Today, the Gold Ten-Dollar Coin remembers the banks’ resuming specie payments on January 15, 1841 and the subsequent results.
In the first days, the Daily Pittsburgh Gazette of January 1841 provided short articles from other newspapers describing the banks and the public’s desire for specie payments.
Yesterday being the day appointed for the resumption of Specie Payments by your Banks, Chestnut street exhibited, during bank hours notwithstanding the extreme disagreeableness of the weather, an unusually thronged appearance.
The great point of attraction however was the US Bank, which was crowded with applicants for the hard stuff, and spectators, the latter class appeared to be in the proportion of twenty to one, and seemed highly to enjoy the anxiety displayed by some of the former.
No extraordinary press was made at any of the other institutions, which may be accounted for by the fact that US Bank notes, particularly those of ten dollars and upwards has constituted our principal currency for some length of time.
Yesterday morning at an early hour, numerous persons were seen gathering in front of the United States Bank, and at the hour of opening, these visitors were admitted into the banking room, where they found not merely a single teller, but divers clerks, well stations and well provided to receive the notes and pay them in specie.
The demands were constant, but chiefly in small sums, so that the drain of specie by such means was not very considerable, though probably the demands of some institutions were larger; but they were, large and small, all promptly responded to; so that those who came with doubtful faces went away with smiles.
A great number of those who now demand specie, do it probably from a misapprehension of the value of the notes, thinking that that necessarily follows the price of the stock.
In early February, the Daily Pittsburgh Gazette exclaimed about the banks, “All is confusion and most painful doubt, which we fear will not be soon abated.”
In a Standard History of Pittsburgh, Pennsylvania, published in 1893, Weston Arthur Goodspeed included an overall description of what happened when specie payment resumed.
By its charter, the Pennsylvania Bank of the United States was required to lend to the State, whenever required, after due notice, the sum of $6,000,000 at six percent interest.
On the 15th of January, 1841, the State banks, in conformity to law, resumed the payment of their notes in specie, and continued to do so until the 4th of February, 1841, when they were again compelled to suspend.
This was precipitated by the action of the Bank of the United States, which, on that date, closed its doors.
The Bank of the United States, having paid out within twenty days, pursuant to its notice to the public, upward of $6,000,000 in specie and specie funds, was forced to suspend.
A dreadful run had been made upon it.
When the Pennsylvania Bank of the United States suspended, the Branch at Pittsburgh did likewise.
Its notes were soon at eight to twelve percent discount and its stock from $38 to $48 per share. Soon the notes were fifteen percent discount and the stock $23 per share.
In May, 1841, the notes fell to twenty percent discount; by January, 1842, to twenty-five percent discount; by December, 1844, to thirty percent discount, and in some places were quoted as low as fifty and sixty percent discount.
In June, 1841, W. H. Denny was appointed agent of the trustees of the Pennsylvania Bank of the United States to collect the debts due the Branch at Pittsburgh.
On the 4th of September, 1841, the Pennsylvania Bank of the United States assigned, whereupon its stock fell to any price brokers were willing to give.
The Branch at Pittsburgh shared the fate of the mother bank. Its notes fell to from forty to seventy percent discount. Slowly its affairs were wound up—debts paid and dues collected.
It took many years to close the account between the State and this bank.
By act of February 26, 1853, the State Treasurer was authorized to receive from the Pennsylvania Bank of the United States $150,000, “in full satisfaction of all claims.”
The Gold Ten-Dollar Coin shows above an image of the Bank of Pittsburgh, circa 1904.