|Date(s):||March 25, 1817 to March 26, 1817|
|Tag(s):||Crime/Violence, Economy, Government|
|Course:||“Rise And Fall of the Slave South,” University of Virginia|
The Republican Star and General Advertiser of Easton, Maryland printed an article titled Citizens, Beware of Counterfeiters on March 25, 1817. The article informed the people of Easton that there is a gang of villains now in our borough, who are endeavoring to further a scheme of the most diabolical swindling, by putting into circulation Counterfeit Notes of 50 and 20 on the Union Bank of Maryland.
Counterfeiters significantly threatened the efficient development of the American economy. For the merchants of Easton, failure to recognize counterfeit notes resulted in substantial financial losses. In terms of their customers, it meant the loss of one's reputation as a trustworthy vendor. Attempts made by Congress to create a sound currency clashed with the cherished belief held by many Americans that the federal government should have a limited role in the nation. According to historian David R. Johnson, the federal government reserved the right to coin money but neither institution that Congress created, the US Mint and the Bank of the United States, exerted much control over national development.
Counterfeiters gained a tremendous advantage with the development and proliferation of state banks such as the Union Bank of Maryland. Due to the Mint's failure to produce enough coin for the rapidly expanding economy, Johnson claims that state banks began to compete with the Mint as a monetary source by issuing their own currency. State governments chartered privately owned banks, and granted them the right to issue currency backed by each bank's capital reserves. State Banks claimed that their bank notes did not violate the federal government's currency policy since the states neither directly issued these banks notes nor supported them with their credit. Counterfeiting became far easier with the increase of paper money in circulation. The Republican Star and General Advertiser newspaper article stated, we look to our police, on this occasion, for such vigilance as may bring the whole of these wretches to justice. Counterfeiting threatened efficient development of the American economy, and failure to recognize counterfeit notes often resulted in significant financial losses.
For southerners, the bank brought out their fears of an oppressive central authority, and the necessity for local control to protect liberty. Senator Nathaniel Macon in 1818 expressed the anxieties of southerners; I must ask you to examine the constitution of the U.S. ... and then tell me whether if Congress can establish banks, make roads and canals, whether they can free all the Slaves in the U.S. The rising numbers of counterfeiter bank notes in circulation became an increasingly greater problem associated with the banking system. The development of the American banking system created tensions between the North and South. According to historian William J. Cooper, opponents of banks in the South charged that the power of banks gave an unnatural privilege that imperiled both the independence of the community and the control individuals had over their own affairs.