1840 $2.50 State Bank Of Illinois "Canal Scrip" Obsolete Currency Banknote Grades vf+. Beginning in ...

1840 $2.50 State Bank Of Illinois "Canal Scrip" Obsolete Currency Banknote Grades vf+. Beginning in 1839, as the Illinois and Michigan canal commissioners increasingly found themselves unable to pay their debts, they simply issued scrip. Canal scrip were checks drawn on the credit of the Illinois and Michigan Canal and payable whenever funds became available. Their face values were accepted when purchasing canal lands. But on the open market they were traded at less than par value. By the fall of 1842, after the State Bank had closed due to insolvency and the last remnants of all construction along the line had ceased, canal paper was being traded at fifteen cents on the dollar.