Peppermint Bank

This chapter recounts how Hiram Hotchkiss opened his own Peppermint Bank in order to avoid the difficulties he continually had with local bankers. It explains how Hiram used his Peppermint Bank primarily as a payment mechanism for his essential oil business. It also discusses how Hiram spent his money in western New York and in Michigan to pay for oil rather than loan his notes into the local market. The chapter traces back free banking, which was the dominant regulatory system for antebellum banks that has taken too much of the blame for economic instability before the Civil War. It also explains that free banking refers to the ability of banks to be established without legislative charters, but the lack of state charters does not imply that the banks were allowed to print money indiscriminately.