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NOTOFILIA Numismatics and Notaphily
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Origins of Commercial Banking in Colombia

Before a central bank existed, dozens of Colombian private banks issued their own notes. How free banking worked —and why it ended.

Reviewed by
Yezid Acosta
Period illustration of a nineteenth-century Colombian colonial street, with two men exchanging a banknote in front of a bank, a balance scale, and coins
Period illustration of a nineteenth-century Colombian colonial street, with two men exchanging a banknote in front of a bank, a balance scale, and coins

For much of the nineteenth century Colombia had neither a central bank nor a single currency issued by the state. In its place ran a little-known system that fascinates collectors: free banking, an era when private banks printed and put their own notes into circulation.

The context: liberal federalism

The starting point was the Constitution of Rionegro of 1863, which shaped the United States of Colombia, a federal republic of marked liberal character. Under its philosophy of minimal economic intervention, founding a bank and issuing notes was, in practice, a private activity open to anyone who could raise the capital. There was no state monopoly of issue.

The first banks

Banco de Bogotá, founded in 1870, is usually named as the country’s first modern commercial bank and opened the way for a whole generation of institutions. In the following years banks appeared in the main commercial plazas —Bogotá, Medellín, Barranquilla, Cartagena, and others— each with the right to issue its own notes, backed and convertible into gold or silver on demand of the bearer.

How those notes worked

Each bank designed and printed its notes, often commissioning the engraving from lithographic houses in Europe or the United States. The result was an enormous variety of designs, denominations, signatures, and vignettes: portraits of founding figures, allegories, commercial scenes. That diversity, together with limited print runs and the fragility of the paper of the time, explains why free-banking issues are so sought after in notaphily today.

The end: the Regeneración

The system began to close with the creation of Banco Nacional in 1880, during the political rise of Rafael Núñez. With the Regeneración and the centralist Constitution of 1886, the state took control of issue: Banco Nacional notes received forced legal tender (curso forzoso) and the private banks’ right to issue money was progressively restricted. By about 1886, the era of free banking had come to an end.

Legacy for the collector

Those notes are key pieces of Colombian economic history and of any serious collection of the country’s paper money. A good example is the 50-centavos note of Banco de Medellín, a private issue typical of the period. At Notofilia you can explore more examples in our catalog of Colombian free-banking banknotes, with issues from different regional banks and their characteristic nineteenth-century designs.

Banco de Medellín 50-centavos note, a free-banking issue, obverse and reverse
Banco de Medellín 50-centavos note, a private free-banking issue. Notofilia collection.

Sources

  • Banco de la República of Colombia — monetary history and banknote collection (banrepcultural.org; banrep.gov.co).
  • Adolfo Meisel Roca and others, studies of Colombia’s monetary and banking history published by Banco de la República.
  • Standard Catalog of World Paper Money (Albert Pick), Colombia section, for cataloguing nineteenth-century bank issues.

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