Demand Notes (1861–1862)
The first paper money issued by the United States government in the Civil War era — the original "greenbacks," redeemable on demand for gold coin.
Demand Notes were the first paper currency issued by the United States federal government under constitutional authority. They were authorized by the Act of July 17, 1861, in response to the financial crisis caused by the outbreak of the Civil War.
Why They Were Created
When the Civil War began in April 1861, the U.S. Treasury was nearly bankrupt. The Buchanan administration had run deficits, and war expenditures were enormous. The government initially financed the war through bond sales, but public demand for bonds was insufficient. By December 1861, banks suspended specie payments (the exchange of notes for gold coins), making it impossible for the government to meet its obligations in coin.
Secretary of the Treasury Salmon P. Chase pushed for the issuance of paper currency. The Act of July 17, 1861 authorized $50 million in Demand Notes, payable on demand in coin at designated Treasury offices in New York, Philadelphia, and Boston. They were the first U.S. paper currency printed with green ink on the back — leading to the popular nickname "greenbacks," which later became attached to all U.S. paper money.
Denominations and Design
Demand Notes were issued in denominations of $5, $10, and $20. They bore portraits of Alexander Hamilton ($5), Abraham Lincoln ($10), and Andrew Jackson ($20). The front was printed in black; the distinctive green back gave the notes their name.
Redemption and Replacement
By February 1862, the Treasury had suspended specie payments entirely — it could no longer redeem Demand Notes for gold on demand. The Legal Tender Act of February 25, 1862 authorized a new type of currency — United States Notes — that was NOT redeemable in coin. Demand Notes were gradually called in and replaced by United States Notes. Most were destroyed; survivors are rare and highly collectible today.
Source: Hessler, Gene. The Comprehensive Catalog of U.S. Paper Money. 7th ed. BNR Press, 1997.
Ready to put this to use?
Bill Bounty hunts involve real circulating U.S. currency. Apply what you've learned to spot target bills in the wild.
More in Types of U.S. Currency
Overview of U.S. Paper Money
A complete guide to every category of U.S. paper currency ever issued — what made each type unique and why most no longer exist.
Continental Currency (1775–1779)
America's first paper money — printed to fund the Revolutionary War, destroyed by British counterfeiting, and so thoroughly debased it gave English the phrase "not worth a Continental."
United States Notes / Legal Tender Notes (1862–1971)
The "greenbacks" of Civil War fame — the first fiat currency of the United States, issued without gold backing, and the subject of fierce constitutional debate.