Why did the Federal government stop minting coins after the Civil War began?
Facing a probable long war, the North decided to stop issuing coins and turned too printing paper money (i.e., greenbacks). As a result, many northerners panicked and started hoarding coins. Before long, most coins were no longer in circulation. CWG: How did the Government respond to the crisis of coins being hoarded? In response to the crisis, the Federal government issued fractional paper currency in denominations of 3, 5, 10, 15, 25, and 50 cents. These became known as shinplasters. People did eventually accept them as substitutes for metal coinage. The government stopped issuing fraction currency in 1876. By then $368 million worth of it made it into the private sector. CWG: Did the South use similar means, as the North to finance the war effort (e.g., bonds, taxes and loans)? In contrast with the North, the South primarily depended on paper currency to finance the war. As a result, inflation impacted the South even more since this currency was not backed by silver or gold. Currenc
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