by Pat Rollins and Ben Noble
In the 18th century, the Finger Lakes was known to General Washington as “the Ohio country” and was the breadbasket for the Continental Army during the Revolutionary War. The opening of the Erie Canal in 1825 revolutionized transportation by enabling bulk goods to be shipped via mule-drawn barges, replacing the inefficient practice of loading only small amounts onto the backs of mules.The canal contributed to a growth in population of the Finger Lakes, New York State and the western territories such as Ohio and Michigan; inspired global canal transportation; and was the model for the Panama Canal. The transportation revolution accelerated the expansion of the United States, yet that expansion was complicated by the lack of a nationwide banking system.
In 1791, Congress chartered the Bank of the United States to aid the expansion of industry. When the bank’s charter expired in 1811, state legislatures chartered their own banks to continue helping merchants and farmers who needed loans.
A continued lack of silver or gold coinage made paper currency necessary for the economy to grow. Without a national currency, thousands of local banks, railroads, farming co-ops and even canal-building companies in 39 states issued their own unique paper money or “bank notes” backed by each institution’s investors and depositors. Bank notes were typically not honored at other chartered institutions.
The Bank of Canandaigua was chartered by New York in 1854 and lasted only three years. Bank President Theodore Hart and Cashier Hiram J. Messenger were signatories for issued notes. It is thought that the $1 note depicts the story of Skenoh Island and features Statesman Henry Clay of Kentucky in the lower right as an example of national pride prior to the Civil War. The $2 note features New York Governor and U.S. Senator William Seward who negotiated the Alaska Territory and went on to become the secretary of state under President Lincoln.
Many of these early chartered state banks became insolvent due to mismanagement, lack of capital and even fraud. For example, “wildcat banks” might have been state chartered and raised money from investors, but they didn’t have a physical address, vault or even depositors for whom they did any business or transactions. One such local wildcat bank was the Perrin Bank.
As commerce expanded beyond the Finger Lakes, the state-chartered banking system was not suited to support interstate commerce. Most commercial transactions were limited to U.S. Mint coinage of gold and silver on par with its denomination. For example, a $5 gold coin was comprised of $5 worth of gold, its “melt value.”
By the 1830s, there was a demand to shorten travel time with steam locomotives. The railroad was transformative and steam power replaced animals as prime movers. By the 1880s, with the evolution of tunneling technology, the canal was struggling to remain competitive. People and goods were on the move, and the growing nation needed a trusted banking system and currency that could move with them. The steam engine drove the Industrial Revolution, allowing factories to operate away from water sources.
The Middlesex Oil Company was founded in 1865 following the discovery of oil in Pennsylvania in 1859. Petroleum replaced whale oil for lamps and lighting and became the preferred fuel source for steam. Gasoline production led to the automotive revolution and the eventual decline of the railroad. Today, Southern Tier wells still produces 1,000 barrels per day of unique high paraffin oil used for specialty lubrication.
By the mid-1800s the Finger Lakes were an important railroad junction, steamboat port, banking center and resort town. However, according to History of Banking in Canandaigua by George Hayes, the early banks of the Finger Lakes lacked leadership, capital and trust. These banks often closed due to lack of capital, and their unique bank notes were deemed worthless. What was needed was a uniform national banking system and bank note negotiable from coast to coast, especially as the Transcontinental Railroad further enabled the settlement of the American West.
On February 25, 1863, President Abraham Lincoln signed the National Banking Act, establishing a national banking system. This system replaced the obsolete state-chartered bank notes with a reliable, standardized series of notes issued by national banks and backed by government bonds deposited with the Treasury.
The national bank notes are often referred to as “hometown currency” printed with the name and charter number of the issuing “hometown” national bank. Every national chartered bank received a sheet of custom printed bank notes including the names of the bank president and cashier. The bank would then cut each individual note by hand to be signed by the bank president and cashier. These signatories were usually prominent and trusted people with recognizable names within each community that are still recognizable today.
The First National Bank of Geneva was chartered in December 1863 with charter #167. Alexander Chew (godson of Marquis de Lafayette) was the first bank president along with board members Phineas Prouty, Corydon Wheat, Thomas Raines and cashier William Scott.
The Geneva National Bank was chartered on March 29, 1865 with charter #949 with a long history of signers including President Samuel Hopkins Ver Planck and Cashier Samuel Southworth.
In 1875, for security reasons, the Treasury Department started managing more of the printing process. The original series and the 1875 series are considered the “first charter period.” Original series notes only appeared in the Finger Lakes Region at the Geneva National Bank Charter and First National Bank of Geneva.
Canandaigua National Bank was established by Frank Harwood Hamlin who served as president and Hiram Taft Parmele as cashier, on November 25, 1887 and holds charter number #3817. Canandaigua National Bank had a variety of signers but the most common and numerous were that of President George Wright Hamlin and Cashier Acey Wheeler Sutherland.
With its uniform appearance, a national bank note issued in Canandaigua or one issued in San Francisco was a trusted and recognizable form of currency that could be used across the nation. By the second half of the 19th century, the U.S. was producing the finest and most stable bank notes in the world. American paper money became the model for many countries, and American concepts of how paper money should look became an accepted standard for most of the world.
If you have a bank note and have a question or would like more information, contact the Ontario County Coin Club (OCCC) through its Facebook page.
