Fractional currency explained

Fractional currency, also referred to as shinplasters, was introduced by the United States federal government following the outbreak of the Civil War. These low-denomination banknotes of the United States dollar were in use between August 21, 1862, and February 15, 1876, and issued in denominations of 3, 5, 10, 15, 25, and 50 cents across five issuing periods.[1] [2] The complete type set below is part of the National Numismatic Collection, housed at the National Museum of American History, part of the Smithsonian Institution.

History

The Civil War economy catalyzed a shortage of United States coinage[3] —gold and silver coins were hoarded given their intrinsic bullion value relative to irredeemable paper currency at the time.[4] [5] In late 1861, to help finance the Civil War, the U.S. government borrowed gold coin from New York City banks in exchange for Seven-thirties treasury notes[6] and the New York banks sold them to the public for gold to repay the loan.[6] In December 1861, the Trent Affair shook public confidence with the threat of war on a second front. The United States Department of the Treasury suspended specie payments[7] and banks in New York City stopped redeeming paper money for gold and silver.[8] In the absence of gold and silver coin, the premium for specie began to devalue paper currency.[9] After the New York banks suspended specie payments (quickly followed by Boston and Philadelphia)[10] the premium on gold rose from 1–3% over paper in early January 1862 to 9% over paper in June 1862,[9] by which time one paper dollar was worth 91.69 cents in gold.[9] This fueled currency speculation (e.g., redeeming banknotes for silver coin which was then sold at a premium as bullion),[11] and created significant disruption across businesses and trade.[12] Alternate methods of providing small change included the reintroduction of Spanish quarter dollars in Philadelphia,[12] cutting dollar bills in quarters or halves,[13] refusing to provide change (without charging a premium for providing silver coins),[13] or the issuance of locally issued shinplasters (i.e., those issued by businesses or local municipalities), which was forbidden by law in many states.[13]

Treasurer of the United States Francis E. Spinner has been credited with finding the solution to the shortage of coinage: he created postage currency (which led into the use of fractional currency).[14] Postage (or postal) currency was the first of five issues of US Post Office fractional paper money printed in 5-cent, 10-cent, 25-cent, and 50-cent denominations and issued from August 21, 1862, through May 27, 1863.[15] Spinner proposed using postage stamps, affixed to Treasury paper,[16] with his signature on the bottom (see illustration below). Based on this initiative, Congress supported a temporary solution involving fractional currency and on July 17, 1862, President Lincoln signed the Postage Currency Bill into law.[2] The intent, however, was not that stamps should be a circulating currency.[17]

The design of the first issue (postage currency) was directly based on Spinner's original handmade examples. Some varieties even had a perforated stamp-like edge. While not considered a legal tender, postage currency could be exchanged for United States Notes in $5 lots[18] and were receivable in payment of all dues to the United States, up to $5. Subsequent issues would no longer include images of stamps and were referred to as Fractional Currency. Despite the July 1862 legislation, postage stamps remained a form of currency until postage currency gained momentum in the spring of 1863.[19] In 1863, Secretary Chase asked for a new fractional currency that was harder to counterfeit than the postage currency. The new fractional currency notes were different from the 1862 postage currency issues. They were more colorful with printing on the reverse, and several anti-counterfeiting measures were employed: experimental paper, adding surcharges, overprints, blue endpaper, silk fibers, and watermarks to name a few. Fractional currency shields which had single-sided specimens were sold to banks to provide a standard for comparison for detecting counterfeits.[20] Postage and fractional currency remained in use until 1876, when Congress authorized the minting of fractional silver coins to redeem the outstanding fractional currency.[14] [21]

Issuing periods and varieties

Issuing periods of United States fractional currency
Issuing periodPeriod datesDenominations issuedFeatures/varieties[22]
data-sort-value="1"First issuedata-sort-value="1862-08-21"Aug 21, 1862
May 27, 1863
$0.05
$0.10
$0.25
$0.50
Issued as postage currency with two main varieties: 1) edges (straight versus perforated), and 2) monogram (presence or absence of the American Bank Note Co. monogram (ABCo) on the reverse). All four denominations bear the stamp motif on the obverse.
data-sort-value="2"Second issuedata-sort-value="1863-10-01"October 10, 1863
Feb 23, 1867
$0.05
$0.10
$0.25
$0.50
Introduction of numerous anti-counterfeiting measures: bronze oval (obverse), bronze ink surcharge (reverse), use of fiber paper.
data-sort-value="3"Third issuedata-sort-value="1864-12-05"December 5, 1864
Aug 16, 1869
$0.03
$0.05
$0.10
$0.25
$0.50
Sporadic use of surcharges, signatures introduced (except 3-cent) both printed (PS) and autographed (AS), design features (or position indicators) – either the letter "a", the number "1", or both, on the extreme left obverse.[23]
data-sort-value="4"Fourth issuedata-sort-value="1869-07-14"July 14, 1869
Feb 16, 1875
$0.10
$0.15
$0.25
$0.50
Additional anti-counterfeiting measures: watermarked paper ("US"), embedding of large silk fibers, blue tinted end paper.[24]
data-sort-value="5"Fifth issuedata-sort-value="1874-02-26"February 26, 1874
Feb 15, 1876
$0.10
$0.25
$0.50
Color tinting in paper, silk fibers.[25]

Complete type set of United States fractional currency

ValueSeriesSizeFr. no.ImagePortraitVarieties
$0.05data-sort-value="1862-08-21"First issuedata-sort-value="2827.5"65 × 43.5 mmFr.1231data-sort-value="Jefferson1"Thomas Jefferson1228 – Perforated; monogram
1229 – Perforated; no monogram
1230 – Straight; monogram
1231 – Straight; no monogram
$0.10data-sort-value="1862-08-21"First issuedata-sort-value="2827.5"65 × 43.5 mmFr.1240data-sort-value="Washington1"George Washington1240 – Perforated; monogram
1241 – Perforated; no monogram
1242 – Straight; monogram
1243 – Straight; no monogram
$0.25data-sort-value="1862-08-21"First issuedata-sort-value="2947.5"78 × 48 mmFr.1280data-sort-value="Jefferson2"Thomas Jefferson1279 – Perforated; monogram
1280 – Perforated; no monogram
1281 – Straight; monogram
1282 – Straight; no monogram
$0.50data-sort-value="1862-08-21"First issuedata-sort-value="2947.5"78 × 48 mmFr.1312data-sort-value="Washington2"George Washington1310 – Perforated; monogram
1311 – Perforated; no monogram
1311a – Same, except 14 versus 12 perf/20 mm
1312 – Straight; monogram
1314 – Straight; no monogram
$0.05data-sort-value="1863-10-10"Second issuedata-sort-value="3078.5"65.5 × 47 mmFr.1232data-sort-value="Washington3"George Washington1232 – No surcharge
1233 – Surcharge "18-63"
1234 – Surcharge "18-63" and "S"
1235 – Surcharge "18-63" and "R-1"; Fiber paper
$0.10data-sort-value="1863-10-10"Second issuedata-sort-value="3078.5"65.5 × 47 mmFr.1246data-sort-value="Washington4"George Washington1244 – No surcharge
1245 – Surcharge "18-63”
1246 – Surcharge "18-63" and "S”
1247 – Surcharge "18-63" and "I”
1248 – Surcharge "0-63"
1249 – Surcharge "18-63” and "T-1"
$0.25data-sort-value="1863-10-10"Second issuedata-sort-value="3078.5"65.5 × 47 mmFr.1284data-sort-value="Washington5"George Washington1283 – No surcharge.
1284 – Surcharge "18-63"
1285 – Surcharge "18-63" and "A"
1286 – Surcharge "18-63" and "S"
1287 – Unissued Friedberg number
1288 – Surcharge "18-63" and "2"
1289 – Surcharge "18-63" and "T-1"; fiber paper
1290 – Surcharge "18-63" and "T-2"; fiber paper
$0.50data-sort-value="1863-10-10"Second issuedata-sort-value="3078.5"65.5 × 47 mmFr.1322data-sort-value="Washington6"George Washington1314 – No surcharge
1315 – Unissued Friedberg number
1316 – Surcharge "18-63"
1317 – Surcharge "18-63" and "A"
1318 – Surcharge "18-63" and "1"
1319 – Unissued Friedberg number
1320 – Surcharge "18-63" and "0-1"; fiber paper
1321 – Surcharge "18-63" and "R-2"; fiber paper
1322 – Surcharge "18-63" and "T-1"; fiber paper
$0.03data-sort-value="1864-12-05"Third issuedata-sort-value="2673"66 × 40.5 mmFr.1226data-sort-value="Washington7"George Washington1226 – Portrait light background
1227 – Portrait dark background
$0.05data-sort-value="1864-12-05"Third issuedata-sort-value="2944"64 × 46 mmFr.1238data-sort-value="Clark"Spencer Clark1236 – Red reverse
1237 – Red reverse; design letter "a"
1238 – Green reverse
1239 – Green reverse; design letter "a"
$0.10data-sort-value="1864-12-05"Third issuedata-sort-value="3807"81 × 47 mmFr.1254data-sort-value="Washington8"George Washington
$0.25data-sort-value="1864-12-05"Third issuedata-sort-value="4488.5"95.5 × 47 mmFr.1294data-sort-value="Fessenden"William Fessenden
$0.50data-sort-value="1864-12-05"Third issuedata-sort-value="5472"114 × 48 mmFr.1328data-sort-value="Spinner1"Francis Spinner


$0.50data-sort-value="1864-12-05"Third issuedata-sort-value="5472"114 × 48 mmFr.1339data-sort-value="Spinner2"Francis Spinner1339 – Green reverse; no surcharge or design figures
1340 – Green reverse; design figures "1” and "a"
1341 – Green reverse; design figure "1"
1342 – Green reverse; design figure "a"
$0.50data-sort-value="1864-12-05"Third issuedata-sort-value="5472"114 × 48 mmFr.1355data-sort-value="Justice"Justice holding scales







$0.10data-sort-value="1869-07-14"Fourth issuedata-sort-value="3634"79 × 46 mmFr.1259data-sort-value="Liberty"Bust of Liberty1257 – Large red seal; watermarked; silk fibers (pink)
1258 – Large red seal; silk fibers (pink)
1259 – Large red seal; silk fibers (violet); blue end paper
1260 – Does not exist
1261 – Smaller red seal; silk fibers (violet); blue end paper
$0.15data-sort-value="1869-07-14"Fourth issuedata-sort-value="4094"89 × 46 mmFr.1269data-sort-value="Columbia"Bust of Columbia1267 – Large red seal; watermarked; silk fibers (pink)
1268 – Large red seal; silk fibers (pink)
1269 – Large red seal; silk fibers (violet); blue end paper
1270 – Does not exist
1271 – Smaller red seal; silk fibers (violet); blue end paper
$0.25data-sort-value="1869-07-14"Fourth issuedata-sort-value="4439"96.5 × 46 mmFr.1303data-sort-value="Washington9"George Washington1301 – Large red seal; watermarked; silk fibers (pink)
1302 – Large red seal; silk fibers (pink)
1303 – Large red seal; silk fibers (violet); blue end paper
1307 – Smaller red seal; silk fibers (violet); blue end paper
$0.50data-sort-value="1869-07-14"Fourth issuedata-sort-value="4982"106 × 47 mmFr.1374data-sort-value="Lincoln"Abraham Lincoln1374 – Large seal; watermarked; silk fibers (pink)
1375 – Delisted Friedberg number
$0.50data-sort-value="1869-07-14"Fourth issuedata-sort-value="4738"103 × 46 mmFr.1376data-sort-value="Stanton"Edwin Stanton1376 – Small red seal; silk fibers (violet); blue end paper
$0.50data-sort-value="1869-07-14"Fourth issuedata-sort-value="4940"95 × 52 mmFr.1379data-sort-value="Dexter"Samuel Dexter1379 - Green seal; silk fibers (light violet); blue end paper
$0.10data-sort-value="1874-02-26"Fifth issuedata-sort-value="4131"81 × 51 mmFr.1265data-sort-value="Meredith"William Meredith1264 – Green seal
1265 – Red seal; long, thin key (in Treasury seal)
1266 – Red seal; short, thick key (in Treasury seal)
$0.25data-sort-value="1874-02-26"Fifth issuedata-sort-value="4557.75"88.5 × 51.5 mmFr.1308data-sort-value="Walker"Robert Walker1308 – Long, thin key (in Treasury seal)
1309 – Short, thick key (in Treasury seal)
$0.50data-sort-value="1874-02-26"Fifth issuedata-sort-value="5858.25"109.5 × 53.5 mmFr.1381data-sort-value="Crawford"William Crawford1380 – Red seal; light pink paper on obverse; silk fibers
1381 – Red seal; blue end paper; silk fibers

Portraits of living individuals

Three people were depicted on fractional currency during their lifetime: Francis E. Spinner (Treasurer of the United States), William P. Fessenden (U.S. Senator and Secretary of the Treasury), and Spencer M. Clark (Superintendent of the National Currency Bureau).[26] Both Spinner and Clark decided to have their portrait depicted on currency, which created controversy.[27] Republican Representative Martin R. Thayer of Pennsylvania was an outspoken critic, suggesting that the Treasury's privilege of portrait selection for currency[28] was being abused. On April 7, 1866, led by Thayer,[29] Congress enacted legislation specifically stating "that no portrait or likeness of any living person hereafter engraved, shall be placed upon any of the bonds, securities, notes, fractional or postal currency of the United States."[30] On the date of passage, a number of plates for the new 15-cent note depicting William Tecumseh Sherman and Ulysses S. Grant had been completed, as the plate proofs for these exist in the archives of the Smithsonian Institute's National Museum of American History. However, the plates were never used to produce notes for circulation. The only Sherman-Grant examples produced were single sided specimens that were placed on Fractional Currency Shields.[31]

See also

References

Books and journals

Further reading

Notes and References

  1. Cuhaj, p. 401.
  2. Kravitz
  3. Pastimes: Numismatics. The New York Times. March 5, 1989. May 3, 2013. October 19, 2022. https://web.archive.org/web/20221019185558/https://www.nytimes.com/1989/03/05/style/pastimes-numismatics.html. live.
  4. Anderson, p. 303.
  5. Reed, p. 298.
  6. Mitchell, 1903, pp. 27–32.
  7. Mitchell, 1902, p. 537.
  8. Mitchell, 1903, pp. 37–38.
  9. Mitchell, 1902, p. 552.
  10. Mitchell, 1903, p. 41.
  11. Mitchell, 1902, p. 540.
  12. Mitchell, 1902, p. 553.
  13. Mitchell, 1902, p. 554.
  14. Blake, p. 32.
  15. Knox, p. 104.
  16. Book: Spaulding, Elbridge Gerry . Elbridge G. Spaulding . History of the Legal Tender Paper Money issued during the Great Rebellion . Express Printing Co. . 1869 . Buffalo NY . 165–166 .
  17. History Timeline . Bureau of Engraving and Printing . May 3, 2013 . dead . https://web.archive.org/web/20140114184200/http://moneyfactory.gov/historytimeline.html . January 14, 2014 .
  18. Knox, p. 103.
  19. Reed, p. 302.
  20. Friedberg & Friedberg, p. 182.
  21. Knox, pp. 104 and 109.
  22. Friedberg & Friedberg, pp. 174–81.
  23. Kravitz, pp. 34–39.
  24. Kravitz, pp. 40–41.
  25. Kravitz, p. 41.
  26. Web site: BEP Directors – Spencer M. Clark . Bureau of Engraving and Printing . September 9, 2013 . dead . https://web.archive.org/web/20130921055121/http://www.moneyfactory.gov/directorclark.html . September 21, 2013 .
  27. Cuhaj, p. 407.
  28. Portraits & Designs. U.S. Treasury Website. September 9, 2013. August 5, 2012. https://archive.today/20120805172406/http://www.treasury.gov/resource-center/faqs/Currency/Pages/edu_faq_currency_portraits.aspx. live.
  29. Rothbard, p. 126.
  30. National Monetary Commission, p. 191.
  31. Friedberg & Friedberg, p. 183.