LET'S face it: no one would buy a book if its subtitle were 'Veracity And Celebrity: The Rise Of Tabloid Journalism In America, 1832-1844'. It's therefore a wise decision that Matthew Goodman's delightful and intelligent volume on that topic, The Sun And The Moon, carries the legend 'The Remarkable True Account Of Hoaxers, Showmen, Duelling Journalists, And Lunar Man-Bats In Nineteenth-Century New York'. Even that is slightly bashful: it easily could have also included bipedal beavers, race-riots, a 161-year-old woman and a cross-eyed, bigoted Scottish genius, as well as advertising the supporting cast, including (as it does) PT Barnum, Edgar Allan Poe, Walt Whitman and Herman Melville.

The Sun of the title is the New York Sun, one of the first "penny papers". Rather than the six-penny broadsheets, it was intended for a much wider audience, and reported on local crime and curious rumours. Before the Sun, the entire combined circulation of the 11 daily New York papers totalled 26,500 copies. When, at the end of August 1835, the Sun broke its most incredible story – that the eminent scientist Sir John Herschel had discovered life on the Moon – it sold 19,360 copies.

The announcement, of course, shocked many people. The description of winged men, cottage-dwelling beavers and geometric sapphire temples was prefaced by convincing scientific descriptions of the new "hydro-oxygen telescope" situated in South Africa. Among those taken aback were Poe (whose own story of a Moon expedition, 'Hans Pfaall', had just appeared in the June 1835 issue of the Southern Literary Messenger); several Yale professors; an impressed young Barnum (then exhibiting his 161-year-old slave, Joice Heth, one-time nursemaid to George Washington); and the infuriated Scottish-born James Gordon Bennett, editor of the rival Morning Herald, and committed racist and anti-Semite.

Two people were certain that the whole Moon story was a hoax. Herschel himself was publicly bemused and privately amused by the whole affair – especially over the news that an American preacher was raising funds to send Bibles to the Moon. The other was Richard Adams Locke, the author of the piece. He was the star reporter for the Sun, and was singled out for praise by Poe in The Literati of New York. An immigrant from Somerset, Locke had argued with his family, most likely on account of his political radicalism – the very same trait that would lead him to New York. His life, as Goodman's account shows, was an unhappy one. He seems to have been intermittently alcoholic, never really broke into 'respectable' writing, and ended his life working for the New York Customs Service. Of all the New York journalists, a tremendously quick-tempered bunch, Locke was distinguished by manners, quietness and wit.

Through the keyhole of the hoax, Goodman provides a panorama of New York life: the poverty and privilege, the religious manias and fierce debates between abolitionists and slave-holders. It's a rip-roaring story, and only occasionally Goodman slips into a tentative academic tone. I was astonished at how many of the features we associate with newspapers – news being on the front page, interviews with news-makers, celebrity gossip and literary reviews – began during this period (many of them instituted by the vile Bennett).

As much as it is a story about the emerging press, this is a story about hoaxes. It's odd that Goodman doesn't mention that Melville, who went on to work in the same office as Locke, gave up on literature with The Confidence-Man in 1857. Locke, however, never intended the Moon story to be a hoax – it was, in his eyes, a satire on various Christian scientists. Maybe that's why it worked so well.

Although Goodman doesn't press the analogy, the contemporary parallels are plain to see: a new medium, with pranks and exposés converging; a rule-less environment capable of both quality and vitriolic drivel. If there had to be yet another subtitle "How The Internet Started On Paper" might do very well indeed.