PC6, 10c Postage Currency, First Issue

1862 United States Civil War era 10 cent Postage Currency note. Imperforate American Bank Note Co. logo.

The outbreak of the Civil War caused a great disruption in the Union’s monetary and fiscal affairs as frightened citizens sensed the impending inflationary pressures inherent in the costs of waging war. Specie – hard money – was hoarded, and commerce was pinched for some form of money to be used in everyday transactions. Ordinary postage stamps were pressed into service but by their very nature soon proved impractical. It was said that in New York City alone $15,000 worth of stamps were sold daily for use as small change. Little imagination is required to visualize the dirty, sticky mess that resulted. Salmon Portland Chase, the Secretary of the Treasury, struggled in Washington with this problem, and on Sunday, July 20, 1862, wrote to Postmaster General Montgomery Blair expressing his concern and putting forward a tentative solution: Sir: Treasury Department July 20, 1862 An Act of the last Congress provides for the use in payments of postage and other stamps of the U. States, and requires that the Secretary of the Treasury furnish them in such amounts as may he required to the Assistant Treasurer and selected designated depositories for use and to be furnished to persons desiring them in exchange for U. States Notes. It has occurred to me that it will be advisable to take from your Department such quantity of these stamps as may be needed immediately. Say 100,000 to 500,000 and pay for them direct in Treasury Notes, and that it may be expedient to have these stamps prepared without glue and perhaps on thicker paper than present stamps. I shall be obliged if you will favor me with your views on these, and any other points which seem to you proper to be considered.

Chase’s solution – postage stamps printed on thicker paper and no glue—did not materialize. U. S. Treasurer F. E. Spinner was also at work on the problem, and he finally conceived the idea of ‘‘Postage Currency” using impressions of one or more stamps on bank note paper. Postage currency, although never specifically legalized by Congress, was issued from August 21, 1862 to May 27, 1863. The “first day of use” of the postage currency was August 21, 1862. In all, the American Bank Note Co. and the National Bank Note Co. produced 124,177,688 notes with printing on both the face and the back. To fulfill a contract of this magnitude, the bank note companies had to invest heavily in machinery and buildings.

An Act of Congress dated March 3, 1863 authorized the government to issue fractional currency notes. This form of money was then used from October 10, 1863 to February 15, 1876. By the latter year normal specie – copper and silver coins – was in abundant supply and the need for paper small change no longer existed.