James Ford Rhodes (1848–1927). History of the Civil War, 1861–1865. 1917.

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  became an article of speculation and was bought at a premium by brokers; much of it was sent to Canada and by July 1, 1862, it seems to have practically disappeared from circulation. Its sudden disappearance brought forth diverse remedies. Individuals, prompter in action than municipalities or the general government, flooded the country with shinplasters—small notes in denominations of from 5 to 50 cents, promises to pay of hotels, restaurants, business houses and country dealers. For a short while copper and nickel cents commanded a premium and various metal tokens were issued by tradesmen to take their place as well as that of the small silver coins. Secretary Chase, in a letter of July 14, 1862, to the Chairman of the Committee of Ways and Means of the House of Representatives, said that “the most serious inconveniences and evils are apprehended” unless the issues of shinplasters and metal tokens “can be checked and the small coins of the government kept in circulation or a substitute provided.” He proposed either to debase the silver coinage of the fractional parts of a dollar or to legalize in effect the use of postage and other stamps as currency. Congress, by Act of July 17, 1862, prohibited the issue of shinplasters by private corporations or individuals, provided for the issuance to the public of postage and other stamps and declared that, under certain limitations, these were receivable in payment of dues to the United States and were redeemable in greenbacks. People naturally preferred the stamps to the promises to pay of private individuals and hastened to the post offices to be supplied therewith, but what they here gained in soundness they lost in convenience. The gummy back, flimsy texture, small surface and light weight of the stamps rendered them the most imperfect circulating medium ever known in the United States. For one thing, the making of