| Fanny & Vera Home About Us News Links Contact |
Before the American
Civil War, citizens generally conducted trade in the time-honored method of
barter or exchange for metal coins.
Only when the war left the U.S. bereft of metals did it print and
distribute large amounts of paper currency as a way to pay soldiers, purchase
supplies and create a standard medium of exchange for citizens.
The U.S. first
issued paper money during the Revolutionary War.
These square, printed notes were rarely worth their face value and became
so distrusted by the citizenry that the practice of printing money was all but
abandoned. States were prohibited by the constitution from issuing
currency, but virtually anyone else could.
Banks, utilities,
and businesses printed and distributed their own currency.
The value of these notes was backed up solely by the reputation of the
issuing entity. Since most notes could only be exchanged at the issuing establishment,
a fistful of local dollars was useless if you traveled 10 miles from home.
The value of these notes varied widely-from printed face value to zero.
The public largely distrusted paper money, and traded their "faith
paper" for metal coin whenever they could.
Within a few days of
the outbreak of the Civil War, rampant inflation meant gold, silver and copper
coins were worth more than face value. Metal
coinage all but disappeared as they were hoarded.
Paper money was reluctantly accepted by a distrusting public, as there
was no other alternative. This led
to a proliferation of paper money-both official and questionable.
Four basic types of
currency notes were widely circulated in the Union during the Civil War era:
Private Issue, Shinplasters, Federal Issue and Stamps & Fractional
Notes.
Railroads, roads,
utilities, manufacturers, associations, and banks issued currency notes.
It
was often a very confusing undertaking for a consumer to establish their value.
Unfortunate employees could be paid in company scrip, which was
redeemable only at the company store-a handy way for unscrupulous businesses to
build on profits.
The
most universally accepted paper money were bank notes.
Bank notes were promissory notes--more like a check of today.
These notes could be exchanged for Federal issue notes, and as such had
some value. Banking was not well
regulated, and new banks would start up then become "broken" with
frequency. Broken Bank currency
was valueless--the consumer had to be wary.
Generally, the better
the artwork on the note the more it was trusted.
Fine examples of the engravers art can be found on private and bank notes.
Favorite themes were allegorical or mythological scenes, scenes of industry,
and scenes of the discovery and exploration of
America. "Cheesecake"
was often featured as bare breasted Liberty or unclad goddesses stalked across
the note.
Enterprising
businesses adopted the practice of issuing a promissory note called a
shinplaster in lieu of unavailable coins. These
notes came in a variety of sizes and were redeemable for merchandise only at the
merchant of issue. Customer
pressure led businesses to promise an exchange of shinplasters for bank notes if
the customer could save up one dollars worth.
This promise was printed prominently on the face of shinplasters to
inspire trust and acceptance.
Regimental sutlers
generally gave change as shinplasters.
Sutlers also printed special notes "for the accommodation of the
officers", often featuring the image of the officer, thus appealing to
their vanity as well as their graft. These
sutler notes were purchased in bulk at discount by the regiment and distributed
to the officers, who could exchange them for company and personal supplies.
They might also hand them out to opportunistic lickspittles in the ranks
as reward for special merit.
The
lack of coin for making change was partially alleviated by using postage stamps.
Stamps had a constant value and were official issue of a sort.
They could be more widely exchanged than local shinplasters.
Stamps, however, often became no more than a sticky mess in the pocket,
and the Post Office was hard pressed to meet the demand for stamps due to this
practice.
Fractional Postage
Currency in a larger, more convenient size without glue was first issued in
1862. Originally these notes were issued on perforated sheets so that the
required amount needed was torn off. These
were popularly accepted, and as demand exceeded the perforation machinery, the
notes were issued on plain sheets and the consumer cut off as many as were
needed for a transaction.
At the beginning of
the war Demand notes and Interest Bearing Notes were available.
Most pre-war issues were large denominations used for exchange of funds
between banks. The US Notes of
Series 1862 and 1863 represent the first generally accepted and circulated
currency. Federal notes were
printed by private companies (who also printed notes for the Confederate
Government).
US notes were known
as "greenbacks" due to the intricate design, in green, printed
on the back of notes to discourage counterfeiting.
It was not until 1863 that the US government halted the practice of private
issue, and US currency began to be accepted as the standard of exchange.
By the end of the Civil War the US economy remained relatively strong and Federal issue was THE standard of exchange for U.S. citizens. The stability of paper currency and its convenience of use increased popular acceptance and "greenbacks are still the medium of exchange used today.
For more information, the Federal Reserve Bank's On-Line Exhibit of American Currency offers high quality images of Civil War currency and interesting miscellany on the economy.
Sue
Rhodes, aka Miss Fanny LaGrande, is often found near military camps
on pay days, where she helps to operate a saloon & gambling establishment
called the Soldier's
Respite. Soldiers from both the US and CS are always welcome to contribute
their currency via the games of Faro, Monte, or Dice.
In "real" life, Sue works at the Jake Jackson Memorial Museum in Northern Calfornia and operates a part-time business on the side--Sue's Good Company.
