10 Dollar Merchants and Mechanics Bank Note, 1833

10 Dollar Merchants and Mechanics Bank Note, 1833

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Description
The Merchants and Mechanics Bank of Monroe, Michigan issued this ten dollar note on April 1, 1838. The note is decorated with a central motif of two men shoeing a horse. A medallion on the upper left has an image of a clipper ship; a medallion below features an image of a train. On the lower right of the note is an inset portrait of a seated woman. The note is signed by the bank’s cashier and president, but is not made out to a bearer. The note also bears the text “Michigan Safety Fund” and “Real Estate Security.”
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.
Location
Currently not on view
Object Name
note
date on object
1833-04-01
date made
1833
place made
United States: Michigan, Monroe
Physical Description
paper (overall material)
Measurements
overall: 7.5 cm x 17.5 cm x.01 cm; 2 15/16 in x 6 7/8 in x in
ID Number
NU.NU46192.0004
accession number
170666
serial number
400
catalog number
NU46192.0004
Credit Line
Estate of Victor H. Huberich
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Work and Industry: National Numismatic Collection
American Enterprise
Coins, Currency and Medals
Data Source
National Museum of American History
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