As the populace began to grow concerned with the widening war between the northern and southern states, they started hoarding gold and silver coinage, which eventually led to the removal of even the copper coins from circulation. This coin shortage put a damper on commerce so people began to use postage stamps as money. This didn’t work well as they got sticky and weren’t very durable. Before long, the postage stamps were put inside small metal containers with a mica window so you could verify the value of the stamp through the window. These became known to collectors as Encased Postage Stamps, which are very collectible. The United States government and some states issued fractional currency to try to alleviate the coin shortage. The most practical solution to the problem came from store owners who purchased small copper coins from manufacturers and put them into circulation. Americans were accustomed to seeing tokens in their pocket change as they had been around since Colonial days. The merchants gave the cent sized coins as change to facilitate transactions in their stores; hence, the Civil War Token was born.
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“A Guide Book of Civil War Tokens: Patriotic Tokens and Store Cards, 1861-1865 (Official Red Books)” http://amzn.to/2GQS4Le