Prior to the Civil War the United States Government did not issue paper money for wide spread circulation. The paper money that was used in everyday transaction were known as Bank Notes and were issued by private banks. These bank notes promised payment in species (hard money) but only at the bank that issued the note.
This Five Dollar Bank Note (L72.60.1) was issued by The Lumberman’s Bank of Warren. This bank was chartered on February 28th, 1834 and was the first bank to open in Warren, PA. The bank’s name is a nod to the importance of the lumber industry to the Warren County in the first half of the 19th century. According to the “History of Warren County” (1887) the first lumber raft headed down the Allegheny River from Warren to Pittsburgh in 1799 or 1801. An engraving of a sawmill is prominent on this bank note.
This bank only operated for a few years. It collapsed in 1838, a victim of the Panic of 1837, the first great economic depression in US history. The building that housed The Lumbermen’s Bank of Warren is still standing, known as the Mansion House.
This system of bank notes from individual banks had many flaws. This was especially evident while traveling. Since these notes were issued and backed by private banks and not the government there was no legal requirement for a store owner to accept them as payment. Often a bank note would lose it’s value the further away from the bank you got. A Tavern owner in Baltimore might only give you 4 dollars for this 5 dollar note from the Lumbermen’s Bank in Warren. If you happened to have this 5 dollar note after the Lumbermen’s Bank closed in 1838 it was worthless. There were as many as 8,000 different kinds of money in the US prior to the Civil War.