Paper “Change”—19th-Century Fractional Currency
Fractional paper currency was introduced in the United States in August of 1862 and continued to be issued by the United States government until February of 1876. During the Civil War, hoarding of coins became increasingly common as the value of the silver and gold in coins outstripped the face value of the coins themselves. Coins were soon in short supply, and the suspension of specie payment for paper money in December 1861 exacerbated the problem. The solution was factional paper currency—sometimes called postage currency—small paper notes in values of 3 cents, 5 cents, 10 cents, 15 cents, 25 cents, and 50 cents.
Some early fractional currency was issued by local institutions for local circulation. This 25-cent note featuring a portrait of President Lincoln was issued on August 1, 1862, by W.P. Carpenter of Utica, N.Y. It could redeemed for bank notes “when presented in sums of One Dollar and upwards.” W.P. Carpenter was the Utica City Treasurer and a bookkeeper for J.S. & M. Peckham, a local retailer, where security for this note issue was deposited.
Peter Vidvard, also of Utica, issued this 15-cent note on September 23, 1862. Vidvard was a local retailer and wholesaler who sold liquor and cigars throughout central New York. The terms for redemption of the note are the same as for the Carpenter note.
The U.S. Treasury produced five issues of fractional currency between August 21, 1862, and February 15, 1876. Notes in the first and second issues featured portraits of George Washington. Notes in the third issue, dating from December 5, 1864, through August 16, 1869, introduced additional designs, including portraits of Lincoln Administration Cabinet member William P. Fessenden, Secretary of the Treasury from July 1864 to March 1865. The reverse of this 25-cent note explains the terms of exchange: “This Note is exchangeable for United States Notes by the Assistant Treasurers and designated Depositories of the United States in sums not less than Three Dollars. Receivable in payment of all dues to the United States less than Five Dollars except Customs.”
The terms of this 50-cent note, also a third issue, are the same. The note features a portrait of Francis Spinner, Treasurer of the United States from 1861 to 1875.
Both Spinner and Fessenden appeared on notes during their lifetimes, which created political controversy and the charge that the Treasury was abusing its privilege of selecting portraits to appear on currency. On April 7, 1866, Congress enacted legislation to prevent such abuse. The new law stated “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.”
Designs of fourth issue (July 14, 1869 – February 16, 1875) and fifth issue (February 26, 1874 – February 16, 1876) notes were even more varied, though the terms of exchange remained the same. Fourth issue notes included this 50-cent notes featuring Edwin M. Stanton (d. 1869), Secretary of War from January 1862 through May 1868.
A portrait of President Lincoln (d. 1865) appears on this 50-cent note, also fourth issue.
Robert J. Walker (d. 1869), Secretary of the Treasury under presidents James Polk and Zachary Taylor from 1845 to 1849, appears on this fifth-issue 25-cent note.
This fifth-issue 10-cent note features Walker’s successor, William M. Meredith (d. 1873), who was Secretary of the Treasury from March 1849 to July 1850.
Fractional currency remained in use until 1876, when Congress passed legislation that authorized fractional silver coins be minted to redeem the fractional currency still in circulation.