During the Civil War, a shortage of supplies forced people to take strange measures. The shortage extended to gold, silver and copper, which people hoarded for themselves. And many people did not believe that paper money had actual value.
In response, the government passed a law in 1862 that allowed people to use postage stamps worth less than $5 to pay off debts to the government since these gave evidence of having paid for postage. Usually the stamps were worth 1 to 10 cents, used to make exact change.
But it was immediately clear that fragile postage stamps might be more trouble than they were worth. The questionable lasting nature of paper made stamps difficult to use as currency.
That’s where a man named John Gault comes in. Gault was an inventor and entrepreneur who created a solution to this stamp problem.
Gault proposed a “New Metallic Currency” that held stamps in a less delicate holder. These coin-shaped holders held a familiar coin shape that prevented stamps from being torn, bent or lost. The holder were originally made of silver so they looked more like real coins, but these quickly proved too expensive, so he made the holders out of brass instead.
Gault knew that he could make a profit from his invention. He sold the cases to stores and, in a clever marketing plan, used the back of the holder for advertising. One of the most prevalent advertisers was J.C. Ayer, a medicine business.
The stamp holders only lasted so long. In 1863 the government issued fractional coins that helped with the coin shortage, and stamps were no longer needed. Gault didn’t produce encased postage long after that as there was no demand for the postage anymore.
These encased stamps are quite rare today because most were torn apart to get to the stamp inside. Mint condition cases can sell for up to $4000.