United States Fractional Currency: A History of Paper Money

Fractional currency, also known as small change, was a type of paper money issued by the United States government in the 19th century. It was designed to fill the gap between coins and larger banknotes, and it played a significant role in the country's monetary system.

The Need for Fractional Currency

In the early days of the United States, coins were the primary form of currency. However, coins were often scarce, especially in remote areas. This made it difficult for people to make small purchases, such as buying a loaf of bread or a newspaper.

To address this problem, the government began issuing fractional currency in 1862. The first fractional currency notes were printed in denominations of 3 cents, 5 cents, 10 cents, 15 cents, 25 cents, and 50 cents. These notes were printed on paper and were similar in size to coins.

The Design of Fractional Currency

Fractional currency notes were designed to be visually appealing and difficult to counterfeit. They were printed with intricate designs and featured the signatures of the Secretary of the Treasury and the Register of the Treasury. The notes also had a unique watermark that could be seen when held up to the light.

The Circulation of Fractional Currency

Fractional currency quickly became popular with the public. It was used for a wide variety of transactions, from buying groceries to paying postage. Fractional currency also played an important role in the economy. It helped to stabilize prices and made it easier for businesses to operate.

The Demise of Fractional Currency

Fractional currency was gradually phased out in the late 19th century. As the economy grew and coins became more plentiful, the need for fractional currency diminished. The government also began issuing smaller banknotes, which were more convenient to use than fractional currency notes.

The last fractional currency notes were issued in 1876. By this time, coins and banknotes had become the primary forms of currency in the United States.

The Legacy of Fractional Currency

Fractional currency played a significant role in the development of the United States monetary system. It helped to fill the gap between coins and banknotes, and it made it easier for people to make small purchases. Fractional currency also helped to stabilize prices and make the economy more efficient.

Today, fractional currency is a collector's item. It is a reminder of a time when paper money was used for a wide variety of transactions.

Table 1: Denominations of Fractional Currency

Table 2: Issuance of Fractional Currency

Table 3: Redemption of Fractional Currency

Table 4: Collectors Value of Fractional Currency