Federal Reserve Bank of Atlanta

The Story of Money: 13--The Civil War Era

Section 13: The Civil War era

Both Union and Confederate governments issued paper money to fund their war efforts, much like the Continental Congress had done in 1775. As before, issuing too much paper money caused inflation.
Union and Confederate governments both issued notes
$1 Confederate note, 1864	$10 Confederate note, 1861	$500 Confederate note, 1864
United States note, 1862: A “legal tender note”	$5 demand note, 1861: A “greenback,” front	$5 demand note, 1861: A “greenback,” back

The Union government established national banks
$1 note of First National Bank of Chelsea, Vermont	$20 note of Lowry National Bank of Atlanta	$20 note of Andalusia National Bank, Andalusia, Alabama

The use of deposit money got an unintended boost
Receipt	Check

Earning interest made these notes more acceptable		Stamps as small change
Compound-interest-bearing $10 Treasury note, 1864	Interest-bearing $10 Treasury note, 1864	Encased postage stamp

Paper money filled the gap
$$0.03 fractional note$ 3¢ fractional note	$$0.15 fractional note$ 15¢ fractional note	$$0.05 fractional note$ 5¢ fractional note
$$0.25 fractional note$ 25¢ fractional note	50¢ postage note	10¢ postage note