Wars are costly and it is the Civil War that prompted the American government to begin issuing its own currency. Prior to this the 13 Colonies issued their own currency starting around 1690 but this was before the country was officially formed. The Continental Congress produced notes in 1775 which were used to fund the American Revolution, but in the aftermath of the war inflation made most of this currency useless, at least at the time. Any surviving notes today would be worth an incredible amount of money.

Private American Notes

After the American Revolution citizens lost interest in federal notes and it would be about 80 years before they would be issued again. Meanwhile, a number of private notes were made available, usually from banks. This would be done in situations where coins weren’t sufficient to meet their needs. Unlike today, American banks in the 19^th century were poorly regulated and as a consequence many of them failed. The currency produced by these banks is called “broken notes” by collectors.

During the Civil War coins made of silver and gold vanished rapidly from the market, the result of citizens beginning to hoard due to the economic and political uncertainty. This left only copper coins, but soon even these weren’t enough to facilitate trade. As a result the federal government was forced to use paper currency, the first of which is called Demand Notes. These notes came in three dominations, which are five, ten and twenty dollar bills, and were issued by 1861. By 1862 the legal tender notes were introduced, with denominations that ranged from three to fifty cents.

The Most Important Forms of American Currency

The two most important forms of American currency are small notes, which were produced from 1929 until the present day, and which are 6 3/16 X 2 5/8 in size. The other is large notes which were produced from 1861 to 1929, and are 7 3/8” X 3 1/8 in size. Within these two categories there are many types of notes which have the backing of the American government. Aside from the Demand Notes, which were produced during the American Civil War, there are the Legal Tender Notes, which were issued subsequently. Some of these notes are extraordinarily rare and feature a red seal.

The Silver Certificate is another type of currency which was authorized from 1878 to 1886. Silver dollars had been placed in the U.S. treasury and were used to back the certificates, which could be redeemed at the Treasurer Office in the District of Columbia. The designs found on these certificates are considered an American classic and are very popular with collectors, especially the $5 Indian Note, Tombstone $10 notes and the Lincoln $5 note. These certificates come with seals that are blue, brown or red. Treasury notes were produced briefly starting around 1890 and then there are the National bank notes which begin production around 1863.