Fractional Currency (1862-1876)

People expected the Civil War to be a very short war. Instead, it dragged on for many years. People started to worry about their money. Instead of spending it, they saved it by hiding their gold and silver coins in “secret” places in their homes. This was called “hoarding.”

The government also needed base metals like copper for weapons and machinery. It could not be used to make new copper coins, so small coins like pennies were soon in short supply too. Coins of any kind got harder and harder to find, so people had nothing they could exchange for food and supplies.

Because coins and small change were so scarce, Congress made a law that allowed people to use postage stamps as money.


An example of a postage stamp that was used as paper money

Using stamps as currency was inconvenient. Imagine carrying around postage stamps today to pay for what you needed at the grocery store. Stamps would be a dirty, crumpled, sticky mess. They would also be easy to lose.

A man named John Gault created one solution. He made two round shells out of brass and “encased” a postage stamp inside. The top shell had a clear window in it so that you could see what was inside. There was no such thing as clear plastic to make a covering in those days. Instead, Mr. Gault used a mineral called mica that could be split into paper-thin sheets. The postage stamp was placed between the two brass shells and the edges were crimped closed. This was called an “encased postage stamp.”

Encased postage Stamp

But the biggest problem with using stamps for buying shoes, food, nails, medicine, or cooking supplies was that pretty soon, there were no more stamps left to mail letters with. Eventually, General F. E. Spinner, the U.S. Treasurer, convinced the government to print small notes (paper money) that looked like stamps. These notes were much smaller than the currency we are familiar with today. This was called Fractional Currency. The men in the military were paid with fractional currency, and sometimes they would stuff the bills inside of their boots to help keep out the cold. The bills became known as "shinplasters." Fractional currency was printed until 1876, so it is possible that some of these "shinplasters" were in the loot bags of Wild West Outlaws.

Fractional Currency