25 Cents State of North Carolina, overprinted

North Carolina's resort to fractional currency in 1864 reflected a Confederate-wide coin famine that had grown acute by mid-war. Small change had effectively vanished from circulation — hoarded, melted, or simply absent — leaving state governments to paper over the gap with their own low-denomination notes. North Carolina was among the more prolific issuers of such fractionals.

The J.T. Paterson & Co. imprint places production in Augusta, Georgia, a printing hub for Confederate and state government work after Union naval pressure made northern suppliers inaccessible years earlier. The overprint on this example distinguishes it within the CS#150 series — North Carolina applied overprints to control reissue batches or validate notes for specific purposes, though the precise administrative rationale varied by issue date.