Do you remember the last time you used cash? The process was probably pretty automatic. You wanted to buy something, you handed the money over to the cashier, maybe got change back, and then walked out of the store. Nothing about the transaction raised alarms, you never doubted the money in your hands.

Yet in Stephen Mihm's A Nation of Counterfeiters, it is clear that wasn't the case in the early part of the 19th century. In a rough and tumble nation, with no central currency and hundreds of state chartered banks, the profession of counterfeiting flourished from the borders of Vermont to the Mississippi River Valley of Ohio. Counterfeiting intertwined with the growing capitalist economy of a new nation, both destabilizing the currency while also meeting a growing demand for paper bills. It wasn't until the Civil War threatened to tear the nation apart that the idea of a federally backed currency took hold and became a source of national pride and trust.

Mihm discusses how counterfeiting operated within the early economy of the United States. Focusing on specific counterfeiters, as well as anti-counterfeiting detectors, Mihm demonstrates how counterfeiting mimicked many of the thoughts and practices of "legitimate" capitalist businesses. Americans had little faith in their banking system, with many banks issuing notes beyond the amount of capital in their vaults. How is that different from producing counterfeit bills? It becomes clear in A Nation of Counterfeiters, that if there was a difference, it was fairly negligible.

I should confess that I took a class with Dr. Mihm when I was an undergrad at UGA and he quickly became a favorite professor of mine. He writes clearly and very engagingly, with more of a narrative tone than most histories. While initially doubtful that I would enjoy history from an economic viewpoint, he quickly persuaded me to his way of thinking. If you have any interest in early American history, A Nation of Counterfeiters is a good introduction to a colorful part of our nation's economic history. ( )

Although we take it for granted, the dollar was not always sound. Stephen Mihm details the muddled and often fraudulent economy of pre-greenback America in his book A Nation of Counterfeiters.

Mihm draw vivid portraits. An Associate history professor at the University of Georgia, he details the flim-flam artists who plied this trade. With more than more than 10,000 shades and varieties of cheaply printed currency on the market by the 1850s, he does not lack for stories. He paints colorful pictures of the flimflam artists, their ruses, and the ramification of their frauds.

His villains include the notorious privateer, minister and alchemist Stephen Burroughs, along with numerous bankers, engravers, cops and charlatans.

Mihm’s book, through long, provides a unique understanding of the nineteenth century banking debate. It underscores the result of our founding fathers’ failure to understand the central role of banking in commerce. This history is unique and entertaining.

Penned by the Pointed Pundit
March 2, 2008
8:16:54 PM ( )