5 Dollar Merchants and Mechanics Bank Note, 1837

Description
The Merchants and Mechanics Bank of Monroe, Michigan, issued this five dollar note on April 1, 183 7. The note is decorated with a scene of men loading barrels on a wagon at a wharf. A medallion at the lower left bears the image of a spread-winged eagle; a medallion on the lower right contains an image of a blacksmith at his anvil pointing to the left. The bottom of the note has an image of a Native American rowing a canoe. The note is signed by the bank’s president but is not made out to a bearer.
After the Second Bank of the United States closed in 1836, national funds were shifted into state banks, and states began a “free banking” period. Prior to this period, banks were explicitly chartered by an act of state legislature. In March 1836 Michigan passed its act to create a state safety fund for banks, and in March 1837 passed an act to organize and regulate banks. The safety fund required each bank to pay one half of one percent of its capital stock to the bank to create a fund in times of crisis. The banking act allowed any twelve landowners to form a bank with capital more than 50,000 dollars but less than 300,000 dollars, with at least 30% of the capital held in specie at the bank. The relaxed regulations gave rise to “wildcat” banks, which would transfer specie among different banks ahead of the regulator arriving, allowing for the approval of around forty new banks in Michigan. This fraud made the safety fund relatively worthless, and the crisis of 1837 caused many of these banks to fail catastrophically, and the “free banking” act in Michigan was promptly amended.
Object Name
paper money
maker
New England Bank Note Co.
Physical Description
paper (overall material)
Measurements
overall: 76 mm x 176 mm; 3 in x 6 15/16 in
place made
United States: Massachusetts, Boston
ID Number
NU*60991
catalog number
NU60991
accession number
227803
collector/donor number
153
subject
Coins, Currency and Medals
American Enterprise
See more items in
Armed Forces History: National Numismatic Collection
American Enterprise
Exhibition
American Enterprise
Data Source
National Museum of American History, Kenneth E. Behring Center

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