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Fractional currency
Series of United States dollar banknotes

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. 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.

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History

The Civil War economy catalyzed a shortage of United States coinage5—gold and silver coins were hoarded given their intrinsic bullion value relative to irredeemable paper currency at the time.67 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 notes8 and the New York banks sold them to the public for gold to repay the loan.9 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 payments10 and banks in New York City stopped redeeming paper money for gold and silver.11 In the absence of gold and silver coin, the premium for specie began to devalue paper currency.12 After the New York banks suspended specie payments (quickly followed by Boston and Philadelphia)13 the premium on gold rose from 1–3% over paper in early January 1862 to 9% over paper in June 1862,14 by which time one paper dollar was worth 91.69 cents in gold.15 This fueled currency speculation (e.g., redeeming banknotes for silver coin which was then sold at a premium as bullion),16 and created significant disruption across businesses and trade.17 Alternate methods of providing small change included the reintroduction of Spanish quarter dollars in Philadelphia,18 cutting dollar bills in quarters or halves,19 refusing to provide change (without charging a premium for providing silver coins),20 or the issuance of locally issued shinplasters (i.e., those issued by businesses, local municipalities), which was forbidden by law in many states.21 Civil War tokens and encased postage stamps were also used for this purpose.

First Issue: Postage Currency

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).22 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, 1863.23 Spinner proposed using postage stamps, affixed to Treasury paper,24 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.25 The intent, however, was not that stamps should be a circulating currency.26

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 lots27 and were receivable in payment of all dues to the United States, up to $5.28 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 1863.29

Second and subsequent Issues

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.30 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.31 Postage and fractional currency remained in use until 1876, when Congress authorized the minting of fractional silver coins to redeem the outstanding fractional currency.3233

Issuing periods and varieties

Issuing periods of United States fractional currency
Issuing periodPeriod datesDenominations issuedFeatures/varieties34
First issueAug 21, 1862May 27, 1863$0.05$0.10$0.25$0.50Issued 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).35 All four denominations bear the stamp motif on the obverse.
Second issueOctober 10, 1863Feb 23, 1867$0.05$0.10$0.25$0.50Introduction of numerous anti-counterfeiting measures: bronze oval (obverse), bronze ink surcharge (reverse), use of fiber paper.36
Third issueDecember 5, 1864Aug 16, 1869$0.03$0.05$0.10$0.25$0.50Sporadic 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.37
Fourth issueJuly 14, 1869Feb 16, 1875$0.10$0.15$0.25$0.50Additional anti-counterfeiting measures: watermarked paper ("US"), embedding of large silk fibers, blue tinted end paper.38
Fifth issueFebruary 26, 1874Feb 15, 1876$0.10$0.25$0.50Color tinting in paper, silk fibers.39

Complete type set of United States fractional currency

ValueSeriesSize40Fr. no.41ImagePortraitVarieties42
$0.05First issue65 × 43.5 mmFr.1231Thomas Jefferson1228 – Perforated; monogram1229 – Perforated; no monogram1230 – Straight; monogram1231 – Straight; no monogram
$0.10First issue65 × 43.5 mmFr.1240George Washington1240 – Perforated; monogram1241 – Perforated; no monogram1242 – Straight; monogram1243 – Straight; no monogram
$0.25First issue78 × 48 mmFr.1280Thomas Jefferson1279 – Perforated; monogram1280 – Perforated; no monogram1281 – Straight; monogram1282 – Straight; no monogram
$0.50First issue78 × 48 mmFr.1312George Washington1310 – Perforated; monogram1311 – Perforated; no monogram1311a – Same, except 14 versus 12 perf/20 mm1312 – Straight; monogram1314 – Straight; no monogram
$0.05Second issue65.5 × 47 mmFr.1232George Washington1232 – No surcharge1233 – Surcharge "18-63"1234 – Surcharge "18-63" and "S"1235 – Surcharge "18-63" and "R-1"; Fiber paper
$0.10Second issue65.5 × 47 mmFr.1246George Washington1244 – No surcharge1245 – 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"
$0.25Second issue65.5 × 47 mmFr.1284George Washington1283 – No surcharge.1284 – Surcharge "18-63"1285 – Surcharge "18-63" and "A"1286 – Surcharge "18-63" and "S"1287 – Unissued Friedberg number1288 – Surcharge "18-63" and "2"1289 – Surcharge "18-63" and "T-1"; fiber paper1290 – Surcharge "18-63" and "T-2"; fiber paper
$0.50Second issue65.5 × 47 mmFr.1322George Washington1314 – No surcharge1315 – Unissued Friedberg number1316 – Surcharge "18-63"1317 – Surcharge "18-63" and "A"1318 – Surcharge "18-63" and "1"1319 – Unissued Friedberg number1320 – Surcharge "18-63" and "0-1"; fiber paper1321 – Surcharge "18-63" and "R-2"; fiber paper1322 – Surcharge "18-63" and "T-1"; fiber paper
$0.03Third issue66 × 40.5 mmFr.1226George Washington1226 – Portrait light background1227 – Portrait dark background
$0.05Third issue64 × 46 mmFr.1238Spencer Clark1236 – Red reverse1237 – Red reverse; design letter "a"1238 – Green reverse1239 – Green reverse; design letter "a"
$0.10Third issue81 × 47 mmFr.1254George Washington
$0.25Third issue95.5 × 47 mmFr.1294William Fessenden
$0.50Third issue114 × 48 mmFr.1328Francis Spinner
$0.50Third issue114 × 48 mmFr.1339Francis Spinner1339 – Green reverse; no surcharge or design figures1340 – Green reverse; design figures "1” and "a"1341 – Green reverse; design figure "1"1342 – Green reverse; design figure "a"
$0.50Third issue114 × 48 mmFr.1355Justice holding scales
$0.10Fourth issue79 × 46 mmFr.1259Bust 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 paper1260 – Does not exist1261 – Smaller red seal; silk fibers (violet); blue end paper
$0.15Fourth issue89 × 46 mmFr.1269Bust 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 paper1270 – Does not exist1271 – Smaller red seal; silk fibers (violet); blue end paper
$0.25Fourth issue96.5 × 46 mmFr.1303George Washington1301 – Large red seal; watermarked; silk fibers (pink)1302 – Large red seal; silk fibers (pink)1303 – Large red seal; silk fibers (violet); blue end paper1307 – Smaller red seal; silk fibers (violet); blue end paper43
$0.50Fourth issue106 × 47 mmFr.1374Abraham Lincoln1374 – Large seal; watermarked; silk fibers (pink)1375 – Delisted Friedberg number
$0.50Fourth issue103 × 46 mmFr.1376Edwin Stanton1376 – Small red seal; silk fibers (violet); blue end paper
$0.50Fourth issue95 × 52 mmFr.1379Samuel Dexter1379 - Green seal; silk fibers (light violet); blue end paper
$0.10Fifth issue81 × 51 mmFr.1265William Meredith1264 – Green seal1265 – Red seal; long, thin key (in Treasury seal)1266 – Red seal; short, thick key (in Treasury seal)
$0.25Fifth issue88.5 × 51.5 mmFr.1308Robert Walker1308 – Long, thin key (in Treasury seal)1309 – Short, thick key (in Treasury seal)
$0.50Fifth issue109.5 × 53.5 mmFr.1381William Crawford1380 – Red seal; light pink paper on obverse; silk fibers1381 – 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).44 Both Spinner and Clark decided to have their portrait depicted on currency, which created controversy.45 Republican Representative Martin R. Thayer of Pennsylvania was an outspoken critic, suggesting that the Treasury's privilege of portrait selection for currency46 was being abused.47 On April 7, 1866, led by Thayer,48 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."49 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.50

See also

  • Money portal
  • Numismatics portal
  • United States portal

Notes

References

Books and journals

Further reading

References

  1. Friedberg & Friedberg, p. 174.

  2. Cuhaj, p. 401.

  3. Kravitz

  4. All images are courtesy of the Smithsonian Institution.

  5. "Pastimes: Numismatics". The New York Times. March 5, 1989. Archived from the original on October 19, 2022. Retrieved May 3, 2013. https://www.nytimes.com/1989/03/05/style/pastimes-numismatics.html

  6. Anderson, p. 303.

  7. Reed, p. 298.

  8. Mitchell, 1903, pp. 27–32.

  9. Mitchell, 1903, pp. 27–32.

  10. Mitchell, 1902, p. 537.

  11. Mitchell, 1903, pp. 37–38.

  12. Mitchell, 1902, p. 552.

  13. Mitchell, 1903, p. 41.

  14. Mitchell, 1902, p. 552.

  15. Mitchell, 1902, p. 552.

  16. Mitchell, 1902, p. 540.

  17. Mitchell, 1902, p. 553.

  18. Mitchell, 1902, p. 553.

  19. Mitchell, 1902, p. 554.

  20. Mitchell, 1902, p. 554.

  21. Mitchell, 1902, p. 554.

  22. Blake, p. 32.

  23. Knox, p. 104.

  24. Spaulding, Elbridge Gerry (1869). History of the Legal Tender Paper Money issued during the Great Rebellion. Buffalo NY: Express Printing Co. pp. 165–166. /wiki/Elbridge_G._Spaulding

  25. Kravitz

  26. "History Timeline". Bureau of Engraving and Printing. Archived from the original on January 14, 2014. Retrieved May 3, 2013. https://web.archive.org/web/20140114184200/http://moneyfactory.gov/historytimeline.html

  27. Knox, p. 103.

  28. The payment obligation printed on first-issue notes states they are "Exchangeable for United States Notes by any Assistant Treasurer or designated U.S. Depositary in sums not less than five dollars. Receivable in payments of all dues to the U. States less than five dollars."[1]

  29. Reed, p. 302.

  30. The payment obligation for the second issue was slightly different: "Exchangeable for United States Notes by the Assistant Treasurer and designated depositories of the U.S. in sums not less than three dollars. Receivable in payment of all dues to the United States less than five dollars except customs."[1]

  31. Friedberg & Friedberg, p. 182.

  32. Blake, p. 32.

  33. Knox, pp. 104 and 109.

  34. Friedberg & Friedberg, pp. 174–81.

  35. The reverse of the first issue was originally printed by the National Bank Note Company. As a security precaution, the Treasury moved the printing contract to the American Bank Note Company who added their monogram ABC to the reverse of the remaining first-issue notes.[1]

  36. Also known as membrane paper; two sheets of paper bonded together with fibers embedded.[24]

  37. Kravitz, pp. 34–39.

  38. Kravitz, pp. 40–41.

  39. Kravitz, p. 41.

  40. Sort by size is based on the surface area of the note in square millimetres. Margins and cut may affect the listed dimensions, but generally not more than +/- 2 mm

  41. "Fr" numbers refer to the numbering system in the widely used Friedberg reference book. Fr. numbers indicate varieties existing within a larger type design.[28]

  42. Varieties are taken from the standard paper money reference by Arthur and Ira Friedberg,[23] with additional descriptions in the Kravitz collector's guide[29]

  43. Fr.1304, 1305, and 1306 are unassigned.[31]

  44. "BEP Directors – Spencer M. Clark". Bureau of Engraving and Printing. Archived from the original on September 21, 2013. Retrieved September 9, 2013. https://web.archive.org/web/20130921055121/http://www.moneyfactory.gov/directorclark.html

  45. Cuhaj, p. 407.

  46. "Portraits & Designs". U.S. Treasury Website. Archived from the original on August 5, 2012. Retrieved September 9, 2013. http://www.treasury.gov/resource-center/faqs/Currency/Pages/edu_faq_currency_portraits.aspx

  47. "But now we see upon our current paper money not only the heads of the illustrious men of our country long since gathered to their fathers, but of living secretaries of the Treasury, and even of such subordinate officers as the superintendent of the Currency Printing Bureau, Mr. S.M. Clark."[35]

  48. Rothbard, p. 126.

  49. National Monetary Commission, p. 191.

  50. Friedberg & Friedberg, p. 183.