5/17/2023 0 Comments Encased postage stamps![]() On August 12, 1862, Gault obtained a patent for a “postage stamp case”, or as he named the item in a newspaper advertisement, the “New Metallic Currency.” John Gault, a New York entrepreneur, decided he had the best solution. The local post offices would not exchange damaged stamps for new ones, so a remedy was needed. But all of this hand-to-hand usage quickly resulted in damaged stamps with denominations sometimes unrecognizable. Vendors gladly accepted the stamps as payment. People began to carry stamps in their purses and pockets and used them repeatedly for daily purchases. Through various newspaper announcements and other mediums, the government attempted to educate the populace as to their misunderstanding, but to no avail. As probably the first case of an “urban myth”, the public grossly misinterpreted this to mean that postage stamps could be universally used in lieu of coins for any type of debt or purchase. Clever remedies for sure, but none that were widely used or accepted.Īll of this radically changed on July 17, 1862, when Congress decided to address the coinage shortage and passed a law that allowed postage stamps to satisfy debts of less than $5, but only debts to the government. In some cities, businesses gave customers I.O.Us, private companies created “Civil War tokens” and paper money was cut into several pieces to represent a fraction of a dollar. ![]() And vendors had to make change when an item’s price was less than a nickel, a dime or a quarter. By mid-1862, it was estimated that $25 million in coinage had disappeared from circulation in the United States.īut people still needed to purchase a 3¢ loaf of bread, a 1¢ newspaper, a 5¢ quart of milk and countless other goods that required coins. These coins would then be sold to foreign markets in exchange for gold, a much more valuable commodity. This hoarding situation was worsened by clever financial traders who would buy U.S. People had very little faith in paper money in 1862.
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