How popular were fractional notes?

[Zoins]

Given the occasional thread on eliminating the $1 FRN and forcing a switch to coins, I was wondering if this was done before in the US? There seem to be early fractional notes with denominations like 5, 10 and 15 cents. Did they circulate with the general population and, if so, was there an uproar when they were removed?

[thebeav]

Hello,

They did circulate, out of necessity. Forced by the fact that there was a shortage of coin at the time (Civil War). Judging by the condition of notes that I see frequently, they circulated heavily. I would not think that their demise led to an uproar however. At the time, paper currency was a relatively new medium. People were used to using real money, gold-silver, in their everyday transactions. They were probably quite happy to return to 'real money'.

 

Paul

[Zoins]

Good to know. Thanks Paul

[TomB]

Folks prefered to hoard hard coinage and thus the fractional notes saw circulation. A little known fact is that into the 1930s one might still buy uncirculated fractional notes at face value from the US government.

[Hoot]

From my article on shield nickels (appeared in Coin Values, 2006):

 

In response to hoarding, and in an effort to keep daily commerce alive, postage stamps were authorized as legal currency for exchange by a law of July 17, 1862. Postage stamps were placed in special encasements in order to keep them from tatters. Merchants and banks issued fractional currency notes (notes of less than one dollar face value) in desperation to make small change. These notes became commonly referred to as “shinplasters,” so dubbed for their resemblance of plasters applied to the legs of Civil War soldiers to aid in healing superficial wounds. Following suit in an attempt to provide a common currency, the federal government produced a wealth of fractional three- and five-cent notes. These, too, became known as shinplasters, and by 1865, shinplasters were widely disdained and discounted significantly in commerce. Private tokens often took the place as “small change” in commerce, and merchants were want to issue change in U.S. one and two cent pieces. (Many so-called Civil War tokens, which are widely collected in modern day, found their origins in these very circumstances.)

 

Hoot

[Zoins]

Good information Tom and Hoot

 

So if history is to be a guide, people won't care if FRNs are removed and they have to use coins. Of course that was before we switched to fiat currency. Kind of interesting how a society's approach to coins can change once they are debased.

[TomB]

Aside from hard currency as an issue, people also remembered their history and knew that previous paper-backed currencies had a tendancy to either led to broken banks or to hyperinflation.

[Hoot]

Aside from hard currency as an issue, people also remembered their history and knew that previous paper-backed currencies had a tendency to either lead to broken banks or to hyperinflation.

 

Gee, I wonder what's happening today?

 

Hoot

[rrantique]

Aside from hard currency as an issue, people also remembered their history and knew that previous paper-backed currencies had a tendency to either lead to broken banks or to hyperinflation.

 

Gee, I wonder what's happening today?

 

Hoot

 

Great post Tom and Hoot I wonder if that is what Numismatic Tangents means