A Demand Note is a type of United States paper money that was issued between August 1861 and April 1862 during the American Civil War in denominations of 5, 10, and 20 dollars. The original legislation referred to the currency as "treasury notes." The term "Demand Note" was applied retroactively because the notes were redeemable on demand for gold coin. While Demand Notes were not the first type of paper money issued by the United States federal government, they were the first in wide circulation.
Demand Notes were created to serve as a means of monetary exchange in place of gold and silver coins that were vanishing from circulation at the time due to hoarding of commodities. The U.S. government used the notes to pay its incurred expenses and also to pay the salaries of its workers and military personnel. Once the public learned the notes were redeemable in gold coin, the notes began to circulate as widely as gold and silver coins had.