Broken Bank Notes & Wildcat Issues:
Ready Funds for Westward Expansion
Between 1837 and 1866, a period known as the "Free Banking Era," lax
federal and state banking laws permitted virtually anyone to open a bank
and issue currency. Paper money was issued by states, cities, counties,
private banks, railroads, stores, churches, and individuals. By 1860,
an estimated 8,000 different state banks were circulating what were sometimes
called "wildcat" or "broken" bank notes.
The term "wildcat bank" referred to the remote locations of some banks,
more accessible to wildcats than people. When a bank "went broke," the
currency they issued became worthless. The era ended with the passing
of the National Bank Act of 1863.