Fractional Currency of the United States

Fractional Currency of the United States

Coin Replacements Due to a Need

Here, currency refers to paper money, and fractional currency is paper money with a denomination of less than one dollar. The lowest denomination most people are familiar with is the one-dollar bill. However, there was a time in the past when smaller denominations of paper money were issued.

The reason fractional currency came about was a metal shortage. Being unable to supply the needed coins, the United States government began issuing paper money in small denominations.

 

So, what caused the coin shortage?  During the Civil war so much metal was used there was a shortage for minting coins.  Even after the war ended, the recovery of the metal supply was slow to recover.  Making paper money, especially money using “rag paper.” Seemed to be the best solution to the problem.

 

The denominations issued were three cents, five cents, ten cents, fifteen cents, twenty-five cents, and fifty cents. These notes could be used in lieu of change. They were issued from 1862 into 1876.  There were several series, so collecting one of each denomination will not complete a collection.  Still, this is a small collection to put together.  There are twenty-four different pieces of fractional currency, issued in five different series.  Note that not every denomination was issued in each series.  The three cent note was not issued except in the third series, and the fifteen cent denomination was only issued in the fourth series.  To complicate matters, there were multiple fifty cent versions in the third and fourth series.  The five cent bills were issued only in the first three series.  Then, there were multiple variations of all but two of the bills, with many having quite a few varieties.  It would take ninety-four bills to have one of each variety.

 

View images of Fractional Currency on Wikipedia.

 

These notes were smaller than dollar bills, and did not wear well. Since they were not being actively collected by many people, few great specimens survived.

 

The Fractional Currency bills had quality issues.  First, these notes are very old, and were intended to circulate, so many wore out. This is unfortunate in that it limits the supply available, but great in that it makes any good pieces you own worth something. But, some quality issues are not detrimental as much as you might think. Those dark spots may have always been there. The notes were originally made from rag paper, paper that came from old, used rags, and its quality was always poor. The spots, if they are pieces of rag that did not break down well, are part of the fractional notes.

 




It should be noted that coins were also being minted.  And, another change, the minting of the one-cent piece, went from the large cent to the small cent still in use.  The first small cent piece was the Flying Eagle Cent.

 



Learn more about Fractional Currency with a book from Barnes and Nobles.

 

The Controversy That Led to Change

Fractional Currency Caused a Law to Be Written

Congress failed to identify an image for the currency, so the first Superintendent of the National Currency Bureau, Spencer M. Clark added his own image. This cost him his position, and resulted in a new law prohibiting living persons from having their images on United States currency.

Not only did Fractional Currency solve a problem, but the controversy was the driving force behind the law that prohibits the United States Government from naming buildings, or anything else, after a living person.  And this is why no former president can have an image on any coin or bill of the United States.

Please visit Black Spaniel Gallery Coins to see out inventory.  Also, we have other informative articles, and will continue to add articles at Black Spaniel Gallery Blog.

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