The Story Of Postage Currency

A portion from my educational web site.

Why Fractional Notes?

Imagine yourself a proprietor of a business in the early 1860's and a customer wants to pay for their purchases. What do you do when you don't have adequate change available? There is a shortage of coins at the bank due to the Civil War. People are hoarding the few coins that they have and others were sending them to Canada to sell for their scrap value which had risen to more than the coins were worth. These are the major reasons why you can't give proper change to your valued customers. What do you do? Do you print your own currency that is only good at your establishment? Do you accept script from another business that may not be good? This was a real problem back in the early 1860's. People and businesses did not have adequate supply of coins to keep the economy running smoothly so they reverted to creating their own form of private currency. In 1862, the federal government stepped in by issuing postage currency and later fractional currency that was widely accepted by the populace.

First issue

The first issue notes, better know as Postage Currency, was authorized in the summer of 1862 and signed into law by the President on July 17, 1862. It was called Postage Currency since these notes resembled stamps. They were issued in 5, 10, 25 and 50 cent denominations. All four denominations came in the following order: straight edge with no monogram, perforated with no monogram, perforated with the ABNCO monogram (American Bank Note Company), and straight edge with monogram. A problem occurred with the perforated sheets. The notes came apart and were sometimes damaged during shipping. Because of this, the straight edge notes became the favorite and the production of the perforated notes was short lived. This accounts for the rarity of the perforated notes.

If anyone has questions about these very curious notes, please ask. Also, it you have any examples, please post them so all can enjoy. I will start with an example.

The FR 1229 is the scarcest of the 5 cent 1st issue Postage Currency notes.





***Title typo fixed - Mod***

Well, very interesting, thanks! The want list keeps growing and growing, I need to be content just reading about some of these things... but I've just got to have one of those?

Truly interesting. I hope this is a thread with lots of additional posts

I have three imperfs that I will scan later today. Not in that shape though, somewhat used. It's the first nice warm sunny day here in Ontario since mid October. Back outside...

Going Postal "Truly interesting. I hope this is a thread with lots of additional posts"

Yes I can do that! One of your moderators doesn't care if I stay or go...I guess I got onto the wrong foot with him. I decided to stay and share my vast wealth of knowledge of these precious 'stamps'/currency. I wasn't allowed to share my educational web page that I posted in the introduction section of this forum but I can use excerpts from it. I hope others will enjoy this thread.

Here is the other perforated example of the 5 cent 'stamp' that has the ABC on the reverse. I won't post the inperfs since Casey Magoo is going to post his examples. Thank you Casey for doing that.

Both of my notes were graded Gem 66

These are not in great condition and one is the later issue of 'Fractional Currency'. I picked up all three for maybe $15 years ago. Please note, I am NOT the dope that put a hinge on Jefferson's face. These are right in Scotts, but far down past 'Encased Postage Stamps'. These are just a little smaller than a credit card, so much smaller than the paper money we are used to.

Thanks for posting.

You posted the FR 1230. Here is the last of the 5 Cents and this one is without monogram, FR 1231. CHCU 64

Is it safe to soak these? I have pesky hinge remnants on two of the three.

I have never tried to remove a stamp hinge. I know they make a fluid to remove hinges but I never tried it. If you try, I would only experiment on a poorer quality note/stamp before doing it on a high quality stamp. There is no gum or adhesive on fractional notes.

I have a couple of pieces of the later fractional currency, but their condition is too horrible to even bother posting them.

erilaz...Please post your 'horrible' notes. There is so much history with them. Counterfeit fractional currency were 'weathered' so that they could be passed off as genuine. I have an extensive collection cft fractional notes and I am planning on getting into this after I deal with the first issue Postage Currency.

By the way, the genuine notes are still legal tender!

Now...1st issue 10 cent Postage Currency.

I love the perforated varieties better so I will start with them.

FR 1240 with monogram ABC





FR 1241 no monogram

I have a few questions about Postage Currency.
1) Some of the imperforate notes are more valuable than the perforate - for example the 50¢ note without the ABCo imprint is $450 with perforations and $750 imperforate (Scott catalogue value). Is there a way to tell whether an imperforate note is actually a trimmed perforated note? Is there is minimum size?
2) The paper money catalogue (Friedberg) values seem to be substantially higher than the Scott Catalogue (postage stamp) values. Are the Scott Catalog values too low? I note that a lot in the Schuyler Rumsey auction this past weekend (lot 2168) with all 16 varieties sold for $5,250 hammer + 18% against a Scott Catalogue value of $4,410.
3) You noted that your notes were both graded Gem 66 - I assume by a paper money grading service. I've seen notes on eBay with high currency grades, but with what I, as a stamp collector, consider to be problems such as clipped perforations or perforations cutting into the design. How does grading work for postal currency?

SPQR

To answer your three questions, I don't trust Scott's catalog values, nor green sheet, Friedberg, etc when it comes to pricing. Those are just general pricing and some are old and not up to date. I have found that the assigned grade (although I don't always agree) does affect the price. The best place to see values of 1st issue Postage Currency is to check auction houses for the archived sales of what you are interested in. A good source is Heritage's web site. I can't give you their internet address as per admin :(
A lot of old fractional collections have come to auction over the last 6 months (including mine) and the prices were sky high.

The perforations on 1st issue notes are very standard but there was one well known and old collector who perforated his 1st issue notes that were imperforate but they are very collectable too. It all depended on how many perforations were on each side, just like stamps.The imperforate notes were hand cut from the sheets so margins do vary but will fall in a general range of size. Usually the grading company can tell when a note has been trimmed as that has happened with wide margin specimens. Some people trimmed notes, especially wide margin specimens to hide corner folds and other defects.

If you are not sure about a note, show me a scan and I can give you an opinion.