Money woes 200 years ago.

• Position: COMMENTARY

Byline: Albert B. Southwick

COLUMN: ALBERT B. SOUTHWICK

You think you have money problems now, in 2013. How would you like to be dealing with money transfers a couple of centuries ago?

For an example, consider Col. Henry Hunt, stationed in Florida, who in April 1818 wrote his wife in New York that he was sending her money:

"I herein enclose the half of a $50 bill of the United States Bank N313 payable at the Savannah Branch to G. Richardson dated at Philadelphia 6th of May, 1817 (Jones, President). I have likewise sent you but one half, for the same reason & shall send you the other half by some other conveyance."

Presumably Mrs. Hunt eventually received both halves of that $50 bill and was able to use it to good effect. But it's quite a contrast to our ATM society.

From time immemorial, money had been in the form of specie - coins of gold and silver. But when it came to developing the farms and factories of the New World, there was a chronic shortage of specie. Barter was the main means of trade in those days, but had its limits. If a Worcester merchant in 1800 wanted to buy flour, shoes or other goods in Boston, he had to use some form of paper. That often came at a hefty premium.

I have an agreement signed in 1803 by my great-grandfather, Amasa Southwick of Leicester, with Daniel Waldo Jr. of Worcester. He needed money to start manufacturing card clothing, the wire brushes used to comb out wool and flax so they could be spun into yarn or thread. At one time 200 years ago, Leicester was the national center for card clothing production. Mr. Southwick went to Mr. Waldo, a prominent merchant and money lender, and signed an IOU, promising to pay "One hundred and ninety Spanish Milled dollars on Demand with lawful interest in like Money after thirty days."

In 1803, that was the only way for a Worcester County entrepreneur to raise capital. Worcester County had no bank until 1804, when Mr. Waldo, Stephen Salisbury and other men of means obtained a charter for the Worcester Bank, the first west of Boston. After 1804, the Worcester Bank issued notes. But those notes were discounted by the Boston banks. A Worcester Bank note for $50 might be worth only $45 at the Suffolk Bank in Boston. That discrepancy caused endless arguments between the Boston banks and the "country banks" like Worcester Bank.

The first paper money proposal in the Colonies was in 1690 when the Massachusetts Bay Colony issued a limited number of tender notes. But when the...