounds like a plot from a book or even a movie, but this actually happened with the banking system.  During the early 1800’s, the banking system was not as safe as it is today.  The banks would go out of business almost as fast as they would open their doors for the first time.

When a bank opened, they were allowed by the United States Government through a charter to print their own paper money.  This was to help the country get the monetary system up and running.

But when a bank went out of business, the money that it produced became no good.  With the country being on the gold and silver standard (which means paper money could basically be traded in for silver or gold coins that equaled the face value of the paper money), it was impossible to take the money in to redeem it.

So how did businesses and other banks know that a bank had gone out of business?  The most common method was to check a list of out-of-business banks, also called “broken banks.”  But many banks folded before they could be added to the list, leaving some businesses with worthless money in exchange for goods and services.

 
Because it was so problematic, the banking system stopped printing money—it became the job of the BEP (which is the Bureau Of Engraving And Printing).  This early form of printing paper money created two types of collectibles—“Broken Bank” Notes and Obsolete United States paper money!