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Marquette County Historical Society
For Decades, U.P. Mines Printed Their Own Money
Companies printed their own “notes” to pay wages in isolated Lake Superior mines.
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Marquette County Historical Society
For Decades, U.P. Mines Printed Their Own Money
Miners used their “iron money” at company-owned stores like this one operated by Minnesota Mining Company in 1859.
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Courtesy Charles Eshbach
For Decades, U.P. Mines Printed Their Own Money
Miners pose on the deepest incline shaft in North America at the Quincy Mine in Hancock, Michigan.
In the mid-19th century, reaching the Upper Peninsula of Michigan was a challenge despite the blossoming mining industries developing there. In those days, boats more fragile than today’s vessels had treacherous going in deep, cold Lake Superior. In summer, storms ravaged boats. In winter, ice stopped travel altogether.
With shipments of supplies scarce, people stocked up on flour, sugar, beans, cured pork, salt and molasses. But money? How do you stock up on money?
East Coast banks were wary of shipping large amounts of cash by boat. Too many had sunk in Lake Superior.
Yet miners at the copper boom in the Keweenaw Peninsula and those in the iron fields of the Marquette Range, Gogebic Range and Menominee Range had to be paid.
The enormous mining operations of the U.P. required vast amounts of currency. Nine billion pounds of copper were taken out of the Keweenaw and sold for $1.5 billion between 1848 and 1945. One two-ton piece of pure copper from this region once sat as an exhibit at the Smithsonian Institution.
By 1887, the Keweenaw was the world’s largest copper producer. Calumet and Hecla Company paid $200 million in dividends on an investment of $2.5 million.
Iron mining was even more widespread than copper mining.
In 1881, some 56 iron mines produced 2.3 million tons of ore valued at $1.8 million. The Jackson Mine from 1846 to 1881 produced $13.8 million worth of iron.
Recruiting and keeping workers for the active mines was a top priority. To accommodate the miners, recruited mostly from Europe, Calumet and Hecla Company maintained a library of 30,000 volumes with newspaper subscriptions in 16 different languages.
Regular payment to workers was also crucial, but difficult with the delivery of cash remaining a problem. The solution? Mining companies began printing their own money.
The first “iron dollars” were issued by the Jackson Iron Company in 1852. The Jackson money started with denominations of $5. The company scrip was entirely printed, void of any handwriting with bills sequentially numbered by a printing machine and marked “Pay to the Bearer.”
The money was drawn upon the Jackson bank fund administered by Fayette Brown, the general agent in Cleveland, Ohio. The company issued separate money for its various Michigan operations, be it in Ishpeming for mining or Fayette for smelting. (Yes, the town of Fayette is named for the general agent.) Scrip notes specified on the face of the bill “Jackson Mine” or “Jackson Furnace.”
Jackson Iron Company later stamped its bills to make them seem authentic to comply with the U.S. Internal Revenue Act of 1864, requiring that a two cents revenue stamp be placed on all bills higher than $2. The two-cent “fee” was to register the bills.
This bogus stamp prompted a Negaunee doctor to issue his own Jackson money. When brought to court for the counterfeiting, the case against the doctor was thrown out. The judge cited an old British law from the 1770s which said counterfeiting money that wasn't real money wasn’t a crime.
In 1866, the Internal Revenue Act changed and 10-cent revenue stamps were required on all bills printed by companies. An Ishpeming banker reported that the companies weren’t complying with the higher fee and so a federal agent was sent from Washington to collect those dimes for all of the iron company bills printed and circulating. The iron companies, believing two cents was enough, sued the federal government. In 1871, the Iron Cliffs Company, which had issued many bills in $1, $2 and $3 denominations, was the test.
Two federal judges heard the case, but before the representative of the U.S. attorney general’s office finished his summation, the judges abruptly ended arguments and threw the case out. The government got to keep its two-cents worth, but the 10-cent stamp was suddenly no longer enforced.
The Collins Iron Works of Marquette issued its own currency as did the Cleveland Iron Mining Company. These bills had hand-written numbering and were printed with blank spaces where the bearer’s name was written in. Following that space was added “or the Bearer.” In each case the money was drawn upon a bank in the East where headquarters for the companies were located as were the wealthy investors of the mining operations.
The government, having lost the test case on the revenue stamp question, changed the regulations and restricted scrip printing. Money could be printed by local banks that would need assets to back up the funds. These printings were regulated by the National Bank Redemption Agency and the Comptroller of the Currency, the Treasury Department acting as overseer. Chartered banks received approval for issuing their own notes until 1935.
During the late 19th century into the early 20th century, 49 U.P. banks in the western half of the peninsula issued their own small denomination notes.
It’s hard to imagine the need for such quick flow of money in tiny towns that today are just a blink along the road, such as Alpha near Iron River. But back then, they were thriving communities. Hotels, cafes, opera houses, saloons and banks that issued notes were assiduously meeting the needs of the people.
First National Bank was a very popular bank name but there were lumbermen’s banks, miners’ banks, union banks all printing notes used as credit, a formal scrip to ease the currency shortage. Some banks with as little as $25,000 in capital printed notes for local use, chartered by the federal government.
As transportation improved with vast networks of railroads and as ore veins thinned, money was more easily delivered, meeting the reduced demand for it. In 1935, the practice of printing local notes for local use was ended.
But in the heyday of mining, when companies needed money for payrolls, they printed their own.
D.A. Guiliani, a former teacher and coach, has been freelance writing in Wisconsin since 1984 covering history, antiques and collectables, outdoor recreation, gardening and finance.