Collectors are sometimes confused by who actually issued Civil War era fractional scrip. 

Sometimes merchants and other commercial interests issued the notes and also took responsibility for redeeming them. In this situation, let’s say that the “Smith Brothers Mercantile Store” decided that it needed to have a means of making change for its customers. 

A local printer was hired to print up perhaps several hundred dollars in fractional notes of various denominations, typically 5 cents, 10 cents, 25 cents, and 50 cents. Then someone from the store signed the notes that were subsequently paid out across the counter to customers who were due change on purchases. 

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These notes were typically redeemable in sums of even dollars (usually $1 or $5) in current bank notes or in merchandise. Smith Brothers actually would have had a pretty strong motivation to redeem the notes in goods, since a dollar’s worth of goods perhaps cost the store only 50 or 60 cents.

The main problem with this arrangement was that the issuer was responsible for all of the bookkeeping associated with the issuance and redemption of these change notes. In most cases, these notes indicate the issuer name and are signed by the issuer or his agent.

Other merchants took a different approach because they didn’t want to be bothered with the work required to redeem notes. In this case, let’s say that Smith Brothers’ competitor, the “Jacobs General Store,” deposited money with its bank, the “Merchants Bank of Centerville.” 

As a customer accommodation, the Merchants Bank of Centerville then served as the redemption agent for Jacobs, who paid out scrip notes indicating that the Merchants Bank would pay to the bearer the face value of the note in current funds when presented in sums of (usually) $1 or $5. When Jacobs’ customers presented his notes for payment at the bank, an equal amount was deducted from Jacobs’ account at the bank. In essence, these scrip notes were treated as denominated checks charged against the merchant’s special deposit account for such notes. 

These notes typically have the bank name prominently displayed and are signed by the merchant (so that the bank knew whose account to charge them against). Collectors often mistakenly assume that these are issues of the bank when, in fact, they are actually merchant issues payable at the bank. 

So read the fine print; you might be surprised who issued the note.