U.S. Fractional Currency Notes

According to the Bureau of Engraving and Printing:

"Fractional Currency notes, of which there are many varieties, denominations, and issues, emerged during the Civil War. Once the war began, the public chose to hold on to coins because of their value as precious metal. The result was fewer coins available for circulation. To remedy the situation, Congress in 1862 authorized the use of postage and other stamps for paying debts to the U.S. government. This created a shortage of postage stamps. To solve this problem, notes in denominations of less than $1 were issued. These notes were known as postage notes because their designs were taken from existing postage stamps. Later issues of such notes in denominations under $1 had designs more in keeping with the appearance of currency notes. These issues were known as Fractional Currency and were authorized in 1863.

"The Bureau of Engraving and Printing (BEP) was a new department at the time of the first issue of Fractional Currency, and so the currency was produced by two private companies—The American Bank Note Company and the National Bank Note Company.

DESIGN FEATURES OF FRACTIONAL CURRENCY

"The first issue of Fractional Currency had no Treasury Department signatures or seals. With the second issue, the size of all denominations became uniform, the obverse (the face) was printed in black and the reverse (the back) was printed in one of four colors (red, purple, green, or tan). With the third issue, more denominations were introduced. With the fourth issue, all denominations included Treasury seals. By the fifth issue, Fractional Currency was largely being phased out, and thus fewer varieties were produced.

"In all, there were five issues of Fractional Currency of varying denominations from 3cents to 50 cents authorized between 1862 and 1876.

"Production of Fractional Currency ceased on February 15, 1876, as the production and usage of coins began replacing the need for smaller denomination notes. In April 1876, Congress passed an act that allowed Fractional Currency to be redeemed for silver coins."

The Bureau's fact sheet, from which this was taken, has additional detailed information.