TOPEKA (KSNT) – Money that wasn’t worth the paper it was printed on is finding new value in private collections and museums in Kansas.
It was the wild west. An era where Kansas and many other states existed as territories and saw little regulation or law enforcement. People looking to make their livelihoods during this dangerous time were desperate for the fruits of civilization. Namely, currency for the purchase of goods in the territory.
These individuals sometimes fell victim to shady business practices involving paper bills printed by banks situated in remote areas. The banks, nicknamed “Wildcat Banks,” printed bills that were unregulated and had poor securities. Some of the banks were set up deliberately as scams while others failed shortly after they were opened, leading to a large supply of, often worthless, paper bills.
“Most banks in territorial Kansas did fail for various reasons and it was before federal regulations,” Anna Woods, museum curator at the Kansas Historical Society (KHS) said. “Most people don’t realize the federal government did not regulate paper bills until the Civil War.”
From the period when Kansas became a territory in 1854 to when it became a state in 1861, Wildcat Banks operating without federal regulations offered many the false promise of a way to buy and sell goods. While this practice was not uncommon, with many banks around the country printing their own money, those located in the east were required to back their bills up with gold and silver by state governments. It wouldn’t be until the National Banking Acts of 1863 and 1864 along with Kansas obtaining statehood that unregulated money began to disappear.
“On the frontier, anybody who wanted to could print paper bills and there was no regulation that they even had to be backed up by precious metals like gold or silver,” Woods said. “As you can imagine, this led to some issues.”
Woods said while there were legitimate attempts to provide people on the frontier with money, some banks operated as scams, as in the case of the Merchants Bank of Leavenworth. Lucien Ayer of New Hampshire announced his intentions to open the bank in 1854, allowing the local newspaper to report it, before traveling back east and giving his paper bills to people traveling to Kansas in exchange for what legitimate currency they had. Upon reaching Kansas, the pioneers realized their money was worthless.
“This bank never actually existed, but a lot of paper bills were printed in its name,” Woods said.
These practices led to the creation of numerous paper bills which now often appear in the possession of collectors or in museums. Some have even found their way into the KHS.
“We have 67 in our collection,” Woods said. “You can find them online for sale. They’ve just kind of been disbursed over time, so museum collections or private collections.”
Woods said while many were initially worthless, they have found new value in the present day.
“To a collector online, it depends on what they are, how rare they are, that kind of thing,” Woods said. “I’ve seen everything from a few hundred to a few thousand. I would recommend bringing them to a museum for preservation.”
If you think you have a Kansas bank note and want to turn it in to the KSHS, you can call 785-272-8681. Keep up with breaking news in northeast Kansas by downloading our mobile app.