What Is Fractional Currency?

History and Values

examples of United States fractional currency banknotes

National Numismatic Collection at the Smithsonian Institution

 

Fractional currency is United States paper money that has a face value of less than one dollar. Also known as "shinplasters" because of the small face value and they eventually became almost worthless in United States commerce by the late 1800s. Although these banknotes are highly unusual, they are also highly collectible even for the beginning banknote collector.

History of Fractional Currency

In the fall of 1861, the Civil War was raging in the United States. At first, it looked as if the Union troops would win easily. However, the Confederate troops were making a comeback in the outcome of the war was uncertain. People began to panic not knowing which side would be the victor. They were afraid that the warring governments would start issuing paper currency to pay the war debt which would soon become worthless. This concern turned out to be true.

Since circulating coinage contained an amount of metal almost equal to the face value of the coin, people very quickly began to hoard gold and silver coins. The economy slowed, and virtually every coin, including copper pennies, eventually disappeared from circulation. This coin shortage made it very hard for merchants and people in business to conduct transactions because they could not make change for the sale of their goods.

Enterprising merchants began to issue private tokens made from brass and copper that were approximately the same size as the United States one-cent coin. They were known as "Civil War Tokens" and usually carried an advertisement for the issuing merchant. Other merchants began to use postage stamps to make change.

General Francis Elias Spinner, Treasurer of the United States, pasted a few postage stamps onto a piece of paper and came up with the idea of printing paper currency in values less than one dollar to be used instead of coins. President Lincoln signed the Postage Currency Act on July 17, 1862. These "paper coins" were issued in 5-, 10-, 25-, and 50-cent denominations. The first series of issues are known as "Postage Currency." Subsequent issues were known as "Fractional Currency."

Fractional Currency Issues

United States fractional currency was first issued in 1862. There are five different design series of issues that lasted until the spring of 1876. In an effort to thwart counterfeiting, the designs became more complex and the Treasury Department used higher-grade paper.

First Issue: Postage Currency

Issue Dates: August 21, 1862 to May 27, 1863

Denominations: 5¢, 10¢, 25¢, and 50¢

United States fractional currency first issue five cent note
First Issue Postage Currency, Five Cent Note. National Numismatic Collection at the Smithsonian Institution

Second Issue: Fractional Currency

Issue Dates: October 20, 1863 to February 23, 1867

Denominations: 5¢, 10¢, 25¢, and 50¢

United States fractional currency second issue ten cent note
Second Issue Fractional Currency, Ten Cent Note.   National Numismatic Collection at the Smithsonian Institution

Third Issue: Fractional Currency

Issue Dates: December 5, 1864 to August 16, 1869

Denominations: 3¢, 5¢, 10¢, 25¢, and 50¢

United States Fractional Currency Third Issue Three Cent Note
Third Issue Fractional Currency, Three Cent Note. National Numismatic Collection at the Smithsonian Institution

Fourth Issue: Fractional Currency

Issue Dates: July 14, 1869 to February 16, 1875

Denominations: 10¢, 15¢, 25¢, and 50¢

United States Fractional Currency Fourth Issue Twenty-Five Cent Note
Fourth Issue Fractional Currency, Twenty-Five Cent Note.  National Numismatic Collection at the Smithsonian Institution

Fifth Issue: Fractional Currency

Issue Dates: February 26, 1874 to February 15, 1876

Denominations: 10¢, 25¢, and 50¢

United States Fractional Currency Fifth Issue Twenty-Five Cent Note
Fifth Issue Fractional Currency, Twenty-Five Cent Note. National Numismatic Collection at the Smithsonian Institution

Fractional Currency Values

Many people think that fractional currency is extremely expensive because they rarely ever see it. However, because it is not a very popular series of paper money to collect, demand is not very strong and circulated specimens are obtainable at an affordable price. Extremely poor and tattered pieces can be acquired for just a few dollars.

U.S. Fractional Currency Values
Series Average Circulated Average Uncirculated
First Issue $35-$100 $300-$800
Second Issue $25-$75 $125-$700
Third Issue $30-$90 $150-$600
Fourth Issue $20-$60 $200-$400
Fifth Issue $20-$25 $80-$200

Collecting Fractional Currency

Most beginning banknote collectors will strive to assemble a type set of each denomination from each of the five issues. This banknote collection would contain a total of twenty-three notes and can easily be assembled on a limited budget and average circulated condition. Intermediate banknote collectors will strive to assemble a type set of average uncirculated notes, which will require a slightly larger investment. Advanced and specialized collectors will focus on a particular issue and collect all the different varieties that exist within that issue.