They worked hard to develop and maintain a reputation that their word was their bond. For these institutions to succeed and prosper, people had to trust their promise to redeem banknotes in specie. The notion that “wildcat banking” was rampant before the Civil War is an exaggeration. Certainly, crooks existed in banking as in every business.
Some banks that issued currency made redemption inconvenient, if not impossible. But these banks were fly-by-night operators and rarely endured beyond the first swindle. In fact, most bankers, especially on Wall Street, competed vigorously for reputation. Those who had a history of redeeming their banknotes in specie, at par, were able to issue substantial quantities, effectively financing their balance sheets with zero-interest debt.