The year 2012 marks the sesquicentennial or 150th anniversary of
the greatest monetary disruption in American history.
The scene began in late December 1861 when the outcome of the
Civil War, earlier thought to be an easy win for the North, was in
serious doubt. With uncertainty in the air, citizens began to hoard
In March 1862 the boom dropped when the Treasury Department
launched its legal tender notes. These pieces of paper, eventually of
denominations from $1 to $1,000, were not redeemable in “hard money”
such as gold and silver coins, but could only be exchanged for other
paper. Perturbed as to what might happen next, the public grabbed
every silver coin in sight. By early summer, the only federal coins in
circulation were copper-nickel cents, even though the federal Mint
continuing striking cents and the silver and gold coins.
In the second week of July, cents disappeared as well. Now no
United States coins circulated at all, all being hoarded as quickly as
they were released to banks. To fill the gap, a panorama of money
substitutes appeared. The Treasury Department declared that postage
stamps were legal tender. Cent-size copper and brass tokens were
issued by merchants and others — bearing political or advertising
inscriptions. Paper scrip notes of values from a cent to 3 and 5 cents
were printed, as were some of slightly higher denominations.
Soon the government issued postage currency — scrip notes bearing
stamp designs — succeeded in 1863 by fractional currency. John Gault,
an inventive New Yorker recently moved from Boston, in 1862 patented
encased postage stamps — with stamps of values from 1 cent to 90 cents
mounted in a brass frame with a clear mica pane on the front.
The monetary situation brightened slightly in 1863 when Indian
Head cents began to reappear, followed in 1864 by bronze 2-cent
pieces, in 1865 by copper-nickel 3-cent pieces and in 1866 by
copper-nickel 5-cent pieces. It was not until April 1876 that silver
coins were again seen, and gold coins remained out of sight until
The coinless year of 1862 remains absolutely unique in American
history. The hobby should celebrate the 150th anniversary of this
remarkable year with enthusiasm.
Q. David Bowers is chairman emeritus of Stack’s Bowers Galleries
and numismatic director of Whitman Publishing LLC. He can be reached
at his private email, firstname.lastname@example.org,
or at Q. David Bowers LLC, Box 1804, Wolfeboro, NH 03894.