United States Fractional and Postage Currency

As a result of the Civil War, people began to hoard coins, not only precious metal but copper, too. Much of the silver coinage was also being shipped to Canada. One improvised answer to the shortage created was to spend postage stamps as small change. The U.S. Treasury even sanctioned this practice, much to the chagrin of the Post Office, which was running out of stamps. It was a useful concept, but impractical. Small envelopes printed with a value were devised to convey the stamps as they were spent, but the stamps soon became a sticky mess, and the envelopes quickly deteriorated. Merchants found an alternative: give customers their own miniature paper currency for small change, requiring the customers to return with more business in order to spend them. These were made illegal.

The problem was solved in 1862 by a hybrid between postage stamps and paper money. Small rectangles of paper depicting stamps and labeled "Postage Currency" were issued. They could be redeemed for postage at any post office, but generally they circulated at the value of the stamps depicted. These sheets initially had stamp-like perforations around the edges, but they were soon removed. The miniature notes were a more convenient size and lacked the adhesive which had made stamps a mess. These special stamps were replaced in March 1863 by small notes of a similar size, but which were designed more in the form of paper money, with no reference to stamps. They were now labeled "Fractional Currency." These continued through several issues, surviving the Civil War well into the period of Reconstruction. More than 99 percent of these notes were redeemed and destroyed. Despite this, fractionals are today quite common. They are a popular and easy series to collect, available in virtually every state of preservation from crisp to pulverized. The latter have slightly more than novelty value.

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Fractional currency can be divided into four different series. The first is the postage currency already mentioned. It contains several varieties of ink and paper color, as well as notes with and without "ABNCo." These are the initials of the American Bank Note Co., the printing contractor. When these were replaced by the fractional currency notes of the second series, an interesting counterfeit-prevention device was incorporated. A metallic bronze ink was used to frame Washington's bust and to overprint the value on the reverse. Like bronze coins, they can both tone down and corrode green. Collectors prefer those notes with the bright, original color. These notes were printed by the government itself, instead of by a private contractor.

Attempts to prevent counterfeiting continued with hard¬to-imitate details incorporated into a set of all-new designs. (The notes of the second series were all identical.) Actual hand signatures were also tried. This third series has the interesting distinction of having two government officials place their portraits on different notes. Both United States Treasurer Frances Spinner, and Superintendent of the National Currency Bureau, Spencer M. Clark, deemed themselves worthy of depiction. Evidently Congress did not agree. It quickly passed a law to prevent the likeness of a living person from being depicted on these notes again. It has been suggested that Clark accidentally placed himself on the 5-cent note in a case of mistaken identity with the explorer of the Northwest, William Clark! A document allegedly called for a portrait of "Clark." Nevertheless these notes continued to be printed for two years.

A new anti-counterfeiting measure was also introduced for the fourth series. Perhaps even more important, these notes incorporated new, almost inimitable paper containing silk threads. It was an oversized treasury seal, superimposed over the entire height of the face of the note. Some also have a bright pink background over the entire face, and are worth more than prices listed. The final series of notes lasted only two years. It was decided that the country had recovered from the Civil War enough to redeem its fractional paper. New silver coins were struck and virtually all fractional paper was turned in.

Known Counterfeits: Contemporary counterfeits of fractional currency were a problem from the very first series of postal currency. It continued to an extent for years into the following series. Nevertheless, these counterfeits were mostly destroyed in the 1860s and 1870s, and they are not abundant today. The bronze metallic ink overprints can be removed in order to create what appears to be a rare variety.