Secretary of the Treasury Chase started disseminating the notes to meet Union commitments in August 1861. At first, different shippers, banks and particularly the railroad business acknowledged the notes at a limited rate or didn’t acknowledge them by any stretch of the imagination. To ease public doubt in the recently given notes Secretary Chase marked a paper consenting to acknowledge the notes in installment of his own compensation and on September 3, 1861 Union General-in-Chief Winfield Scott gave a round to his warriors contending the accommodation of the notes for those wishing to send home a segment of their pay. In mid-September Secretary Chase gave the accompanying roundabout to the associate financiers to eliminate all uncertainty about the money related status of the new notes: business articles
Under the demonstrations of July nineteenth and August fifth last, Treasury Notes of the group of $5, $10, and $20, have been, and will keep on being given, redeemable in coin on interest at the workplaces of the associate financial officer at Boston, New York, Philadelphia, St. Louis, and at the Depository of Cincinnati. These notes are expected to outfit a current mode of installment, trade, and settlement, being consistently convertible into coin at the choice of holder, at where made payable, and wherever receivable for public levy. They should be consistently identical to gold, and frequently and for some reasons more helpful and significant.
An adequate measure of coin to recover these notes speedily on interest will be kept with the depositaries, by whom they are separately made payable. And all contributors and gathering officials will get them, enter them on their books, and pay them to public loan bosses as cash. A lot of the notes of little groups are quickly being given and distributed.
These activities additionally made an eagerness with respect to banks to reclaim the notes for coin too. This put Demand Notes comparable to the worth and buying intensity of gold coins and they circled generally among general society for private transactions. They could be reclaimed for silver coinage as well.
The law took into consideration the notes to be hand-endorsed by F.E. Spinner (Treasurer), and L.E. Chittenden (Register of the Treasury). This demonstrated unworkable, nonetheless, and Congress likewise approved the notes to be endorsed by procurators. Seventy ladies were employed at a yearly compensation of $1,200 to sign the notes. A qualification of “for the” was composed after a mark to show that it was being utilized instead of depository authorities. Clearly, some gifted ladies could even emulate the mark of F.E. Spinner. In late August “for the” was added to printing plates to improve the hand-marking activity. The American Bank Note Company quit printing notes payable at St. Louis and Cincinnati a few days subsequent to updating printing plates with “for the”.
Suspension of specie installment
The capacity of the public authority to recover the Demand Notes in specie went under weight in December 1861. On December 10 Secretary Chase demonstrated that war consumptions were far surpassing projections while Federal incomes were falling short. Then on the sixteenth, information on the British response to the Trent Affair arrived at New York and the significant banks, which had been providing gold to the public authority in return for seven-thirties Treasury Notes and securities which they had been thusly exchanging, saw the interest for their contributions of Union protections drop steeply. Before the month’s over the banks had suspended specie installment on their own banknotes. The Demand Notes at that point started to show up at aide financiers’ workplaces in incredible numbers for redemption, however since the public authority couldn’t get sufficient supplies of coin it had to go with the same pattern and suspend reclaiming the Demand Notes for gold in the initial not many long periods of 1862.