Paper Money

New book focuses on Treasury notes issued between 1812 and 1865

A book offering a fresh perspective on the history of United States paper money will make its debut on Aug. 10 and 11 when Stack’s Bowers Galleries introduces “United States Treasury Notes 1812–1865: An Illustrated History,” by Nicholas J. Bruyer.

Image courtesy of Stack’s Bowers Galleries.

A book offering a fresh perspective on the history of United States paper money will make its debut on Aug. 10, when Stack’s Bowers Galleries introduces United States Treasury Notes 1812–1865: An Illustrated History, by Nicholas J. Bruyer.

The book covers the national paper money that bridged the gap between the Continental Currency of the Revolutionary War and the legal tender paper money issued by the United States in 1861 to finance the Civil War. The 271-page hardcover book presents for the first time a coherent and chronologically ordered study on these early United States notes, providing an in-depth understanding of why many were initially issued — whether to finance wars or to salvage the United States from imminent collapse.

It is a sorely needed book on a subject that has long been insufficiently studied and overlooked by all but a small segment of collectors. The comprehensive, well written, and beautifully designed and illustrated volume measures 8½ x 11 inches and is in full color. Its suggested retail price is $59.95, but will be available for $30, a 50% discount, at the American Numismatic Association World’s Fair of Money in Pittsburgh at the Stack’s Bowers Galleries table, #1000. In addition, Bruyer will be on hand on Aug. 10 and 11 from 1 to 3 p.m. to meet attendees, talk paper money and personally autograph copies.

Treasury notes were authorized under the U.S. Constitution as “bills of credit,” interest-bearing financial instruments of low denominations issued for short terms. Since the Constitution forbade the issuance of paper money by the government, the Treasury repeatedly turned to Treasury notes when it lacked sufficient gold and silver coins during deep recessions or under wartime demands. The notes were issued in small sizes convenient to pass hand-to-hand, with interest ranging from 7.3% to no interest at all. Although opposed by “hard money” advocates in Congress, the notes were issued in denominations as low as $3. Some were made payable to specific individuals, but many were payable to bearer to encourage their use as circulating currency.

Bruyer draws upon Treasury Department documents in the National Archives, congressional records, and contemporary press accounts, among other sources, to explore the use of Treasury notes by a succession of Treasury secretaries to meet the nation’s financial needs during the War of 1812, the Panic of 1837, the Mexican War, the Panic of 1857, and the Civil War.

By far, the greatest use of them was during the Civil War. Treasury Secretary Salmon P. Chase initially believed he could pay the entire cost of winning the war solely using Treasury notes, without new taxes or bonds. As the war progressed, Chase experimented with different kinds of Treasury notes, including coupon-bearing notes, before settling upon a 6% note yielding compound interest in June 1864.

One surprising revelation is that the non-interest-bearing “demand” notes of 1861 were the second issue of such notes by the Treasury. The first demand notes, in a $50 denomination, were issued in 1843 by Treasury Secretary John C. Spencer. They were payable on demand at any one of three federal depositories in New York. In total, $1.3 million was placed into circulation before Congress concluded the notes were unconstitutional and prohibited Spencer from continuing his paper money experiment. Despite congressional disapproval, the $50 demand notes were favorably received by the public and circulated for years.

The book also covers the periods before and after the War of 1812 with chapters on the First (1791–1811) and Second (1816–1836) Bank of the United States. It organizes the paper money of these banks in easy-to-follow chronological sequence. Circulating drafts, a form of paper money created to avoid the requirement for notes to be hand-signed by the Second Bank’s president and chief cashier, are described and illustrated.

United States Treasury Notes is the most extensively illustrated of any reference work yet published on the subject. Most notes are shown in color and include examples from major auction houses and the Smithsonian Institution. Many are rare or even unique, the only known surviving examples. Individual notes illustrated in the book have sold for upwards of $1 million at auction.

Anyone interested in the monetary history of the United States and its paper money, from the beginning of the federal era through the end of the Civil War, will find United States Treasury Notes to be valuable as an introduction and a foundational reference.

Bruyer will also have an extraordinary million-dollar display of Treasury notes, from a $1,000 note from the War of 1812 to a $50 7.3% “coupon” note issued from 1864 to the end of the Civil War. Also on display will be an unissued specimen of the first and only U.S. $3 note, from 1815; a $50 note from the Panic of 1837; the first “demand” note ($50) from 1843; the first $5,000 note, issued for the Mexican War in 1847; the first note issued for the Civil War, a unique 1861 $50 6% 2-year note valued at $1 million; a $100 coupon-bearing 7.3% note proof of 1861; and a $100 1864 compound interest note.

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