GAULT DISCS

At the start of the American Civil War, citizens on both sides of the conflict quickly lost confidence in paper money and started hoarding coins. In the North, coins were generally worth 20% more than the equivalent federal currency; in the South, the discrepancy was far greater with respect to Confederate notes. This situation, coupled with the fact that there were no federal bills smaller than $5 and the fact that most transactions were for less than that amount (remember, the average salary was about $12 a week, and a northern Army private earned $13 a month), threatened to grind the economy to a halt, since there were no coins in circulation to complete basic simple transactions.

To help remedy this, people in the North started using postage stamps for money. However, it was far more problematic to carry wads of gummed paper stamps than coins in a sweaty pocket. In response, John Gault invented a coin-shaped brass disc with a mica window on it which would hold a stamp and protect it from the abuses of circulation. Gault also sold advertising on the back of the disc at the rate of two cents per disc.

Gault's invention was so highly successful that it resulted in a postage stamp shortage. Eventually, the government abandoned the fiction that most of its postage stamps were being issued to be used on letters and surprisingly arrived at the very practical solution of printing durable currency with pictures of postage stamps on it. These bills were known, appropriately enough, as "postage currency" and came in denominations of 5, 10, 25, and 50 cents.

When things settled down after the end of the war, people regained confidence in paper money, coins trickled back into circulation*, and most individuals with Gault discs in their dresser drawers tore them apart to use the stamps contained therein to mail letters. Consequently, very few examples now still exist, and they command a hefty premium on the collector's market.

*Coins were also still supplemented by "fractional currency," which was regular paper money, not related to postage, in denominations less than a dollar. Fractional currency replaced postage currency and was issued until 1876.