By Peter Huntoon
The pair of No. 1 Kansas $5 Brown Backs shown in this column—one from the The First National Bank of Washington, Kan. and the other from The First National Bank of Clay Center, Kan.—constitute the biggest discovery to come out of Kansas in many years. Jess Lipka landed the pair.
Both notes were in a frame that also held the masthead for The First National Bank of Clay Center. Both notes are signed by cashier F. H. Head, so they must have been saved by him.
The Washington bank was chartered April 2, 1883; the Clay Center Nov. 5, 1883. Obviously Head was involved in founding both banks, but he quickly was replaced as cashier by A.S. Race at the Washington bank in 1883 and M.S. Tousey at the Clay Center bank in 1884.
Head next turned up as cashier of the newly organized competing Peoples National Bank of Clay Center, which was chartered May 26, 1885.
You can see that this is going to get good.
Both Washington and Clay Center are located along state highway 15 in the northeast quarter of Kansas respectively 13 and 44 miles south of the Nebraska line.
The First National Banks of Washington and Clay Center as well as the competing Peoples National Bank were organized during the heyday for settlement of Kansas. The following history of the opening of Kansas is abridged from the Kansas Historical Society website.
The newly created territory of Kansas was opened for white settlement in 1854. It was not until after the Civil War, however, that Kansas experienced a significant increase in population. Free and cheap land provided by the Homestead Act of 1862 and the railroads attracted the settlers. More than 70 percent of the immigrants arriving in the first two decades were engaged in agricultural pursuits.
After the Civil War and before 1890 the population of Kansas increased by the greatest amount in its history. More than 1 million people streamed into Kansas seeking a new life on the frontier.
German-speaking people formed the largest group of new immigrants to Kansas by the end of the 1800s. Many came from Germany but many others were living near the Volga River in Russia. They called themselves VolgaGerman or GermanRussian.
Swedish pioneers who moved to central Kansas in the mid-1800s called their new home framtidslandet, the land of the future. Many left Sweden when famine threatened starvation.
Orphaned children were given special help to come to Kansas. Some of these children were recent immigrants from Europe; others were abandoned or homeless American children. The Children’s Aid Society of New York operated orphan trains between 1854 and 1929. Of the 150,000 children who left New York, nearly 5,000 of them were adopted by Kansas families.
The Homestead Act, signed into law by President Lincoln on May 20, 1862, allowed settlers to claim 160 acres of public land. They paid a small filing fee and then had two options for gaining title to the land. If they lived on the 160 acres for five continuous years, built a residence and grew crops, they could then file for their deed. The second option was to purchase the land from the government for $1.25 per acre after living on the land for six months, building a home, and starting to grow crops. The head of a household or immigrant person intending to become a citizen were eligible. The law was amended in 1864 to allow a soldier with two years of service to acquire the land after a one year residency.
Many Kansas settlers, however, acquired their farms by purchasing property, some of which was part of railroad land grants.
Acutely significant to the discussion at hand was that the most rapid settlement of Kansas coincided with the startup of the Series of 1882 Brown Back National Bank Notes. There was a cascade of tiny Kansas country banks being chartered during this period and those bankers were heavy subscribers of $5s.
This meant that the Kansas banks received the largest number and richest diversity of early $5 Brown Backs of any state in the country.
The $5 82BBs from The First National Bank of Clay Center rank in my eyes as the single most important of these issues because they allowed us to understand a very significant chapter in the history of National Bank Note issues. This story involved the use of patented engraving machines that Bureau of Engraving and Printing engravers used to create letters used in the title blocks on the notes. What follows would not be known to us had it not been for official correspondence pertaining to the Clay City bank.
The lettering in the earliest title blocks on the $5 Series of 1882 National Bank Notes was engraved using what was called a patented lettering process. Patented lettering refers to letters in the title blocks made from proprietary engraving machines sold to, or licensed to, the BEP. These machines could engrave letters on a die in an infinite variety of fonts.
It must be emphasized that the patented lettering machines were used to make letters. Thus the bureau employees created numerous distinctive fonts from which they transferred needed letters onto title block dies or directly onto printing plates. In some cases, the letters were superimposed onto other hand-engraved work such as tombstones.
The patented lettering machines were used between 1882 and 1885 to create the title blocks on the new Series of 1882 $5s, but this work was halted. Beginning in 1887, and continuing over succeeding decades, many of the plates with patented lettered title blocks were purged and replaced.
We wouldn’t know much about these layouts, or the reasons they were phased out, except for a letter inspired by a jealousy that developed in the hearts of the bankers in The Peoples National Bank of Clay Center, Kan., some time around the beginning of 1888. These players were president J.B. Quinby and none other than our old friend cashier F.H. Head.
The following letter from Edward O. Graves, chief of the BEP to J. Abrahams, Deputy Comptroller of the Currency, dated April 25, 1888, nicely explains the motivation behind this rash of replacements.
“I am in receipt of your letter of the 24th instant in-closing, with the request that I will inform you whether its wish can be complied with, a letter from the Peoples National Bank of Clay Center, Kansas, No. 3345, asking if a change in the character of the title on its plate can be made so as to remedy its excessive plainness, and stating that a similar favor has been accorded the First National Bank of that place; No. 3072. The letter of the Peoples National Bank is herewith returned with the information that the change in the plate of the First National Bank was made for the reason that the engraving of the title on its former plate was inferior and inartistic, being produced by the patent lettering process, and that a new plate engraved in a more artistic style was prepared, not as a favor to the bank, but for the credit of this Bureau. This course has been pursued at the discretion of the officers of the Bureau to the extent that the state of the work permitted with those national bank notes plates on which the lettering was conspicuously inferior. As the Peoples National Bank does not fall within this category, I would not feel warranted in having a new plate prepared for it. In any event, it would not be desirable to have the titles of two banks in the same town engraved in the same style.” [Bureau of Engraving and Printing, various dates.]
As the illustrations show, the replacement plate for The First National Bank of Clay Center was a spectacular circus poster. The subjects on the plate were lettered E-F-G-H, and it was made in September 1887 to replace the patented letter A-B-C-D plate made in 1883. It was certified for use Sept. 27. The patented letter plate that it replaced is a classic-looking product from the lettering machines.
The BEP director made it clear that they weren’t going to replace the plate for the competing Peoples National Bank. The reason was that the title blocks on the Peoples plate were made from engravings. The officers of the Peoples National Bank couldn’t know this fact, they just saw that their notes paled in comparison to those coming out the front door of The First National Bank down the street.
Whether the explanation for the bureau’s recalcitrance was forwarded to the president J.B. Quinby and cashier F.H. Head at The Peoples National Bank by the deputy comptroller is unknown. It wouldn’t have made any difference, those bankers felt seriously embarrassed each time people in town contrasted their staid notes to those now being issued by the First.
Of course, we know that the bankers at the Peoples National kept a wary eye on their competitor. We don’t know the details, but cashier F.H. Head was in on the organization of The First National Bank in 1883, then abruptly left and appeared as cashier of the newly formed People National in 1885.
The workmanship at the BEP was under intense fire in the early-to-mid-1880s. Discontent had been building since 1875, when the work for producing National Bank Notes began to be taken away from the private bank note companies and turned over to the bureau by congressional decree.
The criticism reaching congressmen, and others in influential positions, generated considerable heat for the BEP. The primary source for the discontent was none other than lobbying by the private bank note companies, which no longer were getting government contracts to design, engrave and print national bank notes. They enlisted their engravers and other employees to participate in these attacks.
The last of those contracts had terminated in 1877, causing bitter and deep resentments within the engraving industry. The work lost by the bank note companies to the bureau was compounded by the loss of other huge government security printing contracts, including postage and revenue stamps, during the same period.
The faces of the $5 Series of 1882 were the first National Bank Notes to circulate that were designed and engraved entirely by BEP personnel. The result was that the $5s were particularly reviled. A focal point for dismissive commentary was the patented lettered title blocks on them, which, because they were mechanically produced, were claimed to be inferior to engraved work.
Initially bureau personnel responded in two significant ways. First, they simply borrowed title blocks from the $5 Original Series, transferring the work from the old title block dies or rolls to the new series when banks were extended. They also constructed title blocks for new banks by borrowing needed lines of text from various old dies and rolls. How could the bank note company engravers fault their own work.
Newly appointed BEP Director Edward O. Graves wrote the following in his 1885 annual report [Graves, 1885, p. 312-313]:
“The artistic quality of much of the work produced by the Bureau is unsatisfactory. Most of the securities engraved of late years have been largely made up of a patented lettering, which is stiff, inartistic, and unsuited to work of the quality required for the securities of the Government. A great amount of money has been expended in the preparation of alphabets and numerals by the patented process. The introduction of surface or relief printing from steel dies in the place of printing from steel plates has also impaired the quality of the work. It will be the aim hereafter to discard as rapidly as possible these inferior processes, and to replace the securities produced by them with work of the first quality from new and artistic designs.”
The bureau engravers began to produce their own hand-engraved title blocks in late 1885. The early efforts were modest, but with maturing self-confidence, the momentum of this effort led to the rollout of ever improving products. Soon the BEP engravers began to labor in-house to surpass themselves. The lavish circus poster layouts arrived in December 1886. These works of art surpassed anything done previously at the bank note companies, and made exceptional use of the large canvas provided by the new fives.
The contracts were not going back to the bank note companies, primarily owning to cost savings. Gradually, a new order set in as the bureau started to become a key player in the engraving industry, despite the fact that it was a child of the government.
I haven’t said anything about Lipka’s Washington note. At the time the note was issued, the bank was a minimally capitalized bank located in a postage stamp-sized town that served as the seat of Washington County. It is the third and certainly the best $5 Brown Back reported from the bank.
You can see from the foregoing why I salivate over Lipka’s Clay Center note. No other Brown Backs are reported from the bank.
What we all are waiting for now is for one of the bank’s $5 circus posters to show. The breakdown between the patented letter layouts and circus posters is 1,600 and 3,046 sheets respectively, where the first circus poster began to be sent to the bank on Oct. 13, 1887. Obviously I expected to see one of the circus posters long before the earlier variety.
As for cashier Head’s Peoples National Bank of Clay Center, none of its $5 Brown Backs has turned up yet. A couple of $10 Brown Backs are reported from the bank, but they are from the end of the bank’s Brown Back issues because they are from a 10-10-10-20 plate made following passage of the Gold Standard Act of 1900, which limited the issue of $5 notes to a third of the circulation of the bank. The bankers only circulated $5s prior to the act.
Literature cited and sources of data
Bureau of Engraving and Printing, 1863-1935, National currency and bond ledgers: Record Group 101, U. S. National Archives, College Park, Md.
Bureau of Engraving and Printing, 1875-1929, Certified proofs of national bank note face and back plates: National Numismatic Collections, Museum of American History, Smithsonian Institution, Washington, D.C.
Bureau of Engraving and Printing, various dates, Correspondence to and from the Bureau of Engraving and Printing: Record Group 318, U.S. National Archives, College Park, MD.
Graves, Edward O., 1885, Report of the operations of the Bureau of Engraving and Printing: p. 312-313; in, Manning, Daniel, Annual report of the Secretary of the Treasury on the state of the finances for the year 1885, vol. 1: U.S. Government Printing Office, Washington, DC, 745 p.
Kansas Historical Society, http://www.kshs.org/kansapedia/settlementinkansas/14546 & http://www.kshs.org/kansapedia/homesteadact/15142.
This article was originally printed in Bank Note Reporter.
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