The dollar bill has been written and produced by various entities over the years, but especially by railroads in the mid 1800’s. A ‘dollar bill’ back in the days when many steam locomotives burned wood rather than coal, and before the War Between the States, had many values. In many states during this period, almost anyone could issue paper money. A silver or gold dollar was always worth a dollar in exchange for merchandise, but a paper dollar was worth whatever you could get for it. If a railroad, insurance company or bank, which issued the paper money would give you a gold or silver dollar for two of its paper dollars, it was said to be at 50% discount. Thus it was possible for any issuing ‘banker’ to control the true value of his paper money … that is as long as he had gold or silver with which to redeem it when called upon. Gold and silver have ALWAYS been real money.
Commercial dealings were usually in paper money, because coins were hoarded and very scarce. Varying discounts on paper money made all transactions more or less a speculation. These dollar bills came to be known as “Red Dog” or “Yellow Dog” monies, and it is now impossible to even imagine the confusion of those times. A merchant receiving one of these notes would turn it up to a light to see if it had holes in it, because it was the custom of banks to file the notes on slender pins which made holes in them. If the note had many holes in it, the note had often been in banks, and its genuineness was sort of ratified. Some holders of the privately issued dollars would artificially age them with tea or punch holes in them to try to make them more acceptable.
The predominance of railroads in those days, dominated the life of every community, and if a town was bypassed by a railroad, it was destined for oblivion. If a train or locomotive was engraved on their colorful notes, it was calculated to impress people who would be more likely to accept it in payment. The term ‘railroad money’ grew to be associated with value in these bills, since there were no autos, trucks, planes, or anything other than railroads used for transport other than horses. We live in an 1887 home, and when it was built, everything had to come in by train, and in our case, narrow gauge trains. Banks in the United States and England invested depositors’ money in American railroad bonds and stocks. Failures were frequent and widespread. In 1857, practically all banks in the United States failed when their investments, largely in railroads, were revalued because of a panic to convert paper into gold or silver, plus the failure of the New York branch of the Ohio Life Insurance and Trust Company. Incidentally, during this time period, the New York Central Railroad broke all speed records, by pulling one of its passenger trains at over 127 miles per hour!
The National Banking Acts or 1861, 1862, and 1863, tried to put a stop to the practice of privately issued paper money, but it was never really legally stopped, except that the acts had ‘legal tender’ laws inserted into the last one, which made it illegal to use any but U.S. issued money for transactions. That didn’t work too well either, because the Civil War was in progress, and the ‘official’ U.S. currency became the North’s ‘greenback,’ which like the South’s confederate money, became worthless. The Federal Reserve Act of 1913, was a fraud from its shady beginnings, and is still a fraud, which Trump is trying to get rid of, but I am certain without success. Railroad dollars and currencies are quite rare and collectible today. The most railroad dollars were seemingly issued by the “Railroad National Bank” of Lowell Mass, which issued $2,814,000 worth of them, and 160 years ago, they bought a lot of stuff! don@coloradogold.com