Chapter XXII
Wild-cat Money and Town-sites
Both of these specimens of natural history were bred, nurtured, and let loose in countless numbers to prey upon the people in the early days that witnessed the opening of the Northwestern territories to settlement. The wild-cat dollars waxed fat upon the blood and brawn of the settlers who had already arrived; wild-cat town-sites found ready victims in the thousands of Eastern people who desired to better their fortunes, and who lent ready ears to the golden tales of unscrupulous promoters, that told of wonderful cities in the West, whose only reality was that blazoned in the prospectuses scattered broadcast through the East.
The younger generation, whose only acquaintance with the circulating symbols of wealth that we call "money", is confined to the decades since the close of the War of Secession, can have no idea of the laxity of banking laws of the fifties, in the Northwestern states and territories, nor of the instability of the so-called "money" that comprised nine-tenths of the medium of exchange then in use in the West. Nowadays, a bank bill stands for its face value in gold, if it be a National Bank issue. If a state bank—and bills of this sort are comparatively few in these days—they are also guaranteed, in a measure, by the laws of the state in which the bank is situated. In the days of which I am writing, and especially in the unsettled and troublesome times just before the war (from 1856 to 1862), the money that was handled on the river in the prosecution of business, except of course the small proportion of gold that was still in circulation, had little or no backing, either by federal or state enactments.
A man went into an embryo city, consisting in that day of two or three thousand town lots, and from fifty to a hundred inhabitants, with an iron box costing twenty-five dollars. In this box he had ten, twenty, or thirty thousand "dollars" in new bank bills purporting to have been issued from two, three, or four banks doing business in other equally large, populous, and growing cities, situated elsewhere in Wisconsin, or preferably in Illinois, Indiana, or Michigan. How did he become possessed of all this wealth? Was it the savings of years? The iron box was, perhaps; perhaps he got trusted for that. The money was not usually the savings of any time at all; it was simply printed to order.
Five or six persons desirous of benefitting their fellow men by assisting them in opening their farms and "moving their crops", would get together in Chicago, Cincinnati, or St. Louis, wherever there was an establishment capable of engraving and printing bank bills—and not very elegant or artistic printing was required, or desired. These men propose to start as many banks, in as many "cities" in the West. They have money enough, each of them, to buy a safe, an iron box into which any carpenter could bore with an ordinary brace and bit, and enough over to pay for the printing of twenty thousand dollars' worth of bills in denominations of one, two, five and ten dollars. The printing finished, each man would sign his own bills as president, and one of the others would add the final touch of authenticity by signing a fictitious name to the same bills as cashier. Then it was "money".
But it would have been overloading the credulity of even the most gullible denizens of his adopted city to ask them to accept his own bills as legal tender; so a swap was made all around, and when the requisite amount of shuffling was completed, each man had his twenty thousand dollars in bills on four or five banks, but none of his own issue. There was a double incentive in this transaction: first, it inspired the utmost confidence in the minds of the men who were to borrow this money. How could this banker who had come among them for their good, have acquired this money by any other than legitimate transactions? If it were bills on his own bank that he proposed to put into circulation, there might be some question as to their guaranty; but he could not get this money by merely going to the printing office and ordering it, as he might in case of bills on his own institution. It certainly must be good money. Secondly, by distributing his bills in as many different localities as possible, the chances of its never being presented for redemption were greatly multiplied; it might be burned, or lost overboard, or worn out, in which case he would be just so much ahead, and no questions asked.
The foregoing may be a somewhat fanciful statement of the way in which the bankers proceeded, but in essence it is a true picture. They may not have all met in Chicago, or anywhere else, to perfect these arrangements, but the arrangements were all perfected practically as stated: "You put my bills into circulation, and I will put out yours; and in each case the exchange will greatly assist each and all of us in hoodwinking our victims into the belief that it is money, and not merely printed paper which we are offering them".
Equipped with these goods, and with a charter from the state in which he proposed to operate—a charter granted for the asking, and no questions raised—the banker transports himself and his box of money to his chosen field of operations. The newspaper which has already been located in the new city heralds the coming of Mr. Rothschild, our new banker, more or less definitely hinting at the great wealth lying behind the coming financier. A bank building is rented, a sign hung out, and he begins to loan his money at five per cent per month on the partially-improved farms of his neighbors, or the house and lot of his "city" friends. He is a liberal man, and if it is not convenient for you to pay the interest as it accrues, he will let it stand—but he does not forget to compound it every month. The result is inevitable. The debt mounts up with a rapidity that paralyzes the borrower, and in the end a foreclosure adds farm and improvements to the growing assets of the banker. Within a very few years he is the owner of eight or ten of the best farms in the county, and perhaps half a dozen houses and lots in the village, and all with the investment of less than a hundred dollars invested in printing, and an iron box, and without the expenditure of an ounce of energy or a legitimate day's work. And the victims break up and start anew for the still farther West, to take new farms, to be engulfed in the maws of other sharks. One may not greatly pity the men themselves, for men are born to work and suffer; but the women! God pity them. Worn, tired, broken-hearted, they must leave that which is dearest to them in all the world, their homes, and fare forth again into the wilderness, to toil and suffer, and at last, blessed release, to die.
[177] [178] And the bankers? They were counted honest. If by any chance one of their bills came to hand and was presented for payment at the home counter, it was promptly redeemed, sometimes in gold or silver, but oftener with another bill on some other bank belonging to the syndicate. I personally knew some of these bankers. Some of them were freebooters without conscience and without shame. Under color of law, they robbed the settlers of their lands and improvements, and defied public opinion. Others put on a cloak of righteousness; they were leaders in the love-feasts and pillars in the church; and they also had their neighbors' lands and improvements. Their descendants are rich and respected to-day in the communities where their fathers plied their iniquitous trade; and these rule where their fathers robbed.