This paper uses numismatic sources to estimate the volume of unaccounted currency issued during the middle two quarters of the nineteenth century. “Unaccounted currency” includes any currency issued by private business firms and by municipal and state governments. This money, unlike state bank notes and deposits and federal government currencies, was issued illegally, and not recorded in conventional statistical sources. Exact quantification, therefore, is next to impossible. The principal significance of this phenomenon is the credibility it gives to private competitive issues of money.

The possession of a few copper cents [in 1862] meant that the owner could ride [the street car] rather than walk…. It meant that he could buy a postage stamp without an altercation with the clerk, or a cigar without receiving in change a handful of the dealer's own manufactured currency.

The chronology of events in 1836 surrounding Jackson's Specie Circular and the Act to Regulate the Deposits of Public Money, under which the Federal fiscal surplus was distributed to the states, has never been much in dispute. The orthodox analysis of these events likewise has been almost universally accepted. The Specie Circular has been seen as a device that provoked an increase in the demand for hand-to-hand specie in the West where the public lands were being sold, at the same time that specie was needed in the East to effect the distribution of the surplus. The monetary system could not have its specie in two places at once, the argument has been, and the attempt to do so led to the disastrous breakdown of the banking system and to the ensuing business recession of 1837.

The general sentiment of Congress toward resumption of specie payments had become more and more desultory, not to say negative, during the early part of the 1870's. Nevertheless, the Resumption Act was passed in 1875, and resumption of specie payments at the pre-Civil War parity occurred on schedule in 1879. Observers have slighted this incongruity. Passage of the Resumption Act has come to be regarded as a true reflection of Victorian sentiment; ultimate resumption in 1879 was the proof of the pudding.2 What seems to have been lost in this rationalization of cause and effect is the generally unfavorable light in which resumption was being viewed in the middle 1870's, the alternatives that were available in lieu of resumption, and some of the forces of “immorality” that made these alternatives attractive.

Central banking institutions during the past quarter-century have been almost free of the constraints that inhibited their actions during the nineteenth century. The special conditions under which earlier central banking institutions were formed and operated frequently have been lost to view; and while contemporary observers have come to regard the first two Banks of the United States sympathetically, the functional evolution of these institutions within the framework of specie standards has been largely neglected. The period between the end of the Second Bank and the organization of the Federal Reserve System is subsequently treated as the Dark Ages of monetary policy, better forgotten than deplored.