Background: the Jacksonian Period
Some historians see a "market revolution" taking place in the Jacksonian era. Emerging capitalism transformed every aspect of American culture. We tend to think of the past as slower, more idyllic, but life in this period could be characterized by wild religious enthusiasms, extraordinary changes in the patterns of work and life, new ideas about gender roles, a confusing and chaotic system of money and exchange, and even powerful new ways of thinking about time itself.
Local banks could issue their own paper money, with little or no restraints. Theoretically, their paper money was backed by gold, stored in a vault somewhere. Enterprising citizens, lacking a lot of gold but trying to jumpstart their local economies, could issue paper money in large quantities in hopes of stimulating construction, exchange, and the formation of wealth--if they could convince people to take it. Or, looked at another way, unscrupulous con men could print paper money to buy things they couldn't really afford.
This note originated in a Tennessee bank. As it traveled farther and farther from Tennessee, it became worth less and less. In this case someone in New York, finding himself with a nearly worthless Tennessee note, simply erased parts of the bill and added in a fake New York bank name.
Counterfeit detectors promised to help merchants sort through the jumble of currencies that passed through their hands. But they competed with each other, and one counterfeit detector would frequently denounce another as a fraud--a tool of unscrupulous bankers who paid the editors to list their banks as sound. Each transaction was fraught with suspicion, and with complicated questions--not just "can I afford this," but "how much is this money worth?" and "is this man or woman trustworthy?" In modern exchange (at least cash exchange), these questions don't come up, because all our money is more or less the same.