Of all the things a person will do in the course of a day, perhaps nothing seems easier than a cash transaction. In most cases, the buyer and seller reach a meeting of the minds. In particular, the value of the transaction and its legitimacy is established through the token of exchange - the physical piece of currency that passes between them. What we take today to be a simple transaction is actually the result of a long and complicated history involving the intersection of many social, political, and cultural forces. The Maryland Historical Society’s Obsolete Currency collection provides an excellent representation of this process. 

The paper currency most of us are familiar with is called a “Federal Reserve Note.” This note is authorized, produced, distributed, and protected from counterfeiting by the United States Federal Government. Accepted on good faith by people all over the country - the world even - as a medium of exchange, it is backed by a common belief in the stability of the United States government. More specifically, the currency is produced by our national central bank, called the Federal Reserve. This “super bank” has many functions, but four of them are of interest here: 1) it produces currency for use in all states; 2) it produces currency for use in both public and private debts; and finally, it maintains both the 3) quality, and 4) quantity, of the currency in circulation. Having one bank do all this - “one stop shopping” - is highly efficient and convenient, and now seems like common sense. Yet historically, this has not always been the case. Until the creation of a strong Federal Reserve Bank in 1913, these four functions were handled in a very chaotic manner. 

Prior to the establishment of a strong federal banking system, currency was not standardized on a national level. Since state governments were explicitly forbidden by the U.S. Constitution to print currency, there was no in-state standard currency. As a result, currency was often produced by local governments or banks, merchants, or tradespeople, causing a great deal of confusion. Currency issued by a local government to pay its own debts was sometimes rejected by private citizens. Currency was often backed by farm crops or shares of a harvest, and sometimes not backed at all. Many currency specimens were easily counterfeited. At times, currency supplies dried up, and other times they flooded regions. This pandemonium has left us two legacies: 1) the Federal Reserve system; and 2) a heritage of many beautiful and sometimes strange and fascinating currency specimens reflecting that disorder. 

Maryland’s history of paper currency is one such example. The Maryland Historical Society’s collection of Obsolete Currency represents a cross-section of the many interesting and clever ways the citizens of Maryland have sought to fill the gap created by the prior lack of a strong federal currency system. 

The first paper notes accepted as currency in Maryland were actually receipts for tobacco held in warehouses. Early colonists traded these back and forth in payment as we would cash today, and the notes could be redeemed at the warehouse by the holder to take possession of the lot. Of course, backed only by tobacco lots, the receipts were only as valuable as that day’s market price for tobacco. Indeed, because the colonies had little gold and silver to mint coins, they continued to rely on paper as a medium of exchange long after the “tobacco standard” had ceased. Still another attempt to back paper currency resulted in the curious “fractional” notes bearing such declarations such as “six and a quarter cents.” These notes were based on foreign metal coinage (usually Spanish) which did not divide evenly into decimal values as our modern currency does. 

As Maryland grew so did its need for currency, particularly during times of unrest. The Revolutionary War prompted a great demand for paper currency that was filled by private banks issuing promissory notes on a state and national level. Similarly, the Civil War created a tremendous need for currency to help defray the cost of the conflict. However, as Richard G. Doty, curator of the National Numismatic Collection at the Smithsonian Institution, points out, 

From the Maryland example we know that scrip can also reflect economic growth, during which the economy needs more small change than it can obtain from the usual sources. 

Often works of art in themselves, these notes trace out a history of Maryland’s growth and development through its images of work and play, industry and agriculture, the real and the mythical. As Doty says, 

Pleasant to look upon, useful for business, Maryland’s early paper money has another meaning for us, but one of an equal or greater importance: it presents an indelible image of ourselves when young.

Provenance unknown.

Collection contains 634 pieces of currency dating from ca. 1733-1929, housed in 3 boxes. Box 1 contains 207 pieces of currency by Baltimore City issuers, non-Maryland currency, foreign currency and U.S. fractional currency. Box 2 contains 141 pieces of currency by Maryland county issuers. Box 3 contains 286 pieces of currency in three categories: small U.S. National Bank Notes; items from the colonial period with brief descriptions of the items, explanation of dates, and notations regarding contemporary repairs; folder 3 holds non-Maryland bills and miscellaneous items including lottery tickets.

Cataloging information for items in this collection is based on Money and Banking in Maryland, Part Two: A Catalogue of Maryland's Paper Money, 1790-1865 by Denwood N. Kelly, Armand M. Shank Jr., and Thomas S. Gordon (Baltimore: Maryland Historical Society, 1996). 

Arrangement varies. Boxes 1 and 2 filed by geographic place of origin and catalog number, where available. Box 3 filed mainly by date or geographic place of origin.