BY STEVEN JUPITER
BRANDON – It’s been common during the COVID years to see signs at cash registers asking patrons to use exact change if possible. During the pandemic, the slowdown in brick-and-mortar retail sales created a shortage in circulating coins. There just hasn’t been enough metal money changing hands, and many retailers have had a hard time keeping an ample supply of pennies, nickels, dimes, and quarters.
It’s not the first time the United States has experienced a coin shortage, however. In both the 1830s and the 1860s, there were financial crises that put a major strain on the supply of coins in the U.S.
In the mid-1830s, President Andrew Jackson hoped to curb rampant land speculation out West by vetoing the renewal of the charter for the Second Bank of the United States, which had been a major lender to speculators, and by issuing an Executive Order mandating that all land purchases be transacted in gold and/or silver. Previously, many land purchases were made with paper notes, often issued by local banks that didn’t have the reserves to back them up.
However, an unintended consequence of these actions was that coins became scarce in commercial centers on the East Coast since they were needed for land purchases in the West. People began hoarding the remaining coins to the point where there weren’t enough in circulation for daily activities like food shopping. Merchants began to suffer since shoppers didn’t have “hard money,” and the merchants were forced to accept what might turn out to be worthless paper.
In response, some merchants minted their own “currency.” The merchant-minted coins from this era have become known as “Hard Times” tokens. They often looked like U.S. minted coins of the era and were used in place of the “real thing” since all that mattered at the time was how much copper, silver, or gold a coin contained. Hard Times tokens came in many styles and designs and are prized by collectors today.
A similar shortage occurred during the Civil War, though the causes were quite different. Because the U.S. government needed gold and silver to finance the war effort, coins began disappearing from circulation. Citizens once again began hoarding what remained. And, as in 1837, merchants stepped in with private mintages of “Civil War tokens” to meet the need for small change in daily life.
Many merchants refused to accept paper banknotes since they were still not seen as reliable in a financial crisis—however, dry-goods merchants E.J. Bliss and N.P. Kingsley of Brandon made it clear in The Brandon Monitor of July 18, 1862, that they were still willing to take paper money in an apparent attempt to differentiate themselves from those local merchants that demanded metal.
Many Civil War tokens bore the names of the merchants that issued them and were supposedly redeemable for U.S. currency if you turned them in at the issuing merchant. This initially meant that other merchants felt confident accepting these tokens because they could eventually cash them in for “real” coins. But in practice, many issuing merchants refused to redeem their tokens. Eventually, Congress passed laws in 1864 that made private currency illegal in the U.S., thereby turning all circulating tokens into mere collectibles.
Without those laws, we might well have seen “COVID tokens” in 2020.