Demand Note

This article is about the Demand Notes issued by the U.S. government. For "demand note" referring to any promissory note that is payable on demand, see promissory note.

A Demand Note is a type of United States paper money that was issued between August 1861 and April 1862 during the American Civil War in denominations of 5, 10, and 20 dollars. The original legislation referred to the currency as "treasury notes." The term "Demand Note" was applied retroactively because the notes were redeemable on demand for gold coin. While Demand Notes were not the first type of paper money issued by the United States federal government, they were the first in wide circulation.

Demand Notes were created to serve as a means of monetary exchange in place of gold and silver coins that were vanishing from circulation at the time due to hoarding of commodities. The U.S. government used the notes to pay its incurred expenses and also to pay the salaries of its workers and military personnel. Once the public learned the notes were redeemable in gold coin, the notes began to circulate as widely as gold and silver coins had.

Because of the distinctive green ink used on the reverse of all Demand Notes, the notes were nicknamed "greenbacks". However, other U.S. government issued notes of the time such as Interest Bearing Notes and the later Legal Tender Notes, which issued in larger quantities, were also known by this nickname. The obverse of the notes contained familiar elements such as the images of a Bald Eagle, Abraham Lincoln, and Alexander Hamilton; the portraits used on Demand Notes are different than the ones seen on U.S. currency today.

After Demand Notes were discontinued, they were replaced with Legal Tender Notes. Legal Tender Notes of the time, however, were not redeemable in coin like Demand Notes, and thus Demand Notes took precedence. As a result, many more Demand Notes were redeemed and not as many notes exist today.

Pre-issuance

After the outbreak of the Civil War in 1861, the Union needed funding for its war efforts and to pay its employees. Congress responded by passing the Act of July 17 1861 which allowed for $250,000,000 to be borrowed on the credit of the United States. Of this sum, $50,000,000 was to be issued in non-interest bearing Demand Notes in denominations less than fifty dollars and not less than ten dollars. The notes were to be redeemable through the Assistant Treasurers' offices at Philadelphia, Boston, and New York. They were to be hand signed by the first or second comptroller of currency or the register of the treasurer; they were also supposed to be counter-signed by any other treasury officials designated by the Secretary of the Treasury. These signature provisions would later be altered several times. This act also stipulated that prior to December 31 1862, an individual Demand Note could be re-issued into circulation after it was presented for redemption. This act, however, never specified what the notes could be redeemed for. United States Congress. Act of July, 17 1861 Chapter Ⅴ. Washington D.C.: 1861

Another reason for Demand Notes issuance was the disappearance of gold and silver coins from circulation; these government-issued coins were the only form of legal tender at the time. The panic of war drove people to hoard coins due to their precious metal content.Lange, David W. (2005). History of the United States Mint and Its Coinage, Atlanta, Georgia: Whitman Publishing. ISBN 079481972-9. The reserves of gold and silver of the United States began to become depleted. Issuing paper money ensured that supplies could more easily be maintained.Bowers, Q. David; David Sundman (2006). 100 GREATEST AMERICAN CURRENCY NOTES, Atlanta, Georgia: Whitman Publishing. ISBN 0-7948-2006-9. Also, gold and silver could be more readily available for international trade.

Just before they were to be released, the Act of August 5 1861 stipulated several changes to the issuance of Demand Notes. It allowed for Demand Notes to be issued in denominations of not less than $5 and be redeemable through the Assistant Treasurer's office at St. Louis or the bullion depository in Cincinnati. This act also stated that Treasurer of the U.S. and Register of the Treasury or any treasury official appointed by the Secretary of the Treasury should sign the notes. Under this act, Demand Notes did not need to carry the Seal of the U.S. Treasury. United States Congress. Act of August 5, 1861 Chapter ⅩⅬⅥ. Washington D.C.: 1861

Because the Bureau of Engraving and Printing did not exist at the time, the American Bank Note Company and National Bank Note Company were contracted to create Demand Notes. Both companies were prominent printers of banknotes for private and state-chartered banks throughout the country. Most likely, the American Bank Note Company engraved the printing plates for $5 and $10 notes while the National Bank Note Company engraved the printing plates for the $20 notes. All of the Demand Notes were printed by the American Bank Note Company.Friedberg, Aurthur L. and Ira S. (2005). The Official RED BOOK A Guide Book of United States Paper Money, Q. David Bowers, Atlanta, Georgia: Whitman Publishing. ISBN 079481786-6.

The idea of issuing paper money as a circulating medium in lieu of precious metal coins was not a new idea then. Only once, however, in 1815, had the U.S. Treasury issued non-interest bearing notes that were intended to circulate in the place of coinage. These are retrospectively referred to as "Small Treasury Notes". Some $3,392,994 were issued in denominations of $3, $5, $10, $20, and $50.Krause, Chester L.; Robert F. Lemke (1998). Standard Catalog of United States Paper Money, 17th edition, Iola, Wisconsin: Krause Publications. ISBN 0-87341-653-8. This was far less of an amount than the 50 million dollars authorized for Demand Notes, however. Not only that, but Small Treasury Notes circulated almost exclusively to the Eastern United States. Banknotes issued by private and state-chartered banks, however, were rampant throughout the country at the time (with the exception of the Western United States where paper money generally was not very common and/or publicly accepted). These types of banknotes were predominately only useful in a close proximity to the issuing bank. The value of a banknote was based upon its ability to be redeemed in coin; thus, a nearby bank location was essential. Demand Notes, on the other hand, would later be redeemable at 5 U.S. government locations throughout the country, thus making them nationally usable. This would enable Demand Notes to essentially become the first broadly-circulating non-interest bearing paper money issued by the United States federal government.

Post-issuance

Initially, various merchants, banks and especially the rail road industry accepted the notes at a discounted rate or did not accept them all. In order to ease public distrust in the newly issued notes, a circular was sent to the 5 payment locations and instructed the Assistant Treasurers to redeem the notes in gold coin if requested. This also created willingness of banks to redeem the notes for coin as well. This put Demand Notes on par with the value and purchasing power of gold coins; thus, the public was more willing to accept the notes. They could be redeemed for silver coinage as well.

Initially the notes were hand-signed by F.E. Spinner (Treasurer), and L.E. Chittenden (Register of the Treasury). However, this proved unfeasible, and Congress authorized the notes to be signed by procurators. Seventy women were hired at an annual salary of $1,200 to sign the notes. A distinction of "for the" was written after a signature to indicate that it was being used in place of Treasury officials. Apparently, some skilled women could even imitate the signature of F.E. Spinner. In late August "for the" was added to printing plates to simplify the hand-signing operation.

The American Bank Note Company stopped printing notes payable at St. Louis and Cincinnati several days after revising printing plates with "for the".Hessler, Gene (2004). UNITED STATES ESSAY, PROOF, and SPECIMEN NOTES, 2nd ed., Port Clinton, Ohio: BNR Press. ISBN 0-931960-62-2.

After December 28 1861 a worsening economic situation forced banks to stop redeeming Demand Notes for gold coin. The notes then began to appear at Assistant Treasurers' offices in great numbers for redemption.

The Act of February 12 1862 allowed for an additional $10,000,000 in Demand Notes to be issued.United States Congress. Act of February, 12 1862 Chapter ⅩⅩ. Washington D.C.: 1862 This act brought the final possible amount of Demand Notes that could be issued to a sum of $60,000,000. Not long after, on April 1 1862, the full $60,000,000 in Demand Notes had been issued.

Issuance of Legal Tender Notes soon followed Demand Notes. The obverse of 1862- and 1863-issue $5, $10, and $20 Legal Tender Notes were very similar in design to the respective Demand Notes; various minor changes were made along with the addition of the U.S Treasury Seal. Legal Tender Notes, unlike Demand Notes, were not redeemable in coin, despite a statement of "Will pay to the bearer on demand" or "Promises to pay the bearer" on the note. Demand Notes, still on par with gold, then traded at a premium with Legal Tender Notes and also had greater purchasing power over the newly issued depreciated notes.

Once Legal Tender Notes were in circulation, the U.S. Treasury Department started to withdraw as many Demand Notes as possible from circulation. The advantage to this practice would be not having to redeem the notes for coin. A year after their issuance, Demand Notes became a rarity in circulation.

Production figures

**Number of Demand Notes printed** Hessler, Gene (1997). *Comprehensive Catalog of United States Currency*, 5th edition, Port Clinton, Ohio: BNR Press.
Location	Notes printed	Dollar amount
$5 denomination
New York	1,500,000	$7,500,000
Philadelphia	1,400,000	$7,000,000
Boston	1,340,000	$6,700,000
Cincinnati	44,000	$220,000
St. Louis	76,000	$380,000
Total:	4,360,000	$21,800,000
$10 denomination
New York	640,000	$6,400,000
Philadelphia	580,000	$5,800,000
Boston	660,000	$6,600,000
Cincinnati	75,000	$750,000
St. Louis	48,000	$480,000
Total:	2,003,000	$20,030,000
$20 denomination
New York	320,000	$6,400,000
Philadelphia	240,000	$4,800,000
Boston	300,000	$6,000,000
Cincinnati	25,000	$500,000
St. Louis	25,000	$500,000
Total:	910,000	$18,200,000
Grand Total:	7,237,000	$60,030,000†

Note:
†: 3,000 $10 notes were reissues of redeemed notes thus creating the $30,000 overage of the legislated $60,000,000

Design

Common features among denominations

The obverses of all denominations Demand Notes contained the following common features printed on them:

A statement that the United States would pay the bearer the denomination on demand (written uniquely per denomination)
A phrase stating the note was payable by the assistant treasurer (written uniquely per denomination)
Stated location of payment (redemption):
- New York
- Boston
- Philadelphia (abbreviated as Philad. on $10 and $20 notes)
- Cincinnati
- St. Louis
"ACT OF JULY 17, 1861", the act that first authorized emergency Civil War paper money
The phrase RECEIVABLE IN PAYMENT OF ALL PUBLIC DUES (meaning the notes were a form of monetary exchange for government payment)
"AMERICAN BANK NOTE CO., NEWYORK", the company that printed Demand Notes
"Washington" and the date "August 10th, 1861" printed in a cursive font (the date, however, was written uniquely per denomination)
"Patented 30 June 1857." referring to a patent held by the American Bank Note Company for "Canada" green ink used on the obverse of the note
The serial number printed only once in red ink
Face plate letter – A, B, C, or D (indicating which metal plate was used to print the note)
Lines above "Register of the Treasurer" and "Treasurer of the United States" where the officials' signatures would normally be
Lack of an United States Treasury Seal (with the exception of fractional currency, this is unlike any other U.S. federally-issued currency)

The reverses of all Demand Notes contained UNITED STATES OF AMERICA, a large numeral of the denomination, and an indication of the denomination (as a small numeral or Roman numeral) repeated many times in a small geometric shape; all of the reverses were printed in green ink.

Common varieties among denominations

Either signatures of L. E. Chittenden and F. E. Spinner or signatures of authorized treasury personnel
For the was used to indicate that a person was authorized to sign in place of treasury officials and is either hand written or engraved with the following varieties:
- Handwritten as either "for the", "For the", or "For The" above the line for the signature
- Engraved as either "For the" or "for the" next to "Register of the Treasurer" and "Treasurer of the United States"
SERIES followed by a letter and period or no series indication at all

$5 notes

Five dollar Demand Notes feature a small portrait of Alexander Hamilton at the lower right of the note. On the left is the "Statue of Freedom" that sits atop the U.S. Capitol Building in Washington D.C. However, at the time of issue, the "Statue of Freedom" was a work in progress and was not completed until 1862 and was not placed atop the Capitol dome until 1863. The base of the statue reads E PLURIBUS UNUM, but only "RIBUS UNUM" is visible on the note.

The border of the note features the word FIVE printed numerous times horizontally at the top, bottom, and right of the note and vertically on the left of the note. The issuing bank note company was printed in middle of the top border and the phrase RECEIVABLE IN PAYMENT OF ALL PUBLIC DUES. was printed in the middle of the bottom border.

ug. 10^th 1861". Also, "ON DEMAND" appears after "FIVE DOLLARS" so that the full statement reads, "THE United States PROMISE TO PAY TO THE BEARER FIVE DOLLARS ON DEMAND". Unlike $10 and $20 notes, five dollar Demand Notes have the phrase "Payable by the Assistant Treasurer AT'' ^*" printed, unbound and in full, in a cursive font. Also unlike the $10 and $20 Demand Notes, $5 notes redeemable at Philadelphia have the location written out in full.

The reverse of the $5 note contains a small numeral 5 inside of a small oval that is repeated numerous times; this design element surrounded the main design elements of the reverse of the note.

$10 notes

Ten dollar Demand Notes feature a portrait of Abraham Lincoln at left and an allegorical figure representing art to the right. In the top center of the note is a vignette of a Bald Eagle perched on olive branches with a ribbon stating E PLURIBUS UNUM. Next to the Bald Eagle is a heraldic stars and stripes shield. Both the portrait of Lincoln and Bald Eagle vignette were stock elements used on previous banknotes issued by the American Bank Note Company.

The border of the note contains the Roman numeral Ⅹ around almost the entire note. Like the $5 Demand Notes, the issuing bank note company was printed in middle of the top border and the phrase RECEIVABLE IN PAYMENT OF ALL PUBLIC DUES. was printed in the middle of the bottom border. The top corners of the note contained two small numeral 10's surrounded by an ornate design. The vertical border design, along with the numeral 10's in the corners were stock elements used on other notes made by the American Bank Note Company. In fact, this stock element along with the portrait of Lincoln were also used on a later $10 bill from the Rutland County Bank of Vermont.

The $10 Demand Note too, has uniquely formatted common features. The date at the top right of the note is formatted as "August 10^th 1861." in a cursive font. Unlike the $5 Demand Notes, "ON DEMAND" appears before "UNITED STATES" so that the statement reads, "ON DEMAND, THE UNITED STATES Promises to Pay to the Bearer TEN DOLLARS"; the middle portion of the statement was printed in a cursive font. The phrase stating the location of payment was abbreviated to PAYABLE BY THE ASST. TREASURER OF THE U.S. AT ^*.

The reverse of the $10 note contains many small Roman Numeral Ⅹ's, each inside of a small square; the main elements of the reverse of the note were superimposed over this.

$20 notes

Twenty Dollar Demand Notes, unlike the $5 and $10 notes, do not feature a portrait of a person. Instead, they feature a feminine allegorical figure representing Liberty in the center of the note. Liberty is standing next to a striped shield that features a Bald Eagle at the top of the shield. A large green numeral 2 and 0 are located respectively to the right and left of liberty.

The border of the note features the word TWENTY repeated numerous times horizontally on the top and bottom borders and vertically on the left and right borders. Also unlike the $5 and $10 notes, ACT OF JULY 17, 1861 is located in the middle of the top border. The very middle of the bottom border contains the issuing bank note company, while "RECIEVABLE IN PAYMENT" is to the left and "OF ALL PUBLIC DUES" is to the right of this.

The date on the note is formatted as "Lower case a.pngugust 10^th 1861" in a cursive font. The statement of payment is formatted the same and surrounded by the same engraved object as the $10 Demand Note and is located in the center of the note under the figure of Liberty. The demand statement is printed as "ON DEMAND THE UNITED STATES Promise To Pay Twenty Dollars To the Bearer".

The reverse of the $20 Demand Note contains a small numeral 20 inside of an oval that is surrounded by an eight-sided star; all of this is located around the shield-shaped object with the numeral 20 in it. The top and bottom borders feature geometrical design elements with UNITED STATES printed horizontally in every other geometric shape.

Collecting ability

Of the surviving Demand Notes, the vast majority are of the type with "For the" engraved on them and from the locations of New York, Boston, and Philadelphia. No notes are known with the actual signatures of F. E. Spinner and L. E. Chittenden. Because of their rarity, Demand Notes are mainly collected by acquiring a single example of the $5 and $10 denomination. Facsimile reproductions are also available.

The price and value of a Demand Note depend primarily on its rarity (which location and "for the" handwritten or engraved) and secondarily on its condition. The most common five dollar notes usually range in price and value from $1,000 to $40,000. Ten dollar notes of the most common varieties usually have a price and value range of $2,500 to $60,000. Price and value ranges of the twenty dollar notes with "for the" engraved and from New York, Boston, and Philadelphia usually vary from $17,000 up to $100,000. Apart from the most common types, Demand Notes usually sell at auction; the sole exception to this is the $5 New York notes with "for the" handwritten, which usually have price and value of $5,000 to $12,000.

**Estimated notes remaining** Harry W. Bass, Jr. Collection. Retrieved March 30, 2006.
Location	"For the" engraved	"For the" handwritten
$5 denomination: Estimated 600-800 notes remain
New York	Most common of $5 notes	8 known
Philadelphia	Most common of $5 notes	0 known
Boston	Most common of $5 notes	1 known
Cincinnati	5 known	0 known
St. Louis	9 known	1 known
$10 denomination: 140 notes known; 160-180 estimated
New York	Most common of $10 notes	5 known
Philadelphia	Most common of $10 notes	3 known
Boston	Most common of $10 notes	2 known
Cincinnati	6 known	1 known
St. Louis	4 known	0 known
$20 denomination
New York	7 known	1 known
Philadelphia	6 known	0 known
Boston	5 known	0 known
Cincinnati	1 known	0 known
St. Louis	0 known	0 known

Note: Most common is used as a relative term to describe the percentage of notes of the $5 and $10 denominations that remain today

References

Paper money of the United States | American Civil War