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Early American Checks and an Example of Their Use

Published online by Cambridge University Press:  11 June 2012

Fritz Redlich  and
Webster M. Christman
Fritz Redlich
Affiliation:
Harvard University (Retired)
Webster M. Christman
Affiliation:
Editor, Girard Papers, American Philosophical Society and University of Pennsylvania
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Abstract

The taxonomy and utility of early American checks are suggested by Dr. Redlich and an example of their use by the customers of Stephen Girard's Bank, 1812–1834, is supplied by Mr. Christman. Readers are encouraged to comment on or supplement this first attempt at the history of an important business instrument.

Type
Articles
Information
Business History Review , Volume 41 , Issue 3 , Autumn 1967 , pp. 285 - 302
Copyright
Copyright © The President and Fellows of Harvard College 1967

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References

1 Clapham, John H., The Bank of England: A History (2 vols., Cambridge, 1944), I, 5, 6, 17, 21, 142, 221–23, II, 149Google Scholar. As to the earliest legal enactments, see Chitty, Joseph, A Practical Treatise on Bills of Exchange, Checks on Bankers, Promissory Notes, and Bank Notes (2nd. ed., London, 1807), 235–36Google Scholar.

2 Clapham, op. cit.

3 I have consulted: Chitty, op. cit., 17–20; Peter Loveless, A Full, Clear, and Familiar Explanation of the Law Concerning Bills of Exchange (London, 1789)Google Scholar, chap. III, sec. 3, also (2nd. ed., Dublin, 1790); Maxwell, John I., Pocket Dictionary of the Law of Bills of Exchange, Promissory Notes, Bank Notes, Checks, etc. (London, 1802), 58Google Scholar.

4 This is stated expressly in Joseph Story's authoritative treatise, but his example of a typical American check does not refer to what I have called below Type 1 but to Type 2. Story, Joseph, Commentaries on the Law of Promissory Notes and Guarantees of Notes and Checks on Banks and Bankers (Boston and London, 1845), 641nGoogle Scholar.

5 To be found in the “Business Instruments” verticle file in the Manuscripts Division, Baker Library, Harvard University, under “Checks.”

6 For the Suffolk system, see Redlich, Fritz, The Moulding of American Banking: Men and Ideas (2 vols., New York, 1947–1951), I, 67–81Google Scholar and La Force, J. Clayburn, “Gresham's Law and the Suffolk System: A Misapplied Epigram,’ Business History Review, XL (Summer, 1966), 149–66CrossRefGoogle Scholar.

7 Story, op. cit., 614–15.

8 See, e.g., Gamers, M. D., A Digest of the Law of Bills of Exchange, Promissory Notes and Cheques (2nd. ed., London, 1881), 229Google Scholar.

9 Story, op. cit., 614. It is interesting to note that as late as November 19, 1804, the directors of the Massachusetts Bank at Boston considered it necessary to establish officially in their minutes the right of their depositors to draw checks at all. Gras, N. S. B., The Massachusetts First National Bank of Boston, 1784–1934 (Cambridge, Mass., 1937), 387Google Scholar.

10 Foster, Benjamin F., The Merchant's Manual (Boston, 1838), 244–45Google Scholar. I am indebted to Professor James P. Baughman of Harvard University for this reference.

11 Ibid.

12 Post notes were banknotes payable to bearer or order on a specified later date, that is, so many days after the date of issue. The cashiers' check illustrated in Plate 3, lower and discussed above is of this genre.

13 Story, op. cit., 624.

14 All checks mentioned herein from the Eleutherian Mills Historical Library are in the Du Pont collections held by that library.

15 Bruchey, Stuart W., Robert Oliver, Merchant of Baltimore, 1783–1819 (Baltimore, 1956), 114–15Google Scholar.

16 Bank Book, Plymouth Bank, December 12, 1825 —August 21, 1835. Plymouth Cordage Co. Records, E-17. Baker Library, Harvard University.

17 Foster, op. cit., 244–45.

18 22 Cong., 1 Sess., House Reports, No. 460, p. 363.

19 Story, op. cit., 616; Chalmers, op. cit., 229.

20 Telling are English figures presented by Andreades, A., History of the Bank of England (London, 1909), 276Google Scholar: in February 1820, the circulation of the Bank of England was £23,000,000 and its deposits amounted to £4,000,000; in February 1890, the respective figures were £25,500,000 and £35,000,000.

21 These items are reproduced on page 119 of Tymeson, Mildred Mc., Worcester Bankbook: From Country Barter to County Bank, 1804–1966 (Worcester, 1966)Google Scholar with no comprehension of their unusual form.

22 This fascinating item is reproduced on 212 of Lunt, Dudley C., The Farmers Bank: An Historical Account of the President, Directors and Company of The Farmers Bank of the State of Delaware, 1807–1957 (Philadelphia, 1957)Google Scholar.

23 Thanks for assistance are due to Mr. Philip A. Putnam, Assistant Librarian, Law Library, Harvard University and to Mrs. Marie E. Windell, Research and Reference Librarian, Eleutherian Mills Historical Library.

24 “Cancelled Checks Drawn on Stephen Girard's Bank, 1812–1834,” The Stephen Girard Papers in the Possession of the Trustees of the Estate of Stephen Girard, Deceased, Reel Numbers 299–306. Also, loose checks inserted in volumes of the series, “Bank Books, 1812–1832,” Reel Numbers 294–298. Permission for reproduction of the data is kindly granted by the American Philosophical Society.

25 Such uniqueness might be expected in view of Girard's inflexibility as an individual and conservative nature in business. See the papers by Kirkland, Edward C. and Christman, Webster M. in the Proceedings of the American Philosophical Society, 110, 6 (December, 1966)Google Scholar.

26 A cursory sample of checks from the late 1820's suggests about 2 to 3 per cent of the bearer checks were endorsed.

27 Gras, Massachusetts First National Bank of Boston, 341.

28 Information received from Archivrat Dr. Loose, Staatsarchiv Hamburg in letters of September 21 and November 11, 1966. The authors express their appreciation and have deposited the letters in the Archives of Baker Library, Harvard University. As to the Hamburg Kassenscheine, see also Handwörterbuch der Staatswissenschaften (4th ed., vol. VII, Jena, 1926), 178Google Scholar and Pöhls, Meno, Darstellung des gemeinen Deutschen und des Hamburgischen Handelsrechts für Juristen und Kaufleute (vol. I, Hamburg, 1828), 289ffGoogle Scholar. The Kassenscheine are called assignations in the latter book.

29 Desilver, Robert, Desilver's Philadelphia Directory and Stranger's Guide (Philadelphia, 1830)Google Scholar. The occupations of the five women who can be identified in this volume are biscuit baker, boarding house keeper, drygoods merchant, jewelry merchant, and “gentlewoman.”