To Rob Peter to Pay Paul’s Office

The process of cataloging Obsolete bank notes, although time-consuming, can shed light on the minutiae of a state’s banking history which, in many cases, was rife with failure and speculation.

Minnesota has a rich history on the subject of Obsolete bank notes, discussed in detail by the Hewitt text Minnesota Obsolete Bank Notes & Scrip a must-have in my opinion for collectors who seek to build comprehensive numismatic libraries. Among the banks discussed by Hewitt, the intertwined circumstances of the Nicollet County Bank (St. Peter) and the Peoples Bank reflect the expression “to rob Peter to pay Paul” or at least Paul’s office in this context.

In 1859 many banks across Minnesota such as the Nicollet County Bank were owned in-part by the New York-based banking Sewell, Ferris & Co. which failed in October 1859. That failure sent shockwaves across Minnesota sending people scrambling to redeem their notes in specie and prompting bank runs across the state.

The Peoples Bank of St. Peter, which maintained offices in St. Paul, astutely handled the crisis by dispatching an agent to St. Peter who secured nearly the entire specie reserve (about $5,000 in gold coin) from the Nicollet County Bank. This allowed the Peoples Bank to redeem its notes at par during the crisis from its office in St. Paul.

The Nicollet County Bank by comparison wasn’t so lucky, and the Minnesota State Auditor’s Office redeemed its notes at a steep discount paying holders only 35% of the face value they held. The Peoples Bank managed to linger on through its office in St. Paul and ultimately became the Second National Bank (Charter# 725). That institution remained independent until 1912 when it merged with the First National Bank (Charter# 203) which existed in such a form until the 1980s.

In 2026, notes from these banks are rare and seldom ever encountered outside of advanced collections. Bidders will have an opportunity to consider both an issued note from the Nicollet County Bank and an unsigned Remainder from the Peoples Bank in one of our upcoming auctions centered around the exceptional holdings of the Caine Collection which includes an impressive selection of rare Obsoletes from Minnesota.  

For more information about our auctions or to consign your numismatic items, please call 800-458-4646 or email [email protected].