CIVIL WAR COINAGE

COINS of the CIVIL WAR

Yet another one of the Allentown/Bethlehem Coin Club’s young numismatists expressed an interest in the coinage of the Civil War.  So let’s start there:

The American Civil War took place from April 12, 1861, to April 9, 1865.

It began when Confederate forces fired on Fort Sumter in South Carolina, and it effectively ended when General Robert E. Lee surrendered to General Ulysses S. Grant at Appomattox Court House in Virginia.

The Civil War had a huge impact on U.S. coinage and everyday money use. Here are the main effects:

1. Coin Shortages

• As the war began, people hoarded gold and silver coins because they didn’t trust paper money and feared inflation.
• By late 1861, nearly all gold and silver coins vanished from circulation in both the North and South.

2. Shift to Paper Money

• To finance the war, the Union issued “greenbacks” (legal-tender paper notes not backed by gold or silver).
• The Confederacy printed its own paper currency, which quickly depreciated due to overprinting and lack of backing.

3. Emergence of “Token Money”

• Since small change was scarce, private businesses and individuals issued substitutes:
  • Civil War Tokens – privately minted small coins (about the size of a cent) used for everyday transactions.
  • Postage Stamp Currency – people actually used stamps as money, later wrapped in small envelopes or encased in brass holders to make them more durable.

4. New Federal Coinage

• In 1864, the U.S. Mint introduced the bronze two-cent coin, the first U.S. coin to carry the motto “In God We Trust.”
• A new bronze one-cent coin (smaller and lighter than the old copper cent) was also introduced in 1864 to replace the bulky large cents.

5. Long-Term Impacts

• The war made Americans more accustomed to using paper money.
• It also pushed the government to assert tighter control over coinage and currency, paving the way for the National Banking System and a stronger federal role in money supply.

In short: the Civil War pulled gold and silver out of circulation, led to widespread use of paper money and tokens, and permanently changed the U.S. monetary system.