Few names in American numismatic history carry as much weight as Salmon Portland Chase. Appointed Secretary of the Treasury by Abraham Lincoln in March 1861, Chase inherited a federal government that was nearly bankrupt, a monetary system fragmented across thousands of competing state-chartered banks, and a war that would ultimately cost the Union more than $3.4 billion. What he built in response, a nationalized banking framework anchored by a uniform paper currency, remade American finance from the ground up. For collectors, the notes that survive from this turbulent period are not just beautiful artifacts. They are physical evidence of one of the most consequential financial transformations in world history.
A Treasury in Crisis: The Financial Landscape of 1861
When Chase took office, the United States had no central bank. The Second Bank of the United States had been killed by Andrew Jackson in 1836, and in the quarter-century since, banking had devolved into a patchwork of more than 1,600 state-chartered institutions, each issuing its own paper currency. By some estimates, over 7,000 distinct varieties of state bank notes circulated in 1861, many of them discounted heavily from face value, counterfeited routinely, or simply worthless when the issuing bank collapsed. A farmer in Ohio might receive a note from a Georgia bank that local merchants refused at any price.
The secession of Southern states immediately drained the Treasury. Tax revenues collapsed, the government’s credit rating fell, and the existing system of tariff-based finance was wholly inadequate to fund a modern industrial war. Chase, a former governor of Ohio and an ideologically committed economic nationalist, saw the crisis as an opportunity to implement reforms that hard-money conservatives had blocked for decades. His solution was bold, politically dangerous, and ultimately successful: replace the chaos of state bank currency with a single, federally supervised, uniform national currency.
The Demand Notes of 1861: The First Federal Paper Money Since 1815
Chase’s first emergency measure was the issuance of Demand Notes, authorized by Congress on July 17, 1861. These notes, issued in denominations of $5, $10, and $20, were the first federal paper money issued since Treasury Notes of the early nineteenth century. They are cataloged in the Friedberg reference as Fr. 1 through Fr. 11 for the three denominations, with distinct varieties based on “for” versus printed signatures.
The $5 Demand Note (Fr. 1-3) featured a vignette of the Capitol building on the left and Alexander Hamilton’s portrait at center. The $10 (Fr. 4-6) showed an eagle and Lincoln’s portrait, while the $20 (Fr. 7-11) displayed a Liberty vignette. These notes were payable “on demand” in coin at certain federal sub-treasuries, which made them legally distinct from later Legal Tender notes and gave them genuine specie backing, at least in theory. Total issuance across all denominations was approximately $60 million.
Demand Notes are among the most sought-after Civil War-era issues. When examining examples, look carefully at the payable clause: notes payable at New York, Philadelphia, Boston, Cincinnati, or St. Louis command different premiums. The Boston $5 (Fr. 2) and Cincinnati $10 (Fr. 5) are notably scarcer than their New York counterparts. Even in VG-F condition, certified examples from PCGS or PMG routinely sell for $1,500 to $4,000, with Fine or better specimens reaching five figures.
Legal Tender Notes: The “Greenbacks” Take Shape
Demand Notes’ convertibility to coin became impossible to maintain as gold hoarding accelerated in late 1861. On December 30, 1861, banks suspended specie payments entirely. Chase reluctantly endorsed a far more radical solution: fiat paper money backed by nothing but the full faith and credit of the United States government. The Legal Tender Act of February 25, 1862 authorized $150 million in United States Notes, soon expanded to $450 million by subsequent legislation.
These notes, quickly nicknamed “greenbacks” for the distinctive green ink on their reverses, were declared legal tender for all debts public and private (with the narrow exception of import duties and interest on the public debt, which still had to be paid in coin). This was constitutionally contentious: the Supreme Court would not definitively uphold the Legal Tender Acts until Knox v. Lee in 1871, seven years after Chase himself, now Chief Justice, had reversed his own earlier position and voted to strike them down.
The Series 1862 and Series 1863 Legal Tender issues covered denominations from $1 through $1,000. Chase’s own portrait appeared on the $1 note (Fr. 16-17c, Series 1862), a fact that generated considerable mockery in the press since it was extraordinarily unusual for a living official to appear on American currency. Chase deflected criticism by noting that he had not approved the design personally. Whether that was entirely true remains debated by historians.
The $1 Legal Tender of 1862 featuring Chase’s portrait (Fr. 16) is an accessible entry point into Civil War currency. In Good-4 condition, certified examples sell for $150 to $250. The key variety to watch is Fr. 17a, which carries the American Bank Note Company imprint alone rather than the joint ABNCo./National Bank Note Company imprint of Fr. 16. The Fr. 17c with a small red serial number and American Bank Note imprint is the scarcest of the group in higher grades.
The National Currency Act of 1863 and the Architecture of National Banking
Legal Tender notes solved the immediate cash-flow crisis but did not address the deeper structural problem: the chaotic state bank note system. Chase’s comprehensive solution was the National Currency Act, signed into law on February 25, 1863, exactly one year after the Legal Tender Act. The revised and strengthened version, the National Bank Act of June 3, 1864, created the framework that would govern American banking for the next half-century.
The system worked as follows: any group of investors could charter a National Bank by depositing United States government bonds with the newly created Office of the Comptroller of the Currency (OCC), established within the Treasury. The bank could then receive National Bank Notes printed by the Bureau of Engraving and Printing (initially contracted to private bank note companies) up to 90 percent of the value of those bonds. Notes were uniform in design across the nation, with the issuing bank’s name, charter number, and location printed on each note, but the vignettes and overall appearance were standardized by the federal government.
This was brilliant wartime finance on two levels. It gave small investors a patriotic, interest-bearing way to participate in funding the war, and it created a captive market for Treasury bonds. Chase himself called it “the keystone of the financial arch” in his 1863 annual report to Congress.
First Charter National Bank Notes: What Collectors Need to Know
The First Charter Period ran from 1863 to 1882, encompassing the Original Series and the Series of 1875. Notes issued under these charters are among the most visually spectacular of all American currency, featuring large-format designs (approximately 7.375 by 3.125 inches) with elaborate historical and allegorical vignettes engraved by the American Bank Note Company and the National Bank Note Company.
Denominations ran from $1 through $1,000, though the $1 and $2 denominations were discontinued after 1875. Each note carries a charter number, a city and state designation, and two sets of signatures: those of the bank’s president and cashier (which vary enormously across the more than 2,000 national banks that eventually issued First Charter notes) and those of the Register of the Treasury and Treasurer of the United States at the federal level.
The federal signature pairs most commonly encountered on Original Series notes are Colby-Spinner (Register-Treasurer, 1864-1867) and Jeffries-Spinner (1867-1869), followed by Allison-Spinner on Series of 1875 notes. Each combination affects catalog value, with Chittenden-Spinner being the earliest and often most valuable pairing on Original Series examples.
When collecting First Charter National Bank Notes, the issuing bank’s location matters enormously. “Home state” collecting, buying notes from banks in your own state or hometown, remains one of the most popular strategies in National Bank Note collecting. Notes from small-town banks in western territories (Colorado, Nevada, Dakota Territory) often had tiny print runs of just a few hundred sheets and can carry premiums of 300 to 500 percent over equivalent notes from major eastern cities. Always cross-reference the Hickman-Oakes reference “National Bank Notes” for precise rarity data by charter number.
Taxing State Banks Out of Existence: The 10 Percent Tax of 1865
One serious problem remained after the National Currency Act passed: state banks continued issuing their own notes, which competed directly with National Bank Notes. Chase and his Congressional allies solved this with characteristic bluntness. The Revenue Act of March 3, 1865, imposed a 10 percent federal tax on all state bank note circulation, effective July 1, 1866. This was a prohibitive rate. Within two years, state bank note circulation had dropped from roughly $200 million to near zero. The national currency system had effectively won.
For collectors, this makes surviving state bank notes from 1865 and 1866 particularly interesting transitional pieces. Notes from banks that converted to national charters sometimes survive with handwritten or stamped notations reflecting their changing status. These transitional pieces are not well-cataloged and represent genuine opportunities for numismatic research.
Chase’s Legacy on the Notes Themselves: Design and Symbolism
Chase was deeply involved in the aesthetic and symbolic content of the new currency, not merely its mechanics. He personally advocated for the motto “In God We Trust” to appear on coins beginning in 1864, driven by pressure from religious groups who felt the war was a divine judgment. While that motto would not appear on paper currency until the 1950s, Chase’s spiritual nationalism permeated the design choices of Civil War-era notes. Allegorical figures of Liberty, Justice, and the Union appear repeatedly on both Legal Tender notes and National Bank Notes, as do portraits of Washington, Franklin, and Lincoln alongside contemporary figures including Chase himself.
The Series 1862 $1 Legal Tender (Fr. 16), with its portrait of Chase in the lower right, represents a uniquely personal artifact. Here is the man who invented the system, literally printed on the money he created. In Fine-12 condition, this note catalogs at approximately $350 in the current Friedberg guide (46th edition). In Choice Uncirculated-63, PCGS and PMG-certified examples have realized $2,000 to $3,500 at major auctions including Heritage and Stack’s Bowers.
| Series / Issue | Denomination / Variety | Approx. Print Run | Rarity |
|---|---|---|---|
| 1861 Demand Note | $5, Payable at Boston (Fr. 2) | Est. 30,000 | Rare |
| 1861 Demand Note | $10, Payable at Cincinnati (Fr. 5) | Est. 15,000 | Key Date |
| 1861 Demand Note | $20, Payable at New York (Fr. 11) | Est. 50,000 | Scarce |
| 1862 Legal Tender | $1, Chase Portrait (Fr. 16) | Est. 450,000 | Common |
| 1862 Legal Tender | $1, Fr. 17a (ABNCo. imprint only) | Est. 60,000 | Scarce |
| 1862 Legal Tender | $500 (Fr. 183c) | Est. 5,000 | Key Date |
| First Charter Original Series | $1 National Bank Note (Fr. 380-386) | Varies by bank | Scarce |
| First Charter Original Series | $50 National, Chittenden-Spinner sig. | Low (most banks under 500 sheets) | Rare |
| First Charter Series 1875 | $2 National Bank Note (Fr. 387-393) | Varies; many under 300 sheets | Rare |
| 1863 Legal Tender | $1, Series 1863, Second Obligation (Fr. 18-18b) | Est. 120,000 | Scarce |
Building a Chase-Era Collection: Strategies for Every Budget
Assembling a thematic collection around Chase and the National Banking System is entirely achievable across a wide range of budgets. A focused collector might pursue three distinct tracks simultaneously.
The first track, the most accessible, centers on Legal Tender notes bearing Chase’s portrait. The Fr. 16 Series 1862 $1 note is affordable in circulated grades and makes an outstanding display piece. Pair it with a $5 Legal Tender from the same series (Fr. 61-63), which features Hamilton’s portrait and the “obligation” text printed in a deep brick red that collectors call the “red reverse” variety.
The second track is a single-state National Bank Note collection from the First Charter Period. Choose a state with surviving notes across multiple charter numbers and attempt to represent different towns, banks, and date ranges. States like Illinois, Ohio, Pennsylvania, and New York offer hundreds of collectible bank charters; smaller states like Nevada or Vermont offer far fewer, making completion more achievable but individual notes costlier.
The third track is the most ambitious: assembling a denomination set of Original Series Legal Tender notes (Fr. 16 through Fr. 183) from the $1 through $1,000. The high denominations, particularly the $500 (Fr. 183) and $1,000 (Fr. 186a-187), are extraordinarily rare in any grade and will require five-figure investments. But a partial set through the $100 denomination is genuinely attainable for a dedicated collector over five to ten years.
Authentication and Grading Considerations
Civil War-era currency presents real authentication challenges. Counterfeiting was rampant during the period itself, which is precisely why Chase pushed for tighter federal control of currency production. The Secret Service, which Chase helped establish in 1865 partly for this purpose, was originally tasked almost entirely with combating currency counterfeiting. Contemporary counterfeits of Demand Notes and early Legal Tender issues do circulate in the market and can be difficult to detect without expert examination.
For modern collectors, certification by PCGS Currency or PMG (Paper Money Guaranty) is strongly advisable for any note over $500 in value. Both services detect alterations, repairs, and cleaning, which are common on Civil War notes that spent decades in circulation. Pay particular attention to paper quality: genuine notes used distinctive fiber-embedded paper, and period counterfeits or later reproductions often fail this test under ultraviolet examination. Repaired corners and pressed folds can artificially elevate the apparent grade of a note by one to two full points, so buying raw (uncertified) examples of valuable Chase-era notes carries meaningful risk.
Conclusion: Why Chase Matters to Every Currency Collector
Salmon Chase left Treasury on June 30, 1864, appointed by Lincoln to the Supreme Court as Chief Justice before the year was out. But the system he built outlasted him by generations. National Bank Notes continued to be issued until 1935. The Bureau of Engraving and Printing, organized under Chase’s tenure, still produces every piece of American paper money today. The principle of a single, federally supervised national currency, which Chase fought to establish against enormous political opposition, has never seriously been challenged since.
Every time a collector holds a First Charter National Bank Note, examines the careful engraving on a Series 1862 Legal Tender, or studies the bold green reverse of an original greenback, they are holding a piece of that transformation. Chase’s portrait on the $1 Legal Tender was not vanity. It was a statement: this is what government-backed money looks like, and the man who staked his career on making it work wanted you to know exactly who to thank, or blame. That combination of high stakes, genuine historical drama, and enduring numismatic beauty is precisely what makes Civil War currency one of the most rewarding fields in American paper money collecting.
