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In the winter of 1860, South Carolina became the first state to succeed from the Union.  By June the following year, ten more states joined the new Confederacy: Mississippi, Florida, Alabama, Georgia, Louisiana, Texas, Virginia, Arkansas, North Carolina, and Tennessee.  April 12th marked the opening battle of the American Civil War, a conflict which was to take the lives of over 600,000 men, some 2% of the nation's population.  The national debt prior to the war was $65 million.  Ultimately Congress would need to borrow several billion dollars by the conflict's end.  To pay for the war, Congress authorized the Treasury Department to issue several types of debt instruments, including bonds, interest bearing notes, and compound interest notes. Examples of issued Treasury Bonds from this era are very rare.  The Herbstman Collection proudly features an 1861 registered specimen along with an issued 1862 coupon bond. More common to the period are the shorter-term interest and compound interest bearing notes. Presented are examples of both.  These Treasury Notes were printed by the American Bank Note Company, and later, the Treasury Department.

1861 $1000 Registered Bond .jpg

1861 $1000 Twenty-year Registered Bond

Six Percent Loan Specimen

This unissued specimen bond was authorized by the Loan Act of July 17th, and the Revenue Act of August 5th, 1861.  The 1861 Act For A National Loan provided for registered and coupon bond issuance up to $250 million, and the creation of the demand notes (currency) famously nicknamed "Greenbacks."   This issue was printed by the National bank Note Company.

There are less than six known registered examples from the war period across all issues and denominations

1862 $500 Twenty-year Coupon "Five-Twenty" Bond

Six Percent Loan​

Issued  May 1, 1862

This $500 issued coupon bond was authorized by the Congressional Act of February 25, 1862.  Known as the Legal Tender Act, this legislation allowed the federal government to pay its bills using the Greenbacks- the demand currency newly introduced a year prior. The act also provided for further issuance of registered and coupon bonds. This bond issue, colloquially known as a "5-20", (a reference to the call and redemption period of the loan), was tax-exempt.  5-20's were the principal means by which the United States financed the war. By the end of the Civil War, some $800 million worth of 5-20's had been sold. This example was issued to the investment firm of Fisk & Hatch.  Working with the famous investment banker Jay Cooke, Fisk & Hatch was one of the leading brokers in government bonds during the war.  This issue was printed by the National Bank Note Company.

Likely Unique

1863 Ten Dollar Interest Bearing Treasury Note

Issued March 16, 1864


These one-year Interest Notes were authorized by a March 3, 1863 Act of Congress, and bore a five percent interest rate from the Treasury. The note was a hybrid debt instrument: it served as legal tender, but because of its interest bearing feature, it was often removed from circulation until maturity.  This allowed the Treasury to issue debt as currency, somewhat mitigating inflation as many notes were held by investors until redemption.

One of approximately 38 surviving $10 examples

1864 $10 Compound Interest Note PMG (fro

1864 Ten Dollar Compound Interest Treasury Note

Issued August 15, 1864


This three-year Compound Interest Note was authorized by a June 30, 1864 Act of Congress, and bore a six percent interest rate from the Treasury. Interest compounded every six months until maturity.  The note was a hybrid debt instrument: it served as legal tender, but because of its compounding interest bearing feature, it was often removed from circulation until maturity.  Like Interest Bearing Treasury Notes, the Compound Interest Treasury Notes were often withdrawn until redemption.

One of approximately 143 surviving $10 examples

1864 Twenty Dollar Compound Interest Treasury Note

Issued August 15, 1864


Like the $10 example above, this $20 note was issued towards the later part of the Civil War.  A prominent feature of all Compound Interest Notes was the usage of a bronze overprint.  This short-lived printing feature was not without problems, as the bronze did in fact often oxidize, turning green over time.  The two Compound Notes featured here are fortunate enough to have retained their original bronze coloring.

One of approximately 69 surviving $20 examples

1867  $1000 Thirty-year Registered Consol

Six Percent Loan

Issued July 3, 1867

Like other sovereign-issue consols, this debt security has no definitive payable date. The bond was redeemable at the pleasure of the Treasury Department after July of 1872.  This bond was callable after five years, and payable after twenty. The interest on this security was paid semi-annually in January and July. 

One of two registered 1867 $1,000-denominated Consols known

Copyright The Joe I. Herbstman Memorial Collection of American Finance 


All Rights Reserved

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