During Alaska’s gold rush, miners put specified weights of gold dust in squares of writing paper, sealed them, and then labeled each packet with the value of the gold inside. (approximately $16 per ounce at the time) These small packets of gold dust were used throughout the state as money, most commonly in one or two-dollar denominations. Some of the packets were still being exchanged after 1899 when the Klondike gold rush ended.
Real gold and real silver coins also circulated, some issued by the US government, others by the states. The “slug,” a $50 gold piece, was used mainly in California, but also circulated in other parts of the country. The percentage of precious metal the coins contained, as well as their value, fluctuated over the years. During the California gold rush, for instance, miners stopped digging for silver and flocked to the gold fields, resulting in a brief period where silver was more valuable than gold. When that happened, people began hoarding silver coins or melting them down since they were worth more as metal than currency.
Coins were also hoarded by professional gamblers. They were less messy than gold dust, easier to verify as the real deal, and they didn’t need to be weighed. If an ordinary cowboy wanted to join a game of cards, and he didn’t have coins, he might bet personal items, such as clothing, ammunition, or his saddle. In Never Done, Vincent teaches Clara how to play poker, and the young couple uses dried beans to make their wagers. Clara mastered the game quickly, winning beans about as often as she lost them. She soon grew tired of moving small piles of beans back and forth across the table, and one day, after Vincent won with a full house higher than hers, she gave the poker stakes a rinse and cooked them for supper.
Due to the lack of coins in circulation, it became almost impossible in the Old West to make change, which resulted in the going rate of a dollar for many items or services regardless of their size or value. My heroine Clara ends up managing a hotel in Ophir Loop, Colorado where the sign near the entrance reads, “Good Beds, $1.00 a Night.” When winter rolls around, the hotel is full to bursting with miners looking for a warm place to stay. Some men had to double up. Although they shared both room and bed, Clara charged each man a dollar per night for the room, a dollar apiece for the food, and nobody argued.
Most frontier communities were small. The townspeople knew each other well and were familiar with the farmers and ranchers who came into town for supplies or entertainment. Rather than charging for every item an individual or family bought, the owner of the general store usually kept track of them in a ledger, asking the accounts be settled by the end of each month. Sometimes the settlement was in the form of commodities or labor.
Accepting paper currency was a risk for many years. Issued by banks or state governments, it could be redeemed for gold or silver coin, but only at the bank that issued it, and many of those “wildcat banks” didn’t have the coin to back up the bills they printed. Paper became a more acceptable medium of exchange after 1863 when National notes became the standard. Counterfeiting, however, became an issue, and still remains a headache, even with modern "fool-proof" designs.
In today’s nearly cashless society, all of the mediums and methods of exchange used in the Old West seem crude and complicated. To me, however, the sociability and trust implicit in having an account at the general store is preferable to the plastic, PayPal, or e-bill pay I use to make sterile, faceless transactions.
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