Fractional Currency Shield

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My great-grandfather worked at Fidelity Union & Trust in Newark, New Jersey. One day he brought home a relic that had been hanging on the wall at the bank.

It was a so-called fractional currency shield and it’s a fascinating artifact of American history, a framed portrait showing notes printed between 1862 and 1876 with denominations of less than a dollar.

The money was introduced after the outbreak of the Civil War created a shortage of coins as gold and silver were hoarded. An initial solution was to issue postage stamps as a form of currency. However, they proved too easy to counterfeit.

Fractional notes circulated until 1876, when Congress authorized minting fractional silver coins.

The government also sold to banks for $4.50 a fractional currency shield with samples of 39 notes — printed on just one side — to help detect fakes.

Ironically, many of the fractional shields were printed using paper seized from the Confederacy. The paper – made from seaweed pulp and watermarked CSA (Confederate States of America) – was produced in Great Britain and seized from a Confederate blockade runner.

My grandfather hung the shield on the wall of the “radio room” on the second floor of their house in Elberon, N.J. From there it passed to my father. We used it to decorate the basement of the house where I grew up.

I remember my dad explaining that banks used these shields to detect fake bills.

I hadn’t realized until recently that they were created because of the scarcity of coins circulating during the Civil War.

Fractional notes are a footnote to history now. They were adopted because a need arose and later discarded. They came and went.

Many of the shields were damaged when the building where they were stored flooded. There are an estimated 600 shields still in existence. Periodically they sell on eBay, with one recently advertised for $6,500.

In a modern context it helps explain some of the passion for Bitcoin and alternatives to fiat currencies that are vulnerable to counterfeit.

It’s also one of those great reminders that the past conceals so much nuance. So many alleyways and forgotten details that were once widely known.

^{MEMENTOS: I inherited a copper wastepaper basket from my grandfather embossed with his initials HOM. It's one of those possessions that you keep because you can’t throw it away. It sat in the corner of his house, then my parent’s house, and now my house. I think a curated selection of mementos helps anchor you.}

^{ANALOG PARKING GARAGE: So much of the world is still analog and it seems to work reasonably well.}

^{SOME THINGS GET BETTER AND SOME GET WORSE: It’s strange to contrast the cause of death for children and realize that cars keep getting safer and guns keep getting more deadly.}

^{THINGS FALL APART: Frank McCourt’s rationale for reading English literature is one for the ages.}  

^{MINDSET:  Hedge fund manager Daniel Loeb cites Carol Dweck's book Mindset as one of the most important things he's ever read. I’d agree.}