Some US Currency Was Once Worth Just a Fraction of a Dollar
August 21, 2010

Five Cent Postage Currency Note 1862

On This Date In History: Many people think that the economy is just terrible. I recall the one in the late 70’s and early 80’s with unemployment at about 8%, Inflation at about 11% and interest rates at about 16%…or maybe higher. Perhaps your grandparents, or maybe even Steve Burgin, can tell you tales about the stock market crash in 1929! But I bet hardly anyone knows about this date in 1862 when economic conditions got so bad that the government started printing 5, 10, 25 and 50-cent notes.

5 Jeffersons Equals 25 Cent Postage Currency in 1862

See, in 1862 the US Government had a little problem. It was called the Civil War. By August 1862 things weren’t going so well. Just like in later wars…WWI, WWII, Korea, Iraq….the good guys weren’t rolling to victory in the first year or so as Americans expected and, in fact, the news wasn’t good so the American public, being short-sighted, turned to despair. In 1862, coins were made of nearly pure metals. Pennies were copper, other coins were silver or gold. Well, with the government falling into debt to finance the war and the perception that the Union might lose, people started hoarding their coins. A building in New York collapsed from the weight of pennies stored on the second floor. The Washington Star wrote that “. . . In 1862 small change became very scarce. . .It was more than a day’s search to find a five-cent silver piece.” So, there was no money in circulation and the government had other things to do like figure out how to stop the Confederate Armies. So, it was up to the Treasury Department.

One George Was on the 10 Cent Note But Five Georges Was Worth 50 Cents

Treasury Secretary Salmon P. Chase proposed using postage stamps as currency.  Americans were already using them in such a manner with the shortage of coins.  But, the postal service did not like the idea and displayed its disapproval by refusing to give refunds for soiled stamps.  In spite of the non-cooperation from the post office, Congress and President Lincoln passed the Postage Currency Act on July 17, 1862 which authorized the printing of 5, 10, 25 and 50-cent notes.  The stamps were designed by US Treasurer General Francis E. Spinner who asked for someone to bring him some postage stamps and blank paper. He cut pieces of paper in equal 2.5 x 5 inch sections and affixed stamps of various denominations on the corner. Spinners cut-outs became the model for the 5 different issues of the mini-bills that continued in production until 1876. There were 23 different designs that apparently are some of the most artistic in American currency.

Front of 3 Cent Note from 3rd Issue of 1864-1869

The first issue began on August 21, 1862 and were known as Postage Stamp Currency.   Spinner had shown no creativity whatsoever in regard to the 5 and 10-cent notes because they were simply facsimiles of the corresponding 5 and 10 cent postage stamps.  The first issue of the Postage Currency was not even legal tender but could be exchanged in 5 dollar lots of United States Notes.  They also could be used for any payments due to the United States up to 5 dollars.  In the first few months of production, the sheets of stamps were perforated like regular postage stamp sheets. 

Reverse Side of 3rd Issue 3 Cent Postage Currency

 But, demand was so high that  the perforating machines couldn’t keep up so they started printing them on regular sheets which had to be cut with a pair of scissors.  Soon, it was discovered that the stamps were quite easily counterfeited and Chase ordered that a new batch be produced in 1863 that wasn’t so easy to duplicate.  The new set had printing on the reverse side (not sure how you could tell front from back) and they had additional colors.  The Currency Stamps are great finds for collectors, especially that first issue.  I got a $10 silver certificate in change some time ago and I’ve also gotten steel pennies in change, but never have I found a 5-cent bill.

Weather Bottom Line:  Saturday morning we had a line of rain and t’storms roll through the area.  This was in advance of  a shortwave trof that is associated with a cold front to the west.  We had much needed rain and this event was very predictable as it was quite prominent in the Midwest on Friday night.   Now, here’s the problem.  The front and shortwave will be approaching all day and will come through tonight.  The big question is will we have enough time to reload the atmosphere.  This morning’s activity used up all the energy.  Given that we have all day, it seems likely that we will erode the clouds by the afternoon and we will heat back up again.  So, in all probability another line will develop this afternoon.  But, a question in this regard is where does it form?  If it forms to our west, then we will be in the midst of developing strong storms and that could be interesting.  It may form right over the top of us too or, less likely to our east.  I suspect that we will get another round this evening with the front, though it may be more of a scattered nature.  Either way, we remain on the edge of the SPC risk outline for severe weather in the slight category. If we get anything the biggest threat, I should think, would be in the form of high winds.  Lightning is not a severe category but is still a risk nonetheless.

Depending on how fast this guy moves through, we may have a lingering leftover shower early Sunday but after that, we look dry and the weather looks pretty good for much of the week ahead with lots of sun, reasonable humidity and highs in the upper 80’s and lows in the upper 60’s.  I believe that we are on the downside of summer and we’re most likely about done with the excessive heat and humidity of the last several weeks.

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