Green’s Dictionary of Slang

nutmeg (maker) n.

also nutmegger
[SE wooden nutmeg, anything false or fraudulent, a fraud, a cheat, a deception. New Englanders have the image of being deceitful, esp. as businessmen. Note the Nutmeg State, Connecticut, where wooden nutmegs are supposedly manufactured for export]

(US) a white New Englander; also attrib.

A. Wetmore Pedlar 14: Your assurance is insufferable, Mr. Nutmeg.
Desert News (Salt Lake City) 17 Apr. 1/1: I was sitting in the store [...] when a real nutmeg came booming along [DA].
[US]C.H. Smith Bill Arp 170: Fretman was a nutmeg skoolteacher who had gone round my naborhood with his skool artikles.
Typographical Journal IX 367: Down Among the Nutmegs [...] The printers of Hartford are alive to their own interests [DAE].
[US]S. Ford Shorty McCabe 128: We did our handsomest to make those Nutmeggers believe that they needed Rajah in their business.