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By Jim Ignasher
An historical treasure has recently surfaced in the form of a five dollar banknote from the former Smithfield Exchange Bank in Greenville. The note, dated July 4, 1859, depicts illustrations of Zachary Taylor, our nation’s 12th president, and Katherine “Bonnie Kate” Sevier, wife of Revolutionary War hero John Sevier, who later became Governor of Tennessee. It’s unclear as to why their images were chosen to be depicted on a Greenville, Rhode Island, banknote as neither was from New England, and at the time the bill was printed, Taylor wasn’t the sitting president.
Legend has it that John Sevier saved Katherine’s life when she was accidentally locked outside Tennessee’s Fort Watauga during a surprise Indian raid in the summer of 1776, and later married her.
The banknote harkens back to an era between the late1700s to the early 1860s when individual banks actually issued their own currency.
The history of paper money in America is long and varied, but to put it briefly, except for certain Treasury notes, general circulation paper money as we know it today wasn’t officially issued by the U. S. Government until 1861. Prior to then individual banks were authorized to issue their own currency in order to keep local economies running.
Most banknotes were issued in one, two, three, five, ten, and one-hundred dollar denominations, but some were issued as fractional currency, either less than a dollar, or somewhere between one and two dollars.
There were however drawbacks to this system, for there were no standardization requirements, and each bank designed and distributed its own style of currency which often caused problems with merchants and creditors especially from one state to another. Sometimes monetary designs were changed without notice, and as the number of banks grew so did the variations of notes in circulation, thus making it fairly easy for counterfeiters and con-men to ply their trade.
Ironically, some banks went out of business because they issued too many banknotes, and their face value exceeded the amount that the bank could actually cover in the event all of them were to be cashed in at the same time.
The type of paper used to print the banknotes was often similar to writing paper, which is one reason so few examples have survived to modern times. Another reason is that at some point after the Civil War, like Confederate money issued by the Confederacy, the notes became worthless, so few bothered to save them.
The first bank in Rhode Island was The Providence Bank, established in 1791.
The first bank in Smithfield was the Smithfield Union Bank, so named because it was originally located in Smithfield’s “Union Village”, which prior to 1871 was still part of Smithfield, but is today Woonsocket. The bank was chartered in 1804 and opened for business the following year. In the basement was large a granite vault with iron doors and two locks which required keys twelve inches long to open.
The bank later relocated to Slatersville in present-day North Smithfield, and the building it occupied survives today as a private home.
Besides being the first bank established in Smithfield, it may also have been the first to be robbed. On October 27, 1838, the lone cashier on duty locked the door and left the bank to conduct some business. While he was away, someone entered a vacant apartment above the bank, and after cutting a hole through the floor, casually made off with $3,400 which had been left in the cash-drawer. The culprit was arrested two weeks later in Boston, and was discovered to be the same man who’d been imprisoned for attempting to rob the Weybosset Bank in Providence.
Ironically, he’d been released just five months earlier with the stipulation that he leave the state and never come back!
Literally dozens of banks came and went in Rhode Island during the first several decades of the 19th century, the names of which have long been forgotten. Some in proximity to Smithfield included The Farmers Bank of Glocester, established in 1804; The Burrillville Agricultural Bank, 1815; The New England Pacific Bank of Smithfield/North Providence, 1818, The Rhode Island Agricultural Bank of Johnston, 1823; the Globe Bank of Providence, (1831), originally located in Globe Village, which was once part of Smithfield, but is now part of Woonsocket; and The Scituate Bank in North Scituate, 1836; to cite but a few examples.
Another early Smithfield bank was The Smithfield Lime Rock Bank, founded in 1823, located on Great Road in the present-day town of Lincoln. The bank moved to Providence in 1847, and went out of business in 1894. The original bank building on Great Road exists today as a private home.
Various banknotes from this institution featured images of George Washington, Native Americans, and eagles, as well as farming, nautical, and transportation themes,
Getting back to the Smithfield Exchange Bank, which was established in June of 1822; the bank’s original location was in the back ell of the former Waterman Tavern in Greenville. Most of the original tavern is gone, but the back ell remains, along with the original vault in which the money was stored. In the 1850s the brick building next to the remaining ell was constructed and became the new home for the bank. It was in this building that the five dollar bank note pictured with this article was first put into circulation in 1859.
In 1865 The Smithfield Exchange Bank became the National Exchange Bank of Greenville, with a capitol of $150,000 – a humble amount of money by today’s standards.
In 1928 the bank became known as The Greenville Trust Company, and in 1954 it was acquired by Citizens Savings Bank, which is located in Greenville today.
19th century banknotes are highly sought after by collectors, and prices can range from affordable to “Holy cow!” depending on condition and rarity.
The banknote pictured with this article was donated to the Historical Society of Smithfield in memory of Edwin and Doris Osler of Burrillville. Should you wish to view a high resolution image of the note, please visit the historical society website at Smithapplebyhouse.org.