In 1861, the Pony Express cut the time to get a letter across the United States from months to 10 days. Also in 1861, the telegraph made national communication instant.
National and state banks had existed in the United States since the late 18th century to make guarantees on dues owed in gold and silver.
After the American Revolutionary War for independence, and in the presence of a stronger American congress, the Coinage Act of 1792 was passed. This created the first true American currency that was federally guaranteed, in a mint of coins similar to what we have today.
At several points, often during wartime and recession, federal banknotes called Treasury Notes were issued that made guarantees of money owed and not yet rendered.
State banks were also issuing their own notes of questionable backing, to be circulated by settlers and via cargo routes. No one was making sure they actually had gold/silver in the safes. With banking becoming a booming and narrowly regulated entity on a state level, state banks came to be referred to as wildcat banks.
Stagecoach companies like Wells Fargo were driving further west, and the notion of trade and currency in America was evolving dramatically as the need for interstate commerce emerged. Wells Fargo was securely delivering goods, letters, and notes of all sorts.
Meanwhile, Americans were interested in figuring out how they could communicate across the country instantly. News might take months to travel coast to coast via stagecoach, and thus the telegraph was invented. The telegraph proliferated throughout eastern states in the 1840s. Miners struck gold in California in 1848, and California soon established its own telegraph networks, but the ability to communicate across the country was still limited.
Back east, Western Union had been established in 1856 as a merger of competing telegraph companies, and they began rapidly buying up telegraph carriers east of the Mississippi River. The Pacific Telegraph Act of 1860 was passed, and now there was a nationally facilitated effort to get the east and west coasts hooked up. The Pacific Telegraph Company started building west from Nebraska.
Mormon (Latter Day Saints) settlers were key stakeholders in the idealism and expansion of the American West, and they had already established a strong community in Utah. The LDS church began directly funding the construction of telegraph lines across Utah, building the first publicly constructed and owned telegraph company. The first transcontinental telegraph was completed in 1861, with the lines between the east and west coast joining in Salt Lake City. Finally, Americans could communicate at the speed of light.
LDS-owned Deseret Telegraph continued expanding throughout Utah in the 1860s, and it was bought out by Western Union in 1900.
During the 1850s and amidst the gold rush, Americans became weary of the prevailing banking structures. There was a need for serious reform, but this wasn't fully acknowledged until the bank run of 1855 where Americans began pulling their money out of banks for fear of insolvency. The subsequent Panic of 1857 was the first financial crisis communicated by telegraph, and the first worldwide financial crisis. People were no longer satisfied by deregulated banks that could not guarantee gold or silver, and many banks collapsed. Wells Fargo was one of the few to survive, having held sufficient assets.
The Pony Express emerged in 1860, heavily subsidized by the government, with Wells Fargo, American Express, and many other coaches participating in an interstate stagecoach system with hundreds of horses, stations, and riders. The Pony Express ran for 18 months and shuttered, unable to reach a profit as the Civil War loomed, and as the telegraph came up from behind.
In 1862, Lincoln came in, the Civil War broke out, and much like in the early 1800s with Treasury Notes, the greenback, originally the "demand note", was issued to fund the war.
These were federally guaranteed notes, meant to be payable on-demand in gold and silver, and featured ornate designs that were difficult to counterfeit. The reserve was ultimately not able to meet the gold and silver demands during the Civil War, and the notes themselves were declared legal tender and obligated to be accepted by any party as payment.
Soon after, in 1863, the National Bank Act was passed and the National Bank Note was issued, representing a collaborative effort among American banks and government to establish a federal note, backed by bonds, and supported by a national system of banks. In 1913, the Federal Reserve Act was passed, to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States, and for other purposes. This appointed a distributed system of 12 Federal Reserve Banks and a Federal Reserve that would guarantee and collateralize the value of Federal Reserve Notes – the dollars we know today.
Perhaps the completion of the transcontinental telegraph in 1861 emboldened the move to paper money as legal tender. Imagine the difference months, or even 10 days, would make if the economy on the east coast was falling apart and the west coast was in the dark. Instant systems allowed the government to make stronger guarantees without more collateral.
These robust networks of interstate commerce and communication were pivotal in the success of the early United States, and still the heritage of stagecoach culture is celebrated in monuments, museums, and city buildings throughout the western United States. There's rich history to the expansion out west, and many lessons learned many times over. Today there is the same fundamental dilemma: how do we establish just, effective, and stable systems that help everyone succeed?