5 Dollars, Kirtland Safety Society Bank, Ohio, United States, 1837

Description:

The Kirtland Safety Society Bank of Kirtland, Ohio, issued this five dollar note on February 10, 1837. The note’s plates are printed by Underwood, Bald, Spencer & Hufty of Philadelphia. The note is decorated with a central motif of a man seated on a log with a dog. The identical end panels depict a young boy with a shovel over his shoulder. The note is signed by the bank’s cashier, Joseph Smith, and its president, Sidney Rigdon.

The Kirtland Safety Society Bank was formed by Joseph Smith and other members of the Church of Jesus Christ of Latter-day Saints on November 2, 1836. The bank’s constitution established the capital stock of four million dollars, a severe overextension of the available specie in the area. With the closing of the Second Bank of the United States in 1836, many states allowed “free banking,” however, Ohio still required banks to be granted a charter from the state legislature. When Ohio’s legislature declined a charter for Kirtland, the officers formed their own “anti” bank. Like many banks at the time, the Kirtland Safety Society Bank failed spectacularly in the general financial crisis of 1837.

From 1790 to 1863, states and private banks issued their own currency to supply capital in a young nation without a national currency. This currency was backed by the hard money the banks had on deposit, and was only used locally where the bank and its operators were trusted in the community. However, banks often oversupplied notes, and this overextension caused bankruptcy among private and state banks when financial panic struck, particularly in 1837. Currencies from these failed banks are known as “obsolete bank notes” or “broken bank notes,” and many are held in the National Numismatic Collection.