Interesting and Amusing

Fractional Currency and Other Paper Money Experiments
The phrase "keep the change" took on a completely different meaning during the Civil War. A downturn in the economy, combined with an increase in the demand for precious metals, resulted in an almost complete disappearance of coins. Coin substitutes such as tokens, scrip, and merchandise were largely ineffective, rendering commercial transactions awkward. The most common substitute for coins was postage stamps, which were redeemable for currency at post offices in 1862. The Treasury Department immediately recognized the disadvantages of postage stamps, especially on a hot day when stamps could stick together and change into a mass of paper and glue. The Treasury Department's solution came in 1863 when President Lincoln signed an Act authorizing the U.S. government to issue fractional currency, or "paper money." By 1869, small paper notes resembling postage stamps--this time without the glue--were issued in denominations of 3, 5, 10, 15, 25, and 50 cents. Fractional currency was not issued after 1876, when coins returned to circulation.

The 14-year lifespan of fractional currency created some heroes and some goats within the United States Treasury Department. One hero was General Francis E. Spinner, who was appointed Treasurer by Salmon Chase, Secretary of the Treasury during the Lincoln Administration. As coins began to disappear from circulation, Spinner was under intense pressure to come up with a solution. General Spinner conceived the idea of fractional currency and completely managed its entrance into circulation. General Spinner also had the wisdom to use fractional currency as a "laboratory" for experimentation with new types of ink, paper, and anti-counterfeiting techniques. Many improvements in American currency resulted from Spinner's research and development program.

Spinner was also known for his vision and values. A dedicated public servant himself, Spinner was responsible for introducing women to public service. Treasury Department employees respected Spinner for his strong work ethic. One evening while at home, he had a bad feeling and returned to the Treasury Department to find the vault doors open. For the remainder of his tenure, Spinner would personally oversee the locking of the vault doors.

During Spinner's successful career, an unpopular figure named Spencer M. Clark was appointed as superintendent of the National Currency Bureau. Clark, a government bureaucrat with an unremarkable record, managed to get his own portrait on a five-cent piece of fractional currency that was issued from 1863 to 1867. Congress became so infuriated with this act of arrogance that it established a ban, which is still in effect today, on portraits of living persons on all bank notes.