Lee Valley Tools    Woodworking Newsletter
   Vol. 5, Issue 1
   September 2010
   Customer Letters

Dear Lee Valley,

  Currency-destroying hammer
  A currency-destroying hammer from the Lee Valley antique tools collection
First of all, I would like to thank you for displaying a bank hammer on your "What Is It?" page (Volume 2, Issue 6). A group of us Trainmen collect and study American-Confederate currency. Like pre-War notes, most Confederate money was cancelled after being funded (i.e. traded in for any other type of fiscal document, such as a bond, a stock, etc.) by using a bank hammer to put cuts in the paper. It was then packaged, if not held at the main office in Richmond, Virginia (the capital city of the Confederate States of America), and shipped back to be recounted, registered and burned, as your article states. They also used pen knives, razors and various-sized hole punches for cut, punch or hole-out cancelling at the larger depositories and the main treasury. They could cancel large stacks of notes by hitting them with one of the sharp-edged sledgehammers, such as you display. These were called Bank Hammer Cancel Tools.

Most of what you write is correct, although your analogy regarding the fibers in the paper isn't applicable during the American-Confederacy period. Any fiber in the paper wasn't uniform, and, therefore, cutting the threads would not in any way affect the ability to reconstitute the paper. In fact, there were few who had the ability to make paper, as evidenced during the Civil War (1861-1865) by the lack of good quality paper suitable for banknotes.

The bank hammer was most used from the mid- to late-1840s and through the American Civil War. It was also used in Canada, where currency was handled in the same manner as in the United States. After 1865 (or thereabouts), especially in the USA, the only money that was printed was done so by the government. The notes would be reused until worn out and then were replaced. The old bills were either macerated or destroyed by burning.

After the War, bank hammers were primarily used for cancelling checks. This practice went on well into the 20th century but gave way to small multiple hole punch machines and various ink stamps.

My group was discussing the cut cancellation of an 1862 Confederate $100 bill. It was an interest-bearing note, and few of those notes were ever cancelled, unlike all the other issues of 1861-1863. Basically, when a note was funded (traded in), the life of the note ended. It was recorded, cancelled in some manner and returned for verification and destruction. After mid-1862, it became impossible to cancel all the notes and even if they were cancelled, it took too much time to ship them back to the capital and destroy them. They were simply warehoused and later picked up as souvenirs of the American Civil War. The 1862 $100 bills, as interest-bearing documents, remained in commerce but were usually closely held by banks and private institutions and, therefore, few were ever cancelled.
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