Skip to comments.The History of U.S. Paper Money
Posted on 04/24/2012 6:25:55 PM PDT by Pharmboy
Excerpted from Warmans Coins and Paper Money by Arlyn G. Sieber, available from http://www.ShopNumisMaster.com.
During the Revolutionary War, the states and Continental Congress continued to issue paper money, but its backing in hard currency was spotty at best. Inflation ensued, and the notes values plummeted. Some were called shinplasters because early Americans put them in their boots to help keep their feet warm. The saying not worth a Continental had its roots in the devaluation of Continental currency.
Designs on state notes varied, but most featured inscriptions within elaborate borders. Coats of arms and crowns were also common. During the mid-1770s, designs became more elaborate; farm scenes and buildings were popular design subjects.
Most Continental currency bore intricate circular seals of allegories.
To deter counterfeiting, leaves were used in the printing process. The fine detail of a leaf on a note was difficult for counterfeiters to duplicate. Each note was hand signed, sometimes by important figures in early American history. The significance of a notes signatures can enhance its value. Because of the devaluation of paper money during the Colonial and Continental Congress eras, the Constitution specified that no state shall make anything but gold and silver coin a tender in payment of debts. This provision, however, still allowed banks and other private institutions to issue paper money, which circulated solely on the peoples trust in the issuing entity. Sound banks kept enough hard money reserves to redeem their notes on demand; less scrupulous banks didnt.
Known as obsolete notes or broken bank notes today, these private issues were produced in especially large numbers in the 1830s and 1850s. They became obsolete in the 1860s when many of the issuing banks went under while others redeemed their outstanding notes and did not issue more. The notes are valued by collectors today because many of them feature artistic vignettes of local industries, such as shipping or cotton, or patriotic themes provided by the printer. Some show their value in coins two half dollars and a quarter to represent $1.25, for example. Most obsolete notes are one-sided.
During the Civil War, the public hoarded gold, silver, and even copper coins. In response to the resulting coin shortage, postage stamps were used for small change in everyday transactions. The stamps were placed in small envelopes printed with a value, but the envelopes deteriorated quickly and the stamps soon became a sticky mess.
The solution was to issue small, rectangular-shaped Postage Currency in 1862.
Depictions of postage stamps on the currency indicated their value; a 50-cent note depicted 50 cents in postage stamps, for example. They could not be used as postage on letters or packages (they had no adhesive), but they could be redeemed at any post office for the indicated amount of postage.
In 1863, fractional currency replaced the postage currency. It was similar in size to the postage currency but did not contain any reference to postage stamps. Fractional notes were issued through 1876, by which time coinage production had caught up with demand and the hoarding of the Civil War era had ended. Fractional currency is common in the collectibles market today. Many issues can be purchased for $20 to $100, depending on the individual note and its condition. Demand notes are considered the first regular paper money issued by the U.S. government.
Paper money issues are identified first by type, then by denomination and series date, which is not necessarily the date in which the piece was issued. Series indicates the year of the act authorizing the series, or the year production of the series began.
Further means of identifying notes include their design, seal color, issuing bank, signers, and size. Through 1928, U.S. paper-money issues were about 7 1/2 inches by 3 1/8 inches and are commonly called large-size notes today. Beginning with Series 1928 (released in 1929), U.S. paper money issues were reduced to 6 1/8 inches by 2 5/8 inches and are commonly called small-size notes.
This is the only piece of paper money that I have saved. Our First Family. Forever.
The RevWar/Colonial History/General Washington ping list...
Ahhh...the gold standard...if only we would get back to it.
|GGG managers are SunkenCiv, StayAt HomeMother & Ernest_at_the_Beach|
Thanks Pharmboy. I'd have pinged this were it not for its lack of currency. [rimshot!] But don't be discouraged, coin-tinue to ping me to such topics, I specie like our first President.
Times have changed. To celebrate PC and Diversity here is the proposed $100 bill.
It has been posted on other threads and taken for what it was: the absurdity of the Left's claim we need 'Diversity' so we don't hurt any feelings.
Wow, very interesting note. From what year?
I can only imagine how much one of those would cost (to collect) these days.
Well, I bought one on eBay about four years ago (in better shape than the one posted just above, but not a LOT better), and I paid $200. I imagine 250 would take a similar one these days.
Really? Thats pretty cool. I’ll have to look into that soon. Thanks again.
I love the history & significance...but dont know much about numimatics.
Well, if someone were to go to the trouble of counterfitting a 100 year-old bill, it wouldn’t be one worth just a couple of hundred. It’s real, all right. eBay is a pretty good site, and they are careful with the claims made by the sellers and the goods they sell. Not foolproof, but in general, reliable.
I left part of my reply off....
Since it was humor would a help you get it?
Meant to say '...would a /sarc after it help you get it?'
I agree. Reopening the gold and silver windows would establish a solid currency that would essentially compete with the fiat currency we are now using and would cut the inflation danger. It seems to me that we could get some stability back though if we were to make coinage of other metals with lower value but with intrinsic value (I know of some people who are currently hoarding nickels) nonetheless.
Perhaps brass, copper, or steel for small change. and silver for ten, twenty, and fifty dollar coins.
Another awful thing that FDR did to this country, that is, take us off the gold standard.
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