In times of crises, people go just a little nuts. Suddenly, the hoarders come out and everything of any value to anyone suddenly disappears. The American Civil War was no exception. We have all heard the terrible tales of suffering in Confederate prisons, and on the front lines of the war. Many of us are even familiar with the Draft Riot that burned down a good section of New York City.
But did you know that things got so bad, that nearly every piece of silver and even copper coins disappeared as well? The American Civil war took place at a time when many were not all that sure about the concept of a United States of America.
After all, in Grandad’s day there was still that thing called a Continental Congress, and that peculiar man, Aaron Burr, had even tried to cut the country apart once before. Things were pretty rough. In fact, they were so rough that out West circulating pieces of eight from the Spanish crown were a lot more common than real American silver.
So when the war was on, who knew from paper money? Lincoln’s cabinet was happily printing greenbacks to finance the war, but would there be a government to redeem them in the end? Let’s not even talk about Confederate currency.
So, in a perfect illustration of Gresham’s law or the economic principal that bad money drives out good, every spare piece of silver and gold disappeared under the rocks in the family garden. So, to the rescue of the American people came…advertisement.
That’s right, no silver dimes, half-dimes, or even pennies, but lots of ads. In those days of patent medicine (with just a bit of liquor or opium to cure what ails you) a merchant by the name of John Gault came up with the idea of using button-making machinery to produce a small case with a transparent mica front and room in the back for advertising.
Inside this dandy case was room for an American stamp and Gault helpfully provided the case, stamp and advertising vehicle to other merchants who paid a 20% mark-up over the cost of the stamps for the privilege. Simultaneously providing both the incentive, and the means, to buy, the stamp currency sold like hot-cakes.
Eventually the post office began to balk, as they had the crazy idea that stamps should be used for…delivering mail. So pressure was brought to bear to dump them.
Since Americans had become accustomed to making change with oddly-denominated stamp currency, and since it was a lot easier to make a single two or three cent piece due to the duty of several scarce pennies or valuable silver half-dimes, the United States began minting coins in both denominations during the Civil War.
The bronze United States Two Cent Piece, minted from 1864 to 1873 has the distinction of being the first coin to bear the motto: “In God we trust” adopted according to legend at the request of a preacher’s wife, but much more likely at the urging of Treasury Secretary, Salmon P. Chase.
This coin had the virtue of replacing two pennies, and containing not a whit of valuable silver, always a plus in inflationary wartime.
The silver three cent piece, first introduced in 1851 for, of all things, making stamp purchases more convenient, was joined by a new, larger sized nickel three cent piece in 1865 and the two coins circulated side by side for the next two decades or so. The nickel piece had the virtue of both being easier to find in the pocket than the diminutive silver coin which was the smallest American ever minted, and costing the government a heck of a lot less to make since nickel was worth less than silver.
The coins were also joined by fractional currencies of American paper money with face values less than a dollar.
Abraham Lincoln was far from a hard currency man. Under his administration, gold and silver took a tremendous trouncing, but would eventually bounce back to become the preferred money until Franklin Delano Roosevelt took us off the gold standard in 1933 during the Depression.
Anyway, that’s my two cents…for what it’s worth.