Sunday, March 16, 2014

Fractional Currency

With the Civil War looming on the horizon, the economy of the United States grew more uncertain. People began hoarding silver and gold coins. Others sent their coins to Canada to sell for scrap which had risen to become more valuable than the coins were worth. At that time the country’s only mint was in Philadelphia and the ability to keep enough coins in the market place had been a growing problem since the mint started making coins in 1793.
Used with permission from private collection.
By1862 small coins had nearly disappeared. People were either unable to get change back for their purchases or they were forced to buy things they didn’t really want. Banks and merchants created their own promissory notes and tokens of metal or wood. But the public didn’t like promissory notes or wooden nickels. The value at one business didn’t always equal the same value at another.
The use of postage stamps was thought to be the answer, but the stamps were easily soiled and torn. If they got wet they would stick together. A special brass case with a thin mica face was designed to hold and protect each stamp. Merchants put their advertising on the back side of the case and this worked well for a time.
Used with permission from private collection.
However a dispute between the Post Office and the Treasury Department soon followed, and stamps intended for use as money grew too scarce to meet demand.
In July 1862 General F.E. Spinner, Treasurer of the United States took blank paper, on which government securities were printed, and cut it into small uniform sizes. He then pasted a few of the stamps onto the cut pieces of treasury paper. The first production of these stamp papers bore the name “Postal Currency” across the top. The small bills measured 2½ to 5 inches across and were issued in denominations of three, five, ten, twenty-five, and fifty cents. Each denomination featured the same presidential portraits as those found on the regular postage stamps.
In March of 1863 and in all issues afterward, the papers were stamped “Fractional Currency.” They featured busts of Washington, Lincoln, Liberty, and Columbia, and the Secretaries of the Treasury, Fessenden, Spinner, Walker, and Crawford. Eleven different papers were used to prevent counterfeiting.
Used with permission from private collection.
These notes of Fractional Currency became the legal tender for amounts up to one dollar and were to be used to alleviate the coin shortage.
But the public hated the currency. The papers were stuffed into the pockets of soldiers along with their jackknife, cartridges, tobacco, and other small items. The notes became ragged and frequently had to be exchanged. Because they resembled the little papers soaked in vinegar used to treat sore legs, they became known as Shinplasters.
By 1875 the government made them redeemable for coin and the last issue of Fractional Currency came in 1876.


McCutcheon, Mark, The Writer’s Guide to Everyday Life in the 1800’s, Writers Digest Books, Cincinnati, OH, 1993
Foster-Harris, William, The Look of the Old West, Skyhorse Publishing, Inc., 2007
Rollins, Philip Ashton, The Cowboy his Characteristics, His Equipment, and His Part in the Development of the West, Skyhorse Publishing, Inc., 2007