10 Dollars, New Hampshire, Hillsborough Bank, 1806

Description:

The Hillsborough Bank of Amherst in New Hampshire issued this ten dollar note on November 18, 1806. The left side of the note reads “Potius Cohibere Quam Punire, New Hampshire, Quid Leges Sine Moribus” (Rather than inflict punishment, restrain. What is law without morals?). The note reads “The President, Directors, & Company of the Hillsborough Bank promise to pay [Name] or bearer on demand, Ten Dollars, Amherst, November 18, 1806.” The note is signed by the bank’s cashier, Dave Holmes, and the bank’s president, Samuel Bell. The Hillsborough Bank was founded on June 18, 1806, and capitalized with 50,000 dollars. The notes were printed using Jacob Perkins’s “Permanent Stereotype Steel Plate” that prevented forgery. The bank only lasted three years, as it extended its currency beyond its reserves, and the Embargo Act of 1807 stymied New England’s trade. When note holders came to collect their specie, the bank could not fulfill its obligations and was forced to shut down.

From 1790 to 1863, states and private banks issued their own currency to supply capital in a young nation without a national currency. This currency was backed by the hard money the banks had on deposit, and was only used locally where the bank and its operators were trusted in the community. However, banks often oversupplied notes, and this overextension caused bankruptcy among private and state banks when financial panic struck, particularly in 1837. Currencies from these failed banks are known as “obsolete bank notes” or “broken bank notes,” and several are held in the National Numismatics Collection.