A Nation of Counterfeiters: Capitalists, Con Men, and the Making of the United States

by Stephen Mihm

Listen to a short interview with Stephen Mihm
Chris Gondek | Heron & Crane Few of us question the slips of green paper that come and go in our purses, pockets, and wallets. Yet confidence in the money supply is a recent prior to the Civil War, the United States did not have a single, national currency. Instead, countless banks issued paper money in a bewildering variety of denominations and designs--more than ten thousand different kinds by 1860. Counterfeiters flourished amid this anarchy, putting vast quantities of bogus bills into circulation. Their success, Stephen Mihm reveals, is more than an entertaining tale of criminal it is the story of the rise of a country defined by a freewheeling brand of capitalism over which the federal government exercised little control. It was an era when responsibility for the country's currency remained in the hands of capitalists for whom "making money" was as much a literal as a figurative undertaking. Mihm's witty tale brims with colorful shady bankers, corrupt cops, charismatic criminals, and brilliant engravers. Based on prodigious research, it ranges far and wide, from New York City's criminal underworld to the gold fields of California and the battlefields of the Civil War. We learn how the federal government issued greenbacks for the first time and began dismantling the older monetary system and the counterfeit economy it sustained. A Nation of Counterfeiters is a trailblazing work of history, one that casts the country's capitalist roots in a startling new light. Readers will recognize the same get-rich-quick spirit that lives on in the speculative bubbles and confidence games of the twenty-first century.

Genres: History, American History, Nonfiction, Economics, Finance, Banking

480 pages, Hardcover

First published September 1, 2007

About the author

Stephen Mihm is professor of history at the University of Georgia. The recipient of a National Endowment for the Humanities Public Scholar Award, during the 2017-2018 academic year, Mihm was the Arthur Molella Distinguished Fellow at the Lemelson Center for the Study of Invention and Innovation, Smithsonian Institution. In previous years, Mihm has been the recipient of numerous fellowships, awards, and grants, including the biennial Harold F. Williamson Prize, given to a mid-career scholar for contributions to the teaching and writing of business history; a two-year, $188,000 grant from the National Science Foundation; and the History Department's Parks Heggoy Graduate Teaching Award in both 2012 and 2014. He has also received a number of major fellowships from, among other institutions, the American Council of Learned Societies; the Library Company of Philadelphia; the United States Department of Agriculture; and the Harvard Business School, where he served as the Newcomen Postdoctoral Fellowship in Business History in 2003-2004.

Reviews

[Bob H · Rating 5 out of 5]

As someone who understands history research, I can say that Prof. Mihn has done a remarkable job of rescuing this story from scattered libraries and newspaper archives -- and, in the process, told a fascinating tale of this country's youthful growth. This was the era of the $3 bill, literally. These were times in which the new Republic was short of specie -- precious metals, or more exactly, coin -- and needed a medium of exchange for a growing economy, and had to improvise paper money. Banks, not the government, would issue banknotes, which counterfeiters were quick to imitate -- but even the genuine banknotes, $1, $2, $3 bills or more -- were of doubtful worth when issued by banks doubtful of being willing or able to back their value. Thus:

"The failure to redeem bank notes, whether in times of panic or in the course of everyday business, inevitably prompted comparisons between bankers and counterfeiters. In many people's eyes paper that could not be redeemed, for whatever reason, was as worthless as a counterfeit -- or worse. At least a well-made counterfeit on a solid bank stood a chance of passing; a genuine bill of a defunct bank, by contract, would find few takers."

What could have been a dry or arcane book on monetary policy has, in Prof. Mihn's prose, become an entertaining and easy-to-follow story. Besides the many rogues printing the fakes, he shows our young economy in times of growth and turmoil: the defeat of a craft- and apprentice-based economy by new and impersonal manufacturers (which left many skilled engravers more willing to print funny money), the growth of canals and roads that spread the demand for money of whatever worth, and, on a higher level, the battle over whether there should be a Bank of the United States. This was capitalism at its most rapacious, as "wildcat" banks foundered, and, so doing, ruined not only investors but yielded new material for counterfeiters at bankruptcy auctions, as Prof. Mihn's rich prose describes:

"There was some poetic justice in all of this. The casualties of capitalism's relentless competition arose from the dead and moved with new purpose. Cast-off plates and dies, lifeless paper promises of broken banks, out-of-work engravers, reputations of now-defunct corporations: all came to life, animated by the necromantic powers of the counterfeiter. Once resurrected and reincarnated, they mingled with their genuine counterparts, further eroding confidence in the currency."

The author also leads us, step by step, through the process of the counterfeit and genuine currency, not just the counterfeiters but the new technologies of engraving and printing, the network of middlemen and "shovers" (bad-buck passers), the "counterfeit detector" publishers with roguish interests of their own, and the vigilantes that tried to stop it.

Indeed, the book throws new light on major figures in our history, and not just the counterfeiter rogues. Andrew Jackson appears in a new and unflattering light; his war on the Bank of the U.S. not only continued the unregulated banks and money but triggered the 1837 Panic. And Sen. John Sherman (brother of William Tecumseh) and Treasury Secretary Salmon Chase appear as visionaries who forged a single national currency out of wartime necessity, and laid the groundwork for a modern U.S. economy.

All in all, a unique story, a valuable contribution to understanding the young Republic, and a very lively story. A not-to-miss for any history collection.

[Izzy · Rating 3 out of 5]

3.82 ⭐️

for class - fell asleep reading sometimes

[Joe · Rating 3 out of 5]

This book talks about the history of counterfeiting in America. It begins early in America's history, and describes not only the counterfeiting, but the banking system and how its unstructured state facilitated the distribution of bogus bills. The story of the financial industry is almost more interesting than the story of counterfeiting itself: the founders had innumerable arguments about the proper role of the federal government in the nation's money supply, banks printed up their own money with very little regulation, and the courts had trouble convicting engravers, printers, and distributors of fake money.

The book ends around the time that three critical (and related) events occurred: the civil war began, the secret service was created, and the federal government took away the power of banks to print their own money. I would have liked to have heard more about counterfeiting in later times.

The topic of the book is interesting, but the telling of the story is deeply flawed. A few main ideas are told time and again: the US financial system had many problems, which allowed counterfeiters to flourish; people needed money to conduct transactions, and counterfeit bills sometimes played that role; people didn't know which bills to trust, so they relied on their judgment of the person using the bill. Furthermore, this book seemed to focus on a few people and institutions in much more detail than was really needed -- especially since their role in counterfeiting didn't really seem to be that much more important that many other people's.

Overall, I enjoyed this book, but I would have enjoyed it much more if it tightened up the writing.

[Bart Breen · Rating 5 out of 5]

An Historian who can Tell a Story!!!

Stephen Mihm is a breath of fresh air.

A Nation of Counterfeiters is both well documented and well written narrative history that draws the reader along to new understanding and perspective on the nation's economy and banking system in the early history of the United States. Rather than the normal economy, however, Mihm tackles the underground economy and in the process allows the reader to better understand both.

Mihm weaves a tapestry of sources to draw clearly an element of society that took great pains to go unnoticed. Using archives, newspapers, family histories, and genealogies, he paints the picture and at the same time illustrates the national situation that not only tempted but almost by default drew an element of shadow capitalists to serve not only their own needs but the needs of a cash starved society stuggling for confidence and sufficient quantity in the money supply.

Nearly every paragraph in this work has at least one source so the scholar will be able to utilize this for academic needs. Better than most books of this genre though the story reads clearly and is tightly written and flows.

I look forward to future works by Mr. Mihm. This was a pleasure to read.

5 unqualified stars!

Bart Breen

[Robert Morris · Rating 5 out of 5]

In 1837, the United States President voluntarily struck one of the greatest blows against US strength and unity that had ever been struck, in the short history of our country. It's a historical lesson that has been almost completely forgotten. So forgotten that a variety of technologists, utopians and frauds have been celebrated over the past decade or so for trying to reintroduce the scourge Andrew Jackson did so much to encourage: private money. The cryptocurrency fraudsters of today are operating in an entirely different technological environment, but I was struck by how similar the characters, victims and frauds were during the 19th century era described in this book.

In 1837, Andrew Jackson finally succeeded in his eight year effort to kill the United States central bank. He thought this would make everybody use metal cash, for some magical reason a more trusted medium of exchange in that era, but instead it provoked a storm of private money. Hundreds of banks, in all of the states that existed at that time, started issuing currency, sometimes based on sound business practices, but sometimes not, and sometimes based on nothing at all. As Mihm emphasizes, over and over, the line between an unscrupulous banker, and the counterfeiters who were straight up "making money" based on nothing was very thin. Sometimes nonexistent.

For a full quarter century, the US's rampaging economic development was stymied by basic questions of whether or not you could trust the money a customer was handing you. Today there is one standard that a merchant can use to judge a piece of paper money. Back then, there were thousands of possible types of "good" money. It was all an unholy mess. The US government used the first opportunity, the Civil War, to do away with this insane system. After 1865, and especially 1876, many elements of Lincoln's modernizing war state were done away with, but nobody who remembered the chaos of the 1840s and 1850s had any interest in doing away with the unified US dollar.

Unfortunately the witnesses who remember the 1940s are passing away quickly, let alone the 1840s. That's what makes Mihm's book so valuable. He seems to have spent a decade or more spelunking in a bewildering array of archives to reconstruct the chaos of the time. The book is focused on the varied careers of professional counterfeiters. But the world depicted goes far beyond the life and times of the central criminals. "A Nation of Counterfeiters" is a valuable exercise in historical resurrection, building an essential picture of how disastrous it was the last time we tried to privatize money. Anybody singing the praises of cryptocurrency should be forced to read this book.

[John · Rating 4 out of 5]

A solid book on the history of counterfeiting in America. It focuses mainly on the era prior to the Civil War, when individual banks issued their own currency, thus prompting multiple scams. It's an interesting side light on a time when the nation was still forming.

[Chesney · Rating 5 out of 5]

Read for a class in graduate school. Best book read for the class, in my opinion. Loved all of Minh’s examples of people I knew nothing about. Hard to believe how much of American money was counterfeit in the EAR. Highly recommend. (Read much smoother than other books.)

[Karen · Rating 3 out of 5]

Interesting history of the US money before the Civil War and the adoption of a national currency during and after. When state banks were issuing bank notes, counterfeiting was a constant problem.

[Vivian Zenari · Rating 4 out of 5]

It covered what I wanted. I had the e-book, and I was disappointed that the many illustrations were omitted: someone must do something about that!

[Pennyeach Collective · Rating 4 out of 5]

A wild and rowdy romp through a portion of U.S. history. Smart and so fun to read!

[Mandy Hoy · Rating 3 out of 5]

400 pages could have easily been cut to 200. Far too much explaining rather than showing.

[Ricardo · Rating 4 out of 5]

…..Making of the United States is a very ambitious end of phrase for a specific time and scope of the history of bank notes in the US. Still an entertaining well documented book.

[David Nichols · Rating 5 out of 5]

The antebellum or early-national era of American history is often a rather dreary one to write about, particularly if one focuses on political and economic events, rather than the more topical subjects of race and gender relations. Stephen Mihm, however, has accomplished the difficult task of making antebellum American economic history interesting, by focusing on a small but diffuse and influential group of men and women who helped make that fragile economy work – and who did so by breaking the law. Mihm's subject is counterfeiting, and in his account, the period between 1790 and the American Civil War emerges as the golden age of that shadowy profession.

Counterfeiting reached its peak in the nineteenth century because the United States' money supply came almost entirely from private banks, and because the nation was too large and lightly-governed to police either those banks or the people who fraudulently imitated them. The early United States never had enough gold and silver to provide a circulating medium, and the depreciation of state and Continental dollars during the Revolutionary War discredited government-issued money. After the ratification of the Constitution, state-chartered banks began to fill the expanding American economy's need for money. By 1840 there were over 700 note-issuing banks, circulating nearly 150 million dollars’ worth of bank bills (289) backed by fractional specie reserves, real estate, promissary notes, or (in a few cases) nothing at all. Sometimes these notes circulated for years after the issuing bank had failed. While some states regulated their banks fairly well, most did not, and the federal government provided little oversight. Congress did charter the Second Bank of the United States (1816-36), a public corporation designed to keep the state banks in check (its specie-backed notes competed with state bank notes), but the B.U.S. fell afoul of Andrew Jackson and died at his hands in the 1830s. Not until the Civil War would the U.S. government nationalize the currency, using federal fiat money (greenbacks) and a network of chartered “national banks,” and effectively prosecute counterfeiting via the Secret Service.

Until then the United States was a nearly ideal environment for counterfeiters, who exploited lax regulation, Americans' need for money, the complexity and anonymity of the existing bank-note currency, and advances in engraving technology that made it easy to manufacture (and thus steal) facsimile banknote plates. The manufacture of counterfeit banknotes was dominated by a handful of criminal gang leaders, like Stephen Burroughs, Seneca Paige, and James, Daniel, and Lucy Brown. These men and women set up their headquarters in isolated, poorly-policed borderland locations, like the Vermont-Quebec border town of Dunham (whose thoroughfare, “Cogniac Street,” became a synecdoche for counterfeiting), the Cuyahoga Valley, and the swamplands of northern Indiana. They distributed notes through a network of peddlers, who sold the forgeries for credit or goods to “shovers,” who in turn passed off the counterfeit notes to shopkeepers or whoever would accept them.

Given Americans' inability to keep track of the notes of 700 separate banks, the decision about whether a banknote was good or bad was always a subjective one. Sometimes retailers made use of “counterfeit detectors,” published by a dozen firms in the 1840s and '50s, which purported to describe valid and invalid banknotes, but counterfeiters subverted these by using them to correct flaws in their own products. In general, retailers had to rely on their own judgment: whether a note appeared to have passed muster with other people (i.e. whether or not it appeared worn and used), and on the appearance and demeanor of the shover. If the shover was confident, or well-dressed, or female, their mark was likely to believe their banknotes were genuine. Counterfeiting was ultimately a confidence game, with the saleability of the counterfeiters' product resting on how confident people were about the validity of their money and of those who used it. This was altogether appropriate, since cash was the most fluid form of capital in the United States, and since, as Karl Marx pointed out, capital was always the product of a social relationship. Mihm does not invoke Marx in his book, and indeed one of its weaknesses is the author's failure to define exactly what he means by “capitalism,” or to demonstrate just how extensively counterfeiters contributed to its development in the United States. But he would add, and I think correctly, that while American society purportedly valued Weberian capitalism, namely hard work and long-term wealth accumulation, in practice Americans preferred the “get-rich-quick scheme, the confidence game, and...speculation” in land and other assets (15), and plentiful, tainted money both symbolized and enabled these pursuits.

[J.S. · Rating 3 out of 5]

Prior to the Civil War, the American government did not issue a national currency. This was in the time when paper money was still frowned upon, yet there wasn't enough gold and silver coin (or specie) to meet the needs of a new and growing nation. In the absence, notes issued by state-chartered banks served as currency, and counterfeiting thrived. Mihm covers the many reasons and ways counterfeits were printed and distributed, as well as a history of many of the banks and individuals involved. He discusses in depth engraving processes and how they developed, as well as notorious areas where counterfeiters congregated, and the ways the law tried to deal with the problems it created.

We hardly give a second thought to the value of the bills we place in our wallets and purses, but Stephen Mihm brings this long-forgotten time to life and uses a multitude of sources to tell the history and the circumstances that created the situation. He argues, rather convincingly, that the counterfeiters provided a valuable function of increasing the money supply in a cash-starved economy, providing capital for enterprise and industry, allowing the economy to grow. Mihm seems to revere the counterfeiters a bit too much at times, though, treating them like Robin Hoods, while acknowledging that the poorest were those hurt most by their inability to recognize the difference. I would have liked a more thorough discussion of the negative impact on society, but Mihm barely talks about it - barely a couple of paragraphs really.

It's interesting in many ways but not exactly exciting, although lots of pictures of old bills and counterfeits help. It wasn't hard to see parallels in modern-day society, however, where the money supply is multiplied through non-cash transactions (checking accounts, credit and debit cards, and where account balances are simply numbers with a promise by the bank to honor the customers purchases). Not for casual readers of history.

[Chip Hunter · Rating 4 out of 5]

While being at its heart a history book, A NATION OF COUNTERFEITERS avoids the dry and tedious nature typical of such books. By including fascinating (and often humorous) biographical descriptions of infamous con-men such as Sephen Burroughs, Lyman Parkes, and Ebenezer Gleason, Mihm brings history to life. These colorful figures, many of whom were something like folk heroes in early America, make this book truly worth reading. Mihm's style is easy to read and engaging, and the numerous illustrations are helpful.

This book chronicles the rather chaotic time (late 18th century - Civil War) when America was struggling with its identity as a nation as well as coping with major changes in population growth and economic freedom. The transition from independent banks printing their own promissory notes to the federalisation of all currency in the U.S. was full of debate, question, and crime. It was a critical time for our country, as the government's role in the economy and in individual's lives was largely determined. Since then, the federal government has done nothing but consolidate more and more power without looking back.

The only thing that bothered me about the book was Mihm's repeated efforts to link criminal counterfeiters to legitimate capitalists. While capitalism may not always be pretty or seem fair, it is far from the obvious immoral and illegal act of passing of forged bills as genuine. Not a major complaint, but I just kept getting the feeling that Mihm was making a pointed effort to bash capitalism in general.

Overall, this book is worth your time and is sure to teach you something new and interesting about American history.

[Larry Hostetler · Rating 4 out of 5]

I would like to be able to have given this 3 1/2 stars. While it is very interesting and educational in many ways, at times it was a slog to get through. I learned not only about currency and its development in the U.S., and counterfeiting, and con men, but also about economics, political history of the banking system pre-civil war, and about life in the early 1800s in the U.S. I learned a lot, and that was what I was hoping. Perhaps my enjoyment would have been heightened by more personal knowledge of the geography so central to the book (primarily New York, New England and southern Canada), but the author tried to inform me. If you're interested in counterfeiting, our monetary or banking system, or life in the early 19th century U.S. you will enjoy this book. But it's not a beach book.

[William · Rating 3 out of 5]

This one drags a bit after the first half and could use a bit more focus but it has some very interesting histoical insights into: i) the lack of precious metals for money being a problem in the "new world"; ii) the need for paper money to facilitate transactions; iii) the respect accorded well made phoney money being greater than that accorded to real money issued by shakey banks; iv) the civil war being a war of phoney money as well as blood and guts, and; v) the civil war driving bank issued notes out of the market in favor of federally issued notes.

A well written book on a somwhat obscure, though interesting, topic area.

[John Thorn]

Too early to comment on the quality of the book, but its premise is intriguing: that the tall-tale tradition, embracing lying, stealing, and cheating, has always been America's national pastime, and this truth derives from our long love affair with funny money. We had no national currency until the civil war and the combination of forgers and four-flushers--individuals, syndicates, and purportedly capitalized banks--were all issuing worthless notes and making us a suspicious people, always disscounting appearances. Ultimately we came to admire a good con as we admired a good prank. With so strong a premise, I am expecting the book to be swell.

[Dagezi]

Did you know that Joseph Smith of Mormon fame all was involved in something called the Kirtland Safety Society anti-Bank-ing Company which issued banknotes that had anti- and -ing in really tiny letters next to the word bank?

[Nicole · Rating 4 out of 5]

An excellent topic. On the whole, I liked the book, although I thought the pacing was a bit slow, and I thought it was an odd choice by the publisher (Harvard) to 1.5 space the text, which made the whole thing a lot longer than it needed to be.

[Dave · Rating 2 out of 5]

The core subject matter of this book was fascinating but I found it a bit repetitive. I would have liked a little less information on the counterfeiting rings. If it were about one hundred pages shorter, it would have been a crisp, compelling read.

[Zeb Larson · Rating 4 out of 5]

Very interesting. It would have been nice to have statistical information on the scale of counterfeiters, but in truth, that statistical information probably doesn't exist. As it is, it sheds light on a period of American history that few people really understand, and the writing is lively.

[Warren · Rating 4 out of 5]

An interesting read about counterfeiting in the US during the 1800s. It was a little dull at times, but a good read.

[Joshua · Rating 3 out of 5]

This book was my idea. If I had the patent, I'd be rich.

[Marty · Rating 5 out of 5]

A fascinating look into early American life and business, and crime.

[Shea Harding · Rating 4 out of 5]

Great insight to the beginnings of American capitalism, read for class but would definitely read for pleasure as well