How the Civil War Created America’s First Small Change Crisis — And the Coins It Spawned

When Coins Vanished from American Pockets

By the spring of 1862, something alarming was happening in towns and cities across the United States: coins had all but disappeared from everyday commerce. The culprit was fear — the deep, bone-level anxiety that grips populations during wartime. As the Civil War ground into its second year and the Union’s financial position grew increasingly uncertain, ordinary citizens began hoarding every piece of metal currency they could find. Gold vanished first, then silver, and finally even the humble copper-nickel Flying Eagle and Indian Head cents were swept off countertops and into coffee tins and leather pouches.

The result was a practical catastrophe for daily trade. Shopkeepers could not make change. Streetcar operators could not collect fares. Laborers could not break larger notes for small purchases. The federal government, consumed by the existential demands of a war that was costing millions of dollars each week, was slow to respond. Into that vacuum stepped private enterprise — and the result was one of the most fascinating episodes in all of American numismatic history.

Merchants Take Matters Into Their Own Hands

Necessity has always been the mother of invention in American commerce, and the small-change crisis of 1862–1863 proved no exception. Merchants, tradesmen, and manufacturers across the North began commissioning private tokens — small copper pieces struck to the approximate size of the cent — to use as substitute currency in their establishments. These so-called Civil War tokens were produced by the tens of millions, issued by druggists, bakers, saloonkeepers, newspaper publishers, and innumerable other businesses eager to keep their tills functioning.

Two broad categories emerged. Storecards bore the name and trade of a specific merchant and served as a de facto local currency redeemable at that establishment. Patriotic tokens carried patriotic slogans, political imagery, and national symbols — eagles, flags, portraits of Lincoln — functioning more as anonymous circulating currency with no issuer accountability. Together, these private pieces numbered in the thousands of distinct varieties and circulated freely alongside whatever federal coinage remained available. For a brief, remarkable period, American commerce ran on the ingenuity of individual entrepreneurs rather than on the output of the Philadelphia Mint.

The government tolerated this improvisation far longer than one might expect, but tolerance eventually gave way to legislative action — partly from a desire to restore monetary order and partly from a growing resentment that private parties were effectively profiting from the issuance of currency, a sovereign prerogative.

Salmon P. Chase and the Push for a National Motto

Amid the monetary chaos, a quieter but historically significant effort was underway within the Treasury Department. Secretary of the Treasury Salmon P. Chase, an intensely devout man who would later serve as Chief Justice of the Supreme Court, had been receiving letters from ministers and civic leaders urging that some acknowledgment of divine providence be inscribed on American coins. The argument, made with particular urgency as battlefield casualties mounted, was that the nation’s coinage should reflect its foundational religious convictions.

Chase was persuaded. In November 1861, he wrote to Mint Director James Pollock directing him to prepare designs incorporating a national motto with religious character. Several formulations were considered — “Our Country, Our God” and “God, Our Trust” among them — before the language drawn from the fourth stanza of Francis Scott Key’s “The Star-Spangled Banner” emerged as the preferred choice: In God We Trust. Pollock moved toward incorporating the motto on existing coinage, but it was the creation of an entirely new denomination that would give it its permanent debut.

The Two-Cent Piece: A New Coin for a Changed Nation

The Act of April 22, 1864, restructured small-change coinage with decisive effect. The legislation authorized a new bronze alloy for the cent — replacing the earlier copper-nickel composition — and introduced an entirely new denomination: the two-cent piece. Struck in bronze at 95 percent copper, the coin was designed by James B. Longacre, the Mint’s chief engraver, and featured a shield motif on the obverse surrounded by arrows and laurel branches, with a simple agricultural reverse bearing the denomination within a wheat wreath.

Most significantly, the two-cent piece became the first regularly issued United States coin to bear the motto In God We Trust — a distinction it holds permanently in the annals of American numismatic history. What began as one Treasury Secretary’s conviction about the character of a nation at war became an inscription that would eventually migrate to every denomination in the United States coinage system, where it remains to this day. The 1864 two-cent piece is therefore not merely a curiosity or a minor denomination; it is a primary document in the story of American civic identity.

The End of Private Tokens and a New Monetary Order

The same legislation that created the two-cent piece also struck a decisive blow against the private token industry. The Act of April 22, 1864, made it a federal misdemeanor to issue, pass, or possess any private coin, token, or device intended for use as currency. Combined with the newly abundant bronze cents and two-cent pieces flowing from the Mint — the Philadelphia Mint struck over nineteen million two-cent pieces in 1864 alone — the practical need for merchant tokens evaporated almost as quickly as congressional patience for them had.

Within months, the improvised monetary ecosystem that had sustained Northern commerce through two years of war was effectively dismantled. The tokens that remain today are prized by collectors as direct material evidence of how ordinary Americans adapted to extraordinary circumstances — and how a young nation, tested nearly to its breaking point, ultimately reasserted the authority of its central institutions.

The two-cent piece itself would survive only until 1873, when the Coinage Act of that year eliminated several minor denominations in a broader rationalization of the currency system. Its lifespan was brief, but its legacy — inscribed in four words on every coin in your pocket — is anything but.