Hacker News Reader

Fraud was high.

It was not fraud by the institutions as such, but counterfeits was a big problem with as many as 7000 unique notes it was next to impossible to know which was genuine.

Post the civil war as much as half the currency was estimated to be counterfeit. The secret service was given the policing money task as a direct result.

There was streamlining of currency issue after that.

George Byron Merrick's book Old Times on the Upper Mississippi: The Recollections of a Steamboat Pilot from 1854 to 1863 [0] has a fascinating chapter on how people got rich on wildcat banking swindles.

[0] https://www.gutenberg.org/ebooks/47262

Nevada, New Hampshire, and Utah have gold notes that are legal tender now.

https://www.jmbullion.com/gold/gold-notes/

https://www.jmbullion.com/1-nevada-goldback-gold-note/