Small Change and the Depression of 1837-1843 - Part One

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“I lost a thousand dollars.”


“What’s worse is that fifty of it was in cash.”

Comedy skits including this lament were part of standard performances in music halls and the public lounges of steamboats during the 1840s.

Americans with money discovered in the Depression of 1837-1842 how large the spread could become between the cash in their pockets and the values of their bank accounts and property.

Part One – Thomas Willing and George Washington disappoint Alexander Hamilton and print small change

From the founding of the colonies, Americans read and studied political news with extraordinary diligence. They listened for hours to political speeches and debates, and they paid careful attention. We can admire those early Americans for their civic dedication, but we should also understand why people so diligently followed politics long before they thought about a rebellion against the Crown.

Following the political news was how people watched their money. Among themselves, the colonists created, exchanged and accumulated private scrip. Colonial legislatures issued bills of exchange secured by mortgages on public lands. Creditors and tax collectors demanded payment in coin, which was not to be found. Bailiffs and county sheriffs enforced the money judgments of local magistrates and the Crown courts, who looked to the latest edicts from Parliament and its royal ministers. The relative prices for scrip, colonial bills of exchange and the rare pieces of eight and other coin fluctuated based on demand and the market’s latest reading of the news about the law.