I have read many times that Civil War tokens were made because of the shortage of coins, due to people hoarding them. This theory always sat wrong with me. Then, like now, most people aren't able to hoard cash, because of the need to eat, etc. My theory is that because we suddenly had many hundreds of thousands of men in uniform that needed a paycheck, many of whom, previously lived in agricultural/barter settings. The mint could not keep up and it had nothing to do with hoarding. I have checked the total mintage of all coins during the Civil War, and the amounts were not anywhere near enough to cover the armed forces payroll of the time. Some people I have mentioned my theory to, tell me that paper money was plentiful at the time, which I believe to a degree. My question is, pre-federal paper money was regional and discounted if you tried to use it "out of town", so how could soldiers on the move and the government function with local "obsolete" paper money? How did the government/army/navy decide which banks currency to use? Thanks for any insight.
Well the Army had sutlers to help supply the troops with essentials not issued by the government. Sutlers would extend credit to the troops through a payroll deduction due on the next pay period and used tokens for small change. Not sure if any of this helps, but even the soldiers didn't have enough coins/paper money to go around.
I think that sutlers were a western army phenomenon. So I don't think relevant to my theory, but I am not very sure.
In my reference book on sutler scrip (can't remember the title/author right now) sutlers were attached to units all over the Union. I remember seeing bunches of the scrip available from Ohio and I remember some references from Indiana and New York. You know, possibly in support of your idea, all these soldiers were paid at the same time too. So at the first of every month, the government was paying all these men at the same time.
I did the math and added up the total mintage of all federal coins and came up with about 8.5 million dollars for 1861. By the end of the year, we had 500,000 men in uniform. If we just use a privates pay of $13 /month, that's 6.5 million per month of payroll, not even counting officers and the rest of the economy.
I just discovered that the US govt. issued $50,000,000 in demand notes in 1861. I thought we didn't have federal paper money until 1863, so I guess that answers my question. Thanks everyone.
