Post-issuance
Secretary of the Treasury Chase began distributing the notes to meet Union obligations in August 1861. Initially, various merchants, banks and especially the railroad industry accepted the notes at a discounted rate or did not accept them at all. In order to ease public distrust in the newly issued notes Secretary Chase signed a paper agreeing to accept the notes in payment of his own salary and on September 3, 1861 Union General-in-Chief Winfield Scott issued a circular to his soldiers arguing the convenience of the notes for those wishing to send home a portion of their pay. In mid-September Secretary Chase issued the following circular to the Assistant Treasurers to remove all doubt about the monetary status of the new notes:
Under the acts of July 19th and August 5th last, Treasury notes of the denomination of $5, $10, and $20, have been, and will continue to be issued, redeemable in coin on demand at the offices of the Assistant Treasurer at Boston, New York, Philadelphia, St. Louis, and at the Depository of Cincinnati. These notes are intended to furnish a current medium of payment, exchange, and remittance, being at all times convertible into coin at the option of holder, at the place where made payable, and everywhere receivable for public dues. They must be always equivalent to gold, and often and for many purposes more convenient and valuable.
A sufficient amount of coin to redeem these notes promptly on demand will be kept with the depositaries, by whom they are respectively made payable. And all depositors and collecting officers will receive them, enter them on their books, and pay them to public creditors as money. Large amounts of the notes of small denominations are rapidly being issued and distributed.
These actions also created a willingness on the part of banks to redeem the notes for coin as well. This put Demand Notes on par with the value and purchasing power of gold coins and they circulated widely among the public for private transactions. They could be redeemed for silver coinage as well.
The law allowed for the notes to be hand-signed by F.E. Spinner (Treasurer), and L.E. Chittenden (Register of the Treasury). This proved unfeasible, however, and Congress also authorized the notes to be signed by procurators. Seventy women were hired at an annual salary of $1,200 to sign the notes. A distinction of "for the" was written after a signature to indicate that it was being used in place of Treasury officials. Apparently, some skilled women could even imitate the signature of F.E. Spinner. In late August "for the" was added to printing plates to simplify the hand-signing operation. The American Bank Note Company stopped printing notes payable at St. Louis and Cincinnati several days after revising printing plates with "for the".
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