Throwback Thursday by Matson Insurance: From Barter to Bank Notes in Jefferson County

Matson Insurance has partnered with Jefferson County History Center to offer readers a look into Jefferson County’s past. Today, the history of banking in Jefferson County is highlighted.

(Pictured above: The Jefferson County National Bank, one of the “three banks in a row” on Brookville’s Main Street, did not make it through President Roosevelt’s “bank holiday” in 1933. Until that time, it had been useful for savings, for loans, and for conducting business in the community.)

(Article submitted by Carole Briggs, Jefferson County Historical Society.)

From Barter to Bank Notes

When the Reverend Gara Bishop wed a young couple during a snowy winter in 1825 or 1826, the groom paid him “a dollar.” We suspect it was a silver dollar because in 1776 coins were in use. However, they were rare. Instead, our pioneers depended upon barter. Men rafted lumber to Pittsburgh and traded it for calico, coffee, and nails. Women carried a basket of eggs to the general store and received needles and thread in return.

In fact, historian William J. McKnight used an entire paragraph in his history to list all the items people traded—“boards, shingles, square timber, wheat, rye, buckwheat, flax seed, clover seed, timothy seed, wool, rags, beeswax, feathers, hickory nuts, chestnuts, hides, deer pelts, elderberries, furs, road orders, school and county orders, eggs, butter, tow cloth, linen cloth, ax handles, rafting bows and pins, rafting grubs, maple sugar in the spring, and oats after harvest.”

Barter was the early method of business, but when men returned after the Civil War, things changed. To finance the war, Congress had first authorized Demand Notes in $5, $10, and $20 denominations. These green notes were redeemable in coins upon demand and were commonly called “greenbacks.” Then in 1862 they issued Legal Tender Notes. Paper money was now in use.

Many veterans returned to timbering, farming, or their trades, but some saw the completion of the railroad in 1874 as an opportunity to start new businesses. Soon shops selling sewing machines, “foreign and domestic dress goods,” stoves, pianos, and much much more lined the main streets of county towns. Foundries manufactured engines and boilers. Manufacturers made carriages and wagons, and a shoe company made 400 pairs a day—items that were sold to people in many many places. Trading became more difficult, and this prolific increase in buying and selling led to an increased need for managing money─for lending it─for investing it─for saving it─for spending it.

America’s economy grew and so did the number of commercial banks. Historian Kate M. Scott described eight banks that functioned here between 1865 and the year when her book was published—1888.

The people of Jefferson County had indeed moved from barter to bank notes.

[email protected] County Historical Society, Inc.

Throwback Thursday is brought to you by Matson Insurance in Brookville.

Submitted by the Jefferson County History Center.

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