When the Civil War erupted in the spring of 1861, the federal government faced a financial crisis unlike anything it had encountered before. Gold and silver were being hoarded, state bank notes were flooding the economy in various states of reliability, and the U.S. Treasury was essentially broke. Into this chaos stepped Salmon Portland Chase, Abraham Lincoln’s newly appointed Secretary of the Treasury, a man of towering ambition, genuine fiscal brilliance, and an ego that would soon become legendary on Capitol Hill. What Chase did next, authorizing his own portrait to appear on the nation’s first true federal paper currency, set off a controversy that echoed through the halls of Congress for years and left collectors today with one of the most fascinating artifacts in American monetary history.
The Birth of Federal Paper Currency: Act of July 17, 1861
Congress passed the Act of July 17, 1861, authorizing the Treasury Department to issue up to $50,000,000 in “demand notes,” so called because they were redeemable on demand in coin at certain designated sub-treasuries. This legislation was a direct emergency measure, pushed through a panicked Congress just three days after the Union defeat at First Bull Run. Chase had already been lobbying hard for the authority to issue paper money, and he moved with remarkable speed once the bill was signed. American Bank Note Company and National Bank Note Company, working under contract, began producing the notes almost immediately.
The initial Act specifically authorized denominations of $5, $10, and $20. A subsequent act passed on August 5, 1861, broadened the scope to include $1 and $2 notes, bringing the total authorized issue to $60,000,000. It was on this $1 note, the denomination most likely to circulate among ordinary working Americans, that Chase chose to place his own portrait on the left-hand side of the face, with an allegorical vignette of a woman representing the nation on the right.
The Design Decision: Chase’s Portrait and Its Justification
Chase later defended his decision by claiming that Treasury officials routinely appeared on departmental documents and that placing a recognizable official’s portrait served as a kind of anti-counterfeiting measure, since the public could theoretically recognize the face. This was a thin argument at best. Living persons had not appeared on U.S. federal currency before, and Chase knew it. The more candid explanation lies in understanding Salmon Chase the politician. He had already mounted one serious presidential campaign before accepting the Treasury post, and he never abandoned his presidential ambitions even while serving Lincoln. Having his face circulate in the pockets and purses of millions of Americans was not a disadvantage.
When examining an 1861 $1 Demand Note, use a loupe to inspect the “payable at” designation on the face. Notes payable at New York, Boston, Philadelphia, Cincinnati, and St. Louis were all issued, and the specific payable city dramatically affects value. New York payable notes are more commonly encountered; Cincinnati and St. Louis payable notes are considerably scarcer and command significant premiums.
The engraved portrait of Chase on the $1 Demand Note was executed by skilled craftsmen at American Bank Note Company. It shows Chase in a three-quarter view, his expression composed and authoritative. The note itself is printed in green and black, measuring approximately 7.4 by 3.1 inches, larger than modern currency. The Treasury seal was a large, ornate red or red-orange impression on earlier specimens. The reverse features an elaborate green geometric lathe work with the denomination spelled out, giving rise to the popular nickname “greenbacks” for this entire generation of Civil War-era federal notes.
The Congressional Reaction: Outrage and Legislation
Word of Chase’s self-portraiture spread quickly, and the reaction in Congress ranged from amusement to genuine indignation. Representative Thaddeus Stevens of Pennsylvania, Chairman of the House Ways and Means Committee and no friend of executive vanity, was particularly vocal. Stevens reportedly quipped that Chase had “transformed the national treasury into his personal campaign bureau.” While this quote appears in several secondary sources, the documented congressional record shows that Stevens and others raised formal objections during subsequent currency debates in 1862 and 1863.
The controversy contributed directly to language that eventually became codified into law. The Act of April 7, 1866, included a provision specifically prohibiting the portrait of any living person from appearing on federal bonds, securities, notes, fractional currency, or coins. This law, 31 U.S.C. Section 5114(b) in its modern codification, remains in effect today. Every president whose face appears on modern U.S. currency, Lincoln on the penny and five-dollar bill, Washington on the quarter and one-dollar bill, was deceased at the time of the design’s adoption.
The 1861 Demand Notes are not signed in the traditional Treasury Secretary and Register sense. Instead, they bear the signatures of Treasury clerks who signed “for the Register” and “for the Treasurer.” There are two signature varieties for the $1: notes signed by hand with actual handwritten signatures, and later notes with printed signatures. Handwritten signature examples are considerably scarcer and typically trade at a 40 to 60 percent premium over printed-signature counterparts in equivalent grades.
Describing the Note: What Collectors Actually Hold
The $1 Demand Note of 1861 catalogs as Friedberg numbers Fr. 1 (handwritten signatures, payable at various cities) and Fr. 2 (printed signatures). Some specialized catalogs further subdivide these by payable city, creating essentially ten distinct major varieties across the two signature types. The Friedberg Paper Money of the United States catalog, now in its 23rd edition, lists separate valuations for each payable city. The Standard Catalog of United States Paper Money by Krause provides additional cross-references.
Physically, the notes feel different from modern currency. They were printed on a heavier, more absorbent paper than later Legal Tender Notes, and the ink sits slightly proud of the surface in high-grade examples, a tactile quality experienced collectors describe as “crisp relief.” The green ink on the reverse was an innovation specifically chosen because it was difficult to photograph with the photographic reproduction technology of the 1860s, making camera-based counterfeiting harder. This green reverse is the direct ancestor of every green-backed U.S. note issued since.
Total print runs for all Demand Notes across all denominations were roughly 7.26 million notes, but the $1 and $2 Demand Notes were authorized later, produced in smaller quantities, and redeemed aggressively by the government after the Legal Tender Act of February 25, 1862 superseded them. Survival rates are correspondingly low. The population data from major third-party grading services, specifically PCGS Currency and PMG, shows that fewer than 800 examples of the $1 Demand Note in all varieties and all grades have been certified as of recent census counts. Uncirculated examples are genuinely rare: PMG census data shows fewer than 25 examples graded 63 or above across all $1 varieties.
Chase’s Later Appearances on Currency: A Postscript
The story does not quite end with the 1861 controversy. Salmon Chase died on May 7, 1873, having served as Chief Justice of the Supreme Court after his Treasury years. With the living-portrait prohibition safely inapplicable to a deceased subject, the government honored Chase by placing his portrait on the $10,000 Legal Tender Note of the Series of 1878 and later on high-denomination Federal Reserve Notes of the twentieth century, including the famous $10,000 Federal Reserve Note of 1928 and 1934. These notes, while extraordinary rarities in their own right, are a fitting coda: Chase ultimately got the extended monetary legacy he had always wanted, though he had to wait until after his death to receive it legally.
If you are considering purchasing an 1861 Demand Note at auction or from a dealer, insist on a PMG or PCGS Currency-certified example. The combination of age, circulation, and historical handling means that cleaned, pressed, and repaired specimens are unfortunately common in the marketplace. Both services specifically note “apparent” grades when restoration is detected, which protects buyers. Even a PMG Fine 15 example with original paper surfaces is preferable to a PMG Very Fine 25 Apparent with processing.
| Fr. Number | Payable City / Signature Type | Est. Known | Rarity |
|---|---|---|---|
| Fr. 1 | New York (Handwritten Sigs) | 120-150 | Scarce |
| Fr. 1 | Boston (Handwritten Sigs) | 50-80 | Rare |
| Fr. 1 | Philadelphia (Handwritten Sigs) | 60-90 | Rare |
| Fr. 1 | Cincinnati (Handwritten Sigs) | 20-35 | Key Date |
| Fr. 1 | St. Louis (Handwritten Sigs) | 15-25 | Key Date |
| Fr. 2 | New York (Printed Sigs) | 200-280 | Scarce |
| Fr. 2 | Boston (Printed Sigs) | 80-110 | Rare |
| Fr. 2 | Philadelphia (Printed Sigs) | 70-100 | Rare |
| Fr. 2 | Cincinnati (Printed Sigs) | 30-45 | Key Date |
| Fr. 2 | St. Louis (Printed Sigs) | 20-30 | Key Date |
Building a Collection Around the 1861 Notes
For collectors at all levels, the Demand Notes offer several entry points. A budget-conscious collector might target a circulated example of Fr. 2 with a New York or Boston payable designation in Good-10 to Very Good-20 condition. Such notes regularly appear in major auction sales hosted by Heritage Auctions, Stack’s Bowers, and Lyn Knight, and can be acquired in the $1,200 to $2,200 range depending on the sale and competition. For the advanced collector, assembling a complete set of all ten payable-city varieties in both signature types is a multi-year, potentially multi-decade project that fewer than a handful of collectors have ever completed. The Smithsonian Institution’s National Numismatic Collection holds examples, as does the Federal Reserve Bank of San Francisco’s museum.
Intermediate collectors often find that the $5 Demand Notes, which feature Alexander Hamilton’s portrait (a safe, non-controversial choice), offer similar historical gravitas with a slightly larger surviving population. The $10 Demand Note carries Lincoln’s portrait, making it a popular crossover piece for presidential memorabilia collectors. But among all the Demand Notes, it is the $1 with Salmon Chase’s unapologetically self-promotional visage that carries the most compelling narrative, an artifact of ambition, crisis, and the strange improvised genius of a nation financing a war for its own survival.
Conclusion: A Legacy Printed in Green Ink
Salmon Chase’s decision to put his own face on the 1861 $1 Demand Note was, by any measure, a self-serving act. It was also, perhaps unintentionally, a perfect distillation of the man himself: brilliant, bold, politically calculating, and utterly unapologetic. The congressional controversy that followed gave the United States one of its most sensible and enduring laws governing currency design. And the notes themselves, these heavy, elegantly engraved pieces of Civil War history with Chase’s engraved eyes staring out from the left panel, survive today as some of the rarest and most historically loaded artifacts a paper money collector can own. Every time one crosses an auction block, it carries with it 160-plus years of American financial history, the ghost of a political controversy, and the face of a man who never stopped running for president, even when printing money.