Early Banks & Counterfeiters
By Jennie Shurtleff
In the early American colonies, coins were scarce, and much of the economy relied on bartering. Bartering -- or exchanging one item for another — had its challenges, primarily because it wasn’t always straightforward. For example, if you had candles to sell but needed cloth, you might have to trade your candles for something else first, like live chickens. Then, you might trade the chickens for dried apples, and finally trade the apples for the cloth you needed. This system not only consumed time but also often required handling perishable and cumbersome goods.
In 1790, Alexander Hamilton proposed creating a national bank to issue paper currency and serve as the government's fiscal agent. Despite opposition from high-profile figures like Thomas Jefferson, Hamilton's bill passed both the House and Senate, leading to the establishment of the Bank of the United States in 1791. Backed by gold reserves, this bank facilitated a pool of money that could be lent out.
Following the creation of a federal bank, many states set up their own banks and were allowed to print their own currency.
Vermont, which had recently joined the Union as the 14th state, was slower to establish a state bank than some of its neighbors. Nevertheless, out-of-state banknotes circulated in Vermont. Since each bank had its own currency -- instead of having a standard, uniform currency -- it was difficult to spot fraudulent bills.
Counterfeiting was not a new problem; during the Revolutionary War, the Continental Congress issued paper currency without sufficient gold and silver to back it. The British exploited this weakness by circulating counterfeit money to create inflation - thus undermining the currency’s value and the economic stability of the Continental Congress. The British plan worked. Within five years, the values of the Continental Congress’s paper money, called “continentals,” were worth only a small fraction of the currency’s face value.
In light of such a history, it is not surprising that many Vermonters were suspicious of paper currency, fearing that unscrupulous bankers might print excess currency that did not have adequate backing. Their fears proved to be well founded. In 1806, Vermont established its own state bank with branches in Burlington and Woodstock. Woodstock, already a political hub as the shire town of Windsor County, became a financial center with this new branch. However, the Woodstock branch did not always adhere strictly to its charter for printing money. An article by Mark Bushnell for the Vermont Digger recounts a notable incident from 1808:
“One day in 1808, Jireh Durkee walked into the Woodstock branch of the Vermont State Bank and demanded $9,000. The bank’s directors quickly acted to prevent him from obtaining the cash. They attempted to have him brought to Windsor County Court on charges and criticized him as an ‘evil-minded person’ seeking to ‘realize a filthy gain’ and ‘diminish and destroy the resources of the State of Vermont.’ Durkee had entered the bank unarmed except for a stack of paper. These papers were banknotes from the Woodstock bank itself, promising to pay the bearer in hard cash. In essence, Durkee was attempting to make a withdrawal.”
Above is an 1809 example of paper currency circulated by the Woodstock branch of the Vermont State Bank. Notice the denomination is for $1.75. Collection of the Woodstock History Center.
Woodstock's bank was not unique in printing more money than its reserves could cover. Other banks, both in Vermont and beyond, commonly engaged in similar practices. The proliferation of state banks also led to an increase in counterfeiting because each bank issued its own unique currency, making it easier for fraudsters to create and circulate counterfeit notes that would go undetected.
One such counterfeiter was Christian Meadows. An engraver by profession, Meadows' motivations for joining a group of counterfeiters around 1849 are unclear, though personal circumstances such as having a wife and a child to support might have influenced his decision.
Up to 1849, Meadows worked for the Boston firm W.W. Wilson, where he engraved dies for coinage and banknote plates. His abrupt departure from the firm coincided with the theft of some of these engraved plates. Meadows, with his family, soon reappeared in Groton, Vermont, collaborating with Ephraim Low on a counterfeiting scheme. Meadows’ role involved altering genuine currency to increase its denominations. Other members of the group included a bank robber named William Warburton (nicknamed “Bristol Bill”) and George Green (a burglar responsible for circulating the counterfeit currency).
The scheme was short-lived. The group was soon arrested, and their counterfeiting operation was dismantled. Both Meadows and Warburton were tried, convicted, and sentenced to ten years hard labor in Windsor's state prison.
Census record for 1850 showing Christian Meadows with some of his “colleagues” while in jail. Christian’s occupation was listed as “engraver.” William Warburton’s occupation was listed as “Burglar.”
William Warburton, a/k/a Bristol Bill, was well known as a criminal, and according to one article, “His arrival here [at the jail] created a good deal of excitement, and eager curiosity was soon manifested to get a look at the world-renown burglar.”
The prospect of ten years in prison must have been daunting; however, Meadows seems to have quickly made friends both inside and outside of the prison, and he was ultimately released early, after serving only a few years. How, you might ask, did he secure an early release? It turns out that Meadows’ road to freedom was a bit of a circuitous one, and his talents as an engraver played a large role.
Above: Print of Dartmouth College made from an etching done by Christian Meadows.
During his incarceration, Meadows continued to work as an engraver. His skill caught the attention of Dartmouth College. According to a 1967 article in the Lebanon Daily News, Meadows was allowed to commute daily from the prison to Hanover so that he could work on a picture that was the basis for his print of the college. In addition to working for Dartmouth, Meadows had two other high-profile clients: Vermont’s most prominent silversmith, Roswell Bailey (who had his shop in Woodstock), and the New Hampshire State Agricultural Society. One of Meadow’s assignments for the Agricultural Society was to do an engraving of Daniel Webster’s birthplace. Some members of the Society were so delighted with Meadows’ work that they (and other supporters) sought to get him a pardon. Their early efforts were unsuccessful when in 1851, Governor Charles Williams refused to pardon Meadows. However, Williams’ successor, Governor Erastus Fairbanks, was more amenable to the idea and granted clemency in 1852. According to an article in the Vermont Journal, published on August 22, 1891, Meadows was told of the pardon on July 4, a day that appears to have been symbolically chosen for his release. According to the paper: “Meadows was summoned to the warden’s room in the forenoon of the Fourth, as arranged, much wondering of what infraction of the prison rules he had been guilty. When told that the rest of his sentence had been remitted and he was a free man, he trembled with emotion and could scarcely speak. His prison garb was exchanged for a good suit of clothes, and now said the warden, come with me. He was led down the street and into a neat cottage, where, to his joy and amazement stood his wife, waiting to welcome him and help him partake of a smoking dinner prepared by her own hands. She had been brought from Boston as a further surpise to him.”
After being released, Meadows settled in Windsor, where he continued – at least until 1859 - his career as an engraver. After this point, the conclusive trail of what happened to Meadows goes cold. There is a Christian Meadows who dies in Toronto in 1893, which could be he. If so, it is a bit ironic as that was the same year that a kettle of coins was discovered in Groton, Vermont, that was believed to have been hidden by the counterfeiters. The kettle, which was buried two feet deep and had a large flat stone and a “small boulder” on it, contained several hundred dollars in gold, silver and copper coins.