US Coins

This Day in History: April 10

The Second Bank of the United States was chartered on April 10, 1816, but a fight in the 1830s to keep it alive ultimately led to an economic depression and “Hard Times” tokens.

Images courtesy of the National Numismatic Collection, National Museum of American History, and Heritage Auctions.

The Second Bank of the United States was approved on April 10, 1816, setting up a political showdown that would define a presidential election campaign, destroy the American economy and lead to the issuance of “Hard Times” tokens.

The Second Bank of the United States was a federally chartered private institution that was the closest the nation had to a central bank. It was created as the nascent nation transitioned from an agrarian economy to one based on manufacturing, and was a successor to Alexander Hamilton’s Bank of the United States, chartered from 1792 to 1812. 

The Second Bank facilitated the transfer of funds from one region of the country to another and served as a storehouse for federal deposits. The bank also made loans to state and local governments, private individuals and businesses.

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Congress and the Treasury secretary had oversight of the bank, but it was a president who would have the most to say about the future of the agency. 

The efforts to renew the bank’s charter put the institution at the center of the general election of 1832, in which the bank’s president, Nicholas Biddle, and pro-bank National Republicans led by Henry Clay clashed with President Andrew Jackson’s “hard-money” administration and Eastern banking interests. 

The issue propelled Jackson to victory, but his action to weaken the bank before its charter expired in 1836, coupled with other financial crises around the world, not only caused financial calamity for the United States but doomed his successor to a one-term presidency.

 It also ushered in perhaps the most entertaining of historical United States exonumia, known as “Hard Times tokens.”

Hard Times tokens were large-cent-sized copper pieces struck from about 1833 through 1843 that served as unofficial currency. These privately made pieces, comprising merchant, political and satirical pieces, were used during a time of political and financial crisis in the United States.

When Jackson campaigned for the presidency in 1828, he appealed to people that shared his belief that wealthy people held powerful political positions and made decisions that favored the rich. Once re-elected in 1832, not only did Jackson veto the bank’s petition to Congress to extend its charter, but he also removed federal funds from the bank, which would prove to be politically fatal.

Without the Bank of the United States, state banks attempted to fill the paper money gap and issued a large number of bank notes, which fueled inflation and further expansion. Hoping to halt the inflation and speculation in public lands, Jackson and his Treasury secretary, Levi Woodbury, issued the Specie Circular on July 11, 1836. The circular simply stated that as of Aug. 15, 1836, banks and others who received public money were required to accept only gold and silver coins in payment for public lands. 

Instead of the intended results, the circular spelled the end of a time of economic prosperity — one that ultimately would stretch beyond the end of Jackson's second term in office. The circular set into motion a panic, and the public began hoarding specie. Without specie to pay out, banks and merchants began having financial troubles. Soon, banks and businesses across the nation failed; a depression ensued during the presidential term of Martin Van Buren, who had been Jackson’s vice president. The period of economic hardship during Van Buren’s presidency came to be known as the “Hard Times.”

Small change disappeared from circulation, leading private merchants to issue token substitutes to serve as emergency money. Many of the pieces are merchant store cards, bearing advertising for the issuers. Others are satirical, playing on the roles Jackson and Van Buren played in the financial crisis. Yet others are political in nature, addressing various issues of the era.

One of the best-known designs portraying Jackson in an unflattering manner features a bust of the president dressed in military garb standing in a treasure chest. He holds a sword in one hand and a bag of money in the other.

The reverse of the same token, which was also used as an obverse on other tokens, displays a jackass in the center with LL.D stamped on its body with ROMAN FIRMNESS above it and VETO below it. Surrounding the design is the inscription THE CONSTITUTION AS I UNDERSTAND IT.

The inscription refers to Jackson’s belief that the Second Bank of the United States was unconstitutional.

Jackson uttered several of the terms the tokens use to lampoon him, and the LL.D inscription references an honorary law degree Harvard College bestowed upon Jackson.

Another anti-Jackson political token from the 1834 elections satirizes his attacks on the bank. The obverse depicts a running boar. Encircling the rim of the token is the legend PERISH CREDIT. PERISH COMMERCE, phrases apparently referencing the end of loans from the Second Bank. Above the boar is MY VICTORY, and below, DOWN WITH THE BANK.

Jackson’s portrait appears on the reverse, surrounded by MY SUBSTITUTE FOR THE U.S. BANK, with MY EXPERIMENT/MY CURRENCY/MY GLORY below his portrait.

The VICTORY legend on this token refers to Jackson’s intervention at the Battle of New Orleans, while the GLORY is another reference to his military successes.

The Hard Times tokens are a series rich with history and satirical wit.

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