The Faking of the United States

Perhaps it is best to begin at the end—in the “Note on Sources” to be exact. Here Stephen Mihm encapsulates the purpose and significance of his work, but also reveals the two competing stories he is trying to tell.

[T]he story of counterfeiting—and more broadly, money—is just as much a social, political, and cultural history as a story of economics. It is very strange indeed that historians studying the “market revolution” or the “transition to capitalism” have failed to examine the curious transformations that the money supply underwent during the nineteenth century, even while they have written countless books and articles on changes in production and consumption. Money was the mysterious link between all these elements, a tangible incarnation of the sometimes elusive transformation taking place at that time

(p. 435).

Mihm is right to highlight both the centrality of the money supply to antebellum economic transformations, and the curious failure of earlier historians to study it. This is where his book makes a significant contribution to the literature and to our understanding of a financially chaotic world we have lost. At the very start, Mihm makes it clear that our unquestioned confidence in the value of the little slips of paper in our wallets is a luxury that did not exist until the Civil War. In the first seven decades of the nation’s existence (roughly 1790 to 1860) there was no centralized, standardized, and single United States currency. Instead—and even in those periods when there was a Bank of the United States—hundreds of state-chartered but private banks printed their own notes that circulated as currency, and that were redeemable at those banks for the “hard money” of gold or silver, also known as “specie.” It was within this loosely regulated and highly decentralized financial world that counterfeiters flourished, polluting and diluting the stream of legitimate notes with their sometimes exceptionally well-crafted but ultimately worthless bills.

Drawing on impressive and wide-ranging research, Mihm tells their story thoroughly. He takes his reader from the tight-knit community of counterfeiters of Cogniac Street on the Canadian border, to their heirs in the Cuyahoga River valley, all the way out to the goldfields of California. Mihm also shows his readers the brass tacks of the counterfeiting enterprise, from the artistry of the engraver, to the ingenuity of those who copied printing plates and dies, to the audacity of the “passers” or “shovers” who first put the bills into circulation. In early America, Mihm informs us, counterfeit bills were ubiquitous, accounting for anywhere from 10 percent of the money supply to—in the worst times and places—close to 50 percent.

But even though counterfeit notes were commonplace and the counterfeiting underworld a virtual constant in antebellum America, a crucial question remains as to whether this enterprise was truly central to early American capitalism or merely peripheral. From the book’s subtitle, “Capitalists, Con Men, and the Making of the United States,” Mihm seems to suggest—although he never overtly argues this point—that counterfeiting was an essential, albeit illegal, component of the developing American economy. This, in my opinion, is the book’s principle weakness—an overestimation of the importance of counterfeiting to “the making of the United States.”

Mihm’s reasons for this overestimation are understandable. For starters, of course, he wants to persuade his readers as to the significance of his project. But more importantly, Mihm also wants to embed in his narrative a critique of capitalism itself—a critique that is both measured and justified. Instead of casting capitalists as upstanding legitimate businessmen and counterfeiters as lowly criminals, Mihm wants us to see them as “mirror images of each other” (p. 13). “Both trafficked in confidence” and both were in the business of making money—some just more literally than others (p. 51). “In all of this,” Mihm argues, “the border between the real and the counterfeit...