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

The banking system of the antebellum period was chaotic, with hundreds of banks issuing their own notes. As Stephen Mihm shows in vivid historical detail, this situation provided ample opportunities for counterfeiters to ply their trade, so that it quickly became impossible to know which bills were counterfeit, and which were real. Mihm argues that the presence of so much dubious paper revealed the essentially unfounded nature of a bank’s promise to redeem its notes in silver or gold. Such was the unreliability of antebellum banking that ordinary Americans actually preferred a counterfeit note of a stable, reputable bank to a genuine note issued by a more dubious concern. In Mihm’s words, counterfeiting exposed the extent to which, “at its core, capitalism was little more than a confidence game” (11).

Mihm has concentrated a vast amount of research into a wide range of sources— newspapers, court records, criminal memoirs, land records, credit reports, and of course, bank notes—and crafted an absorbing narrative, the story of “a monetary system run wild” (252). He also provides a rich cast of characters. Counterfeiting first flourished in the lawless borderlands of Lower Canada, where Seneca Paige set up shop in the 1820s. Paige employed skilled engravers such as Thomas Adams Lewis, who justified his actions as revenge against unreliable banks. Retailers or dealers in counterfeit notes were distressed artisans like the shoemaker Abraham Shepherd, or small grocers and merchants in the notorious Five Points district of New York City. Mihm’s central argument is that counterfeiting operated as a “shadow” economy which mimicked and extended the logic of a largely unregulated market. Paige acted as a “fully-fledged capitalis[t],” taking ownership of the plates and extracting the “lion’s share of the profit” he obtained from selling counterfeit notes to dealers (85). Dealers like Shepherd exploited the poorest and most vulnerable, people with little “real” money, who risked imprisonment for passing imitations. Mihm’s study is noteworthy for this sensitivity to the ways in which social inequalities result in a grossly uneven distribution of risk.

Mihm’s story ends after the Civil War, when the establishment of a uniform national currency and concerted federal action against counterfeiters restored order to the monetary system. The American nation was, he argues, created through the federal government’s underwriting of promises formerly made by private individuals. Perhaps Mihm might have allowed his arguments about capitalism as a confidence game to resonate beyond this conclusion. Both antebellum banking and its counterfeiting shadow made a mockery of “claims that private economic interests inevitably contributed to the public good” (263). As Mihm notes, those claims persisted in the dark arts of stock dealing and trading commodities practiced by Gilded Age speculators like Jay Gould and Jim Fisk. While faith in the currency may have been restored, faith in the economy continued to rest on shaky ground.