It all started as a scheme to get one over on the Federal government. In the aftermath of the Civil War, the American government attempted to clamp down on local currency by levying a heavy tax on state banknotes. Louisiana during Reconstruction, as you can imagine, was loathe to pay taxes to Federal government so they issued banknotes disguised as “baby bonds.” These notes came in five dollar denominations with 7 1/2 cent tear off coupons.
The ruse worked as Louisiana avoided paying the banknote tax on its “baby bonds“, which were accepted with a wink and a nod by local residents as five dollar bills.
Alas, the Louisiana state legislature did not have the last laugh. In the 1880s, state treasurer Ed Bunker stole the original plates and counterfeited the Louisiana “baby bonds.” Ed Bunker’s facsimile signature appears on the coupons.
When $300,000 in counterfeit “baby bond” banknotes was discovered in his safe deposit box, Mr. Bunker fled to Brazil staying one step ahead of local authorities.